I 

109TH CONGRESS 

1ST SESSION H. R. 1377 

To amend the Internal Revenue Code of 1986 to deter the smuggling of 

tobacco products into the United States, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2005 

Mr. DOGGETT (for himself, Mr. ABERCROMBIE, Mr. ACKERMAN, Mr. ALLEN, 

Mr. ANDREWS, Ms. BALDWIN, Mr. BECERRA, Mr. BERMAN, Mr. 

BLUMENAUER, Mr. BROWN of Ohio, Mrs. CAPPS, Mr. CAPUANO, Mr. 

CONYERS, Mr. CROWLEY, Mr. DAVIS of Illinois, Mrs. DAVIS of California, 

Mr. DEFAZIO, Ms. DEGETTE, Mr. DELAHUNT, Ms. DELAURO, Ms. 

ESHOO, Mr. EVANS, Mr. FARR, Mr. FILNER, Mr. FRANK of Massachusetts, Mr. GENE GREEN of Texas, Mr. GRIJALVA, Mr. GUTIERREZ, Mr. 

HINCHEY, Mr. HINOJOSA, Mr. HOLT, Mr. HONDA, Ms. HOOLEY, Mr. 

JACKSON of Illinois, Ms. JACKSON-LEE of Texas, Ms. EDDIE BERNICE

JOHNSON of Texas, Ms. KAPTUR, Mr. KENNEDY of Rhode Island, Ms. 

KILPATRICK of Michigan, Mr. KIND, Mr. KUCINICH, Mr. LANGEVIN, Mr. 

LANTOS, Ms. LEE, Mr. LEVIN, Mr. LEWIS of Georgia, Mr. LIPINSKI, Ms. 

ZOE LOFGREN of California, Mr. LYNCH, Mrs. MALONEY, Mr. MARKEY, 

Mr. MATHESON, Mrs. MCCARTHY, Mr. MCDERMOTT, Mr. MCGOVERN, 

Mr. MCNULTY, Mr. MEEHAN, Mr. MEEKS of New York, Ms. 

MILLENDER-MCDONALD, Mr. GEORGE MILLER of California, Mr. NADLER, Mrs. NAPOLITANO, Mr. NEAL of Massachusetts, Mr. OBERSTAR, 

Mr. OLVER, Mr. OWENS, Mr. PALLONE, Mr. PASCRELL, Mr. PLATTS, 

Mr. ROTHMAN, Ms. ROYBAL-ALLARD, Mr. RUSH, Mr. RYAN of Ohio, Ms. 

LINDA T. SA ́NCHEZ of California, Ms. LORETTA SANCHEZ of California, 

Mr. SANDERS, Ms. SCHAKOWSKY, Mr. SCHIFF, Mr. SERRANO, Mr. SHERMAN, Ms. SLAUGHTER, Mr. SNYDER, Ms. SOLIS, Mr. STARK, Mrs. 

TAUSCHER, Mr. TIERNEY, Mrs. JONES of Ohio, Mr. UDALL of New Mexico, Mr. VAN HOLLEN, Ms. VELA ́ZQUEZ, Ms. WATERS, Ms. WATSON, Mr. 

WAXMAN, Mr. WEINER, Ms. WOOLSEY, and Mr. WU) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committee on the Judiciary, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 
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A BILL 

To amend the Internal Revenue Code of 1986 to deter the 

smuggling of tobacco products into the United States, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Smuggled Tobacco 

5 Prevention Act of 2005’’. 

6 TITLE I—AMENDMENTS TO IN7 TERNAL REVENUE CODE OF 

8 1986 

9 SEC. 101. AMENDMENT OF 1986 CODE. 

10 Except as otherwise expressly provided, whenever in 

11 this title an amendment or repeal is expressed in terms 

12 of an amendment to, or repeal of, a section or other provi13 sion, the reference shall be considered to be made to a 

14 section or other provision of the Internal Revenue Code 

15 of 1986. 

16 SEC. 102. IMPROVED MARKING AND LABELING; EXPORT 

17 BONDS. 

18 (a) IN GENERAL.—Subsection (b) of section 5723 

19 (relating to marks, labels, and notices) is amended— 

20 (1) by striking ‘‘, if any,’’ and 
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1 (2) by adding at the end the following: ‘‘Such 

2 marks, labels, and notices shall include marks and 

3 notices relating to the following: 

4 ‘‘(1) IDENTIFICATION.—Each person who is a 

5 manufacturer or importer of tobacco products shall 

6 (in accordance with regulations prescribed by the 

7 Secretary) legibly print a unique serial number on 

8 all packages of tobacco products manufactured or 

9 imported by such person for sale or distribution. 

10 Such serial number shall be designed to enable the 

11 Secretary to identify the manufacturer of the prod12 uct (and, in the case of importation, the manufac13 turer and importer of the product), the location and 

14 date of manufacture (and, if imported, the location 

15 and date of importation), and any other information 

16 the Secretary determines necessary or appropriate 

17 for the proper administration of the chapter. The 

18 Secretary shall determine the size and location of 

19 the serial number. 

20 ‘‘(2) MARKING REQUIREMENTS FOR EX21 PORTS.—Each package of a tobacco product that is 

22 exported shall be marked for export from the United 

23 States and shall be marked as to the foreign country 

24 which is to be the final destination of such product. 

25 Such marking shall be visible and prominent and 
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1 shall be in English and in the primary language of 

2 such foreign country. The Secretary shall promul3 gate regulations to determine the size and location 

4 of the mark.’’. 

5 (b) SALES ON INDIAN RESERVATIONS; PACKAGE DE6 FINED.—Section 5723 is amended by adding at the end 

7 the following new subsections: 

8 ‘‘(f) SALES ON INDIAN RESERVATIONS.—Each pack9 age of a tobacco product that is sold on an Indian reserva10 tion (as defined in section 403(9) of the Indian Child Pro11 tection and Family Violence Prevention Act (25 U.S.C. 

12 3202(9)) shall be visibly and prominently labeled as such. 

13 The Secretary, in consultation with the Secretary of the 

14 Interior, shall promulgate regulations with respect to such 

15 labeling, including requirements for the size and location 

16 of the label. 

17 ‘‘(g) DEFINITION OF PACKAGE.—For purposes of 

18 this section, the term ‘package’ means the innermost 

19 sealed container visible from the outside of the individual 

20 container irrespective of the material from which such con21 tainer is made, in which a tobacco product is placed by 

22 the manufacturer and in which such tobacco product is 

23 offered for sale to a member of the general public.’’. 

24 (c) REQUIREMENTS FOR TRACKING OF TOBACCO

25 PRODUCTS.— 
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1 (1) IN GENERAL.—Subchapter B of chapter 52 

2 is amended by adding at the end the following new 

3 section: 

4 ‘‘SEC. 5714. EXPORT BONDS. 

5 ‘‘(a) POSTING OF BOND.— 

6 ‘‘(1) IN GENERAL.—It shall be unlawful for any 

7 person to export any tobacco product unless such 

8 person— 

9 ‘‘(A) has posted with the Secretary a to10 bacco product bond in accordance with this sec11 tion for such product that contains a disclosure 

12 of the country to which such product will be ex13 ported; and 

14 ‘‘(B) receives a written statement from the 

15 recipient of the tobacco products involved that 

16 such person— 

17 ‘‘(i) will not knowingly and willfully 

18 violate or cause to be violated any law or 

19 regulation of such country, the United 

20 States, any State, the District of Colum21 bia, or any possession of the United States 

22 with respect to such products; and 

23 ‘‘(ii) has never been convicted of any 

24 offense with respect to tobacco products. 
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1 ‘‘(2) REGULATIONS.—The Secretary shall pro2 mulgate regulations that determine the frequency 

3 and the amount of each bond that must be posted 

4 under paragraph (1), but in no case shall such 

5 amount be less than an amount equal to the tax im6 posed under this chapter on the value of the ship7 ment of the products involved if such products were 

8 consumed within the United States. 

9 ‘‘(3) EXPORT.—For purposes of this subsection, 

10 property shall be treated as exported if it is shipped 

11 to a foreign country, Puerto Rico, the Virgin Is12 lands, or a possession of the United States, or for 

13 consumption beyond the jurisdiction of the internal 

14 revenue laws of the United States. 

15 ‘‘(b) RETURN OF BOND.—The Secretary shall return 

16 a bond posted under subsection (a)— 

17 ‘‘(1) upon a determination by the Secretary 

18 (based on documentation provided by the person who 

19 posted the bond in accordance with regulations pro20 mulgated by the Secretary) that the items to which 

21 the bond applies have been received in the country 

22 of final destination as designated in the bond, or 

23 ‘‘(2) under such other circumstance as the Sec24 retary may specify.’’. 
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter B is amended by adding 

3 at the end the following new item: 

‘‘Sec. 5714. Export bonds.’’. 

4 SEC. 103. WHOLESALERS REQUIRED TO HAVE PERMIT. 

5 Section 5712 (relating to application for permit) is 

6 amended by inserting ‘‘, wholesaler,’’ after ‘‘manufac7 turer’’. 

8 SEC. 104. CONDITIONS OF PERMIT. 

9 Subsection (a) of section 5713 (relating to issuance 

10 of permit) is amended to read as follows: 

11 ‘‘(a) ISSUANCE.— 

12 ‘‘(1) IN GENERAL.—A person shall not engage 

13 in business as a manufacturer, wholesaler, or im14 porter of tobacco products or as an export ware15 house proprietor without a permit to engage in such 

16 business. Such permit shall be issued in such form 

17 and in such manner as the Secretary shall by regula18 tion prescribe, to every person properly qualified 

19 under sections 5711 and 5712. A new permit may 

20 be required at such other time as the Secretary shall 

21 by regulation prescribe. 

22 ‘‘(2) CONDITIONS.—The issuance of a permit 

23 under this section shall be conditioned upon the 

24 compliance with the requirements of— 

25 ‘‘(A) this chapter, 
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1 ‘‘(B) the Contraband Cigarette Trafficking 

2 Act (18 U.S.C. chapter 114), 

3 ‘‘(C) the Act of October 19, 1949 (15 

4 U.S.C. chapter 10A), 

5 ‘‘(D) any regulations issued pursuant to 

6 such statutes, and 

7 ‘‘(E) any other federal laws or regulations 

8 relating to the taxation, sale, or transportation 

9 of tobacco products.’’. 

10 SEC. 105. RECORDS TO BE MAINTAINED. 

11 Section 5741 (relating to records to be maintained) 

12 is amended— 

13 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

14 ‘‘Every manufacturer’’, 

15 (2) by inserting ‘‘every wholesaler,’’ after 

16 ‘‘every importer,’’, 

17 (3) by striking ‘‘such records’’ and inserting 

18 ‘‘records concerning the chain of custody of the to19 bacco products (including the foreign country of 

20 final destination for packages marked for export) 

21 and such other records’’, and 

22 (4) by adding at the end the following new sub23 section: 

24 ‘‘(b) RETAILERS.—Retailers shall maintain records 

25 of receipt of tobacco products, and such records shall be 
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1 available to the Secretary for inspection and audit. An or2 dinary commercial record or invoice shall satisfy the re3 quirements of this subsection if such record shows the date 

4 of receipt, from whom tobacco products were received, and 

5 the quantity of tobacco products received. The preceding 

6 provisions of this subsection shall not be construed to limit 

7 or preclude other recordkeeping requirements imposed on 

8 any retailer.’’. 

9 SEC. 106. REPORTS. 

10 Section 5722 (relating to reports) is amended— 

11 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

12 ‘‘Every manufacturer’’, and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(b) REPORTS BY EXPORT WAREHOUSE PROPRI16 ETORS.— 

17 ‘‘(1) IN GENERAL.—Prior to exportation of to18 bacco products from the United States, the export 

19 warehouse proprietor shall submit a report (in such 

20 manner and form as the Secretary may by regula21 tion prescribe) to enable the Secretary to identify 

22 the shipment and assure that it reaches its intended 

23 destination. 

24 ‘‘(2) AGREEMENTS WITH FOREIGN GOVERN25 MENTS.—Notwithstanding section 6103 of this title, 
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1 the Secretary is authorized to enter into agreements 

2 with foreign governments to exchange or share infor3 mation contained in reports received from export 

4 warehouse proprietors of tobacco products if— 

5 ‘‘(A) the Secretary believes that such 

6 agreement will assist in— 

7 ‘‘(i) ensuring compliance with the pro8 visions of this chapter or regulations pro9 mulgated thereunder, or 

10 ‘‘(ii) preventing or detecting violations 

11 of the provisions of this chapter or regula12 tions promulgated thereunder, and 

13 ‘‘(B) the Secretary obtains assurances 

14 from such government that the information will 

15 be held in confidence and used only for the pur16 poses specified in clauses (i) and (ii) of sub17 paragraph (A). 

18 No information may be exchanged or shared with 

19 any government that has violated such assurances.’’. 

20 SEC. 107. FRAUDULENT OFFENSES. 

21 (a) IN GENERAL.—Subsection (a) of section 5762 

22 (relating to fraudulent offenses) is amended by striking 

23 paragraph (1) and redesignating paragraphs (2) through 

24 (6) as paragraphs (1) through (5), respectively. 
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1 (b) OFFENSES RELATING TO DISTRIBUTION OF TO2 BACCO PRODUCTS.—Section 5762 is amended— 

3 (1) by redesignating subsection (b) as sub4 section (c), 

5 (2) in subsection (c) (as so redesignated), by in6 serting ‘‘or (b)’’ after ‘‘(a)’’, and 

7 (3) by inserting after subsection (a) the fol8 lowing new subsection: 

9 ‘‘(b) OFFENSES RELATING TO DISTRIBUTION OF TO10 BACCO PRODUCTS.—It shall be unlawful— 

11 ‘‘(1) for any person to engage in the business 

12 as a manufacturer or importer of tobacco products 

13 or cigarette papers and tubes, or to engage in the 

14 business as a wholesaler or an export warehouse pro15 prietor, without filing the bond and obtaining the 

16 permit where required by this chapter or regulations 

17 thereunder; 

18 ‘‘(2) for a manufacturer, importer, or whole19 saler permitted under this chapter intentionally to 

20 ship, transport, deliver, or receive any tobacco prod21 ucts from or to any person other than a person per22 mitted under this chapter or a retailer, except a per23 mitted importer may receive foreign tobacco prod24 ucts from a foreign manufacturer or a foreign dis-
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1 tributor that have not previously entered the United 

2 States; 

3 ‘‘(3) for any person (other than the original 

4 manufacturer of such tobacco products or an export 

5 warehouse proprietor authorized to receive any to6 bacco products that have previously been exported 

7 and returned to the United States) to receive any to8 bacco products that have previously been exported 

9 and returned to the United States; 

10 ‘‘(4) for any export warehouse proprietor inten11 tionally to ship, transport, sell, or deliver for sale 

12 any tobacco products to any person other than the 

13 original manufacturer of such tobacco products, an14 other export warehouse proprietor, or a foreign pur15 chaser; 

16 ‘‘(5) for any person (other than a manufacturer 

17 or an export warehouse proprietor permitted under 

18 this chapter) intentionally to ship, transport, receive, 

19 or possess, for purposes of resale, any tobacco prod20 uct in packages marked pursuant to regulations 

21 issued under section 5723, other than for direct re22 turn to a manufacturer for repacking or for re-ex23 portation or to an export warehouse proprietor for 

24 re-exportation; 
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1 ‘‘(6) for any manufacturer, importer, export 

2 warehouse proprietor, or wholesaler permitted under 

3 this chapter to make intentionally any false entry in, 

4 to fail willfully to make appropriate entry in, or to 

5 fail willfully to maintain properly any record or re6 port that such person is required to keep as required 

7 by this chapter or the regulations promulgated 

8 thereunder; 

9 ‘‘(7) for any person to alter, mutilate, destroy, 

10 obliterate, or remove any mark or label required 

11 under this chapter upon a tobacco product held for 

12 sale, except pursuant to regulations of the Secretary 

13 authorizing relabeling for purposes of compliance 

14 with the requirements of this section or of State law; 

15 and 

16 ‘‘(8) for any person to sell at retail more than 

17 5,000 cigarettes in a single transaction or in a series 

18 of related transactions, or, in the case of other to19 bacco products, an equivalent quantity as deter20 mined by regulation. 

21 Any person violating any of the provisions of this sub22 section shall, upon conviction, be fined as provided in sec23 tion 3571 of title 18, United States Code, imprisoned for 

24 not more than 5 years, or both.’’. 
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1 (c) INTENTIONALLY DEFINED.—Section 5762 is 

2 amended by adding at the end the following: 

3 ‘‘(d) DEFINITION OF INTENTIONALLY.—For pur4 poses of this section and section 5761, the term ‘inten5 tionally’ means doing an act, or omitting to do an act, 

6 deliberately, and not due to accident, inadvertence, or mis7 take, regardless of whether the person knew that the act 

8 or omission constituted an offense.’’. 

9 SEC. 108. CIVIL PENALTIES. 

10 Subsection (a) of section 5761 (relating to civil pen11 alties) is amended— 

12 (1) by striking ‘‘willfully’’ and inserting ‘‘inten13 tionally’’, and 

14 (2) by striking ‘‘$1,000’’ and inserting 

15 ‘‘$10,000’’. 

16 SEC. 109. DEFINITIONS. 

17 (a) EXPORT WAREHOUSE PROPRIETOR.—Subsection 

18 (i) of section 5702 (relating to definition of export ware19 house proprietor) is amended by inserting before the pe20 riod the following: ‘‘or any person engaged in the business 

21 of exporting tobacco products from the United States for 

22 purposes of sale or distribution. Any duty free store that 

23 sells, offers for sale, or otherwise distributes to any person 

24 in any single transaction more than 30 packages of ciga25 rettes, or its equivalent for other tobacco products as the 
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1 Secretary shall by regulation prescribe, shall be deemed 

2 an export warehouse proprietor under this chapter’’. 

3 (b) RETAILER; WHOLESALER.—Section 5702 is 

4 amended by adding at the end the following: 

5 ‘‘(p) RETAILER.—The term ‘retailer’ means any deal6 er who sells, or offers for sale, any tobacco product at re7 tail. The term ‘retailer’ includes any duty-free store that 

8 sells, offers for sale, or otherwise distributes at retail in 

9 any single transaction 30 or fewer packages of cigarettes 

10 or its equivalent for other tobacco products. 

11 ‘‘(q) WHOLESALER.—The term ‘wholesaler’ means 

12 any person engaged in the business of purchasing tobacco 

13 products for resale at wholesale, or any person acting as 

14 an agent or broker for any person engaged in the business 

15 of purchasing tobacco products for resale at wholesale.’’. 

16 SEC. 110. EFFECTIVE DATE. 

17 The amendments made by this title shall take effect 

18 on January 1, 2006. 

19 TITLE II—AMENDMENTS TO THE 

20 CONTRABAND CIGARETTE 

21 TRAFFICKING ACT 

22 SEC. 201. AMENDMENTS TO THE CONTRABAND CIGARETTE 

23 TRAFFICKING ACT. 

24 (a) EXPANSION OF ACT TO COVER OTHER TOBACCO

25 PRODUCTS.— 
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1 (1) Paragraphs (1) and (2) of section 2341 of 

2 title 18, United States Code, are amended to read 

3 as follows: 

4 ‘‘(1) the term ‘tobacco product’ has the mean5 ing given to such term by section 5702 of the Inter6 nal Revenue Code of 1986; 

7 ‘‘(2) the term ‘contraband tobacco product’ 

8 means any tobacco product if— 

9 ‘‘(A)(i) in the case of cigarettes, such ciga10 rettes are in a quantity in excess of 2,000 ciga11 rettes; or 

12 ‘‘(ii) in the case of a tobacco product other 

13 than a cigarette, such product is in a quantity 

14 in excess of the equivalent of 2,000 cigarettes 

15 as determined under rules made by the Attor16 ney General; 

17 ‘‘(B)(i) if the State in which such tobacco 

18 product is found requires a stamp, impression, 

19 or other indication to be placed on packages or 

20 other containers of product to evidence payment 

21 of tobacco taxes, such tobacco product bears no 

22 evidence of such payment; or 

23 ‘‘(ii) if such State has no such require24 ment, applicable tobacco taxes are found to be 

25 not paid; and 
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1 ‘‘(C) such tobacco product is in the posses2 sion of any person other than— 

3 ‘‘(i) a person holding a permit issued 

4 pursuant to chapter 52 of the Internal 

5 Revenue Code of 1986 as a manufacturer 

6 or importer of tobacco products or as an 

7 export warehouse proprietor, or a person 

8 operating a customs bonded warehouse 

9 pursuant to section 311 or 555 of the Tar10 iff Act of 1930 (19 U.S.C. 1311 or 1555) 

11 or an agent of such person; 

12 ‘‘(ii) a common or contract carrier 

13 transporting the tobacco product involved 

14 under a proper bill of lading or freight bill 

15 which states the quantity, source, and des16 tination of such product; 

17 ‘‘(iii) a person— 

18 ‘‘(I) who is licensed or otherwise 

19 authorized by the State where the to20 bacco product is found to account for 

21 and pay tobacco taxes imposed by 

22 such State; and 

23 ‘‘(II) who has complied with the 

24 accounting and payment requirements 

25 relating to such license or authoriza-
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1 tion with respect to the tobacco prod2 uct involved; or 

3 ‘‘(iv) an officer, employee, or other 

4 agent of the United States or a State, or 

5 any department, agency, or instrumentality 

6 of the United States or a State (including 

7 any political subdivision of a State) having 

8 possession of such tobacco product in con9 nection with the performance of official du10 ties;’’. 

11 (2) Section 2345 of title 18, United States 

12 Code, is amended— 

13 (A) by striking ‘‘cigarette tax laws’’ each 

14 place it appears and inserting ‘‘tobacco tax 

15 laws’’, and 

16 (B) by striking ‘‘cigarettes’’ and inserting 

17 ‘‘tobacco products’’. 

18 (b) UNLAWFUL ACTS.—Section 2342 of title 18, 

19 United States Code, is amended to read as follows: 

20 ‘‘§ 2342. Unlawful acts 

21 ‘‘(a) It shall be unlawful for any person knowingly 

22 to ship, transport, receive, possess, sell, distribute, or pur23 chase contraband tobacco products. 

24 ‘‘(b)(1) It shall be unlawful for any person know25 ingly— 
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1 ‘‘(A) to make any false statement or represen2 tation with respect to the information required by 

3 this chapter to be kept in the records or reports of 

4 any person who ships, sells, or distributes (in a sin5 gle transaction or in a series of related transactions) 

6 any quantity of tobacco product in excess of the 

7 quantity specified in or pursuant to section 

8 2341(2)(A) with respect to such product, or 

9 ‘‘(B) to fail to maintain records or reports, 

10 alter or obliterate required markings, or interfere 

11 with any inspection, required under this chapter, 

12 with respect to such quantity of tobacco product. 

13 ‘‘(c) It shall be unlawful for any person knowingly 

14 to transport tobacco products under a false bill of lading 

15 or without any bill of lading.’’. 

16 (c) CONFORMING AMENDMENTS RELATING TO REC17 ORDKEEPING.— 

18 (1) Subsections (a) and (b) of section 2343 of 

19 title 18, United States Code, are each amended by 

20 striking ‘‘any quantity of cigarettes in excess of 

21 60,000 in a single transaction’’ and inserting ‘‘(in a 

22 single transaction or in a series of related trans23 actions) any quantity of tobacco product in excess of 

24 the quantity specified in or pursuant to section 

25 2341(2)(A) with respect to such product’’. 
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1 (d) PENALTIES.—Section 2344 of title 18, United 

2 States Code, is amended— 

3 (1) in subsection (b), by inserting ‘‘or (c)’’ after 

4 ‘‘section 2342(b)’’; and 

5 (2) by striking subsection (c) and inserting the 

6 following new subsection: 

7 ‘‘(c) Any contraband tobacco products involved in any 

8 violation of this chapter shall be subject to seizure and 

9 forfeiture, and all provisions of section 9703(o) of title 31, 

10 United States Code, shall, so far as applicable, extend to 

11 seizures and forfeitures under this chapter.’’. 

12 (e) JENKINS ACT AMENDMENTS.— 

13 (1) Section 4 of the Act of October 19, 1949 

14 (15 U.S.C. 378) is amended by adding at the end 

15 the following: ‘‘A State tobacco tax authority may 

16 commence a civil action to obtain appropriate relief 

17 with respect to a violation of this Act.’’. 

18 (2) Paragraph (2) of section 1 of such Act is 

19 amended to read as follows: 

20 ‘‘(2) The term ‘tobacco product’ has the mean21 ing given to such term by section 5702 of the Inter22 nal Revenue Code of 1986.’’. 

23 (3) Such Act is further amended by striking 

24 ‘‘cigarette’’ and ‘‘cigarettes’’ each place either ap-
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1 pears and inserting ‘‘tobacco product’’ and ‘‘tobacco 

2 products’’ respectively. 

3 (f) NON-PREEMPTION.—Nothing in this title or the 

4 amendments made by this title shall be construed to pro5 hibit an authorized State official from proceeding in State 

6 court on the basis of an alleged violation of State law. 

7 TITLE III—WHISTLEBLOWER 

8 PROTECTION PROVISIONS 

9 SEC. 301. WHISTLEBLOWER PROTECTION. 

10 (a) IN GENERAL.—Chapter 73 of title 18, United 

11 States Code, is amended by inserting after section 1514 

12 the following: 

13 ‘‘§ 1514B. Civil action to protect against retaliation in 

14 contraband tobacco cases 

15 ‘‘(a) WHISTLEBLOWER PROTECTION FOR CONTRA16 BAND TOBACCO.—No person may discharge, demote, sus17 pend, threaten, harass, or in any other manner discrimi18 nate against an employee in the terms and conditions of 

19 employment because of any lawful act done by the em20 ployee— 

21 ‘‘(1) to provide information, cause information 

22 to be provided, or otherwise assist in an investiga23 tion regarding any conduct which the employee rea24 sonably believes constitutes a violation of section 

25 2342 or any other provision of Federal law relating 
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1 to contraband tobacco, when the information or as2 sistance is provided to or the investigation is con3 ducted by— 

4 ‘‘(A) a Federal regulatory or law enforce5 ment agency; 

6 ‘‘(B) any Member of Congress or any com7 mittee of Congress; or 

8 ‘‘(C) a person with supervisory authority 

9 over the employee (or such other person work10 ing for the employer who has the authority to 

11 investigate, discover, or terminate misconduct); 

12 or 

13 ‘‘(2) to file, cause to be filed, testify, participate 

14 in, or otherwise assist in a proceeding filed or about 

15 to be filed (with any knowledge of the employer) re16 lating to an alleged violation of section 2342, or any 

17 provision of Federal law relating to contraband to18 bacco. 

19 ‘‘(b) ENFORCEMENT ACTION.— 

20 ‘‘(1) IN GENERAL.—A person who alleges dis21 charge or other discrimination by any person in vio22 lation of subsection (a) may seek relief under sub23 section (c), by— 

24 ‘‘(A) filing a complaint with the Secretary 

25 of Labor; or 
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1 ‘‘(B) if the Secretary has not issued a final 

2 decision within 180 days of the filing of the 

3 complaint and there is no showing that such 

4 delay is due to the bad faith of the claimant, 

5 bringing an action at law or equity for de novo 

6 review in the appropriate district court of the 

7 United States, which shall have jurisdiction 

8 over such an action without regard to the 

9 amount in controversy. 

10 ‘‘(2) PROCEDURE.— 

11 ‘‘(A) IN GENERAL.—An action under para12 graph (1)(A) shall be governed under the rules 

13 and procedures set forth in section 42121(b) of 

14 title 49, United States Code. 

15 ‘‘(B) EXCEPTION.—Notification made 

16 under section 42121(b)(1) of title 49, United 

17 States Code, shall be made to the person named 

18 in the complaint and to the employer. 

19 ‘‘(C) BURDENS OF PROOF.—An action 

20 brought under paragraph (1)(B) shall be gov21 erned by the legal burdens of proof set forth in 

22 section 42121(b) of title 49, United States 

23 Code. 

24 ‘‘(D) STATUTE OF LIMITATIONS.—An ac25 tion under paragraph (1) shall be commenced 
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1 not later than 90 days after the date on which 

2 the violation occurs. 

3 ‘‘(c) REMEDIES.— 

4 ‘‘(1) IN GENERAL.—An employee prevailing in 

5 any action under subsection (b)(1) shall be entitled 

6 to all relief necessary to make the employee whole. 

7 ‘‘(2) COMPENSATORY DAMAGES.—Relief for any 

8 action under paragraph (1) shall include— 

9 ‘‘(A) reinstatement with the same seniority 

10 status that the employee would have had, but 

11 for the discrimination; 

12 ‘‘(B) the amount of back pay, with inter13 est; and 

14 ‘‘(C) compensation for any special damages 

15 sustained as a result of the discrimination, in16 cluding litigation costs, expert witness fees, and 

17 reasonable attorney fees. 

18 ‘‘(d) RIGHTS RETAINED BY EMPLOYEE.—Nothing in 

19 this section shall be deemed to diminish the rights, privi20 leges, or remedies of any employee under any Federal or 

21 State law, or under any collective bargaining agreement.’’. 

22 (b) CLERICAL AMENDMENT.—The table of sections 

23 at the beginning of chapter 73 of title 18, United States 

24 Code, is amended by inserting after the item relating to 

25 section 1514 the following new item: 
25 

•HR 1377 IH 

‘‘1514B. Civil action to protect against retaliation in contraband tobacco 

cases.’’. 

Æ