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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5689 Introduced in House (IH)]

110th CONGRESS
  2d Session
                                H. R. 5689

To amend the Internal Revenue Code of 1986 and title 18, United States 
   Code, to deter the smuggling of tobacco products into the United 
                    States, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 3, 2008

Mr. Doggett (for himself, Mr. Abercrombie, Mr. Ackerman, Mr. Allen, Mr. 
    Andrews, Mr. Arcuri, Ms. Baldwin, Mr. Becerra, Mr. Berman, Mr. 
Blumenauer, Mr. Braley of Iowa, Ms. Ginny Brown-Waite of Florida, Mrs. 
 Capps, Mr. Capuano, Ms. Clarke, Mr. Cummings, Mr. Davis of Illinois, 
 Mrs. Davis of California, Mr. DeFazio, Ms. DeGette, Mr. Delahunt, Ms. 
DeLauro, Mr. Ellison, Mr. Emanuel, Ms. Eshoo, Mr. Farr, Mr. Filner, Mr. 
  Frank of Massachusetts, Mr. Gene Green of Texas, Mr. Grijalva, Mr. 
 Hare, Mr. Hinchey, Mr. Hinojosa, Ms. Hirono, Mr. Holt, Mr. Honda, Ms. 
Hooley, Mr. Israel, Mr. Jackson of Illinois, Ms. Jackson-Lee of Texas, 
Ms. Eddie Bernice Johnson of Texas, Ms. Kaptur, Mr. Kennedy, Mr. Kind, 
 Mr. Kucinich, Mr. Langevin, Ms. Lee, Mr. Levin, Mr. Lewis of Georgia, 
Mr. Lipinski, Mr. Loebsack, Ms. Zoe Lofgren of California, Mrs. Lowey, 
  Mr. Lynch, Mrs. Maloney of New York, Mr. Markey, Mr. Matheson, Ms. 
  Matsui, Mrs. McCarthy of New York, Mr. McDermott, Mr. McGovern, Mr. 
 McNulty, Mr. Meeks of New York, Mr. George Miller of California, Mr. 
 Nadler, Mrs. Napolitano, Mr. Neal of Massachusetts, Mr. Oberstar, Mr. 
     Olver, Mr. Pallone, Mr. Pascrell, Mr. Payne, Mr. Platts, Ms. 
Richardson, Mr. Rothman, Ms. Roybal-Allard, Mr. Rush, Mr. Ryan of Ohio, 
Ms. Linda T. Sanchez of California, Ms. Loretta Sanchez of California, 
Mr. Sarbanes, Ms. Schakowsky, Mr. Serrano, Mr. Sestak, Mr. Sherman, Ms. 
 Slaughter, Mr. Smith of Washington, Mr. Snyder, Ms. Solis, Mr. Stark, 
Ms. Sutton, Mrs. Tauscher, Mr. Thompson of California, Mr. Tierney, Ms. 
     Tsongas, Mr. Udall of New Mexico, Mr. Van Hollen, Mr. Walz of 
Minnesota, Ms. Waters, Ms. Watson, Mr. Waxman, Mr. Weiner, Mr. Welch of 
Vermont, 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

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 and title 18, United States 
   Code, to deter the smuggling of tobacco products into the United 
                    States, and for other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Smuggled Tobacco 
Prevention Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title and table of contents.
          TITLE I--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Sec. 101. Amendment of 1986 code.
Sec. 102. Improved marking and labeling; export bonds.
Sec. 103. Wholesalers required to have permit.
Sec. 104. Conditions of permit.
Sec. 105. Records to be maintained.
Sec. 106. Reports.
Sec. 107. Fraudulent offenses.
Sec. 108. Civil penalties.
Sec. 109. Definitions.
Sec. 110. Effective date.
   TITLE II--AMENDMENTS RELATING TO CONTRABAND CIGARETTE TRAFFICKING

Sec. 201. Expanding scope of penal provisions relating to trafficking 
                            in contraband tobacco products.
Sec. 202. Creating right of action for State tobacco tax administrator 
                            for failure to report.
             TITLE III--WHISTLEBLOWER PROTECTION PROVISIONS

Sec. 301. Whistleblower protection.

          TITLE I--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

SEC. 101. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Internal Revenue Code of 
1986.

SEC. 102. IMPROVED MARKING AND LABELING; EXPORT BONDS.

    (a) In General.--
            (1) Section 5723 (relating to marks, labels, and notices) 
        is amended--
                    (A) by striking ``, if any,'' in subsection (b),
                    (B) by adding at the end of subsection (b) the 
                following: ``Such marks, labels, and notices shall 
                include marks and notices relating to the following:
            ``(1) Identification.--Each person who is a manufacturer or 
        importer of tobacco products shall (in accordance with 
        regulations prescribed by the Secretary) legibly print a unique 
        serial number on all packages of tobacco products manufactured 
        or imported by such person for sale or distribution. Such 
        serial number shall be designed to enable the Secretary to 
        identify the manufacturer of the product (and, in the case of 
        importation, the manufacturer and importer of the product), the 
        location and date of manufacture (and, if imported, the 
        location and date of importation), and any other information 
        the Secretary determines necessary or appropriate for the 
        proper administration of the chapter. The Secretary shall 
        determine the size and location of the serial number.
            ``(2) Marking requirements for exports.--Each package of a 
        tobacco product that is exported, or sold for export, shall be 
        marked for export from the United States and shall be marked as 
        to the foreign country which is to be the final destination of 
        such product. Such marking shall be visible and prominent and 
        shall be in English and in the primary language of such foreign 
        country. The Secretary shall promulgate regulations to 
        determine the size and location of the mark.
            ``(3) Additional methods of identification or marking.--The 
        Secretary may by regulation authorize such additional secure 
        methods of identification or marking as may be, taking into 
        account available technology, necessary or appropriate to carry 
        out the purposes of this subsection.'', and
                    (C) by adding at the end the following new 
                subsection:
    ``(f) Additional Marks.--
            ``(1) In general.--Not later than 180 days after the date 
        of the enactment of the Smuggled Tobacco Prevention Act of 
        2008, the Secretary shall prescribe a system of tobacco tax 
        stamps, meter impressions, or other Federal tax-payment indicia 
        to be affixed by manufacturers and importers of tobacco 
        products on all tobacco products subject to tax under this 
        chapter.
            ``(2) System specifications.--
                    ``(A) The Secretary shall design such system to 
                coordinate and avoid interference with State and local 
                tax stamps or markings, facilitate collection of the 
                tax under this chapter, impede contraband tobacco 
                trafficking, minimize counterfeit stamping or meter 
                impressions, allow for more effective tracking and 
                tracing of tobacco products, facilitate the enforcement 
                of related Federal laws, and utilize such available 
                technology as may promote the purposes of this chapter.
                    ``(B) The Secretary shall prescribe the method and 
                manner in which such stamps, meter impressions, or 
                indicia are to be distributed, purchased, and affixed 
                to tobacco product packages, and may provide for the 
                cancellation of such stamps, meter impressions, or 
                indicia.
                    ``(C) Any such tax stamp, meter impression, or 
                indicia must provide the following information:
                            ``(i) The denominated value of the stamp, 
                        meter impression, or indicia.
                            ``(ii) A unique serial number or tracking 
                        code.
                            ``(iii) The name and address of the person 
                        purchasing (and, if different, of the person 
                        affixing) the stamp, meter impression, or 
                        indicia.
                            ``(iv) The date the stamp, meter 
                        impression, or indicia was purchased and when 
                        it was affixed.
                            ``(v) The name and address of the person 
                        purchasing or otherwise receiving the tobacco 
                        product from the person who affixes the tax 
                        stamp, meter impression, or indicia, and the 
                        date of such purchase or transfer.
                            ``(vi) Such other information as the 
                        Secretary may prescribe to carry out the 
                        purposes of this chapter.
                    ``(D) The information described in subparagraph (C) 
                shall, to the extent practicable, be cryptographically 
                encrypted and readable by a portable scanning device 
                (or similar device) at the time and place of 
                inspection, and shall otherwise be accessible remotely 
                by such a device at such time and place.
                    ``(E) The Secretary may establish different stamps, 
                meter impressions, or indicia for the same type of 
                tobacco product to correspond to different 
                jurisdictions of manufacture, distribution, or sale.
                    ``(F) The Secretary may by regulation authorize 
                such additional secure methods of identification or 
                marking as may be, taking into account available 
                technology, necessary or appropriate to carry out the 
                purposes of this subsection.
                    ``(G) No tobacco product may be sold, distributed, 
                or otherwise delivered to any consumer in the United 
                States unless the tax stamp, meter impression, or 
                indicia required under regulations prescribed pursuant 
                to this section is affixed to the tobacco product 
                packaging in accordance with such regulations.''.
    (b) Sales on Indian Reservations; Package Defined.--Section 5723, 
as amended by subsection (a), is amended by adding at the end the 
following new subsections:
    ``(g) Sales on Indian Reservations.--Each package of a tobacco 
product that is sold on an Indian reservation (as defined in section 
403(9) of the Indian Child Protection and Family Violence Prevention 
Act (25 U.S.C. 3202(9)) shall be visibly and prominently labeled as 
such. The Secretary, in consultation with the Secretary of the 
Interior, shall promulgate regulations with respect to such labeling, 
including requirements for the size and location of the label.
    ``(h) Definition of Package.--For purposes of this section, the 
term `package' means the innermost sealed container visible from the 
outside of the individual container irrespective of the material from 
which such container is made, in which a tobacco product is placed by 
the manufacturer and in which such tobacco product is offered for sale 
to a member of the general public.''.
    (c) Requirements for Tracking of Tobacco Products.--
            (1) In general.--Subchapter B of chapter 52 is amended by 
        adding at the end the following new section:

``SEC. 5714. EXPORT BONDS.

    ``(a) Posting of Bond.--
            ``(1) In general.--It shall be unlawful for any person to 
        export any tobacco product unless such person--
                    ``(A) has posted with the Secretary a tobacco 
                product bond in accordance with this section for such 
                product that contains a disclosure of the country to 
                which such product will be exported; and
                    ``(B) receives a written statement from the 
                recipient of the tobacco products involved that such 
                person--
                            ``(i) will not knowingly and willfully 
                        violate or cause to be violated any law or 
                        regulation of such country, the United States, 
                        any State, the District of Columbia, or any 
                        possession of the United States with respect to 
                        such products; and
                            ``(ii) has never been convicted of any 
                        offense with respect to tobacco products.
            ``(2) Regulations.--The Secretary shall promulgate 
        regulations that determine the frequency and the amount of each 
        bond that must be posted under paragraph (1), but in no case 
        shall such amount be less than an amount equal to the tax 
        imposed under this chapter on the value of the shipment of the 
        products involved if such products were consumed within the 
        United States.
            ``(3) Export.--For purposes of this subsection, property 
        shall be treated as exported if it is shipped to a foreign 
        country, Puerto Rico, the Virgin Islands, or a possession of 
        the United States, or for consumption beyond the jurisdiction 
        of the internal revenue laws of the United States.
    ``(b) Return of Bond.--The Secretary shall return a bond posted 
under subsection (a)--
            ``(1) upon a determination by the Secretary (based on 
        documentation provided by the person who posted the bond in 
        accordance with regulations promulgated by the Secretary) that 
        the items to which the bond applies have been received in the 
        country of final destination as designated in the bond, or
            ``(2) under such other circumstance as the Secretary may 
        specify which is consistent with the purposes of this 
        chapter.''.
            (2) Clerical amendment.--The table of sections for such 
        subchapter B is amended by adding at the end the following new 
        item:

``Sec. 5714. Export bonds.''.

SEC. 103. WHOLESALERS REQUIRED TO HAVE PERMIT.

    Section 5712 (relating to application for permit) is amended by 
inserting ``, wholesaler,'' after ``manufacturer''.

SEC. 104. CONDITIONS OF PERMIT.

    Subsection (a) of section 5713 (relating to issuance of permit) is 
amended to read as follows:
    ``(a) Issuance.--
            ``(1) In general.--A person shall not engage in business as 
        a manufacturer, wholesaler, or importer of tobacco products or 
        as an export warehouse proprietor without a permit to engage in 
        such business. Such permit shall be issued in such form and in 
        such manner as the Secretary shall by regulation prescribe, to 
        every person properly qualified under sections 5711 and 5712. A 
        new permit may be required at such other time as the Secretary 
        shall by regulation prescribe.
            ``(2) Conditions.--The issuance of a permit under this 
        section shall be conditioned upon the compliance with the 
        requirements of--
                    ``(A) this chapter,
                    ``(B) chapter 114 of title 18, United States Code,
                    ``(C) the Act of October 19, 1949 (15 U.S.C. 375 et 
                seq.),
                    ``(D) any regulations issued pursuant to such 
                statutes, and
                    ``(E) any other federal laws or regulations 
                relating to the taxation, manufacture, distribution, 
                marketing, sale, or transportation of tobacco 
                products.''.

SEC. 105. RECORDS TO BE MAINTAINED.

    Section 5741 (relating to records to be maintained) is amended--
            (1) by inserting ``(a) In General.--'' before ``Every 
        manufacturer'',
            (2) by inserting ``every wholesaler,'' after ``every 
        importer,'',
            (3) by striking ``such records'' and inserting ``records 
        concerning the chain of custody of the tobacco products 
        (including the foreign country of final destination for 
        packages marked for export) and such other records'', and
            (4) by adding at the end the following new subsection:
    ``(b) Retailers.--Retailers shall maintain records of receipt of 
tobacco products, and such records shall be available to the Secretary 
for inspection and audit. An ordinary commercial record or invoice 
shall satisfy the requirements of this subsection if such record shows 
the date of receipt, from whom tobacco products were received, and the 
quantity of tobacco products received. The preceding provisions of this 
subsection shall not be construed to limit or preclude other 
recordkeeping requirements imposed on any retailer.''.

SEC. 106. REPORTS.

    Section 5722 (relating to reports) is amended--
            (1) by inserting ``(a) In General.--'' before ``Every 
        manufacturer'', and
            (2) by adding at the end the following new subsection:
    ``(b) Reports by Export Warehouse Proprietors.--
            ``(1) In general.--Prior to exportation of tobacco products 
        from the United States, the export warehouse proprietor shall 
        submit a report (in such manner and form as the Secretary may 
        by regulation prescribe) to enable the Secretary to identify 
        the shipment and assure that it reaches its intended 
        destination.
            ``(2) Agreements with foreign governments.--Notwithstanding 
        section 6103 of this title, the Secretary is authorized to 
        enter into agreements with foreign governments to exchange or 
        share information contained in reports received from export 
        warehouse proprietors of tobacco products if--
                    ``(A) the Secretary believes that such agreement 
                will assist in--
                            ``(i) ensuring compliance with the 
                        provisions of this chapter or regulations 
                        promulgated thereunder, or
                            ``(ii) preventing or detecting violations 
                        of the provisions of this chapter or 
                        regulations promulgated thereunder, and
                    ``(B) the Secretary obtains assurances from such 
                government that the information will be held in 
                confidence and used only for the purposes specified in 
                clauses (i) and (ii) of subparagraph (A).
        No information may be exchanged or shared with any government 
        that has violated such assurances.''.

SEC. 107. FRAUDULENT OFFENSES.

    (a) In General.--Subsection (a) of section 5762 (relating to 
fraudulent offenses) is amended by striking paragraph (1) and 
redesignating paragraphs (2) through (6) as paragraphs (1) through (5), 
respectively.
    (b) Offenses Relating to Distribution of Tobacco Products.--Section 
5762 is amended--
            (1) by redesignating subsection (b) as subsection (c),
            (2) in subsection (c) (as so redesignated), by inserting 
        ``or (b)'' after ``(a)'', and
            (3) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Offenses Relating to Distribution of Tobacco Products.--It 
shall be unlawful--
            ``(1) for any person to engage in the business as a 
        manufacturer or importer of tobacco products or cigarette 
        papers and tubes, or to engage in the business as a wholesaler 
        or an export warehouse proprietor, without filing the bond and 
        obtaining the permit where required by this chapter or 
        regulations thereunder;
            ``(2) for a manufacturer, importer, or wholesaler permitted 
        under this chapter intentionally to ship, transport, deliver, 
        or receive any tobacco products from or to any person other 
        than a person permitted under this chapter or a retailer, 
        except a permitted importer may receive foreign tobacco 
        products from a foreign manufacturer or a foreign distributor 
        that have not previously entered the United States;
            ``(3) for any person (other than the original manufacturer 
        of such tobacco products or an export warehouse proprietor 
        authorized to receive any tobacco products that have previously 
        been exported and returned to the United States) to receive any 
        tobacco products that have previously been exported and 
        returned to the United States;
            ``(4) for any export warehouse proprietor intentionally to 
        ship, transport, sell, or deliver for sale any tobacco products 
        to any person other than the original manufacturer of such 
        tobacco products, another export warehouse proprietor, or a 
        foreign purchaser;
            ``(5) for any person (other than a manufacturer or an 
        export warehouse proprietor permitted under this chapter) 
        intentionally to ship, transport, receive, or possess, for 
        purposes of resale, any tobacco product in packages marked 
        pursuant to regulations issued under section 5723, other than 
        for direct return to a manufacturer for repacking or for re-
        exportation or to an export warehouse proprietor for re-
        exportation;
            ``(6) for any manufacturer, importer, export warehouse 
        proprietor, or wholesaler permitted under this chapter to make 
        intentionally any false entry in, to fail willfully to make 
        appropriate entry in, or to fail willfully to maintain properly 
        any record or report that such person is required to keep as 
        required by this chapter or the regulations promulgated 
        thereunder;
            ``(7) for any person to alter, mutilate, destroy, 
        obliterate, or remove any mark or label required under this 
        chapter upon a tobacco product held for sale, except pursuant 
        to regulations of the Secretary authorizing relabeling for 
        purposes of compliance with the requirements of this section or 
        of State law, or to create, possess, or apply on any tobacco 
        product or its packaging any counterfeit versions of any such 
        marks or labels; and
            ``(8) for any person to sell at retail more than 5,000 
        cigarettes in a single transaction or in a series of related 
        transactions, or, in the case of other tobacco products, an 
        equivalent quantity as determined by regulation.
Any person violating any of the provisions of this subsection shall, 
upon conviction, be fined as provided in section 3571 of title 18, 
United States Code, or imprisoned for not more than 5 years, or 
both.''.
    (c) Intentionally Defined.--Section 5762 is amended by adding at 
the end the following:
    ``(d) Definition of Intentionally.--For purposes of this section 
and section 5761, the term `intentionally' means doing an act, or 
omitting to do an act, deliberately, and not due to accident, 
inadvertence, or mistake, regardless of whether the person knew that 
the act or omission constituted an offense.''.

SEC. 108. CIVIL PENALTIES.

    Subsection (a) of section 5761 (relating to civil penalties) is 
amended--
            (1) by striking ``willfully'' and inserting 
        ``intentionally'', and
            (2) by striking ``$1,000'' and inserting ``$10,000''.

SEC. 109. DEFINITIONS.

    (a) Export Warehouse Proprietor.--Subsection (i) of section 5702 
(relating to definition of export warehouse proprietor) is amended by 
inserting before the period the following: ``or any person engaged in 
the business of exporting tobacco products from the United States for 
purposes of sale or distribution. Any duty free store that sells, 
offers for sale, or otherwise distributes to any person in any single 
transaction more than 30 packages of cigarettes, or its equivalent for 
other tobacco products as the Secretary shall by regulation prescribe, 
shall be deemed an export warehouse proprietor under this chapter''.
    (b) Retailer; Wholesaler.--Section 5702 is amended by adding at the 
end the following new subsections:
    ``(p) Retailer.--The term `retailer' means any dealer who sells, or 
offers for sale, any tobacco product at retail. The term `retailer' 
includes any duty free store that sells, offers for sale, or otherwise 
distributes at retail in any single transaction 30 or fewer packages of 
cigarettes or its equivalent for other tobacco products.
    ``(q) Wholesaler.--The term `wholesaler' means any person engaged 
in the business of purchasing tobacco products for resale at wholesale, 
or any person acting as an agent or broker for any person engaged in 
the business of purchasing tobacco products for resale at wholesale.''.

SEC. 110. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this title shall take effect on January 1, 2009.
    (b) Additional Tobacco Mark System.--The amendments made by 
subparagraph (C) of section 102(a)(1) of this Act shall take effect on 
the date of the enactment of this Act.

   TITLE II--AMENDMENTS RELATING TO CONTRABAND CIGARETTE TRAFFICKING

SEC. 201. EXPANDING SCOPE OF PENAL PROVISIONS RELATING TO TRAFFICKING 
              IN CONTRABAND TOBACCO PRODUCTS.

    (a) Provisions Relating to Definition of Tobacco Products.--
            (1) In general.--Paragraphs (1) and (2) of section 2341 of 
        title 18, United States Code, are amended to read as follows:
            ``(1) the term `tobacco product' has the meaning given to 
        such term by section 5702 of the Internal Revenue Code of 1986;
            ``(2) the term `contraband tobacco product' means any 
        tobacco product if--
                    ``(A)(i) in the case of cigarettes, such cigarettes 
                are in a quantity in excess of 2,000 cigarettes; or
                    ``(ii) in the case of a tobacco product other than 
                a cigarette, such product is in a quantity in excess of 
                the equivalent of 2,000 cigarettes as determined under 
                rules made by the Attorney General;
                    ``(B) such tobacco product is not marked with a 
                Federal tax stamp, meter impression, or other Federal 
                tax-payment indicia as required by law;
                    ``(C) such tobacco product is marked with a 
                counterfeit, stolen, or unauthorized Federal or State 
                tax stamp, meter impression, or other tax-payment 
                indicia;
                    ``(D) such tobacco product is a counterfeit tobacco 
                product, including tobacco products having any 
                counterfeit markings, labels, or packaging or bearing 
                any unauthorized trademarks;
                    ``(E) such tobacco product has been brought into 
                the United States illegally;
                    ``(F)(i) if the State or other jurisdiction in 
                which such tobacco product is found requires a stamp, 
                impression, or other indication to be placed on 
                packages or other containers of product to evidence 
                payment of tobacco taxes, such tobacco product bears no 
                evidence of such payment; or
                    ``(ii) if such State or other such jurisdiction has 
                no such requirement, applicable tobacco taxes are found 
                to be not paid; and
                    ``(G) such tobacco product is in the possession of 
                any person other than--
                            ``(i) a person holding a permit issued 
                        pursuant to chapter 52 of the Internal Revenue 
                        Code of 1986 as a manufacturer or importer of 
                        tobacco products or as an export warehouse 
                        proprietor, or a person operating a customs 
                        bonded warehouse pursuant to section 311 or 555 
                        of the Tariff Act of 1930 (19 U.S.C. 1311 or 
                        1555) or an agent of such person;
                            ``(ii) a common or contract carrier 
                        transporting the tobacco product involved under 
                        a proper bill of lading or freight bill which 
                        states the quantity, source, and destination of 
                        such product;
                            ``(iii) a person--
                                    ``(I) who is licensed or otherwise 
                                authorized by the State where the 
                                tobacco product is found to account for 
                                and pay tobacco taxes imposed by such 
                                State; and
                                    ``(II) who has complied with the 
                                accounting and payment requirements 
                                relating to such license or 
                                authorization with respect to the 
                                tobacco product involved; or
                            ``(iv) an officer, employee, or other agent 
                        of the United States or a State, or any 
                        department, agency, or instrumentality of the 
                        United States or a State (including any 
                        political subdivision of a State) having 
                        possession of such tobacco product in 
                        connection with the performance of official 
                        duties;''.
            (2) Cigarettes.--Section 2341 of title 18, United States 
        Code, is amended by adding at the end the following new 
        paragraph:
            ``(8) the term `cigarette' has the meaning given such term 
        by section 5702 of the Internal Revenue Code of 1986.''.
            (3) Conforming amendments.--Section 2341 of title 18, 
        United States Code, as amended by paragraph (2), is amended--
                    (A) by inserting ``and'' at the end of paragraph 
                (5);
                    (B) by striking paragraphs (6) and (7); and
                    (C) by redesignating paragraph (8) as paragraph 
                (6).
    (b) Provisions Relating to Unlawful Acts.--Section 2342 of title 
18, United States Code, is amended to read as follows:
``Sec. 2342. Unlawful acts
    ``(a) It shall be unlawful for any person knowingly to ship, 
transport, receive, possess, sell, distribute, or purchase contraband 
tobacco products.
    ``(b) It shall be unlawful for any person knowingly--
            ``(1) to make any false statement or representation with 
        respect to the information required by this chapter to be kept 
        in the records or reports of any person who ships, sells, or 
        distributes (in a single transaction or in a series of related 
        transactions) any quantity of tobacco product in excess of the 
        quantity specified in or pursuant to section 2341(2)(A) with 
        respect to such product; or
            ``(2) to fail to maintain records or reports, alter or 
        obliterate required markings, or interfere with any inspection, 
        required under this chapter, with respect to such quantity of 
        tobacco product.
    ``(c) It shall be unlawful for any person knowingly to transport 
tobacco products under a false bill of lading or without any bill of 
lading.''.
    (c) Provisions Relating to Recordkeeping, Reporting, and Inspection 
Requirements.--
            (1) In general.--Section 2343 of title 18, United States 
        Code, is amended--
                    (A) in subsection (a), by striking ``any quantity 
                of cigarettes in excess of 10,000, or'' and all that 
                follows through ``cans or packages, in a single 
                transaction'' and inserting ``(in a single transaction 
                or in a series of related transactions) any quantity of 
                tobacco product in excess of the quantity specified in 
                or pursuant to section 2341(2)(A) with respect to such 
                product'';
                    (B) in subsection (b), by striking ``any quantity 
                in excess of 10,000 cigarettes, or'' and all that 
                follows through ``smokeless tobacco, or their 
                equivalent'' and inserting ``any quantity of tobacco 
                product in excess of the quantity specified in or 
                pursuant to section 2341(2)(A) with respect to such 
                product''; and
                    (C) in subsection (c), by striking ``any quantity 
                of cigarettes in excess of 10,000 in a single 
                transaction'' and inserting ``(in a single transaction 
                or in a series of related transactions) any quantity of 
                tobacco product in excess of the quantity specified in 
                or pursuant to section 2341(2)(A) with respect to such 
                product''.
            (2) Conforming amendments.--Section 2343 of title 18, 
        United States Code, as amended by paragraph (1) of this 
        subsection, is amended--
                    (A) in paragraph (2) of subsection (e), by striking 
                ``are'' and inserting ``is''; and
                    (B) by striking--
                            (i) ``cigarettes'' each place it appears in 
                        subsections (a) and (c);
                            (ii) ``cigarettes and cans or packages of 
                        smokeless tobacco'' each place it appears in 
                        subsection (b); and
                            (iii) ``cigarettes or smokeless tobacco'' 
                        each place it appears in subsection (e);
                and inserting ``tobacco product''.
    (d) Provisions Relating to Machines Used To Manufacture or Package 
Cigarettes or Other Tobacco Products.--Chapter 114 of title 18, United 
State Code, is amended by inserting after section 2343 the following:
``Sec. 2343A. Machines used to manufacture or package cigarettes or 
              other tobacco products
    ``(a) Any machine used to manufacture or package tobacco products 
shall be sold, leased, or delivered only to persons lawfully engaged in 
the sale, lease, or delivery of such machines or lawfully engaged in 
the manufacture of tobacco products, and that have all permits or 
licenses required to engage in such activities by the laws of the 
country and other jurisdictions where the person is located.
    ``(b) Any machine used to apply or affix tax stamps, meter 
impressions, or other tax-payment indicia to packages of tobacco 
products shall be sold, leased, or delivered only to persons lawfully 
engaged in the sale, lease, or delivery of such machines or lawfully 
engaged in the application of such stamps, meter impressions or other 
tax-payment indicia onto tobacco product packages, and that have all 
permits or licenses required to engage in such activities by the laws 
of the country and other jurisdictions where the person is located.
    ``(c) No machine used in the manufacture or packaging of tobacco 
products or in the application of tax stamps, meter impressions, or 
other tax-payment indicia to packages of tobacco products shall 
knowingly be manufactured for or be sold, leased, delivered, directly 
or indirectly, or otherwise made available to any person engaged in the 
manufacture, distribution or sale of counterfeit or contraband tobacco 
products or counterfeit tax stamps, meter impressions, or other tax-
payment indicia.
    ``(d) Any machine used to manufacture or package tobacco products 
or to apply or affix tax stamps, meter impressions, or other tax-
payment indicia to packages of tobacco products that is no longer being 
used or offered for that purpose shall be made irreparably inoperable 
for those purposes before being disposed of or put to any other use. 
This paragraph shall not apply to any such machines being kept solely 
for display or for historical purposes.
    ``(e) Any person manufacturing, selling, leasing, delivering, or 
disposing of a machine used to manufacture or package tobacco products 
or to apply or affix tax stamps, meter impressions, or other tax-
payment indicia to packages of tobacco products shall maintain and keep 
records relating to any transfers of deliveries of the machine, 
including the name, address, and other contact information of any 
person ordering, buying, leasing, or receiving delivery of the machine. 
Such reports shall be made available to the Secretary and other federal 
and state government law enforcement officials for inspection and audit 
upon request. An ordinary commercial record or invoice shall satisfy 
the requirements of this subsection if such record describes the 
transaction and the related machine and provides the date of the 
transaction and the name and contact information of all persons parties 
to the transaction or acting as agents for those parties in regard to 
the transaction.
    ``(f) This section shall not apply to machines meant and expected 
for use only by individual consumers of tobacco products for personal 
use.''.
    (e) Provisions Relating to Penalties.--Section 2344 of title 18, 
United States Code, is amended--
            (1) in subsection (a), by inserting ``or subsection (a), 
        (b), or (c) of section 2343A'' after ``section 2342(a)'', and
            (2) in subsection (b), by striking ``section 2342(b)'' and 
        inserting ``subsection (b) or (c) of section 2342 or subsection 
        (d) or (e) of section 2343A''.
    (f) Provisions Relating to Effect on State and Local Law.--Section 
2345 of title 18, United States Code, is amended--
            (1) by striking ``cigarette tax laws'' each place it 
        appears and inserting ``tobacco product tax laws''; and
            (2) by striking ``cigarettes or smokeless tobacco'' and 
        inserting ``tobacco products''.
    (g) Clerical Amendments.--(1) The heading for chapter 114 of title 
18, United States Code, is amended to read as follows:

      ``CHAPTER 114--TRAFFICKING IN CONTRABAND TOBACCO PRODUCTS''.

    (2) The table of chapters at the beginning of part I of title 18, 
United States Code, is amended by striking the item relating to section 
114 and inserting the following new item:

``114. Trafficking in contraband tobacco products...........    2341''.
    (3) The table of sections for chapter 114 of title 18, United 
States Code, is amended by inserting after the item relating to section 
2343 the following new item:

``2343A. Machines used to manufacture or package cigarettes or other 
                            tobacco products.''.

SEC. 202. CREATING RIGHT OF ACTION FOR STATE TOBACCO TAX ADMINISTRATOR 
              FOR FAILURE TO REPORT.

    (a) In General.--(1) Section 4 of the Act of October 19, 1949 (15 
U.S.C. 378) is amended by adding at the end the following: ``A State 
tobacco tax administrator may commence a civil action to obtain 
appropriate relief with respect to a violation of this Act.''.
    (2) Section 1 of such Act is amended by striking paragraph (2) and 
inserting following new paragraph:
            ``(2) The term `tobacco product' has the meaning given to 
        such term by section 5702 of the Internal Revenue Code of 
        1986.''.
    (b) Conforming Amendment.--Such Act is further amended by striking 
``cigarette'' and ``cigarettes'' each place either appears and 
inserting ``tobacco product'' and ``tobacco products'', respectively.

             TITLE III--WHISTLEBLOWER PROTECTION PROVISIONS

SEC. 301. WHISTLEBLOWER PROTECTION.

    (a) In General.--Chapter 73 of title 18, United States Code, is 
amended by inserting after section 1514A the following:
``Sec. 1514B. Civil action to protect against retaliation in contraband 
              tobacco cases
    ``(a) Whistleblower Protection for Contraband Tobacco.--No person 
may discharge, demote, suspend, threaten, harass, or in any other 
manner discriminate against an employee in the terms and conditions of 
employment because of any lawful act done by the employee--
            ``(1) to provide information, cause information to be 
        provided, or otherwise assist in an investigation regarding any 
        conduct which the employee reasonably believes constitutes a 
        violation of section 2342 or any other provision of Federal law 
        relating to contraband tobacco, when the information or 
        assistance is provided to or the investigation is conducted 
        by--
                    ``(A) a Federal regulatory or law enforcement 
                agency;
                    ``(B) any Member of Congress or any committee of 
                Congress; or
                    ``(C) a person with supervisory authority over the 
                employee (or such other person working for the employer 
                who has the authority to investigate, discover, or 
                terminate misconduct); or
            ``(2) to file, cause to be filed, testify, participate in, 
        or otherwise assist in a proceeding filed or about to be filed 
        (with any knowledge of the employer) relating to an alleged 
        violation of section 2342, or any provision of Federal law 
        relating to contraband tobacco.
    ``(b) Enforcement Action.--
            ``(1) In general.--A person who alleges discharge or other 
        discrimination by any person in violation of subsection (a) may 
        seek relief under subsection (c), by--
                    ``(A) filing a complaint with the Secretary of 
                Labor; or
                    ``(B) if the Secretary has not issued a final 
                decision within 180 days of the filing of the complaint 
                and there is no showing that such delay is due to the 
                bad faith of the claimant, bringing an action at law or 
                equity for de novo review in the appropriate district 
                court of the United States, which shall have 
                jurisdiction over such an action without regard to the 
                amount in controversy.
            ``(2) Procedure.--
                    ``(A) In general.--An action under paragraph (1)(A) 
                shall be governed under the rules and procedures set 
                forth in section 42121(b) of title 49, United States 
                Code.
                    ``(B) Exception.--Notification made under section 
                42121(b)(1) of title 49, United States Code, shall be 
                made to the person named in the complaint and to the 
                employer.
                    ``(C) Burdens of proof.--An action brought under 
                paragraph (1)(B) shall be governed by the legal burdens 
                of proof set forth in section 42121(b) of title 49, 
                United States Code.
                    ``(D) Statute of limitations.--An action under 
                paragraph (1) shall be commenced not later than 90 days 
                after the date on which the violation occurs.
    ``(c) Remedies.--
            ``(1) In general.--An employee prevailing in any action 
        under subsection (b)(1) shall be entitled to all relief 
        necessary to make the employee whole.
            ``(2) Compensatory damages.--Relief for any action under 
        paragraph (1) shall include--
                    ``(A) reinstatement with the same seniority status 
                that the employee would have had, but for the 
                discrimination;
                    ``(B) the amount of back pay, with interest; and
                    ``(C) compensation for any special damages 
                sustained as a result of the discrimination, including 
                litigation costs, expert witness fees, and reasonable 
                attorney fees.
    ``(d) Rights Retained by Employee.--Nothing in this section shall 
be deemed to diminish the rights, privileges, or remedies of any 
employee under any Federal or State law, or under any collective 
bargaining agreement.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 73 of title 18, United States Code, is amended by inserting 
after the item relating to section 1514A the following new item:

``1514B. Civil action to protect against retaliation in contraband 
                            tobacco cases''.
                                 <all>
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