79–006 

111TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 111–117 

PREVENT ALL CIGARETTE TRAFFICKING ACT OF 2009 

(PACT ACT) 

MAY 18, 2009.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 1676] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1676) to prevent tobacco smuggling, to ensure the collection 

of all tobacco taxes, and for other purposes, having considered the 

same, reports favorably thereon with an amendment and recommends that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 17 

Background and Need for the Legislation ............................................................. 17 

Hearings ................................................................................................................... 19 

Committee Consideration ........................................................................................ 19 

Committee Votes ...................................................................................................... 19 

Committee Oversight Findings ............................................................................... 19 

New Budget Authority and Tax Expenditures ...................................................... 20 

Congressional Budget Office Cost Estimate .......................................................... 20 

Performance Goals and Objectives ......................................................................... 23 

Constitutional Authority Statement ...................................................................... 24 

Advisory on Earmarks ............................................................................................. 24 

Section-by-Section Analysis .................................................................................... 24 

Changes in Existing Law Made by the Bill, as Reported ..................................... 28 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 


wwoods2 on PRODPC68 with REPORTS
2 

SECTION 1. SHORT TITLE; FINDINGS; PURPOSES. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Prevent All Cigarette Trafficking Act of 2009’’ or ‘‘PACT Act’’. 

(b) FINDINGS.—Congress finds that— 

(1) the sale of illegal cigarettes and smokeless tobacco products significantly 

reduces Federal, State, and local government revenues, with Internet sales 

alone accounting for billions of dollars of lost Federal, State, and local tobacco 

tax revenue each year; 

(2) Hezbollah, Hamas, al Qaeda, and other terrorist organizations have 

profited from trafficking in illegal cigarettes or counterfeit cigarette tax stamps; 

(3) terrorist involvement in illicit cigarette trafficking will continue to grow 

because of the large profits such organizations can earn; 

(4) the sale of illegal cigarettes and smokeless tobacco over the Internet, 

and through mail, fax, or phone orders, make it cheaper and easier for children 

to obtain tobacco products; 

(5) the majority of Internet and other remote sales of cigarettes and smokeless tobacco are being made without adequate precautions to protect against 

sales to children, without the payment of applicable taxes, and without complying with the nominal registration and reporting requirements in existing 

Federal law; 

(6) unfair competition from illegal sales of cigarettes and smokeless tobacco 

is taking billions of dollars of sales away from law-abiding retailers throughout 

the United States; 

(7) with rising State and local tobacco tax rates, the incentives for the illegal sale of cigarettes and smokeless tobacco have increased; 

(8) the number of active tobacco investigations being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives rose to 452 in 2005; 

(9) the number of Internet vendors in the United States and in foreign 

countries that sell cigarettes and smokeless tobacco to buyers in the United 

States increased from only about 40 in 2000 to more than 500 in 2005; and 

(10) the intrastate sale of illegal cigarettes and smokeless tobacco over the 

Internet has a substantial effect on interstate commerce. 

(c) PURPOSES.—It is the purpose of this Act to— 

(1) require Internet and other remote sellers of cigarettes and smokeless tobacco to comply with the same laws that apply to law-abiding tobacco retailers; 

(2) create strong disincentives to illegal smuggling of tobacco products; 

(3) provide government enforcement officials with more effective enforcement tools to combat tobacco smuggling; 

(4) make it more difficult for cigarette and smokeless tobacco traffickers to 

engage in and profit from their illegal activities; 

(5) increase collections of Federal, State, and local excise taxes on cigarettes 

and smokeless tobacco; and 

(6) prevent and reduce youth access to inexpensive cigarettes and smokeless 

tobacco through illegal Internet or contraband sales. 

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

(a) DEFINITIONS.—The Act of October 19, 1949 (15 U.S.C. 375 et seq.; commonly 

referred to as the ‘‘Jenkins Act’’) (referred to in this Act as the ‘‘Jenkins Act’’), is 

amended by striking the first section and inserting the following: 

‘‘SECTION 1. DEFINITIONS. 

‘‘As used in this Act, the following definitions apply: 

‘‘(1) ATTORNEY GENERAL.—The term ‘attorney general’, with respect to a 

State, means the attorney general or other chief law enforcement officer of the 

State, or the designee of that officer. 

‘‘(2) CIGARETTE.— 

‘‘(A) IN GENERAL.—For purposes of this Act, the term ‘cigarette’ shall— 

‘‘(i) have the same meaning given that term in section 2341 of title 

18, United States Code; and 

‘‘(ii) include ‘roll-your-own tobacco’ (as that term is defined in section 5702 of the Internal Revenue Code of 1986). 

‘‘(B) EXCEPTION.—For purposes of this Act, the term ‘cigarette’ does not 

include a ‘cigar’, as that term is defined in section 5702 of the Internal Revenue Code of 1986. 

‘‘(3) COMMON CARRIER.—The term ‘common carrier’ means any person 

(other than a local messenger service or the United States Postal Service) that 

holds itself out to the general public as a provider for hire of the transportation 

by water, land, or air of merchandise, 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. 


wwoods2 on PRODPC68 with REPORTS
3 

‘‘(4) CONSUMER.—The term ‘consumer’ means any person that purchases 

cigarettes or smokeless tobacco, but does not include any person lawfully operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes or 

smokeless tobacco. 

‘‘(5) DELIVERY SALE.—The term ‘delivery sale’ means any sale of cigarettes 

or smokeless tobacco to a consumer if— 

‘‘(A) the consumer submits the order for 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 to the buyer by 

common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the buyer when the 

buyer obtains possession of the cigarettes or smokeless tobacco. 

‘‘(6) DELIVERY SELLER.—The term ‘delivery seller’ means a person who 

makes a delivery sale. 

‘‘(7) INDIAN COUNTRY.—The term ‘Indian country’ means— 

‘‘(A) Indian country as defined in section 1151 of title 18, United States 

Code, except that within the State of Alaska that term applies only to the 

Metlakatla Indian Community, Annette Island Reserve; and 

‘‘(B) any other land held by the United States in trust or restricted status for one or more Indian tribes. 

‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’, ‘tribe’, or ‘tribal’ refers to an Indian tribe as defined in section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)) or as listed pursuant to section 104 

of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a–1). 

‘‘(9) INTERSTATE COMMERCE.—The term ‘interstate commerce’ means commerce between a State and any place outside the State, commerce between a 

State and any Indian country in the State, or commerce between points in the 

same State but through any place outside the State or through any Indian country. 

‘‘(10) INTO A STATE, PLACE, OR LOCALITY.—A sale, shipment, or transfer of 

cigarettes or smokeless tobacco that is made in interstate commerce, as defined 

herein, shall be deemed to have been made into the State, place or locality in 

which such cigarettes or smokeless tobacco are delivered. 

‘‘(11) PERSON.—The term ‘person’ means an individual, corporation, company, association, firm, partnership, society, State government, local government, Indian tribal government, governmental organization of such government, 

or joint stock company. 

‘‘(12) STATE.—The term ‘State’ means each of the several States of the 

United States, the District of Columbia, the Commonwealth of Puerto Rico, or 

any territory or possession of the United States. 

‘‘(13) SMOKELESS TOBACCO.—The term ‘smokeless tobacco’ means any finely 

cut, ground, powdered, or leaf tobacco, or other product containing tobacco, that 

is intended to be placed in the oral or nasal cavity or otherwise consumed without being combusted. 

‘‘(14) TOBACCO TAX ADMINISTRATOR.—The term ‘tobacco tax administrator’ 

means the State, local, or tribal official duly authorized to collect the tobacco 

tax or administer the tax law of a State, locality, or tribe, respectively. 

‘‘(15) TRIBAL ENTERPRISE.—The term ‘tribal enterprise’ means any business 

enterprise, incorporated or unincorporated under Federal or tribal law, of an Indian tribe or group of Indian tribe. 

‘‘(16) USE.—The term ‘use’, in addition to its ordinary meaning, means the 

consumption, storage, handling, or disposal of cigarettes or smokeless tobacco.’’. 

(b) REPORTS TO STATE TOBACCO TAX ADMINISTRATORS.—Section 2 of the Jenkins 

Act (15 U.S.C. 376) is amended— 

(1) by striking ‘‘cigarettes’’ each place it appears and inserting ‘‘cigarettes 

or smokeless tobacco’’; 

(2) in subsection (a)— 

(A) in the matter preceding paragraph (1)— 

(i) by inserting ‘‘CONTENTS.—’’ after ‘‘(a)’’; 

(ii) by striking ‘‘or transfers’’ and inserting ‘‘, transfers, or ships’’; 

(iii) by inserting ‘‘, locality, or Indian country of an Indian tribe’’ 

after ‘‘a State’’; 

(iv) by striking ‘‘to other than a distributor licensed by or located 

in such State,’’; and 

(v) by striking ‘‘or transfer and shipment’’ and inserting ‘‘, transfer, 

or shipment’’; 

(B) in paragraph (1)— 


wwoods2 on PRODPC68 with REPORTS
4 

(i) by striking ‘‘with the tobacco tax administrator of the State’’ and 

inserting ‘‘with the Attorney General of the United States and with the 

tobacco tax administrators of the State and place’’; and 

(ii) by striking ‘‘; and’’ and inserting the following: ‘‘, as well as telephone numbers for each place of business, a principal electronic mail 

address, any website addresses, and the name, address, and telephone 

number of an agent in the State authorized to accept service on behalf 

of 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: 

‘‘(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.’’; 

(3) in subsection (b)— 

(A) by inserting ‘‘PRESUMPTIVE EVIDENCE.—’’ after ‘‘(b)’’; 

(B) by striking ‘‘(1) that’’ and inserting ‘‘that’’; and 

(C) by striking ‘‘, and (2)’’ and all that follows and inserting a period; 

and 

(4) by adding at the end the following: 

‘‘(c) USE OF INFORMATION.—A tobacco tax administrator or chief law enforcement officer who receives a memorandum or invoice under paragraph (2) or (3) of 

subsection (a) shall use such memorandum or invoice solely for the purposes of the 

enforcement of this Act and the collection of any taxes owed on related sales of cigarettes and smokeless tobacco, and shall keep confidential any personal information 

in such memorandum or invoice not otherwise required for such purposes.’’. 

(c) REQUIREMENTS FOR DELIVERY SALES.—The Jenkins Act is amended by inserting after section 2 the following: 

‘‘SEC. 2A. DELIVERY SALES. 

‘‘(a) IN GENERAL.—With respect to delivery sales into a specific State and place, 

each delivery seller shall comply with— 

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

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

‘‘(3) all State, local, tribal, and other laws generally applicable to sales of 

cigarettes or smokeless tobacco as if such delivery sales occurred entirely within 

the specific State and place, including laws imposing— 

‘‘(A) excise taxes; 

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

‘‘(C) restrictions on sales to minors; and 

‘‘(D) other payment obligations or legal requirements relating to the 

sale, distribution, or delivery of cigarettes or smokeless tobacco; and 

‘‘(4) the tax collection requirements set forth in subsection (d). 

‘‘(b) SHIPPING AND PACKAGING.— 

‘‘(1) REQUIRED STATEMENT.—For any shipping package containing cigarettes 

or smokeless tobacco, the delivery seller shall include on the bill of lading, if 

any, and on the outside of the shipping package, on the same surface as the 

delivery address, a clear and conspicuous statement providing as follows: ‘CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE WITH 

APPLICABLE LICENSING AND TAX–STAMPING OBLIGATIONS’. 

‘‘(2) FAILURE TO LABEL.—Any shipping package described in paragraph (1) 

that is not labeled in accordance with that paragraph shall be treated as nondeliverable matter by a common carrier or other delivery service, if the common 

carrier or other delivery service knows or should know the package contains 

cigarettes or smokeless tobacco. If a common carrier or other delivery service 

believes a package is being submitted for delivery in violation of paragraph (1), 

it may require the person submitting the package for delivery to establish that 

it is not being sent in violation of paragraph (1) before accepting the package 

for delivery. Nothing in this paragraph shall require the common carrier or 

other delivery service to open any package to determine its contents. 

‘‘(3) WEIGHT RESTRICTION.—A delivery seller shall not sell, offer for sale, deliver, or cause to be delivered in any single sale or single delivery any cigarettes 

or smokeless tobacco weighing more than 10 pounds. 


wwoods2 on PRODPC68 with REPORTS
5 

‘‘(4) AGE VERIFICATION.— ‘‘(A) IN GENERAL.—Notwithstanding any other provision of law, a delivery seller who mails or ships tobacco products— 

‘‘(i) shall not sell, deliver, or cause to be delivered any tobacco products to a person under the minimum age required for the legal sale or 

purchase of tobacco products, as determined by the applicable law at 

the place of delivery; 

‘‘(ii) shall use a method of mailing or shipping that requires— 

‘‘(I) the purchaser placing the delivery sale order, or an adult 

who is at least the minimum age required for the legal sale or purchase of tobacco products, as determined by the applicable law at 

the place of delivery, to sign to accept delivery of the shipping container at the delivery address; and 

‘‘(II) the person who signs to accept delivery of the shipping 

container to provide proof, in the form of a valid, governmentissued identification bearing a photograph of the individual, that 

the person is at least the minimum age required for the legal sale 

or purchase of tobacco products, as determined by the applicable 

law at the place of delivery; and 

‘‘(iii) shall not accept a delivery sale order from a person without— 

‘‘(I) obtaining the full name, birth date, and residential address 

of that person; and 

‘‘(II) verifying the information provided in subclause (I), 

through the use of a commercially available database or aggregate 

of databases, consisting primarily of data from government sources, 

that are regularly used by government and businesses for the purpose of age and identity verification and authentication, to ensure 

that the purchaser is at least the minimum age required for the 

legal sale or purchase of tobacco products, as determined by the applicable law at the place of delivery. 

‘‘(B) LIMITATION.—No database being used for age and identity 

verification under subparagraph (A)(iii) shall be in the possession or under 

the control of the delivery seller, or be subject to any changes or supplementation by the delivery seller. 

‘‘(c) RECORDS.— 

‘‘(1) IN GENERAL.—Each delivery seller shall keep a record of any delivery 

sale, including all of the information described in section 2(a)(2), organized by 

the State, and within such State, by the city or town and by zip code, into which 

such delivery sale is so made. 

‘‘(2) RECORD RETENTION.—Records of a delivery sale shall be kept as described in paragraph (1) in the year in which the delivery sale is made and for 

the next 4 years. 

‘‘(3) ACCESS FOR OFFICIALS.—Records kept under paragraph (1) shall be 

made available to tobacco tax administrators of the States, to local governments 

and Indian tribes that apply 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) DELIVERY.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), no delivery seller 

may sell or deliver to any consumer, or tender to any common carrier or other 

delivery service, any cigarettes or smokeless tobacco pursuant to a delivery sale 

unless, in advance of the sale, delivery, or tender— 

‘‘(A) any cigarette or smokeless tobacco excise tax that is imposed by 

the State in which the cigarettes or smokeless tobacco are to be delivered 

has been paid to the State; 

‘‘(B) any cigarette or smokeless tobacco excise tax that is imposed by 

the local government of the place in which the cigarettes or smokeless tobacco are to be delivered has been paid to the local government; and 

‘‘(C) any required stamps or other indicia that such excise tax has been 

paid are properly affixed or applied to the cigarettes or smokeless tobacco. 

‘‘(2) EXCEPTION.—Paragraph (1) does not apply to a delivery sale of smokeless tobacco if the law of the State or local government of the place where the 

smokeless tobacco is to be delivered requires or otherwise provides that delivery 

sellers collect the excise tax from the consumer and remit the excise tax to the 

State or local government, and the delivery seller complies with the requirement. 

‘‘(e) LIST OF UNREGISTERED OR NONCOMPLIANT DELIVERY SELLERS.— 


wwoods2 on PRODPC68 with REPORTS
6 

‘‘(1) IN GENERAL.— ‘‘(A) INITIAL LIST.—Not later than 90 days after this subsection goes 

into effect under the Prevent All Cigarette Trafficking Act of 2009, the Attorney General of the United States shall compile a list of delivery sellers 

of cigarettes or smokeless tobacco that have not registered with the Attorney General, pursuant to section 2(a) or that are otherwise not in compliance with this Act, and— 

‘‘(i) distribute the list to— 

‘‘(I) the attorney general and tax administrator of every State; 

‘‘(II) common carriers and other persons that deliver small 

packages to consumers in interstate commerce, including the 

United States Postal Service; and 

‘‘(III) at the discretion of the Attorney General of the United 

States, to any other persons; and 

‘‘(ii) publicize and make the list available to any other person engaged in the business of interstate deliveries or who delivers cigarettes 

or smokeless tobacco in or into any State. 

‘‘(B) LIST CONTENTS.—To the extent known, the Attorney General of the 

United States shall include, for each delivery seller on the list described in 

subparagraph (A)— 

‘‘(i) all names the delivery seller uses in the transaction of its business or on packages delivered to customers; 

‘‘(ii) all addresses from which the delivery seller does business or 

ships cigarettes or smokeless tobacco; 

‘‘(iii) the website addresses, primary e-mail address, and phone 

number of the delivery seller; and 

‘‘(iv) any other information that the Attorney General determines 

would facilitate compliance with this subsection by recipients of the 

list. 

‘‘(C) UPDATING.—The Attorney General of the United States shall update and distribute the list at least once every 4 months, and may distribute the list and any updates by regular mail, electronic mail, or any 

other reasonable means, or by providing recipients with access to the list 

through a nonpublic website that the Attorney General of the United States 

regularly updates. 

‘‘(D) STATE, LOCAL, OR TRIBAL ADDITIONS.—The Attorney General of the 

United States shall include in the list under subparagraph (A) any noncomplying delivery sellers identified by any State, local, or tribal government 

under paragraph (5), and shall distribute the list to the attorney general 

or chief law enforcement official and the tax administrator of any government submitting any such information and to any common carriers or other 

persons who deliver small packages to consumers identified by any government pursuant to paragraph (5). 

‘‘(E) ACCURACY AND COMPLETENESS OF LIST OF NONCOMPLYING DELIVERY

SELLERS.—In preparing and revising the list required by subparagraph (A), 

the Attorney General shall— 

‘‘(i) use reasonable procedures to ensure maximum possible accuracy and completeness of the records and information relied on for the 

purpose of determining that such delivery seller is noncomplying; 

‘‘(ii) not later than 14 days prior to including any delivery seller on 

the list under paragraph (1), make a reasonable attempt to send notice 

to the delivery seller by letter, electronic mail, or other means that the 

delivery seller is being placed on such list or update, with that notice 

citing the relevant provisions of this Act and the specific reasons for 

being placed on such list; 

‘‘(iii) provide an opportunity to such delivery seller to challenge 

placement on such list; 

‘‘(iv) investigate each such challenge by contacting the relevant 

Federal, State, tribal, and local law enforcement officials, and provide 

the specific findings and results of such investigation to such delivery 

seller not later than 30 days after the challenge is made; and 

‘‘(v) upon finding that any placement is inaccurate, incomplete, or 

cannot be verified, promptly delete such delivery seller from the list as 

appropriate and notify each appropriate Federal, State, tribal, and local 

authority of such finding. 

‘‘(F) CONFIDENTIALITY.—The list distributed pursuant to subparagraph 

(A) shall be confidential, and any person receiving the list shall maintain 

the confidentiality of the list but may deliver the list, for enforcement purposes, to any government official or to any common carrier or other person 


wwoods2 on PRODPC68 with REPORTS
7 

that delivers tobacco products or small packages to consumers. Nothing in 

this section shall prohibit a common carrier, the United States Postal Service, or any other person receiving the list from discussing with the listed 

delivery sellers the delivery sellers’ inclusion on the list and the resulting 

effects on any services requested by such listed delivery seller. 

‘‘(2) PROHIBITION ON DELIVERY.— ‘‘(A) IN GENERAL.—Commencing on the date that is 60 days after the 

date of the initial distribution or availability of the list under paragraph 

(1)(A), no person who receives the list under paragraph (1), and no person 

who delivers cigarettes or smokeless tobacco to consumers, shall knowingly 

complete, cause to be completed, or complete its portion of a delivery of any 

package for any person whose name and address are on the list, unless— 

‘‘(i) the person making the delivery knows or believes in good faith 

that the item does not include cigarettes or smokeless tobacco; 

‘‘(ii) the delivery is made to a person lawfully engaged in the business of manufacturing, distributing, or selling cigarettes or smokeless 

tobacco; or 

‘‘(iii) the package being delivered weighs more than 100 pounds 

and the person making the delivery does not know or have reasonable 

cause to believe that the package contains cigarettes or smokeless tobacco. 

‘‘(B) IMPLEMENTATION OF UPDATES.—Commencing on the date that is 30 

days after the date of the distribution or availability of any updates or corrections to the list under paragraph (1), all recipients and all common carriers or other persons that deliver cigarettes or smokeless tobacco to consumers shall be subject to subparagraph (A) in regard to such corrections 

or updates. 

‘‘(C) EXEMPTIONS.—Subparagraphs (A) and (B), subsection (b)(2), and 

any other requirements or restrictions placed directly on common carriers 

elsewhere in this subsection, shall not apply to a common carrier that is 

subject to a settlement agreement relating to tobacco product deliveries to 

consumers or, if any such settlement agreement to which the common carrier was a party is terminated or otherwise becomes inactive, is administering and enforcing, on a nationwide basis, policies and practices that are 

at least as stringent as any such agreement. For the purposes of this section, ‘settlement agreement’ shall be defined to include the Assurance of 

Discontinuance entered into by the Attorney General of New York and DHL 

Holdings USA, Inc. and DHL Express (USA), Inc. on or about July 1, 2005, 

the Assurance of Discontinuance entered into by the Attorney General of 

New York and United Parcel Service, Inc. on or about October 21, 2005, 

and the Assurance of Compliance entered into by the Attorney General of 

New York and Federal Express Corporation and Fed Ex Ground package 

Systems, Inc. on or about February 3, 2006, so long as each is honored nationwide to block illegal deliveries of cigarettes or smokeless tobacco to consumers, and also includes any other active agreement between a common 

carrier and the States that operates nationwide to ensure that no deliveries 

of cigarettes and smokeless tobacco shall be made to consumers for illegally 

operating Internet or mail-order sellers and that any such deliveries to consumers shall not be made to minors or without payment to the States and 

localities where the consumers are located of all taxes on the tobacco products. 

‘‘(3) SHIPMENTS FROM PERSONS ON LIST.— 

‘‘(A) IN GENERAL.—In the event that a common carrier or other delivery 

service delays or interrupts the delivery of a package it has in its possession because it determines or has reason to believe that the person ordering 

the delivery is on a list distributed under paragraph (1)— 

‘‘(i) the person ordering the delivery shall be obligated to pay— 

‘‘(I) the common carrier or other delivery service as if the delivery of the package had been timely completed; and 

‘‘(II) if the package is not deliverable, any reasonable additional fee or charge levied by the common carrier or other delivery 

service to cover its extra costs and inconvenience and to serve as 

a disincentive against such noncomplying delivery orders; and 

‘‘(ii) if the package is determined not to be deliverable, the common 

carrier or other delivery service shall, in its discretion, either provide 

the package and its contents to a Federal, State, or local law enforcement agency or destroy the package and its contents. 

‘‘(B) RECORDS.—A common carrier or other delivery service shall maintain, for a period of 5 years, any records kept in the ordinary course of busiVerDate Nov 24 2008 01:29 May 19, 2009 Jkt 079006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6621 E:\HR\OC\HR117.XXX HR117

wwoods2 on PRODPC68 with REPORTS
8 

ness relating to any deliveries interrupted pursuant to this paragraph and 

provide that information, upon request, to the Attorney General of the 

United States or to the attorney general or chief law enforcement official 

or tax administrator of any State, local, or tribal government. 

‘‘(C) CONFIDENTIALITY.—Any person receiving records under subparagraph (B) shall use such records solely for the purposes of the enforcement 

of this Act and the collection of any taxes owed on related sales of cigarettes 

and smokeless tobacco, and the person receiving records under subparagraph (B) shall keep confidential any personal information in such records 

not otherwise required for such purposes. 

‘‘(4) PREEMPTION.— 

‘‘(A) IN GENERAL.—No State, local, or tribal government, nor any political authority of 2 or more State, local, or tribal governments, may enact 

or enforce any law or regulation relating to delivery sales that restricts deliveries of cigarettes or smokeless tobacco to consumers by common carriers 

or other delivery services on behalf of delivery sellers by— 

‘‘(i) requiring that the common carrier or other delivery service 

verify the age or identity of the consumer accepting the delivery by requiring the person who signs to accept delivery of the shipping container to provide proof, in the form of a valid, government-issued identification bearing a photograph of the individual, that such person is 

at least the minimum age required for the legal sale or purchase of tobacco products, as determined by either State or local law at the place 

of delivery; 

‘‘(ii) requiring that the common carrier or other delivery service obtain a signature from the consumer accepting the delivery; 

‘‘(iii) requiring that the common carrier or other delivery service 

verify that all applicable taxes have been paid; 

‘‘(iv) requiring that packages delivered by the common carrier or 

other delivery service contain any particular labels, notice, or markings; or 

‘‘(v) prohibiting common carriers or other delivery services from 

making deliveries on the basis of whether the delivery seller is or is 

not identified on any list of delivery sellers maintained and distributed 

by any entity other than the Federal Government. 

‘‘(B) RELATIONSHIP TO OTHER LAWS.—Except as provided in subparagraph (C), nothing in this paragraph shall be construed to prohibit, expand, 

restrict, or otherwise amend or modify— 

‘‘(i) section 14501(c)(1) or 41713(b)(4) of title 49, United States 

Code; 

‘‘(ii) any other restrictions in Federal law on the ability of State, 

local, or tribal governments to regulate common carriers; or 

‘‘(iii) any provision of State, local, or tribal law regulating common 

carriers that falls within the provisions of sections 14501(c)(2) or 

41713(b)(4)(B) of title 49 of the United States Code. 

‘‘(C) STATE LAWS PROHIBITING DELIVERY SALES.—Nothing in the Prevent 

All Cigarette Trafficking Act of 2008, the amendments made by that Act, 

or in any other Federal statute shall be construed to preempt, supersede, 

or otherwise limit or restrict State laws prohibiting the delivery sale, or the 

shipment or delivery pursuant to a delivery sale, of cigarettes or other tobacco products to individual consumers or personal residences except that 

no State may enforce against a common carrier a law prohibiting the delivery of cigarettes or other tobacco products to individual consumers or personal residences without proof that the common carrier was not entitled to 

an exemption referred to in paragraph (2)(C) of this subsection. 

‘‘(5) STATE, LOCAL, AND TRIBAL ADDITIONS.— 

‘‘(A) IN GENERAL.—Any State, local, or tribal government shall provide 

the Attorney General of the United States with— 

‘‘(i) all known names, addresses, website addresses, and other primary contact information of any delivery seller that offers for sale or 

makes sales of cigarettes or smokeless tobacco in or into the State, locality, or tribal land but has failed to register with or make reports to 

the respective tax administrator, as required by this Act, or that has 

been found in a legal proceeding to have otherwise failed to comply 

with this Act; and 

‘‘(ii) a list of common carriers and other persons who make deliveries of cigarettes or smokeless tobacco in or into the State, locality, or 

tribal lands. 


wwoods2 on PRODPC68 with REPORTS
9 

‘‘(B) UPDATES.—Any government providing a list to the Attorney General of the United States under subparagraph (A) shall also provide updates 

and corrections every 4 months until such time as such government notifies 

the Attorney General of the United States in writing that such government 

no longer desires to submit such information to supplement the list maintained and distributed by the Attorney General of the United States under 

paragraph (1). 

‘‘(C) REMOVAL AFTER WITHDRAWAL.—Upon receiving written notice that 

a government no longer desires to submit information under subparagraph 

(A), the Attorney General of the United States shall remove from the list 

under paragraph (1) any persons that are on the list solely because of such 

government’s prior submissions of its list of noncomplying delivery sellers 

of cigarettes or smokeless tobacco or its subsequent updates and corrections. 

‘‘(6) DEADLINE TO INCORPORATE ADDITIONS.—The Attorney General of the 

United States shall— 

‘‘(A) include any delivery seller identified and submitted by a State, 

local, or tribal government under paragraph (5) in any list or update that 

is distributed or made available under paragraph (1) on or after the date 

that is 30 days after the date on which the information is received by the 

Attorney General of the United States; and 

‘‘(B) distribute any such list or update to any common carrier or other 

person who makes deliveries of cigarettes or smokeless tobacco that has 

been identified and submitted by another government, pursuant to paragraph (5). 

‘‘(7) NOTICE TO DELIVERY SELLERS.—Not later than 14 days prior to including any delivery seller on the initial list distributed or made available under 

paragraph (1), or on any subsequent list or update for the first time, the Attorney General of the United States shall make a reasonable attempt to send notice to the delivery seller by letter, electronic mail, or other means that the delivery seller is being placed on such list or update, with that notice citing the 

relevant provisions of this Act. 

‘‘(8) LIMITATIONS.— 

‘‘(A) IN GENERAL.—Any common carrier or other person making a delivery subject to this subsection shall not be required or otherwise obligated 

to— 

‘‘(i) determine whether any list distributed or made available under 

paragraph (1) is complete, accurate, or up-to-date; 

‘‘(ii) determine whether a person ordering a delivery is in compliance with this Act; or 

‘‘(iii) open or inspect, pursuant to this Act, any package being delivered to determine its contents. 

‘‘(B) ALTERNATE NAMES.—Any common carrier or other person making 

a delivery subject to this subsection shall not be required or otherwise obligated to make any inquiries or otherwise determine whether a person ordering a delivery is a delivery seller on the list under paragraph (1) who 

is using a different name or address in order to evade the related delivery 

restrictions, but shall not knowingly deliver any packages to consumers for 

any such delivery seller who the common carrier or other delivery service 

knows is a delivery seller who is on the list under paragraph (1) but is 

using a different name or address to evade the delivery restrictions of paragraph (2). 

‘‘(C) PENALTIES.—Any common carrier or person in the business of delivering packages on behalf of other persons shall not be subject to any penalty under section 14101(a) of title 49, United States Code, or any other 

provision of law for— 

‘‘(i) not making any specific delivery, or any deliveries at all, on behalf of any person on the list under paragraph (1); 

‘‘(ii) not, as a matter of regular practice and procedure, making any 

deliveries, or any deliveries in certain States, of any cigarettes or 

smokeless tobacco for any person or for any person not in the business 

of manufacturing, distributing, or selling cigarettes or smokeless tobacco; or 

‘‘(iii) delaying or not making a delivery for any person because of 

reasonable efforts to comply with this Act. 

‘‘(D) OTHER LIMITS.—Section 2 and subsections (a), (b), (c), and (d) of 

this section shall not be interpreted to impose any responsibilities, requirements, or liability on common carriers. 


wwoods2 on PRODPC68 with REPORTS
10 

‘‘(f) PRESUMPTION.—For purposes of this Act, a delivery sale shall be deemed to 

have occurred in the State and place where the buyer obtains personal possession 

of the cigarettes or smokeless tobacco, and a delivery pursuant to a delivery sale 

is deemed to have been initiated or ordered by the delivery seller.’’. 

(d) PENALTIES.—The Jenkins Act is amended by striking section 3 and inserting 

the following: 

‘‘SEC. 3. PENALTIES. 

‘‘(a) CRIMINAL PENALTIES.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), whoever violates 

any provision of this Act shall be guilty of a felony and shall be imprisoned not 

more than 3 years, fined under title 18, United States Code, or both. 

‘‘(2) EXCEPTIONS.— 

‘‘(A) GOVERNMENTS.—Paragraph (1) shall not apply to a State, local, or 

tribal government. 

‘‘(B) DELIVERY VIOLATIONS.—A common carrier or independent delivery 

service, or employee of a common carrier or independent delivery service, 

shall be subject to criminal penalties under paragraph (1) for a violation of 

section 2A(e) only if the violation is committed intentionally— 

‘‘(i) as consideration for the receipt of, or as consideration for a 

promise or agreement to pay, anything of pecuniary value; or 

‘‘(ii) for the purpose of assisting a delivery seller to violate, or otherwise evading compliance with, section 2A. 

‘‘(b) CIVIL PENALTIES.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (3), whoever violates 

any provision of this Act shall be subject to a civil penalty in an amount not 

to exceed— 

‘‘(A) in the case of a delivery seller, the greater of— 

‘‘(i) $5,000 in the case of the first violation, or $10,000 for any other 

violation; or 

‘‘(ii) for any violation, 2 percent of the gross sales of cigarettes or 

smokeless tobacco of such person during the 1-year period ending on 

the date of the violation. 

‘‘(B) in the case of a common carrier or other delivery service, $2,500 

in the case of a first violation, or $5,000 for any violation within 1 year of 

a prior violation. 

‘‘(2) RELATION TO OTHER PENALTIES.—A civil penalty under paragraph (1) 

for a violation of this Act shall be imposed in addition to any criminal penalty 

under subsection (a) and any other damages, equitable relief, or injunctive relief 

awarded by the court, including the payment of any unpaid taxes to the appropriate Federal, State, local, or tribal governments. 

‘‘(3) EXCEPTIONS.— 

‘‘(A) DELIVERY VIOLATIONS.—An employee of a common carrier or independent delivery service shall be subject to civil penalties under paragraph 

(1) for a violation of section 2A(e) only if the violation is committed intentionally— 

‘‘(i) as consideration for the receipt of, or as consideration for a 

promise or agreement to pay, anything of pecuniary value; or 

‘‘(ii) for the purpose of assisting a delivery seller to violate, or otherwise evading compliance with, section 2A. 

‘‘(B) OTHER LIMITATIONS.—No common carrier or independent delivery 

service shall be subject to civil penalties under paragraph (1) for a violation 

of section 2A(e) if— 

‘‘(i) the common carrier or independent delivery service has implemented and enforces effective policies and practices for complying with 

that section; or 

‘‘(ii) an employee of the common carrier or independent delivery 

service who physically receives and processes orders, picks up packages, processes packages, or makes deliveries, takes actions that are 

outside the scope of employment of the employee in the course of the 

violation, or that violate the implemented and enforced policies of the 

common carrier or independent delivery service described in clause (i).’’. 

(e) ENFORCEMENT.—The Jenkins Act is amended by striking section 4 and inserting the following: 

‘‘SEC. 4. ENFORCEMENT. 

‘‘(a) IN GENERAL.—The United States district courts shall have jurisdiction to 

prevent and restrain violations of this Act and to provide other appropriate injunctive or equitable relief, including money damages, for such violations. 


wwoods2 on PRODPC68 with REPORTS
11 

‘‘(b) AUTHORITY OF THE ATTORNEY GENERAL.—The Attorney General of the 

United States shall administer and enforce the provisions of this Act. 

‘‘(c) STATE, LOCAL, AND TRIBAL ENFORCEMENT.— ‘‘(1) IN GENERAL.— ‘‘(A) STANDING.—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 a United States district court 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) SOVEREIGN IMMUNITY.—Nothing in this Act shall be deemed to abrogate or constitute a waiver of any sovereign immunity of a State or local 

government or Indian tribe against any unconsented lawsuit under this Act, 

or otherwise to restrict, expand, or modify any sovereign immunity of a 

State or local government or Indian tribe. 

‘‘(2) PROVISION OF INFORMATION.—A State, through its attorney general, or 

a local government or Indian tribe that levies a tax subject to section 2A(a)(3), 

through its chief law enforcement officer (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 States attorney, who shall take appropriate actions to enforce the provisions of this Act. 

‘‘(3) USE OF PENALTIES COLLECTED.— 

‘‘(A) IN GENERAL.—There is established a separate account in the 

Treasury known as the ‘PACT Anti-Trafficking Fund’. Notwithstanding any 

other provision of law and subject to subparagraph (B), an amount equal 

to 50 percent of any criminal and civil penalties collected by the United 

States Government in enforcing the provisions of this Act shall be transferred into the PACT Anti-Trafficking Fund and shall be available to the 

Attorney General of the United States for purposes of enforcing the provisions of this Act and other laws relating to contraband tobacco products. 

‘‘(B) ALLOCATION OF FUNDS.—Of the amount available to the Attorney 

General under subparagraph (A), not less than 50 percent shall be made 

available only to the agencies and offices within the Department of Justice 

that were responsible for the enforcement actions in which the penalties 

concerned were imposed or for any underlying investigations. 

‘‘(4) NONEXCLUSIVITY OF REMEDY.— 

‘‘(A) IN GENERAL.—The remedies available under this section and section 3 are in addition to any other remedies available under Federal, State, 

local, tribal, or other law. 

‘‘(B) STATE COURT PROCEEDINGS.—Nothing in this Act shall be construed to expand, restrict, or otherwise modify any right of an authorized 

State official to proceed in State court, or take other enforcement actions, 

on the basis of an alleged violation of State or other law. 

‘‘(C) TRIBAL COURT PROCEEDINGS.—Nothing in this Act shall be construed to expand, restrict, or otherwise modify any right of an authorized 

Indian tribal government official to proceed in tribal court, or take other enforcement actions, on the basis of an alleged violation of tribal law. 

‘‘(D) LOCAL GOVERNMENT ENFORCEMENT.—Nothing in this Act shall be 

construed to expand, restrict, or otherwise modify any right of an authorized local government official to proceed in State court, or take other enforcement actions, on the basis of an alleged violation of local or other law. 

‘‘(d) PERSONS DEALING IN TOBACCO PRODUCTS.—Any person who holds a permit 

under section 5712 of the Internal Revenue Code of 1986 (regarding permitting of 

manufacturers and importers of tobacco products and export warehouse proprietors) 

may bring an action in a United States district court 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) NOTICE.— 

‘‘(1) PERSONS DEALING IN TOBACCO PRODUCTS.—Any person who commences 

a civil action under subsection (d) shall inform the Attorney General of the 

United States of the action. 

‘‘(2) STATE, LOCAL, AND TRIBAL ACTIONS.—It is the sense of Congress that 

the attorney general of any State, or chief law enforcement officer of any locality 

or tribe, that commences a civil action under this section should inform the Attorney General of the United States of the action. 


wwoods2 on PRODPC68 with REPORTS
12 

‘‘(f) PUBLIC NOTICE.— ‘‘(1) IN GENERAL.—The Attorney General of the United States shall make 

available to the public, by posting such information on the Internet and by 

other appropriate means, information regarding all enforcement actions undertaken by the Attorney General or United States attorneys, or reported to the 

Attorney General, under this section, including information regarding the resolution of such actions and how the Attorney General and the United States attorney have responded to referrals of evidence of violations pursuant to subsection (c)(2). 

‘‘(2) REPORTS TO CONGRESS.—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. 

(a) IN GENERAL.—Chapter 83 of title 18, United States Code, is amended by inserting after section 1716D the following: 

‘‘§ 1716E. Tobacco products as nonmailable 

‘‘(a) PROHIBITION.—All cigarettes (as that term is defined in section 1 of the Act 

of October 19, 1949, commonly referred to as the Jenkins Act) and smokeless tobacco (as that term is defined in section 1 of the Act of October 19, 1949, commonly 

referred to as the Jenkins Act) are nonmailable and shall not be deposited in or carried through the mails. The United States Postal Service shall not accept for delivery or transmit through the mails any package that it knows or has reasonable 

cause to believe contains any cigarettes or smokeless tobacco made nonmailable by 

this subsection. For the purposes of subsection (a) reasonable cause includes— 

‘‘(1) a statement on a publicly available website, or an advertisement, by 

any person that such person will mail matter which is nonmailable under this 

section in return for payment; and 

‘‘(2) the placement of the person on the list created under section 2A(e) of 

the Jenkins Act. 

‘‘(b) EXCEPTIONS.—This section shall not apply to the following: 

‘‘(1) CIGARS.—Cigars (as that term is defined in section 5702(a) of the Internal Revenue Code of 1986). 

‘‘(2) GEOGRAPHIC EXCEPTION.—Mailings within the State of Alaska or within 

the State of Hawaii. 

‘‘(3) BUSINESS PURPOSES.—Tobacco products mailed only for business purposes between legally operating businesses that have all applicable State and 

Federal Government licenses or permits and are engaged in tobacco product 

manufacturing, distribution, wholesale, export, import, testing, investigation, or 

research, or for regulatory purposes between any such businesses and State or 

Federal Government regulatory agencies, if the Postal Service issues a final 

rule establishing the standards and requirements that apply to all such mailings and which includes the following: 

‘‘(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the mails as authorized by this 

paragraph is a business or government agency permitted to make such 

mailings pursuant to this section and the related final rule. 

‘‘(B) The Postal Service shall ensure that any recipient of an otherwise 

nonmailable tobacco product sent through the mails pursuant to this paragraph is a business or government agency that may lawfully receive such 

product. 

‘‘(C) The mailings shall be sent through the Postal Service’s systems 

that provide for the tracking and confirmation of the delivery. 

‘‘(D) The identities of the business or government entity submitting the 

mailing containing otherwise nonmailable tobacco products for delivery and 

the business or government entity receiving the mailing shall be clearly set 

forth on the package and such information shall be kept in Postal Service 

records and made available to the Postal Service, the Attorney General, and 

to persons eligible to bring enforcement actions pursuant to section 3(d) of 

the Prevent All Cigarette Trafficking Act of 2008 for a period of at least 

three years. 

‘‘(E) The mailings shall be marked with a Postal Service label or marking that makes it clear to Postal Service employees that it is a permitted 

mailing of otherwise nonmailable tobacco products that may be delivered 

only to a permitted government agency or business and may not be delivered to any residence or individual person. 

‘‘(F) The mailings shall be delivered only to verified adult employees of 

the recipient businesses or government agencies who shall be required to 

sign for the mailing. 


wwoods2 on PRODPC68 with REPORTS
13 

‘‘(4) CERTAIN INDIVIDUALS.—Tobacco products mailed by individual adult 

people for noncommercial, nonbusiness and non-money making purposes, including the return of a damaged or unacceptable tobacco product to its manufacturer, if the Postal Service issues a final rule establishing the standards and 

requirements that applies to all such mailings and which includes the following: 

‘‘(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the mails as authorized by this section is the individual person identified on the return address label of the 

package and is an adult. 

‘‘(B) For mailings to individual persons the Postal Service shall require 

the person submitting the otherwise nonmailable tobacco product into the 

mails as authorized by this subsection to affirm that the recipient is an 

adult. 

‘‘(C) The package shall not weigh more than 10 ounces. 

‘‘(D) The mailings shall be sent through the Postal Service’s systems 

that provide for the tracking and confirmation of the delivery. 

‘‘(E) No package shall be delivered or placed in the possession of any 

individual person who is not a verified adult. For mailings to individual 

persons, the Postal Service shall deliver the package only to the verified 

adult recipient at the recipient address or transfer it for delivery to an Air/ 

Army Postal Office (APO) or Fleet Postal Office (FPO) number designated 

in the recipient address. 

‘‘(F) No person shall initiate more than ten such mailings in any thirtyday period. 

‘‘(5) EXCEPTION FOR MAILINGS FOR CONSUMER TESTING BY MANUFACTURERS.—Nothing in this Act shall preclude a legally operating cigarette manufacturer operating on its own or through its legally authorized agent from using 

the Postal Service to mail cigarettes to verified adult smokers solely for consumer testing purposes, provided that— 

‘‘(A) the cigarette manufacturer has a federal permit, in good standing, 

pursuant to section 5713 of the Internal Revenue Code of 1986; 

‘‘(B) any package of cigarettes mailed pursuant to this exception shall 

contain no more than one carton of cigarettes (200 cigarettes); 

‘‘(C) no individual shall receive more than 1 package of cigarettes per 

manufacturer pursuant to this exception in any 30-day period; 

‘‘(D) all taxes as required by law on the cigarettes levied by the State 

and locality of delivery have been paid to the State and locality prior to delivery, and tax stamps or other tax-payment indicia have been affixed to the 

cigarettes as required by law; 

‘‘(E) the recipient has not made any payments of any kind in exchange 

for receiving the cigarettes; 

‘‘(F) the mailings are made pursuant to a final rule that the Postal 

Service shall issue to establish standards and requirements that apply to 

all such mailings and that include the following: 

‘‘(i) The Postal Service shall verify that any person submitting a tobacco product into the mails pursuant to this paragraph is a manufacturer or an agent legally authorized by the manufacturer to submit the 

tobacco product into the mails on the manufacturer’s behalf permitted 

to make such mailings pursuant to this paragraph. 

‘‘(ii) The Postal Service shall require the manufacturer submitting 

the cigarettes into the mails pursuant to this paragraph to affirm that 

the manufacturer or its legally authorized agent has verified that the 

recipient is an adult established smoker who has not made any payment for the cigarettes, has formally stated in writing that he or she 

wishes to receive such mailings, and has not withdrawn that agreement despite being offered the opportunity to do so by the manufacturer or its legally authorized agent at least once in every 3-month period. 

‘‘(iii) The Postal Service shall require the manufacturer or its legally authorized agent submitting the cigarettes into the mails pursuant to this paragraph to affirm that the package contains no more than 

a single carton (200) cigarettes on which all taxes levied on the cigarettes by the State and locality of delivery have been paid and all related State tax stamps or other tax-payment indicia have been applied. 

‘‘(iv) The mailings shall be sent through the Postal Service’s systems that provide for the tracking and confirmation of the delivery and 

all related records shall be kept in Postal Service records and made 

available to persons enforcing this section for a period of at least 3 

years. 


wwoods2 on PRODPC68 with REPORTS
14 

‘‘(v) The mailings shall be marked with a Postal Service label or 

marking that makes it clear to Postal Service employees that it is a 

permitted mailing of otherwise nonmailable tobacco products that may 

be delivered only to the named recipient after verifying that the recipient is an adult. 

‘‘(vi) The Postal Service shall deliver the mailing only to the named 

recipient and only after verifying that the recipient is an adult. 

‘‘(6) DEFINITION OF ADULT.—For the purposes of paragraphs (3), (4), and (5), 

the term ‘adult’ means an individual person of at least 21 years of age. 

‘‘(c) SEIZURE AND FORFEITURE.—Any cigarettes or smokeless tobacco made nonmailable by this subsection that are deposited in the mails shall be subject to seizure and forfeiture, pursuant to the procedures set forth in chapter 46 of this title. 

Any tobacco products so seized and forfeited shall either be destroyed or retained 

by Government officials for the detection or prosecution of crimes or related investigations and then destroyed. 

‘‘(d) ADDITIONAL PENALTIES.—In addition to any other fines and penalties imposed by this chapter for violations of this section, any person violating this section 

shall be subject to an additional civil penalty in the amount of 10 times the retail 

value of the nonmailable cigarettes or smokeless tobacco, including all Federal, 

State, and local taxes. 

‘‘(e) CRIMINAL PENALTY.—Whoever knowingly deposits for mailing or delivery, 

or knowingly causes to be delivered by mail, according to the direction thereon, or 

at any place at which it is directed to be delivered by the person to whom it is addressed, anything that this section declares to be nonmailable matter shall be fined 

under this title, imprisoned not more than 1 year, or both. 

‘‘(f) DEFINITION.—As used in this section, the term ‘State’ has the meaning given 

that term in section 1716(k). 

‘‘(g) USE OF PENALTIES.—There is established a separate account in the Treasury of the United States, to be known as the ‘PACT Postal Service Fund’. Notwithstanding any other provision of law, an amount equal to 50 percent of any criminal 

and civil fines or monetary penalties collected by the United States Government in 

enforcing the provisions of this subsection shall be transferred into the PACT Postal 

Service Fund and shall be available to the Postmaster General for the purpose of 

enforcing the provisions of this subsection. 

‘‘(h) COORDINATION OF EFFORTS.—In the enforcement of this section, the Postal 

Service shall cooperate and coordinate its efforts with related enforcement activities 

of any other Federal agency or of any State, local, or tribal government, whenever 

appropriate.’’. 

(b) ACTIONS BY STATE, LOCAL OR TRIBAL GOVERNMENTS RELATING TO CERTAIN

TOBACCO PRODUCTS.— 

(1) A State, through its attorney general (or a designee thereof), or a local 

government or Indian tribe that levies an excise tax on tobacco products, 

through its chief law enforcement officer (or a designee thereof), may in a civil 

action in a United States district court obtain appropriate relief with respect to 

a violation of section 1716E of title 18, United States Code. Appropriate relief 

includes injunctive and equitable relief and damages equal to the amount of unpaid taxes on tobacco products mailed in violation of that section to addressees 

in that State. 

(2) Nothing in this section shall be deemed to abrogate or constitute a waiver of any sovereign immunity of a State or local government or Indian tribe 

against any unconsented lawsuit under paragraph (1), or otherwise to restrict, 

expand, or modify any sovereign immunity of a State or local government or Indian tribe. 

(3) Nothing 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) A State, through its attorney general, or a local government or Indian 

tribe that levies an excise tax on tobacco products, through its chief law enforcement officer (or a designee thereof), may provide evidence of a violation of paragraph (1) for commercial, business or money-making purposes by any person not 

subject to State, local, or tribal government enforcement actions for violations 

of paragraph (1) to the Attorney General of the United States or a United 

States attorney, who shall take appropriate actions to enforce the provisions of 

this subsection. 

(5) The remedies available under this subsection are in addition to any 

other remedies available under Federal, State, local, tribal, or other law. Nothing in this subsection shall be construed to expand, restrict, or otherwise modify 

any right of an authorized State, local, or tribal government official to proceed 


wwoods2 on PRODPC68 with REPORTS
15 

in a State, tribal, or other appropriate court, or take other enforcement actions, 

on the basis of an alleged violation of State, local, tribal, or other law. 

(c) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 83 

of title 18 is amended by adding after the item relating to section 1716D the following new item: 

‘‘1716E. Tobacco products as nonmailable.’’. 

SEC. 4. 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 statute. 

(b) JURISDICTION TO PREVENT AND RESTRAIN VIOLATIONS.— 

(1) IN GENERAL.—The United States district courts shall have jurisdiction 

to prevent and restrain violations of subsection (a) in accordance with this subsection. 

(2) INITIATION OF ACTION.—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) ATTORNEY FEES.—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) NONEXCLUSIVITY OF REMEDIES.—The remedy available under paragraph 

(2) is in addition to any other remedies available under Federal, State, or other 

law. No provision of this Act or any other Federal law shall be held or construed 

to prohibit or preempt the Master Settlement Agreement, the Model Statute (as 

defined in the Master Settlement Agreement), any legislation amending or complementary to the Model Statute in effect as of June 1, 2006, or any legislation 

substantially similar to such existing, amending, or complementary legislation 

hereinafter enacted. 

(5) OTHER ENFORCEMENT ACTIONS.—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) AUTHORITY OF THE ATTORNEY GENERAL.—The Attorney General of the 

United States may administer and enforce subsection (a). 

(c) DEFINITIONS.—In this section the following definitions apply: 

(1) DELIVERY SALE.—The term ‘‘delivery sale’’ means any sale of cigarettes 

or smokeless tobacco to a consumer if— 

(A) the consumer submits the order for 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 to the buyer by 

common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the buyer when the 

buyer obtains possession of the cigarettes or smokeless tobacco. 

(2) IMPORTER.—The term ‘‘importer’’ means each of the following: 

(A) SHIPPING OR CONSIGNING.—Any person in the United States to 

whom nontaxpaid tobacco products manufactured in a foreign country, 

Puerto Rico, the Virgin Islands, or a possession of the United States are 

shipped or consigned. 

(B) MANUFACTURING WAREHOUSES.—Any person who removes cigars or 

cigarettes for sale or consumption in the United States from a customsbonded manufacturing warehouse. 

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

(3) MASTER SETTLEMENT AGREEMENT.—The term ‘‘Master Settlement Agreement’’ means the agreement executed November 23, 1998, between the attorneys general of 46 States, the District of Columbia, the Commonwealth of Puerto Rico, and 4 territories of the United States and certain tobacco manufacturers. 

(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. 


wwoods2 on PRODPC68 with REPORTS
16 

(5) TOBACCO PRODUCT MANUFACTURER.—The term ‘‘Tobacco Product Manufacturer’’ has the meaning given that term in section II(uu) of the Master Settlement Agreement. 

SEC. 5. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES OF 

RECORDS OF CERTAIN CIGARETTE AND SMOKELESS TOBACCO SELLERS; CIVIL 

PENALTY. 

Section 2343(c) of title 18, United States Code, is amended to read as follows: 

‘‘(c)(1) Any officer of the Bureau of Alcohol, Tobacco, Firearms, and Explosives 

may, during normal business hours, enter the premises of any person described in 

subsection (a) or (b) for the purposes of inspecting— 

‘‘(A) any records or information required to be maintained by such person 

under the provisions of law referred to in this chapter; or 

‘‘(B) any cigarettes or smokeless tobacco kept or stored by such person at 

such premises. 

‘‘(2) The district courts of the United States shall have the authority in a civil 

action under this subsection to compel inspections authorized by paragraph (1). 

‘‘(3) Whoever violates paragraph (1), or an order issued under paragraph (2), 

shall be subject to a civil penalty in an amount not to exceed $10,000 for each violation.’’. 

SEC. 6. 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 section 4(e) of 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; 

(2) any State laws that authorize or otherwise pertain to any such intergovernmental arrangements or create special rules or procedures for the collection 

of State, local, or tribal taxes on cigarettes or smokeless tobacco sold in Indian 

country; 

(3) any limitations under Federal or State law, including Federal common 

law and treaties, on State, local, and tribal tax and regulatory authority with 

respect to the sale, use, or distribution of cigarettes and smokeless tobacco by 

or to Indian tribes, tribal members, tribal enterprises, or in Indian country; 

(4) any Federal law, including Federal common law and treaties, regarding 

State jurisdiction, or lack thereof, over any tribe, tribal members, tribal enterprises, tribal reservations, or other lands held by the United States in trust for 

one or more Indian tribes; and 

(5) any State or local government authority to bring enforcement actions 

against persons located in Indian country. 

(b) COORDINATION OF LAW ENFORCEMENT.—Nothing in this Act or the amendments made by this Act shall be construed to inhibit or otherwise affect any coordinated law enforcement effort by 1 or more States or other jurisdictions, including 

Indian tribes, through interstate compact or otherwise, that— 

(1) provides for the administration of tobacco product laws or laws pertaining to interstate sales or other sales of tobacco products; 

(2) provides for the seizure of tobacco products or other property related to 

a violation of such laws; or 

(3) establishes cooperative programs for the administration of such laws. 

(c) TREATMENT OF STATE AND LOCAL GOVERNMENTS.—Nothing in this Act or the 

amendments made by this Act is 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. 7. ENHANCED CONTRABAND TOBACCO ENFORCEMENT. 

(a) REQUIREMENTS.—The Director of the Bureau of Alcohol, Tobacco, Firearms 

and Explosives shall— 

(1) create 6 regional contraband tobacco trafficking teams over a 3-year period in New York City, Washington DC, Detroit, Los Angeles, Seattle, and 

Miami, 


wwoods2 on PRODPC68 with REPORTS
17 

(2) create a new Tobacco Intelligence Center to oversee investigations and 

monitor and coordinate ongoing investigations and to serve as a nerve center 

for all on going tobacco diversion investigations in the United States, and where 

applicable with law enforcement organizations around the world within the Bureau of Alcohol, Tobacco, Firearms, and Explosives, 

(3) establish covert national warehouse for undercover operations, and 

(4) create a computer database that will track and analyze information 

from retail sellers of tobacco products that sell through the internet, mail order 

or make other non face to face sales. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated 

to carry out subsection (a) $8,500,000 for each of 5 fiscal years. 

SEC. 8. EFFECTIVE DATE. 

(a) IN GENERAL.—Except as provided in subsection (b), this Act shall take effect 

on the date that is 90 days after the date of enactment of this Act. 

(b) BATFE AUTHORITY.—Section 5 shall take effect on the date of enactment of 

this Act. 

SEC. 9. SEVERABILITY. 

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

thereof to any person or circumstance is held invalid, the remainder of the Act and 

the application of it to any other person or circumstance shall not be affected thereby. 

SEC. 10. SENSE OF CONGRESS CONCERNING THE PRECEDENTIAL EFFECT OF THIS ACT. 

It is the sense of Congress that unique harms are associated with online cigarette sales, including problems with verifying the ages of consumers in the digital 

market and the long-term health problems associated with the use of certain tobacco 

products. This Act was enacted recognizing the longstanding interest of Congress in 

urging compliance with States’ laws regulating remote sales of certain tobacco products to citizens of those States, including the passage of the Jenkins Act over 50 

years ago, which established reporting requirements for out-of-State companies that 

sell certain tobacco products to citizens of the taxing States, and which gave authority to the Department of Justice and the Bureau of Alcohol, Tobacco, Firearms, and 

Explosives to enforce the Jenkins Act. In light of the unique harms and circumstances surrounding the online sale of certain tobacco products, this Act is intended to help collect cigarette excise taxes, to stop tobacco sales to underage youth, 

and to help the States enforce their laws that target the online sales of certain tobacco products only. This Act is in no way meant to create a precedent regarding 

the collection of State sales or use taxes by, or the validity of efforts to impose other 

types of taxes on, out-of-State entities that do not have a physical presence within 

the taxing State. 

PURPOSE AND SUMMARY

H.R. 1676, the Prevent All Cigarette Trafficking Act of 2009 

(‘‘PACT Act’’), will help prevent tobacco smuggling and ensure the 

collection of tobacco taxes. This legislation will combat unlawful 

cigarette trafficking by updating existing anti-trafficking laws and 

introducing new tools to combat illegal remote sales, such as those 

conducted over the Internet. 

BACKGROUND AND NEED FOR THE LEGISLATION

OVERVIEW OF THE PROBLEM

Every year, tens of billions of cigarettes flow into the lucrative 

black market for tobacco products and are trafficked throughout 

the world. This smuggling seriously harms public health by making 

cheaper tax-free cigarettes available, including to young people, 

and undermining tobacco tax policies that have been an important 

funding source for public health programs. In addition, cigarette 


wwoods2 on PRODPC68 with REPORTS
18 

1 Campaign for Tobacco-Free Kids, International Resource Center, available at http:// 

tobaccofreecenter.org. 2See Hearing Before the Subcomm. on Crime, Terrorism, and Homeland Security of the H. 

Comm. on the Judiciary, 110th Cong. (2008) (testimony of William Hoover, Assistant Director 

for Field Operations, Bureau of Alcohol, Tobacco, Firearms and Explosives) 3 Campaign for Tobacco-Free Kids, International Resource Center, available at http:// 

tobaccofreecenter.org. 4See Hearing Before the Subcomm. on Crime, Terrorism, and Homeland Security of the H. 

Comm. on the Judiciary, 110th Cong. (2008) (testimony of William Hoover, Assistant Director 

for Field Operations, Bureau of Alcohol, Tobacco, Firearms and Explosives). 5 Id. 

6See H.R. 1676, the Prevent All Cigarette Trafficking Act of 2009 S. Rep. No. 110–153 (2007). 

7 15 U.S.C. § 375. 

8 18 U.S.C. § 2342. 

9The threshold was originally 60,000 in a transaction, but was amended to 10,000 in 2006. 

smuggling has played an increasing role in financing criminal and 

terrorist groups.1

Organized tobacco smuggling generally involves the diversion of 

large consignments of cigarettes onto the black market while the 

product is in transit. It is estimated that the illicit worldwide trade 

in cigarettes accounts for approximately 11 percent of all cigarettes 

sold.2 By diverting cigarettes while they are in the wholesale distribution chain, large-scale smugglers generally avoid all taxes.3

Estimates of worldwide tax loss to governments are between $40 

billion and $50 billion per year.4 Within the United States, the tax 

losses to States from cigarette trafficking were estimated at $1 billion for 2005—New York State alone loses an estimated $500 million annually.5

Unfortunately, tobacco smuggling appears to be an increasing 

problem in the United States. The U.S. Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (‘‘ATF’’) states that the number of ATF 

tobacco smuggling investigations has increased from ten in 1998 to 

425 in fiscal year 2005.6

INADEQUACY OF CURRENT LAW FOR COMBATING UNLAWFUL

CIGARETTE TRAFFICKING

Existing Federal statutes applicable to the prosecution of tobacco 

smugglers include the Jenkins Act 7 and the Contraband Cigarette 

Trafficking Act.8 The Jenkins Act prohibits anyone from selling 

and shipping cigarettes across a State line to a buyer, other than 

to a licensed distributor, without reporting the sale to tax officials 

in the buyer’s State. The Contraband Cigarette Trafficking Act prohibits anyone from knowingly shipping, transporting, receiving, 

possessing, selling, distributing, or purchasing contraband cigarettes or contraband smokeless tobacco. It also prohibits any person 

from knowingly making any false statement with respect to information required to be kept in the records of anyone who ships, 

sells, or distributes in excess of 10,000 cigarettes in any single 

transaction.9

Unfortunately, these existing laws are inadequate in the Internet 

Age. The Internet makes it possible for today’s illegal tobacco vendors to be mobile and invisible, and to operate with near impunity. 

Even when they can be identified and pursued, they can often 

quickly shut down operations and reappear under a new name, on 

a new website. Consequently, Internet-based unlawful tobacco trafVerDate Nov 24 2008 01:29 May 19, 2009 Jkt 079006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6601 E:\HR\OC\HR117.XXX HR117

wwoods2 on PRODPC68 with REPORTS
19 

10 Internet Cigarette Sales: Limited Compliance and Enforcement of the Jenkins Act Result 

in Loss of State Tax Revenue, U.S. Government Accountability Office, May 1, 2003, at 

<http://www.gao.gov/docdblite/details.php?rptno=GAO-03-714T> 

ficking has resulted in an estimated loss of billions of dollars in tax 

revenue.10

THE PACT ACT

Illegal remote sellers of cigarettes and smokeless tobacco have 

been very successful at eluding traditional enforcement measures, 

by making their cigarette and smokeless tobacco deliveries by mail. 

To combat this problem, the PACT Act makes cigarettes and 

smokeless tobacco a non-mailable matter through the U.S. Postal 

Service. Moreover, under the bill, Internet sellers are required to 

verify the purchaser’s age and identity through easily accessible 

databases, and distributors are also required under the Act to use 

a method of delivery that requires the person accepting delivery to 

verify their age and to sign for delivery. 

HEARINGS

No hearings were held on this legislation during the 111th Congress. However in the 110th Congress, the Committee’s Subcommittee on Crime, Terrorism, and Homeland Security held 1 day 

of hearings on similar legislation, H.R. 4081, the ‘‘Prevent All Cigarette Trafficking Act of 2007,’’ and on a related bill, H.R. 5689, the 

‘‘Smuggled Tobacco Prevention Act of 2008,’’ on May 1, 2008. Testimony was received from Representative Anthony Weiner (D-NY); 

Representative Dale E. Kildee (D-MI); Arian Melendez, Chairman, 

Reno-Sparks Indian Colony; Matthew L. Myers, President, Campaign for Tobacco-Free Kids; Steve Rosenthal, New York State Association of Wholesale Marketers; John Colledge, Independent Consultant; and David Lapp, Chief Counsel, Tobacco Enforcement 

Unit, Office of the Attorney General of Maryland. 

COMMITTEE CONSIDERATION

On April 27, 2009, the Committee met in open session and ordered the bill, H.R. 1676, favorably reported, as amended, by voice 

vote, a quorum being present. 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during the Committee’s consideration of H.R. 

1676. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 


wwoods2 on PRODPC68 with REPORTS
20 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 1676, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 18, 2009. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1676, the ‘‘Prevent All 

Cigarette Trafficking Act of 2009.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Mark Grabowicz, who 

can be reached at 226-2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

H.R. 1676—Prevent All Cigarette Trafficking Act of 2009. 

SUMMARY

H.R. 1676 would require individuals and businesses that make 

interstate sales of cigarettes or smokeless tobacco to comply with 

State tax laws and register with the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (ATFE). The bill would authorize the appropriation of $8.5 million annually over five fiscal years for ATFE 

to improve the enforcement of laws governing the sale of tobacco. 

In addition, the bill would permit ATFE to inspect the premises of 

anyone who distributes or sells more than 10,000 cigarettes or 500 

cans or packages of smokeless tobacco in a month via telephone, 

the mail, or the Internet. H.R. 1676 also would increase penalties, 

including criminal and civil fines, for violations of the laws relating 

to taxation of cigarettes and smokeless tobacco. Finally, the bill 

would prohibit the use of the United States Postal Service (USPS) 

to mail certain tobacco products. 

CBO estimates that implementing H.R. 1676 would cost about 

$160 million over the 2010–2014 period, assuming appropriation of 

the necessary amounts. Enacting the bill could affect direct spending and receipts, but we estimate that any such effects would not 

be significant. 


wwoods2 on PRODPC68 with REPORTS
21 

H.R. 1676 would impose both intergovernmental and private-sector mandates, as defined in the Unfunded Mandates Reform Act 

(UMRA), on certain tobacco sellers, common carriers, and individuals. The bill also would preempt certain State, local, and tribal 

laws regulating the delivery of tobacco products. CBO expects that 

the direct costs to comply with those mandates would not be significant and would not exceed the annual thresholds established in 

UMRA for intergovernmental or private-sector mandates ($69 million and $139 million respectively, in 2009, adjusted annually for 

inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 1676 is shown in the following table. The costs of this legislation fall within budget function 750 (administration of justice). In addition to the costs shown 

below, enacting H.R. 1676 could affect direct spending and receipts. 

However, we estimate that any such effects would be insignificant. 

By Fiscal Year, in Millions of Dollars 

2010 2011 2012 2013 2014 2010– 

2014 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Enforcement Activities 

Authorization Level 9 9 9 9 9 43 

Estimated Outlays 7 9 9 9 9 41 

Inspections 

Estimated Authorization Level 18 25 26 27 28 124 

Estimated Outlays 15 24 26 27 28 120 

Total 

Estimated Authorization Level 27 34 35 36 37 167 

Estimated Outlays 22 33 35 36 37 161 

Note: Components may not sum to totals because of rounding. 

BASIS OF ESTIMATE

CBO estimates that implementing H.R. 1676 would cost about 

$160 million over the 2010–2014 period. For this estimate, CBO assumes that the authorized and necessary amounts will be appropriated near the start of each fiscal year and that spending will follow historical patterns for similar activities. In addition, the bill 

would have an insignificant effect on direct spending and receipts. 

Spending Subject to Appropriations 

Enforcement Activities. H.R. 1676 would authorize the appropriation of $8.5 million annually over five fiscal years for ATFE to 

improve enforcement of the laws governing the sale of tobacco. 

(CBO assumes that the bill would authorize this funding over the 

2010–2014 period.) The agency would be required to use those 

funds to form regional enforcement teams, establish a tobacco intelligence center and a covert national warehouse (for undercover operations), and create a database to track and analyze certain retail 

sales of tobacco products. 

Inspections. H.R. 1676 would permit ATFE to inspect the premises of businesses that distribute or sell more than 10,000 cigarettes or 500 cans or packages of smokeless tobacco each month via 


wwoods2 on PRODPC68 with REPORTS
22 

telephone, the mail, or the Internet. Under the bill, the agency expects that it would need to conduct inspections of about 7,500 businesses each year. ATFE anticipates that it would need to hire 

about 130 new employees, including inspectors, agents, auditors, 

and support personnel, to carry out inspections and any subsequent 

investigations into illegal activity. Once fully phased in, CBO estimates that the costs of additional employees under the bill would 

reach $25 million annually, including salaries, benefits, training, 

equipment, upgraded computer systems, and support costs. For this 

estimate, we assume that the new positions would be fully staffed 

by fiscal year 2011, and costs would be adjusted for anticipated future inflation. 

Revenues and Direct Spending 

Enacting H.R. 1676 could increase collections of civil and criminal fines for violations of the bill’s provisions relating to the sale 

of cigarettes and smokeless tobacco. CBO expects that any additional collections would not be significant because of the relatively 

small number of additional cases likely to be affected. Criminal and 

civil fines are recorded in the budget as revenues. 

Under the bill’s provisions, some of those fines would not be 

available for spending, some would be deposited in the Crime Victims Fund and later spent, and others would be deposited in new 

funds established by the bill and later spent. (Deposits into one of 

those new funds would be spent by the U.S. Postal Service and 

thus would be classified as off-budget.) CBO estimates that spending of fines collected under H.R. 1676 would not be significant. 

H.R. 1676 would prohibit the use of the Postal Service to mail 

most tobacco products. This could affect revenue and spending by 

the USPS, depending on how the agency decides to enforce this 

provision and regulate the exceptions permitted by the bill. The 

Postal Service attempts to enforce current laws on nonmailable 

matter but inspects a very small fraction of the 200 billion pieces 

of mail it delivers each year. CBO expects that H.R. 1676 would 

not lead to a significant increase in those inspections and thus implementing the bill would not have a significant effect on net USPS 

spending. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 1676 contains both intergovernmental and private-sector 

mandates, as defined in UMRA by imposing new requirements on 

certain sales of tobacco products by private and tribal entities and 

preempting certain State, local, and tribal laws. CBO estimates 

that the costs of complying with the requirements in the bill would 

not exceed the annual thresholds established in UMRA for intergovernmental or private-sector mandates ($69 million and $139 

million, respectively, in 2009, adjusted annually for inflation). 

Requirements on Delivery Sales of Tobacco 

H.R. 1676 would require delivery sellers of tobacco products to 

comply with certain requirements regarding reporting, shipping, 

record keeping, and collecting taxes. Delivery sellers include those 

businesses that sell or deliver tobacco products purchased online, 

by catalog, or by phone. The bill also would prohibit importers and 

interstate sellers of tobacco from selling cigarettes produced by 


wwoods2 on PRODPC68 with REPORTS
23 

companies that are not in full compliance with the terms of the tobacco settlement agreement between States and tobacco manufacturers and sellers. Those requirements would be both intergovernmental and private-sector mandates because tobacco delivery sales 

are conducted by both private-sector and tribal entities. 

H.R. 1676 also would require common carriers and delivery services to keep records for five years of any business relating to a delivery that has been interrupted because the carrier or service determines or has reason to believe that the person ordering the delivery is in violation of this act. In addition, the bill would affect 

individuals who currently send or receive tobacco products in the 

mail by prohibiting the mailing of such tobacco products in the continental United States through the U.S. 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. 

According to ATFE and industry sources, most of the entities affected by the requirements already perform many of the duties required by the bill, and CBO estimates that the additional requirements would impose minimal additional costs. 

Preemption of State, Local, and Tribal Laws 

The bill also would preempt State, local, and tribal laws that require common carriers and delivery services to verify the age and 

require the signature of the individual accepting a tobacco delivery 

or place other restrictions on those services. CBO expects that the 

preemption would impose minimal costs on State, local, or tribal 

governments. 

Other Impacts on State, Local, and Tribal Governments 

H.R. 1676 would benefit State, local, and tribal governments by 

expanding their authority to collect cigarette taxes through the 

Jenkins Act. This expanded authority would allow State attorneys 

general or the chief law enforcement official of a local or tribal government to file charges in U.S. district courts against sellers or 

deliverers who violate this law. The bill also would preserve existing agreements between States and tribal governments regarding 

cigarette taxes. 

ESTIMATE PREPARED BY: 

Federal Costs: Mark Grabowicz 

Impact on State, Local, and Tribal Governments: Melissa Merrell 

Impact on the Private Sector: Jacob Kuipers 

ESTIMATE APPROVED BY: 

Theresa Gullo 

Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states, pursuant to clause 3(c)(4) of rule XIII of 

the Rules of the House of Representatives, that H.R. 1676 strengthens and updates existing cigarette trafficking laws to ensure the 

collection of tobacco taxes, and introduces new law enforcement 


wwoods2 on PRODPC68 with REPORTS
24 

tools to combat illegal remote sales of cigarettes, such as those conducted over the Internet. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8, clause 3 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 1676 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of Rule XXI. 

SECTION-BY-SECTION ANALYSIS

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short Title; Findings; Purposes. Section 1(a) sets forth the 

short title of the bill as the ‘‘Prevent All Cigarette Trafficking Act 

of 2009’’ or ‘‘PACT Act.’’ 

Section 1(b) sets forth certain findings. It notes, for example, that 

federal, State, and local governments are losing billions of dollars 

in tax revenue each year due to the illegal sale of tobacco products. 

It notes that Hezbollah, Hamas, al Qaeda, and other terrorist and 

criminal organizations have profited from trafficking in illegal cigarettes or counterfeit cigarette tax stamps. And it notes that protections against Internet sales of tobacco to minors are also needed. 

Section 1(c) sets forth the purposes of this Act. These include 

providing the government with more tools to combat tobacco smuggling, increasing collection of tobacco product tax revenue, and preventing access by minors to tobacco products. 

Sec. 2. Collection of State Cigarette and Smokeless Tobacco Taxes. 

Section 2(a) sets forth various definitions. Subsection (a) replaces 

the entire definitions section of the existing Jenkins Act. It redefines the term ‘‘cigarette’’ to include ‘‘roll-your-own’’ tobacco. It adds 

a definition of ‘‘delivery sale’’ to ensure that the Jenkins Act covers 

all remote sellers, whether they conduct sales by telephone, fax, 

Internet, or through the mail. 

This subsection also adds definitions for ‘‘Attorney General,’’ 

‘‘common carrier,’’ ‘‘consumer,’’ ‘‘delivery sale,’’ ‘‘delivery seller,’’ ‘‘Indian country,’’ ‘‘Indian tribe,’’ ‘‘interstate commerce,’’ and ‘‘smokeless tobacco.’’ It redefines the term ‘‘person’’ to include State, local, 

and Indian tribal governments, and it expands the definition of 

‘‘use’’ to include the consumption, storage, handling, or disposal of 

smokeless tobacco, in addition to cigarettes. This subsection also 

amends the definition of ‘‘tobacco tax administrator’’ to include 

local or tribal officials duly authorized to collect and administer the 

tobacco tax, in addition to State officials. 

Section (2)(b) enhances the existing reporting requirements 

under the Jenkins Act, under which interstate sellers of tobacco 

products must register with each State’s tobacco tax officials and 

report all sales into that State. Subsection (b) expands the scope 

of the reporting requirements to apply to smokeless tobacco products, and to shipment as well as transfer, and to require reporting 


wwoods2 on PRODPC68 with REPORTS
25 

to tax officials in relevant localities or Indian country, and to the 

U.S. Attorney General, as well as State officials. It also requires 

vendors to provide additional identifying information, so that law 

enforcement officials can locate them for inspection and enforcement purposes. 

Subsection (c) adds a new section 2A to the Jenkins Act, to provide for stronger enforcement of the bill’s new requirements for 

Internet and other remote sellers, defined as ‘‘delivery sellers’’ 

under the bill, by requiring them to comply with three basic requirements. 

First, a delivery seller must comply with new shipping requirements. There must be a label on the outside of the package indicating that it contains cigarettes or smokeless tobacco, to give notice to a common carrier or other delivery service. The weight of 

any single sale or delivery cannot exceed 10 pounds. And the delivery seller must verify that the purchaser is of legal age to purchase 

tobacco products in the place of purchase. 

Second, delivery sellers are required to keep records of all delivery sales, for at least 4 years. These records must be made available to State, local, tribal and Federal officials for enforcement purposes. 

Third, delivery sellers must comply with all State, local, tribal 

and other laws applicable to the sale, distribution, or delivery of tobacco products, including payment of excise taxes, licensing and 

stamping requirements, and restrictions on sales to minors. The delivery seller must pay all applicable excise taxes and affix all required stamps or other indicia to the cigarettes or smokeless tobacco in advance of completing the sale or delivery. 

The new section 2A would direct the Attorney General of the 

United States to compile, and update periodically, a list of delivery 

sellers who have not registered with the Attorney General as required, or are otherwise not in compliance with the Jenkins Act. 

The list would be compiled with the input of Federal law enforcement officials and the attorney general, tax administrator, or chief 

law enforcement official of each State, local, or tribal government 

that levies a tobacco tax. Both the initial list and any updates 

would be distributed to these tax and law enforcement officials, and 

to all common carriers and other delivery services, including the 

United States Postal Service. The bill would prohibit any common 

carrier from knowingly completing the delivery of any package for 

a person on the list. 

The bill clarifies that a common carrier will not be penalized 

under section 14101(a) of Title 49, United States Code, for not completing the delivery of a package for a delivery seller on the noncompliance list or because of reasonable efforts to comply with the 

Jenkins Act. The bill preempts State, local, and tribal laws regulating the delivery of cigarettes or smokeless tobacco to consumers 

that impose obligations on common carriers or delivery services 

that are duplicative of, or inconsistent with, the new obligations 

imposed under the Jenkins Act as amended by the bill. 

Subsection 2(d) of the bill replaces Section 3 of the Jenkins Act 

to enhance criminal and civil penalties. Criminal violations of the 

Jenkins Act are made a felony, punishable by up to 3 years in prison and a commensurate fine. The new section 3 clarifies that State, 

local, and tribal governments are not subject to criminal penalties, 


wwoods2 on PRODPC68 with REPORTS
26 

and that common carriers and independent delivery services are 

subject to criminal penalties only if the violation was committed intentionally, either for economic gain or to assist a delivery seller 

in a violation. 

Under the civil penalties, delivery sellers who violate the Jenkins Act will be fined the greater of $5,000 for a first violation and 

$10,000 for any subsequent violation, or 2 percent of the gross sales 

of cigarettes or smokeless tobacco sold during the 1 year period 

ending on the date of the violation. A delivery service is not subject 

to civil liability if it has implemented effective policies and practices for compliance. 

Section 2(e) of the bill authorizes State, local, and tribal law enforcement officials to enforce the Jenkins Act in Federal court, for 

injunctive or other equitable relief or money damages, to better enable them to reach out-of-State cigarette traffickers, which is difficult in State court under State law. This subsection also permits 

States, localities, and tribes to provide evidence of Jenkins Act violations to the Attorney General for enforcement purposes. 

Subsection 2(e) also establishes a PACT Anti-Trafficking Fund in 

the Treasury. Fifty percent of penalties collected by the Federal 

Government through PACT enforcement efforts would be transferred into the fund, available to the Attorney General for use in 

connection with enforcement of the Jenkins Act and other tobacco 

product anti-contraband laws. Of that amount, fifty percent of 

those funds must be made available to the Department of Justice 

agencies and offices responsible for the investigations leading to 

the collection of the penalty. 

Sec. 3. Treatment of Cigarettes and Smokeless Tobacco as Nonmailable Matter. Section 3 of the bill amends 18 U.S.C. 1716 to add 

cigarettes and smokeless tobacco to the list of materials, including 

alcohol, poisons, weapons, and other materials, that are non-mailable matter. This would make it illegal for delivery sellers to deposit tobacco products in the U.S. mails, and it would prohibit the 

U.S. Postal Service from accepting for delivery, or delivering, packages its employees know or have reason to believe contain cigarettes or smokeless tobacco. A delivery seller who violates this prohibition is subject to a fine of as much as ten times the retail value 

of the cigarettes or smokeless tobacco in question, in addition to 

any unpaid taxes, as well as imprisonment of up to 1 year. There 

is an exception for mailing cigarettes for purposes of consumer testing. 

Sec. 4. Compliance with Model Statute or Qualifying Statute. In 

1998, 46 States, Puerto Rico, the U.S. Virgin Islands, American 

Samoa, the Northern Mariana Islands, Guam, the District of Columbia, the Brown & Williamson Tobacco Corporation, Lorillard 

Tobacco Company, Philip Morris Incorporated, R. J. Reynolds Tobacco Company, Commonwealth Tobacco, and Liggett & Myers entered into what is called the Master Settlement Agreement (MSA). 

The MSA imposed a variety of restrictions on the advertising, marketing, and promotion of cigarettes. In addition to evading taxes, 

an important way in which illicit cigarette traffickers are able to 

raise money and compete with legitimate sellers is to evade compliance with the Model Statute, which requires manufacturers who 

are not party to the MSA to pay money into an escrow fund. Section 4 of the bill makes it a felony for a manufacturer or importer 


wwoods2 on PRODPC68 with REPORTS
27 

to sell or deliver tobacco products into a State that is a party to 

the MSA if the cigarettes or smokeless tobacco are produced by a 

manufacturer that is not complying with the Model statute or 

Qualifying Statute enacted by a State. 

Section 4(b) of the bill authorizes State, local, and tribal law enforcement officials, acting through their attorneys general, to bring 

suit in U.S. district court for violations of subsection (a), and to recover attorneys fees from persons found to have willfully and knowingly violated it. 

Sec. 5. Inspection by Bureau of Alcohol, Tobacco, Firearms, and 

Explosives of Records of certain cigarette and smokeless tobacco sellers. Section 5 authorizes the Bureau of Alcohol, Tobacco, Firearms, 

and Explosives to inspect the premises and records of delivery sellers who transfer more than ten thousand cigarettes or more than 

five hundred single-unit cans or packages of smokeless tobacco in 

a single month. The inspection authority is enforceable in Federal 

court, with failure to comply subject to a fine up to $10,000. 

Sec. 6. Exclusions Regarding Indian Tribes and Tribal Matters. 

Section 6 of the bill preserves: (1) agreements, compacts, or other 

intergovernmental arrangements between Indian tribes and States 

or local governments relating to the collection of taxes on cigarettes 

or smokeless tobacco; (2) limitations under existing Federal law, including Federal common law and treaties, on State, local and tribal 

tax and regulatory authority with respect to sale, use, or distribution of cigarettes and smokeless tobacco by or to Indian tribes or 

tribal members in Indian country; (3) tribal sovereignty as against 

State and local government jurisdiction; and (4) existing authorities 

for coordination of law enforcement efforts. 

Sec. 7. Enhanced Contraband Tobacco Enforcement. Section 7 directs the Bureau of Alcohol , Tobacco, and Firearms to create six 

regional contraband tobacco trafficking teams in New York City, 

Washington, D.C., Detroit, Los Angeles, Seattle, and Miami; a Tobacco Intelligence Center to oversee smuggling investigations; a 

covert national warehouse for undercover operations; and a computer database to track information regarding Internet, mail, and 

other tobacco sales not made in person. $8,500,000 is authorized for 

each of the first five fiscal years for these purposes. 

Sec. 8 Effective Date. Section 8 provides that section 5 of the bill, 

dealing with Bureau of Alcohol, Tobacco, Firearms, and Explosives 

authority, takes effect on the date of enactment, and that all sections of the bill PACT Act takes effect ninety days after the date 

of enactment. 

Sec. 9. Severability. Section 9 provides that the invalidation of 

any provision of the bill or its application to any person or circumstance will not affect other provisions of the bill, or the bill’s 

application to any other person or circumstance. 

Sec. 10. Sense of Congress Concerning the Precedential Effect of 

this Act. Section 10 expresses the sense of Congress that the bill 

responds to unique problems, and is not meant to create a precedent regarding the collection of State sales or use taxes by, or the 

validity of efforts to impose other types of taxes on, out-of-State entities that do not have a physical presence within the taxing State. 


wwoods2 on PRODPC68 with REPORTS
28 

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 italics, 

existing law in which no change is proposed is shown in roman): 

ACT OF OCTOBER 19, 1949 

(Commony known as the Jenkins Act) 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, øThat for the purposes of this Act— 

ø(1) The term ‘‘person’’ includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies, 

as well as individuals. 

ø(2) The term ‘‘cigarette’’ means any roll for smoking made 

wholly or in part of tobacco, irrespective of size or shape and 

whether or not such tobacco is flavored, adulterated, or mixed with 

any other ingredient, the wrapper or cover of which is made of 

paper or any other substance or material except tobacco. 

ø(3) The term ‘‘distributor licensed by or located in such State’’ 

means— 

ø(A) in the case of any State which by State statute or regulation authorizes the distribution of cigarettes at wholesale or 

retail, any person so authorized, or 

ø(B) in the case of any other State, any person located in 

such State who distributes cigarettes at wholesale or retail; 

øbut such term in no case includes a person who acquires cigarettes for purposes other than resale. 

ø(4) The term ‘‘use’’ in addition to its ordinary meaning, means 

the consumption, storage, handling, or disposal of cigarettes. 

ø(5) The term ‘‘tobacco tax administratior’’ means the State official duly authorized to administer the cigarette tax law of a State. 

ø(6) The term ‘‘State’’ includes the District of Columbia, Alaska, Hawaii, and the Commonwealth of Puerto Rico. 

ø(7) The term ‘‘transfers for profit’’ means any transfer for 

profit or other disposition for profit, including any transfer or disposition by an agent to his principal in connection with which the 

agent receives anything of value.¿ 

SECTION 1. DEFINITIONS. 

As used in this Act, the following definitions apply: 

(1) ATTORNEY GENERAL.—The term ‘‘attorney general’’, with 

respect to a State, means the attorney general or other chief law 

enforcement officer of the State, or the designee of that officer. 

(2) CIGARETTE.— 

(A) IN GENERAL.—For purposes of this Act, the term 

‘‘cigarette’’ shall— 

(i) have the same meaning given that term in section 2341 of title 18, United States Code; and 


wwoods2 on PRODPC68 with REPORTS
29 

(ii) include ‘‘roll-your-own tobacco’’ (as that term is 

defined in section 5702 of the Internal Revenue Code of 

1986). 

(B) EXCEPTION.—For purposes of this Act, the term 

‘‘cigarette’’ does not include a ‘‘cigar’’, as that term is defined in section 5702 of the Internal Revenue Code of 1986. 

(3) COMMON CARRIER.—The term ‘‘common carrier’’ means 

any person (other than a local messenger service or the United 

States Postal Service) that holds itself out to the general public 

as a provider for hire of the transportation by water, land, or 

air of merchandise, 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. 

(4) CONSUMER.—The term ‘‘consumer’’ means any person 

that purchases cigarettes or smokeless tobacco, but does not include any person lawfully operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes or smokeless tobacco. 

(5) DELIVERY SALE.—The term ‘‘delivery sale’’ means any 

sale of cigarettes or smokeless tobacco to a consumer if— 

(A) the consumer submits the order for 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 to 

the buyer by common carrier, private delivery service, or 

other method of remote delivery, or the seller is not in the 

physical presence of the buyer when the buyer obtains possession of the cigarettes or smokeless tobacco. 

(6) DELIVERY SELLER.—The term ‘‘delivery seller’’ means a 

person who makes a delivery sale. 

(7) INDIAN COUNTRY.—The term ‘‘Indian country’’ means— 

(A) Indian country as defined in section 1151 of title 

18, United States Code, except that within the State of 

Alaska that term applies only to the Metlakatla Indian 

Community, Annette Island Reserve; and 

(B) any other land held by the United States in trust 

or restricted status for one or more Indian tribes. 

(8) INDIAN TRIBE.—The term ‘‘Indian tribe’’, ‘‘tribe’’, or 

‘‘tribal’’ refers to an Indian tribe as defined in section 4(e) of the 

Indian Self-Determination and Education Assistance Act (25 

U.S.C. 450b(e)) or as listed pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 

479a–1). 

(9) INTERSTATE COMMERCE.—The term ‘‘interstate commerce’’ means commerce between a State and any place outside 

the State, commerce between a State and any Indian country in 

the State, or commerce between points in the same State but 

through any place outside the State or through any Indian 

country. 

(10) INTO A STATE, PLACE, OR LOCALITY.—A sale, shipment, 

or transfer of cigarettes or smokeless tobacco that is made in 

interstate commerce, as defined herein, shall be deemed to have 


wwoods2 on PRODPC68 with REPORTS
30 

been made into the State, place or locality in which such cigarettes or smokeless tobacco are delivered. 

(11) PERSON.—The term ‘‘person’’ means an individual, corporation, company, association, firm, partnership, society, State 

government, local government, Indian tribal government, governmental organization of such government, or joint stock company. 

(12) STATE.—The term ‘‘State’’ means each of the several 

States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the 

United States. 

(13) SMOKELESS TOBACCO.—The term ‘‘smokeless tobacco’’ 

means any finely cut, ground, powdered, or leaf tobacco, or 

other product containing tobacco, that is intended to be placed 

in the oral or nasal cavity or otherwise consumed without being 

combusted. 

(14) TOBACCO TAX ADMINISTRATOR.—The term ‘‘tobacco tax 

administrator’’ means the State, local, or tribal official duly authorized to collect the tobacco tax or administer the tax law of 

a State, locality, or tribe, respectively. 

(15) TRIBAL ENTERPRISE.—The term ‘‘tribal enterprise’’ 

means any business enterprise, incorporated or unincorporated 

under Federal or tribal law, of an Indian tribe or group of Indian tribe. 

(16) USE.—The term ‘‘use’’, in addition to its ordinary 

meaning, means the consumption, storage, handling, or disposal of cigarettes or smokeless tobacco. 

SEC. 2. (a) CONTENTS.—Any person who sells øor transfers¿, transfers, or ships for profit øcigarettes¿ cigarettes or smokeless tobacco in interstate commerce, whereby such øcigarettes¿ cigarettes 

or smokeless tobacco are shipped into a State, locality, or Indian 

country of an Indian tribe taxing the sale or use of øcigarettes¿ 

cigarettes or smokeless tobacco, øto other than a distributor licensed 

by or located in such State,¿ or who advertises or offers øcigarettes¿ cigarettes or smokeless tobacco for such a sale øor transfer 

and shipment¿, transfer, or shipment, shall— 

(1) first file øwith the tobacco tax administrator of the 

State¿ with the Attorney General of the United States and with 

the tobacco tax administrators of the State and place into which 

such shipment is made or in which such advertisement trade 

name (if any), and the address of his principal place of business and of any other place of businessø; and¿, 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; 

(2) not later than the 10th day of each calendar month, file 

with the tobacco tax administrator of the State into which such 

shipment is made, a memorandum or a copy of the invoice covering each and every shipment of øcigarettes¿ cigarettes or 

smokeless tobacco made during the previous calendar month 

into such State; the memorandum or invoice in each case to include the name and address of the person to whom the shipment was made, the brand, øand the quantity thereof.¿ the 

quantity thereof, and the name, address, and phone number of 


wwoods2 on PRODPC68 with REPORTS
31 

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 

(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. 

(b) PRESUMPTIVE EVIDENCE.—The fact that any person ships or 

delivers for shipment any øcigarettes¿ cigarettes or smokeless tobacco shall, if such shipment is into a State in which such person 

has filed a statement with the tobacco tax administrator under 

subsection (a)(1) of this section, be presumptive evidence ø(1) that¿ 

that such øcigarettes¿ cigarettes or smokeless tobacco were sold, or 

transferred for profit, by such personø, and (2) that such sale or 

transfer was to other than a distributor licensed by or located in 

such State.¿. (c) USE OF INFORMATION.—A tobacco tax administrator or chief 

law enforcement officer who receives a memorandum or invoice 

under paragraph (2) or (3) of subsection (a) shall use such memorandum or invoice solely for the purposes of the enforcement of this 

Act and the collection of any taxes owed on related sales of cigarettes and smokeless tobacco, and shall keep confidential any personal information in such memorandum or invoice not otherwise required for such purposes. 

øSEC. 3. Whoever violates any provision of this Act shall be guilty of a misdemeanor and shall be fined not more than $1,000, 

or imprisoned not more than 6 months, or both. 

øSEC. 4. The United States district courts shall have jurisdiction to prevent and restrain violations of this Act.¿ 

SEC. 2A. DELIVERY SALES. 

(a) IN GENERAL.—With respect to delivery sales into a specific 

State and place, each delivery seller shall comply with— 

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

(2) the recordkeeping requirements set forth in subsection 

(c); 

(3) all State, local, tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if such delivery 

sales occurred entirely within the specific State and place, including laws imposing— 

(A) excise taxes; 

(B) licensing and tax-stamping requirements; 

(C) restrictions on sales to minors; and 

(D) other payment obligations or legal requirements relating to the sale, distribution, or delivery of cigarettes or 

smokeless tobacco; and 

(4) the tax collection requirements set forth in subsection 

(d). 

(b) SHIPPING AND PACKAGING.— 

(1) REQUIRED STATEMENT.—For any shipping package containing cigarettes or smokeless tobacco, the delivery seller shall 

include on the bill of lading, if any, and on the outside of the 


wwoods2 on PRODPC68 with REPORTS
32 

shipping package, on the same surface as the delivery address, 

a clear and conspicuous statement providing as follows: ‘‘CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE 

TAXES, AND COMPLIANCE WITH APPLICABLE LICENSING AND TAX–STAMPING OBLIGATIONS’’. 

(2) FAILURE TO LABEL.—Any shipping package described in 

paragraph (1) that is not labeled in accordance with that paragraph shall be treated as nondeliverable matter by a common 

carrier or other delivery service, if the common carrier or other 

delivery service knows or should know the package contains 

cigarettes or smokeless tobacco. If a common carrier or other delivery service believes a package is being submitted for delivery 

in violation of paragraph (1), it may require the person submitting the package for delivery to establish that it is not being 

sent in violation of paragraph (1) before accepting the package 

for delivery. Nothing in this paragraph shall require the common carrier or other delivery service to open any package to determine its contents. 

(3) WEIGHT RESTRICTION.—A delivery seller shall not sell, 

offer for sale, deliver, or cause to be delivered in any single sale 

or single delivery any cigarettes or smokeless tobacco weighing 

more than 10 pounds. 

(4) AGE VERIFICATION.— (A) IN GENERAL.—Notwithstanding any other provision 

of law, a delivery seller who mails or ships tobacco products— 

(i) shall not sell, deliver, or cause to be delivered 

any tobacco products to a person under the minimum 

age required for the legal sale or purchase of tobacco 

products, as determined by the applicable law at the 

place of delivery; 

(ii) shall use a method of mailing or shipping that 

requires— 

(I) the purchaser placing the delivery sale 

order, or an adult who is at least the minimum 

age required for the legal sale or purchase of tobacco products, as determined by the applicable 

law at the place of delivery, to sign to accept delivery of the shipping container at the delivery address; and 

(II) the person who signs to accept delivery of 

the shipping container to provide proof, in the form 

of a valid, government-issued identification bearing a photograph of the individual, that the person 

is at least the minimum age required for the legal 

sale or purchase of tobacco products, as determined by the applicable law at the place of delivery; and 

(iii) shall not accept a delivery sale order from a 

person without— 

(I) obtaining the full name, birth date, and 

residential address of that person; and 

(II) verifying the information provided in subclause (I), through the use of a commercially availVerDate Nov 24 2008 01:29 May 19, 2009 Jkt 079006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6603 E:\HR\OC\HR117.XXX HR117

wwoods2 on PRODPC68 with REPORTS
33 

able database or aggregate of databases, consisting 

primarily of data from government sources, that 

are regularly used by government and businesses 

for the purpose of age and identity verification and 

authentication, to ensure that the purchaser is at 

least the minimum age required for the legal sale 

or purchase of tobacco products, as determined by 

the applicable law at the place of delivery. 

(B) LIMITATION.—No database being used for age and 

identity verification under subparagraph (A)(iii) shall be in 

the possession or under the control of the delivery seller, or 

be subject to any changes or supplementation by the delivery seller. 

(c) RECORDS.— 

(1) IN GENERAL.—Each delivery seller shall keep a record 

of any delivery sale, including all of the information described 

in section 2(a)(2), organized by the State, and within such 

State, by the city or town and by zip code, into which such delivery sale is so made. 

(2) RECORD RETENTION.—Records of a delivery sale shall be 

kept as described in paragraph (1) in the year in which the delivery sale is made and for the next 4 years. 

(3) ACCESS FOR OFFICIALS.—Records kept under paragraph 

(1) shall be made available to tobacco tax administrators of the 

States, to local governments and Indian tribes that apply 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) DELIVERY.— 

(1) IN GENERAL.—Except as provided in paragraph (2), no 

delivery seller may sell or deliver to any consumer, or tender to 

any common carrier or other delivery service, any cigarettes or 

smokeless tobacco pursuant to a delivery sale unless, in advance 

of the sale, delivery, or tender— 

(A) any cigarette or smokeless tobacco excise tax that is 

imposed by the State in which the cigarettes or smokeless 

tobacco are to be delivered has been paid to the State; 

(B) any cigarette or smokeless tobacco excise tax that is 

imposed by the local government of the place in which the 

cigarettes or smokeless tobacco are to be delivered has been 

paid to the local government; and 

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

cigarettes or smokeless tobacco. 

(2) EXCEPTION.—Paragraph (1) does not apply to a delivery 

sale of smokeless tobacco if the law of the State or local government of the place where the smokeless tobacco is to be delivered 

requires or otherwise provides that delivery sellers collect the excise tax from the consumer and remit the excise tax to the State 

or local government, and the delivery seller complies with the 

requirement. 


wwoods2 on PRODPC68 with REPORTS
34 

(e) LIST OF UNREGISTERED OR NONCOMPLIANT DELIVERY SELL- ERS.— (1) IN GENERAL.— (A) INITIAL LIST.—Not later than 90 days after this 

subsection goes into effect under the Prevent All Cigarette 

Trafficking Act of 2009, the Attorney General of the United 

States shall compile a list of delivery sellers of cigarettes or 

smokeless tobacco that have not registered with the Attorney General, pursuant to section 2(a) or that are otherwise 

not in compliance with this Act, and— 

(i) distribute the list to— 

(I) the attorney general and tax administrator 

of every State; 

(II) common carriers and other persons that 

deliver small packages to consumers in interstate 

commerce, including the United States Postal 

Service; and 

(III) at the discretion of the Attorney General 

of the United States, to any other persons; and 

(ii) publicize and make the list available to any 

other person engaged in the business of interstate deliveries or who delivers cigarettes or smokeless tobacco in 

or into any State. 

(B) LIST CONTENTS.—To the extent known, the Attorney 

General of the United States shall include, for each delivery 

seller on the list described in subparagraph (A)— 

(i) all names the delivery seller uses in the transaction of its business or on packages delivered to customers; 

(ii) all addresses from which the delivery seller 

does business or ships cigarettes or smokeless tobacco; 

(iii) the website addresses, primary e-mail address, 

and phone number of the delivery seller; and 

(iv) any other information that the Attorney General determines would facilitate compliance with this 

subsection by recipients of the list. 

(C) UPDATING.—The Attorney General of the United 

States shall update and distribute the list at least once 

every 4 months, and may distribute the list and any updates by regular mail, electronic mail, or any other reasonable means, or by providing recipients with access to the 

list through a nonpublic website that the Attorney General 

of the United States regularly updates. 

(D) STATE, LOCAL, OR TRIBAL ADDITIONS.—The Attorney General of the United States shall include in the list 

under subparagraph (A) any noncomplying delivery sellers 

identified by any State, local, or tribal government under 

paragraph (5), and shall distribute the list to the attorney 

general or chief law enforcement official and the tax administrator of any government submitting any such information and to any common carriers or other persons who 

deliver small packages to consumers identified by any government pursuant to paragraph (5). 

(E) ACCURACY AND COMPLETENESS OF LIST OF NONCOMPLYING DELIVERY SELLERS.—In preparing and revising 


wwoods2 on PRODPC68 with REPORTS
35 

the list required by subparagraph (A), the Attorney General 

shall— 

(i) use reasonable procedures to ensure maximum 

possible accuracy and completeness of the records and 

information relied on for the purpose of determining 

that such delivery seller is noncomplying; 

(ii) not later than 14 days prior to including any 

delivery seller on the list under paragraph (1), make a 

reasonable attempt to send notice to the delivery seller 

by letter, electronic mail, or other means that the delivery seller is being placed on such list or update, with 

that notice citing the relevant provisions of this Act 

and the specific reasons for being placed on such list; 

(iii) provide an opportunity to such delivery seller 

to challenge placement on such list; 

(iv) investigate each such challenge by contacting 

the relevant Federal, State, tribal, and local law enforcement officials, and provide the specific findings 

and results of such investigation to such delivery seller 

not later than 30 days after the challenge is made; and 

(v) upon finding that any placement is inaccurate, 

incomplete, or cannot be verified, promptly delete such 

delivery seller from the list as appropriate and notify 

each appropriate Federal, State, tribal, and local authority of such finding. 

(F) CONFIDENTIALITY.—The list distributed pursuant to 

subparagraph (A) shall be confidential, and any person receiving the list shall maintain the confidentiality of the list 

but may deliver the list, for enforcement purposes, to any 

government official or to any common carrier or other person that delivers tobacco products or small packages to consumers. Nothing in this section shall prohibit a common 

carrier, the United States Postal Service, or any other person receiving the list from discussing with the listed delivery sellers the delivery sellers’ inclusion on the list and the 

resulting effects on any services requested by such listed delivery seller. 

(2) PROHIBITION ON DELIVERY.— 

(A) IN GENERAL.—Commencing on the date that is 60 

days after the date of the initial distribution or availability 

of the list under paragraph (1)(A), no person who receives 

the list under paragraph (1), and no person who delivers 

cigarettes or smokeless tobacco to consumers, shall knowingly complete, cause to be completed, or complete its portion of a delivery of any package for any person whose 

name and address are on the list, unless— 

(i) the person making the delivery knows or believes in good faith that the item does not include cigarettes or smokeless tobacco; 

(ii) the delivery is made to a person lawfully engaged in the business of manufacturing, distributing, 

or selling cigarettes or smokeless tobacco; or 

(iii) the package being delivered weighs more than 

100 pounds and the person making the delivery does 


wwoods2 on PRODPC68 with REPORTS
36 

not know or have reasonable cause to believe that the 

package contains cigarettes or smokeless tobacco. 

(B) IMPLEMENTATION OF UPDATES.—Commencing on 

the date that is 30 days after the date of the distribution 

or availability of any updates or corrections to the list 

under paragraph (1), all recipients and all common carriers or other persons that deliver cigarettes or smokeless 

tobacco to consumers shall be subject to subparagraph (A) 

in regard to such corrections or updates. 

(C) EXEMPTIONS.—Subparagraphs (A) and (B), subsection (b)(2), and any other requirements or restrictions 

placed directly on common carriers elsewhere in this subsection, shall not apply to a common carrier that is subject 

to a settlement agreement relating to tobacco product deliveries to consumers or, if any such settlement agreement to 

which the common carrier was a party is terminated or 

otherwise becomes inactive, is administering and enforcing, 

on a nationwide basis, policies and practices that are at 

least as stringent as any such agreement. For the purposes 

of this section, ‘‘settlement agreement’’ shall be defined to 

include the Assurance of Discontinuance entered into by the 

Attorney General of New York and DHL Holdings USA, 

Inc. and DHL Express (USA), Inc. on or about July 1, 

2005, the Assurance of Discontinuance entered into by the 

Attorney General of New York and United Parcel Service, 

Inc. on or about October 21, 2005, and the Assurance of 

Compliance entered into by the Attorney General of New 

York and Federal Express Corporation and Fed Ex Ground 

package Systems, Inc. on or about February 3, 2006, so 

long as each is honored nationwide to block illegal deliveries of cigarettes or smokeless tobacco to consumers, and 

also includes any other active agreement between a common 

carrier and the States that operates nationwide to ensure 

that no deliveries of cigarettes and smokeless tobacco shall 

be made to consumers for illegally operating Internet or 

mail-order sellers and that any such deliveries to consumers shall not be made to minors or without payment to 

the States and localities where the consumers are located of 

all taxes on the tobacco products. 

(3) SHIPMENTS FROM PERSONS ON LIST.— 

(A) IN GENERAL.—In the event that a common carrier 

or other delivery service delays or interrupts the delivery of 

a package it has in its possession because it determines or 

has reason to believe that the person ordering the delivery 

is on a list distributed under paragraph (1)— 

(i) the person ordering the delivery shall be obligated to pay— 

(I) the common carrier or other delivery service 

as if the delivery of the package had been timely 

completed; and 

(II) if the package is not deliverable, any reasonable additional fee or charge levied by the common carrier or other delivery service to cover its 

extra costs and inconvenience and to serve as a 


wwoods2 on PRODPC68 with REPORTS
37 

disincentive against such noncomplying delivery 

orders; and 

(ii) if the package is determined not to be deliverable, the common carrier or other delivery service shall, 

in its discretion, either provide the package and its 

contents to a Federal, State, or local law enforcement 

agency or destroy the package and its contents. 

(B) RECORDS.—A common carrier or other delivery 

service shall maintain, for a period of 5 years, any records 

kept in the ordinary course of business relating to any deliveries interrupted pursuant to this paragraph and provide 

that information, upon request, to the Attorney General of 

the United States or to the attorney general or chief law enforcement official or tax administrator of any State, local, 

or tribal government. 

(C) CONFIDENTIALITY.—Any person receiving records 

under subparagraph (B) shall use such records solely for 

the purposes of the enforcement of this Act and the collection of any taxes owed on related sales of cigarettes and 

smokeless tobacco, and the person receiving records under 

subparagraph (B) shall keep confidential any personal information in such records not otherwise required for such 

purposes. 

(4) PREEMPTION.— (A) IN GENERAL.—No State, local, or tribal government, 

nor any political authority of 2 or more State, local, or tribal governments, may enact or enforce any law or regulation 

relating to delivery sales that restricts deliveries of cigarettes or smokeless tobacco to consumers by common carriers or other delivery services on behalf of delivery sellers 

by— 

(i) requiring that the common carrier or other delivery service verify the age or identity of the consumer 

accepting the delivery by requiring the person who 

signs to accept delivery of the shipping container to 

provide proof, in the form of a valid, governmentissued identification bearing a photograph of the individual, that such person is at least the minimum age 

required for the legal sale or purchase of tobacco products, as determined by either State or local law at the 

place of delivery; 

(ii) requiring that the common carrier or other delivery service obtain a signature from the consumer accepting the delivery; 

(iii) requiring that the common carrier or other delivery service verify that all applicable taxes have been 

paid; 

(iv) requiring that packages delivered by the common carrier or other delivery service contain any particular labels, notice, or markings; or 

(v) prohibiting common carriers or other delivery 

services from making deliveries on the basis of whether 

the delivery seller is or is not identified on any list of 

delivery sellers maintained and distributed by any entity other than the Federal Government. 


wwoods2 on PRODPC68 with REPORTS
38 

(B) RELATIONSHIP TO OTHER LAWS.—Except as provided in subparagraph (C), nothing in this paragraph shall 

be construed to prohibit, expand, restrict, or otherwise 

amend or modify— 

(i) section 14501(c)(1) or 41713(b)(4) of title 49, 

United States Code; 

(ii) any other restrictions in Federal law on the 

ability of State, local, or tribal governments to regulate 

common carriers; or 

(iii) any provision of State, local, or tribal law regulating common carriers that falls within the provisions of sections 14501(c)(2) or 41713(b)(4)(B) of title 

49 of the United States Code. 

(C) STATE LAWS PROHIBITING DELIVERY SALES.—Nothing in the Prevent All Cigarette Trafficking Act of 2008, the 

amendments made by that Act, or in any other Federal 

statute shall be construed to preempt, supersede, or otherwise limit or restrict State laws prohibiting the delivery 

sale, or the shipment or delivery pursuant to a delivery 

sale, of cigarettes or other tobacco products to individual 

consumers or personal residences except that no State may 

enforce against a common carrier a law prohibiting the delivery of cigarettes or other tobacco products to individual 

consumers or personal residences without proof that the 

common carrier was not entitled to an exemption referred 

to in paragraph (2)(C) of this subsection. 

(5) STATE, LOCAL, AND TRIBAL ADDITIONS.— (A) IN GENERAL.—Any State, local, or tribal government shall provide the Attorney General of the United 

States with— 

(i) all known names, addresses, website addresses, 

and other primary contact information of any delivery 

seller that offers for sale or makes sales of cigarettes or 

smokeless tobacco in or into the State, locality, or tribal 

land but has failed to register with or make reports to 

the respective tax administrator, as required by this 

Act, or that has been found in a legal proceeding to 

have otherwise failed to comply with this Act; and 

(ii) a list of common carriers and other persons 

who make deliveries of cigarettes or smokeless tobacco 

in or into the State, locality, or tribal lands. 

(B) UPDATES.—Any government providing a list to the 

Attorney General of the United States under subparagraph 

(A) shall also provide updates and corrections every 4 

months until such time as such government notifies the Attorney General of the United States in writing that such 

government no longer desires to submit such information to 

supplement the list maintained and distributed by the Attorney General of the United States under paragraph (1). 

(C) REMOVAL AFTER WITHDRAWAL.—Upon receiving 

written notice that a government no longer desires to submit information under subparagraph (A), the Attorney General of the United States shall remove from the list under 

paragraph (1) any persons that are on the list solely because of such government’s prior submissions of its list of 


wwoods2 on PRODPC68 with REPORTS
39 

noncomplying delivery sellers of cigarettes or smokeless tobacco or its subsequent updates and corrections. 

(6) DEADLINE TO INCORPORATE ADDITIONS.—The Attorney 

General of the United States shall— 

(A) include any delivery seller identified and submitted 

by a State, local, or tribal government under paragraph (5) 

in any list or update that is distributed or made available 

under paragraph (1) on or after the date that is 30 days 

after the date on which the information is received by the 

Attorney General of the United States; and 

(B) distribute any such list or update to any common 

carrier or other person who makes deliveries of cigarettes or 

smokeless tobacco that has been identified and submitted 

by another government, pursuant to paragraph (5). 

(7) NOTICE TO DELIVERY SELLERS.—Not later than 14 days 

prior to including any delivery seller on the initial list distributed or made available under paragraph (1), or on any subsequent list or update for the first time, the Attorney General of 

the United States shall make a reasonable attempt to send notice to the delivery seller by letter, electronic mail, or other 

means that the delivery seller is being placed on such list or update, with that notice citing the relevant provisions of this Act. 

(8) LIMITATIONS.— (A) IN GENERAL.—Any common carrier or other person 

making a delivery subject to this subsection shall not be required or otherwise obligated to— 

(i) determine whether any list distributed or made 

available under paragraph (1) is complete, accurate, or 

up-to-date; 

(ii) determine whether a person ordering a delivery 

is in compliance with this Act; or 

(iii) open or inspect, pursuant to this Act, any 

package being delivered to determine its contents. 

(B) ALTERNATE NAMES.—Any common carrier or other 

person making a delivery subject to this subsection shall 

not be required or otherwise obligated to make any inquiries or otherwise determine whether a person ordering a delivery is a delivery seller on the list under paragraph (1) 

who is using a different name or address in order to evade 

the related delivery restrictions, but shall not knowingly deliver any packages to consumers for any such delivery seller 

who the common carrier or other delivery service knows is 

a delivery seller who is on the list under paragraph (1) but 

is using a different name or address to evade the delivery 

restrictions of paragraph (2). 

(C) PENALTIES.—Any common carrier or person in the 

business of delivering packages on behalf of other persons 

shall not be subject to any penalty under section 14101(a) 

of title 49, United States Code, or any other provision of 

law for— 

(i) not making any specific delivery, or any deliveries at all, on behalf of any person on the list under 

paragraph (1); 

(ii) not, as a matter of regular practice and procedure, making any deliveries, or any deliveries in cerVerDate Nov 24 2008 01:29 May 19, 2009 Jkt 079006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6603 E:\HR\OC\HR117.XXX HR117

wwoods2 on PRODPC68 with REPORTS
40 

tain States, of any cigarettes or smokeless tobacco for 

any person or for any person not in the business of 

manufacturing, distributing, or selling cigarettes or 

smokeless tobacco; or 

(iii) delaying or not making a delivery for any person because of reasonable efforts to comply with this 

Act. 

(D) OTHER LIMITS.—Section 2 and subsections (a), (b), 

(c), and (d) of this section shall not be interpreted to impose 

any responsibilities, requirements, or liability on common 

carriers. 

(f) PRESUMPTION.—For purposes of this Act, a delivery sale 

shall be deemed to have occurred in the State and place where the 

buyer obtains personal possession of the cigarettes or smokeless tobacco, and a delivery pursuant to a delivery sale is deemed to have 

been initiated or ordered by the delivery seller. 

SEC. 3. PENALTIES. 

(a) CRIMINAL PENALTIES.— (1) IN GENERAL.—Except as provided in paragraph (2), 

whoever violates any provision of this Act shall be guilty of a 

felony and shall be imprisoned not more than 3 years, fined 

under title 18, United States Code, or both. 

(2) EXCEPTIONS.— (A) GOVERNMENTS.—Paragraph (1) shall not apply to 

a State, local, or tribal government. 

(B) DELIVERY VIOLATIONS.—A common carrier or independent delivery service, or employee of a common carrier 

or independent delivery service, shall be subject to criminal 

penalties under paragraph (1) for a violation of section 

2A(e) only if the violation is committed intentionally— 

(i) as consideration for the receipt of, or as consideration for a promise or agreement to pay, anything of 

pecuniary value; or 

(ii) for the purpose of assisting a delivery seller to 

violate, or otherwise evading compliance with, section 

2A. 

(b) CIVIL PENALTIES.— (1) IN GENERAL.—Except as provided in paragraph (3), 

whoever violates any provision of this Act shall be subject to a 

civil penalty in an amount not to exceed— 

(A) in the case of a delivery seller, the greater of— 

(i) $5,000 in the case of the first violation, or 

$10,000 for any other violation; or 

(ii) for any violation, 2 percent of the gross sales of 

cigarettes or smokeless tobacco of such person during 

the 1-year period ending on the date of the violation. 

(B) in the case of a common carrier or other delivery 

service, $2,500 in the case of a first violation, or $5,000 for 

any violation within 1 year of a prior violation. 

(2) RELATION TO OTHER PENALTIES.—A civil penalty under 

paragraph (1) for a violation of this Act shall be imposed in addition to any criminal penalty under subsection (a) and any 

other damages, equitable relief, or injunctive relief awarded by 

the court, including the payment of any unpaid taxes to the appropriate Federal, State, local, or tribal governments. 


wwoods2 on PRODPC68 with REPORTS
41 

(3) EXCEPTIONS.— (A) DELIVERY VIOLATIONS.—An employee of a common 

carrier or independent delivery service shall be subject to 

civil penalties under paragraph (1) for a violation of section 

2A(e) only if the violation is committed intentionally— 

(i) as consideration for the receipt of, or as consideration for a promise or agreement to pay, anything of 

pecuniary value; or 

(ii) for the purpose of assisting a delivery seller to 

violate, or otherwise evading compliance with, section 

2A. 

(B) OTHER LIMITATIONS.—No common carrier or independent delivery service shall be subject to civil penalties 

under paragraph (1) for a violation of section 2A(e) if— 

(i) the common carrier or independent delivery 

service has implemented and enforces effective policies 

and practices for complying with that section; or 

(ii) an employee of the common carrier or independent delivery service who physically receives and 

processes orders, picks up packages, processes packages, or makes deliveries, takes actions that are outside 

the scope of employment of the employee in the course 

of the violation, or that violate the implemented and 

enforced policies of the common carrier or independent 

delivery service described in clause (i). 

SEC. 4. ENFORCEMENT. 

(a) IN GENERAL.—The United States district courts shall have 

jurisdiction to prevent and restrain violations of this Act and to provide other appropriate injunctive or equitable relief, including 

money damages, for such violations. 

(b) AUTHORITY OF THE ATTORNEY GENERAL.—The Attorney 

General of the United States shall administer and enforce the provisions of this Act. 

(c) STATE, LOCAL, AND TRIBAL ENFORCEMENT.— (1) IN GENERAL.— (A) STANDING.—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 a United States district court 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) SOVEREIGN IMMUNITY.—Nothing in this Act shall 

be deemed to abrogate or constitute a waiver of any sovereign immunity of a State or local government or Indian 

tribe against any unconsented lawsuit under this Act, or 

otherwise to restrict, expand, or modify any sovereign immunity of a State or local government or Indian tribe. 

(2) PROVISION OF INFORMATION.—A State, through its attorney general, or a local government or Indian tribe that levies 

a tax subject to section 2A(a)(3), through its chief law enforceVerDate Nov 24 2008 01:29 May 19, 2009 Jkt 079006 PO 00000 Frm 00041 Fmt 6659 Sfmt 6603 E:\HR\OC\HR117.XXX HR117

wwoods2 on PRODPC68 with REPORTS
42 

ment 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 

States attorney, who shall take appropriate actions to enforce 

the provisions of this Act. 

(3) USE OF PENALTIES COLLECTED.— (A) IN GENERAL.—There is established a separate account in the Treasury known as the ‘‘PACT Anti-Trafficking Fund’’. Notwithstanding any other provision of law 

and subject to subparagraph (B), an amount equal to 50 

percent of any criminal and civil penalties collected by the 

United States Government in enforcing the provisions of 

this Act shall be transferred into the PACT Anti-Trafficking Fund and shall be available to the Attorney General 

of the United States for purposes of enforcing the provisions 

of this Act and other laws relating to contraband tobacco 

products. 

(B) ALLOCATION OF FUNDS.—Of the amount available 

to the Attorney General under subparagraph (A), not less 

than 50 percent shall be made available only to the agencies and offices within the Department of Justice that were 

responsible for the enforcement actions in which the penalties concerned were imposed or for any underlying investigations. 

(4) NONEXCLUSIVITY OF REMEDY.— (A) IN GENERAL.—The remedies available under this 

section and section 3 are in addition to any other remedies 

available under Federal, State, local, tribal, or other law. 

(B) STATE COURT PROCEEDINGS.—Nothing in this Act 

shall be construed to expand, restrict, or otherwise modify 

any right of an authorized State official to proceed in State 

court, or take other enforcement actions, on the basis of an 

alleged violation of State or other law. 

(C) TRIBAL COURT PROCEEDINGS.—Nothing in this Act 

shall be construed to expand, restrict, or otherwise modify 

any right of an authorized Indian tribal government official to proceed in tribal court, or take other enforcement actions, on the basis of an alleged violation of tribal law. 

(D) LOCAL GOVERNMENT ENFORCEMENT.—Nothing in 

this Act shall be construed to expand, restrict, or otherwise 

modify any right of an authorized local government official 

to proceed in State court, or take other enforcement actions, 

on the basis of an alleged violation of local or other law. 

(d) PERSONS DEALING IN TOBACCO PRODUCTS.—Any person 

who holds a permit under section 5712 of the Internal Revenue 

Code of 1986 (regarding permitting of manufacturers and importers 

of tobacco products and export warehouse proprietors) may bring an 

action in a United States district court 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) NOTICE.— (1) PERSONS DEALING IN TOBACCO PRODUCTS.—Any person 

who commences a civil action under subsection (d) shall inform 

the Attorney General of the United States of the action. 


wwoods2 on PRODPC68 with REPORTS
43 

(2) STATE, LOCAL, AND TRIBAL ACTIONS.—It is the sense of 

Congress that the attorney general of any State, or chief law enforcement officer of any locality or tribe, that commences a civil 

action under this section should inform the Attorney General of 

the United States of the action. 

(f) PUBLIC NOTICE.— (1) IN GENERAL.—The Attorney General of the United 

States shall make available to the public, by posting such information on the Internet and by other appropriate means, information regarding all enforcement actions undertaken by the Attorney General or United States attorneys, or reported to the Attorney General, under this section, including information regarding the resolution of such actions and how the Attorney 

General and the United States attorney have responded to referrals of evidence of violations pursuant to subsection (c)(2). 

(2) REPORTS TO CONGRESS.—The Attorney General shall 

submit to Congress each year a report containing the information described in paragraph (1). 

* * * * * * * 

TITLE 18, UNITED STATES CODE 

* * * * * * * 

PART I—CRIMES 

* * * * * * * 

CHAPTER 83—POSTAL SERVICE 

Sec. 

1691. Laws governing postal savings. 

* * * * * * * 

1716E. Tobacco products as nonmailable. 

* * * * * * * 

§ 1716E. Tobacco products as nonmailable 

(a) PROHIBITION.—All cigarettes (as that term is defined in section 1 of the Act of October 19, 1949, commonly referred to as the 

Jenkins Act) and smokeless tobacco (as that term is defined in section 1 of the Act of October 19, 1949, commonly referred to as the 

Jenkins Act) are nonmailable and shall not be deposited in or carried through the mails. The United States Postal Service shall not 

accept for delivery or transmit through the mails any package that 

it knows or has reasonable cause to believe contains any cigarettes 

or smokeless tobacco made nonmailable by this subsection. For the 

purposes of subsection (a) reasonable cause includes— 

(1) a statement on a publicly available website, or an advertisement, by any person that such person will mail matter 

which is nonmailable under this section in return for payment; 

and 

(2) the placement of the person on the list created under 

section 2A(e) of the Jenkins Act. 


wwoods2 on PRODPC68 with REPORTS
44 

(b) EXCEPTIONS.—This section shall not apply to the following: 

(1) CIGARS.—Cigars (as that term is defined in section 

5702(a) of the Internal Revenue Code of 1986). 

(2) GEOGRAPHIC EXCEPTION.—Mailings within the State of 

Alaska or within the State of Hawaii. 

(3) BUSINESS PURPOSES.—Tobacco products mailed only for 

business purposes between legally operating businesses that 

have all applicable State and Federal Government licenses or 

permits and are engaged in tobacco product manufacturing, 

distribution, wholesale, export, import, testing, investigation, or 

research, or for regulatory purposes between any such businesses and State or Federal Government regulatory agencies, if 

the Postal Service issues a final rule establishing the standards 

and requirements that apply to all such mailings and which includes the following: 

(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the 

mails as authorized by this paragraph is a business or government agency permitted to make such mailings pursuant 

to this section and the related final rule. 

(B) The Postal Service shall ensure that any recipient 

of an otherwise nonmailable tobacco product sent through 

the mails pursuant to this paragraph is a business or government agency that may lawfully receive such product. 

(C) The mailings shall be sent through the Postal Service’s systems that provide for the tracking and confirmation 

of the delivery. 

(D) The identities of the business or government entity 

submitting the mailing containing otherwise nonmailable 

tobacco products for delivery and the business or government entity receiving the mailing shall be clearly set forth 

on the package and such information shall be kept in Postal Service records and made available to the Postal Service, 

the Attorney General, and to persons eligible to bring enforcement actions pursuant to section 3(d) of the Prevent 

All Cigarette Trafficking Act of 2008 for a period of at least 

three years. 

(E) The mailings shall be marked with a Postal Service 

label or marking that makes it clear to Postal Service employees that it is a permitted mailing of otherwise nonmailable tobacco products that may be delivered only to a 

permitted government agency or business and may not be 

delivered to any residence or individual person. 

(F) The mailings shall be delivered only to verified 

adult employees of the recipient businesses or government 

agencies who shall be required to sign for the mailing. 

(4) CERTAIN INDIVIDUALS.—Tobacco products mailed by individual adult people for noncommercial, nonbusiness and nonmoney making purposes, including the return of a damaged or 

unacceptable tobacco product to its manufacturer, if the Postal 

Service issues a final rule establishing the standards and requirements that applies to all such mailings and which includes the following: 

(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the 


wwoods2 on PRODPC68 with REPORTS
45 

mails as authorized by this section is the individual person 

identified on the return address label of the package and 

is an adult. 

(B) For mailings to individual persons the Postal Service shall require the person submitting the otherwise nonmailable tobacco product into the mails as authorized by 

this subsection to affirm that the recipient is an adult. 

(C) The package shall not weigh more than 10 ounces. 

(D) The mailings shall be sent through the Postal Service’s systems that provide for the tracking and confirmation 

of the delivery. 

(E) No package shall be delivered or placed in the possession of any individual person who is not a verified 

adult. For mailings to individual persons, the Postal Service shall deliver the package only to the verified adult recipient at the recipient address or transfer it for delivery to 

an Air/Army Postal Office (APO) or Fleet Postal Office 

(FPO) number designated in the recipient address. 

(F) No person shall initiate more than ten such mailings in any thirty-day period. 

(5) EXCEPTION FOR MAILINGS FOR CONSUMER TESTING BY

MANUFACTURERS.—Nothing in this Act shall preclude a legally 

operating cigarette manufacturer operating on its own or 

through its legally authorized agent from using the Postal Service to mail cigarettes to verified adult smokers solely for consumer testing purposes, provided that— 

(A) the cigarette manufacturer has a federal permit, in 

good standing, pursuant to section 5713 of the Internal 

Revenue Code of 1986; 

(B) any package of cigarettes mailed pursuant to this 

exception shall contain no more than one carton of cigarettes (200 cigarettes); 

(C) no individual shall receive more than 1 package of 

cigarettes per manufacturer pursuant to this exception in 

any 30-day period; 

(D) all taxes as required by law on the cigarettes levied 

by the State and locality of delivery have been paid to the 

State and locality prior to delivery, and tax stamps or other 

tax-payment indicia have been affixed to the cigarettes as 

required by law; 

(E) the recipient has not made any payments of any 

kind in exchange for receiving the cigarettes; 

(F) the mailings are made pursuant to a final rule that 

the Postal Service shall issue to establish standards and requirements that apply to all such mailings and that include the following: 

(i) The Postal Service shall verify that any person 

submitting a tobacco product into the mails pursuant 

to this paragraph is a manufacturer or an agent legally authorized by the manufacturer to submit the tobacco product into the mails on the manufacturer’s behalf permitted to make such mailings pursuant to this 

paragraph. 

(ii) The Postal Service shall require the manufacturer submitting the cigarettes into the mails pursuant 


wwoods2 on PRODPC68 with REPORTS
46 

to this paragraph to affirm that the manufacturer or 

its legally authorized agent has verified that the recipient is an adult established smoker who has not made 

any payment for the cigarettes, has formally stated in 

writing that he or she wishes to receive such mailings, 

and has not withdrawn that agreement despite being 

offered the opportunity to do so by the manufacturer or 

its legally authorized agent at least once in every 3- 

month period. 

(iii) The Postal Service shall require the manufacturer or its legally authorized agent submitting the 

cigarettes into the mails pursuant to this paragraph to 

affirm that the package contains no more than a single 

carton (200) cigarettes on which all taxes levied on the 

cigarettes by the State and locality of delivery have 

been paid and all related State tax stamps or other 

tax-payment indicia have been applied. 

(iv) The mailings shall be sent through the Postal 

Service’s systems that provide for the tracking and confirmation of the delivery and all related records shall 

be kept in Postal Service records and made available 

to persons enforcing this section for a period of at least 

3 years. 

(v) The mailings shall be marked with a Postal 

Service label or marking that makes it clear to Postal 

Service employees that it is a permitted mailing of otherwise nonmailable tobacco products that may be delivered only to the named recipient after verifying that the 

recipient is an adult. 

(vi) The Postal Service shall deliver the mailing 

only to the named recipient and only after verifying 

that the recipient is an adult. 

(6) DEFINITION OF ADULT.—For the purposes of paragraphs 

(3), (4), and (5), the term ‘‘adult’’ means an individual person 

of at least 21 years of age. 

(c) SEIZURE AND FORFEITURE.—Any cigarettes or smokeless tobacco made nonmailable by this subsection that are deposited in the 

mails shall be subject to seizure and forfeiture, pursuant to the procedures set forth in chapter 46 of this title. Any tobacco products so 

seized and forfeited shall either be destroyed or retained by Government officials for the detection or prosecution of crimes or related 

investigations and then destroyed. 

(d) ADDITIONAL PENALTIES.—In addition to any other fines and 

penalties imposed by this chapter for violations of this section, any 

person violating this section shall be subject to an additional civil 

penalty in the amount of 10 times the retail value of the nonmailable cigarettes or smokeless tobacco, including all Federal, 

State, and local taxes. 

(e) CRIMINAL PENALTY.—Whoever knowingly deposits for mailing or delivery, or knowingly causes to be delivered by mail, according to the direction thereon, or at any place at which it is directed 

to be delivered by the person to whom it is addressed, anything that 

this section declares to be nonmailable matter shall be fined under 

this title, imprisoned not more than 1 year, or both. 


wwoods2 on PRODPC68 with REPORTS
47 

(f) DEFINITION.—As used in this section, the term ‘‘State’’ has 

the meaning given that term in section 1716(k). 

(g) USE OF PENALTIES.—There is established a separate account 

in the Treasury of the United States, to be known as the ‘‘PACT 

Postal Service Fund’’. Notwithstanding any other provision of law, 

an amount equal to 50 percent of any criminal and civil fines or 

monetary penalties collected by the United States Government in enforcing the provisions of this subsection shall be transferred into the 

PACT Postal Service Fund and shall be available to the Postmaster 

General for the purpose of enforcing the provisions of this subsection. 

(h) COORDINATION OF EFFORTS.—In the enforcement of this section, the Postal Service shall cooperate and coordinate its efforts 

with related enforcement activities of any other Federal agency or 

of any State, local, or tribal government, whenever appropriate. 

* * * * * * * 

CHAPTER 114—TRAFFICKING IN CONTRABAND 

CIGARETTES AND SMOKELESS TOBACCO 

* * * * * * * 

§ 2343. Recordkeeping, reporting, and inspection 

(a) * * * 

* * * * * * * 

ø(c) Upon the consent of any person who ships, sells, or distributes any quantity of cigarettes in excess of 10,000 in a single transaction, or pursuant to a duly issued search warrant, the Attorney 

General may enter the premises (including places of storage) of 

such person for the purpose of inspecting any records or information required to be maintained by such person under this chapter, 

and any cigarettes kept or stored by such person at such premises.¿ 

(c)(1) Any officer of the Bureau of Alcohol, Tobacco, Firearms, 

and Explosives may, during normal business hours, enter the premises of any person described in subsection (a) or (b) for the purposes 

of inspecting— 

(A) any records or information required to be maintained 

by such person under the provisions of law referred to in this 

chapter; or 

(B) any cigarettes or smokeless tobacco kept or stored by 

such person at such premises. 

(2) The district courts of the United States shall have the authority in a civil action under this subsection to compel inspections 

authorized by paragraph (1). 

(3) Whoever violates paragraph (1), or an order issued under 

paragraph (2), shall be subject to a civil penalty in an amount not 

to exceed $10,000 for each violation. 

* * * * * * * 

Æ 


wwoods2 on PRODPC68 with REPORTS