II 

Calendar No. 351 

110TH CONGRESS 

1ST SESSION S. 1027 

[Report No. 110–153] 

To prevent tobacco smuggling, to ensure the collection of all tobacco taxes, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 29, 2007 

Mr. KOHL (for himself, Mr. SPECTER, Mr. LEAHY, Mr. KYL, Mr. SCHUMER, 

and Ms. COLLINS) introduced the following bill; which was read twice and 

referred to the Committee on the Judiciary 

SEPTEMBER 11, 2007 

Reported by Mr. LEAHY, without amendment 

A BILL 

To prevent tobacco smuggling, to ensure the collection of 

all tobacco taxes, 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; FINDINGS; PURPOSES. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Prevent All Cigarette Trafficking Act of 2007’’ or 

6 ‘‘PACT Act’’. 


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1 (b) FINDINGS.—Congress finds that— 

2 (1) the sale of illegal cigarettes and smokeless 

3 tobacco products significantly reduces Federal, 

4 State, and local government revenues, with Internet 

5 sales alone accounting for billions of dollars of lost 

6 Federal, State, and local tobacco tax revenue each 

7 year; 

8 (2) Hezbollah, Hamas, al Qaeda, and other ter9 rorist organizations have profited from trafficking in 

10 illegal cigarettes or counterfeit cigarette tax stamps; 

11 (3) terrorist involvement in illicit cigarette traf12 ficking will continue to grow because of the large 

13 profits such organizations can earn; 

14 (4) the sale of illegal cigarettes and smokeless 

15 tobacco over the Internet, and through mail, fax, or 

16 phone orders, make it cheaper and easier for chil17 dren to obtain tobacco products; 

18 (5) the majority of Internet and other remote 

19 sales of cigarettes and smokeless tobacco are being 

20 made without adequate precautions to protect 

21 against sales to children, without the payment of ap22 plicable taxes, and without complying with the nomi23 nal registration and reporting requirements in exist24 ing Federal law; 


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1 (6) unfair competition from illegal sales of ciga2 rettes and smokeless tobacco is taking billions of dol3 lars of sales away from law-abiding retailers 

4 throughout the United States; 

5 (7) with rising State and local tobacco tax 

6 rates, the incentives for the illegal sale of cigarettes 

7 and smokeless tobacco have increased; 

8 (8) the number of active tobacco investigations 

9 being conducted by the Bureau of Alcohol, Tobacco, 

10 Firearms, and Explosives rose to 452 in 2005; 

11 (9) the number of Internet vendors in the 

12 United States and in foreign countries that sell ciga13 rettes and smokeless tobacco to buyers in the United 

14 States has increased from only about 40 in 2000 to 

15 more than 500 in 2005; and 

16 (10) the intrastate sale of illegal cigarettes and 

17 smokeless tobacco over the Internet has a substan18 tial effect on interstate commerce. 

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

20 (1) require Internet and other remote sellers of 

21 cigarettes and smokeless tobacco to comply with the 

22 same laws that apply to law-abiding tobacco retail23 ers; 

24 (2) create strong disincentives to illegal smug25 gling of tobacco products; 


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1 (3) provide government enforcement officials 

2 with more effective enforcement tools to combat to3 bacco smuggling; 

4 (4) make it more difficult for cigarette and 

5 smokeless tobacco traffickers to engage in and profit 

6 from their illegal activities; 

7 (5) increase collections of Federal, State, and 

8 local excise taxes on cigarettes and smokeless to9 bacco; and 

10 (6) prevent and reduce youth access to inexpen11 sive cigarettes and smokeless tobacco through illegal 

12 Internet or contraband sales. 

13 SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKE14 LESS TOBACCO TAXES. 

15 (a) DEFINITIONS.—The Act of October 19, 1949 (15 

16 U.S.C. 375 et seq.; commonly referred to as the ‘‘Jenkins 

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

18 amended by striking the first section and inserting the fol19 lowing: 

20 ‘‘SECTION 1. DEFINITIONS. 

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

22 ‘‘(1) ATTORNEY GENERAL.—The term ‘attorney 

23 general’, with respect to a State, means the attorney 

24 general or other chief law enforcement officer of the 

25 State, or the designee of that officer. 


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1 ‘‘(2) CIGARETTE.— 

2 ‘‘(A) IN GENERAL.—For purposes of this 

3 Act, the term ‘cigarette’ shall— 

4 ‘‘(i) have the same meaning given that 

5 term in section 2341 of title 18, United 

6 States Code; and 

7 ‘‘(ii) include ‘roll-your-own tobacco’ 

8 (as that term is defined in section 5702 of 

9 the Internal Revenue Code of 1986). 

10 ‘‘(B) EXCEPTION.—For purposes of this 

11 Act, the term ‘cigarette’ does not include a 

12 ‘cigar,’ as that term is defined in section 5702 

13 of the Internal Revenue Code of 1986. 

14 ‘‘(3) COMMON CARRIER.—The term ‘common 

15 carrier’ means any person (other than a local mes16 senger service or the United States Postal Service) 

17 that holds itself out to the general public as a pro18 vider for hire of the transportation by water, land, 

19 or air of merchandise, whether or not the person ac20 tually operates the vessel, vehicle, or aircraft by 

21 which the transportation is provided, between a port 

22 or place and a port or place in the United States. 

23 ‘‘(4) CONSUMER.—The term ‘consumer’ means 

24 any person that purchases cigarettes or smokeless 

25 tobacco, but does not include any person lawfully opVerDate Aug 31 2005 03:17 Sep 12, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1027.RS S1027

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1 erating as a manufacturer, distributor, wholesaler, 

2 or retailer of cigarettes or smokeless tobacco. 

3 ‘‘(5) DELIVERY SALE.—The term ‘delivery sale’ 

4 means any sale of cigarettes or smokeless tobacco to 

5 a consumer if— 

6 ‘‘(A) the consumer submits the order for 

7 such sale by means of a telephone or other 

8 method of voice transmission, the mails, or the 

9 Internet or other online service, or the seller is 

10 otherwise not in the physical presence of the 

11 buyer when the request for purchase or order is 

12 made; or 

13 ‘‘(B) the cigarettes or smokeless tobacco 

14 are delivered by use of a common carrier, pri15 vate delivery service, or the mails, or the seller 

16 is not in the physical presence of the buyer 

17 when the buyer obtains possession of the ciga18 rettes or smokeless tobacco. 

19 ‘‘(6) DELIVERY SELLER.—The term ‘delivery 

20 seller’ means a person who makes a delivery sale. 

21 ‘‘(7) INDIAN COUNTRY.—The term ‘Indian 

22 country’ has the meaning given that term in section 

23 1151 of title 18, United States Code, except that 

24 within the State of Alaska that term applies only to 


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1 the Metlakatla Indian Community, Annette Island 

2 Reserve. 

3 ‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’, 

4 ‘tribe’, or ‘tribal’ refers to an Indian tribe as defined 

5 in section 4(e) of the Indian Self-Determination and 

6 Education Assistance Act (25 U.S.C. 450b(e)) or as 

7 listed pursuant to section 104 of the Federally Rec8 ognized Indian Tribe List Act of 1994 (25 U.S.C. 

9 479a–1). 

10 ‘‘(9) INTERSTATE COMMERCE.—The term 

11 ‘interstate commerce’ means commerce between a 

12 State and any place outside the State, commerce be13 tween a State and any Indian country in the State, 

14 or commerce between points in the same State but 

15 through any place outside the State or through any 

16 Indian country. 

17 ‘‘(10) PERSON.—The term ‘person’ means an 

18 individual, corporation, company, association, firm, 

19 partnership, society, State government, local govern20 ment, Indian tribal government, governmental orga21 nization of such government, or joint stock company. 

22 ‘‘(11) STATE.—The term ‘State’ means each of 

23 the several States of the United States, the District 

24 of Columbia, the Commonwealth of Puerto Rico, or 

25 any territory or possession of the United States. 


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1 ‘‘(12) SMOKELESS TOBACCO.—The term 

2 ‘smokeless tobacco’ means any finely cut, ground, 

3 powdered, or leaf tobacco, or other product con4 taining tobacco, that is intended to be placed in the 

5 oral or nasal cavity or otherwise consumed without 

6 being combusted. 

7 ‘‘(13) TOBACCO TAX ADMINISTRATOR.—The 

8 term ‘tobacco tax administrator’ means the State, 

9 local, or tribal official duly authorized to collect the 

10 tobacco tax or administer the tax law of a State, lo11 cality, or tribe, respectively. 

12 ‘‘(14) USE.—The term ‘use’, in addition to its 

13 ordinary meaning, means the consumption, storage, 

14 handling, or disposal of cigarettes or smokeless to15 bacco.’’. 

16 (b) REPORTS TO STATE TOBACCO TAX ADMINISTRA17 TORS.—Section 2 of the Jenkins Act (15 U.S.C. 376) is 

18 amended— 

19 (1) by striking ‘‘cigarettes’’ each place it ap20 pears and inserting ‘‘cigarettes or smokeless to21 bacco’’; 

22 (2) in subsection (a)— 

23 (A) in the matter preceding paragraph 

24 (1)— 


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1 (i) by inserting ‘‘CONTENTS.—’’after 

2 ‘‘(a)’’ 

3 (ii) by striking ‘‘or transfers’’ and in4 serting ‘‘, transfers, or ships’’; 

5 (iii) by inserting ‘‘, locality, or Indian 

6 country of an Indian tribe’’ after ‘‘a 

7 State’’; 

8 (iv) by striking ‘‘to other than a dis9 tributor licensed by or located in such 

10 State,’’; and 

11 (v) by striking ‘‘or transfer and ship12 ment’’ and inserting ‘‘, transfer, or ship13 ment’’; 

14 (B) in paragraph (1)— 

15 (i) by striking ‘‘with the tobacco tax 

16 administrator of the State’’ and inserting 

17 ‘‘with the Attorney General of the United 

18 States and with the tobacco tax adminis19 trators of the State and place’’; and 

20 (ii) by striking ‘‘; and’’ and inserting 

21 the following: ‘‘, as well as telephone num22 bers for each place of business, a principal 

23 electronic mail address, any website ad24 dresses, and the name, address, and tele25 phone number of an agent in the State auVerDate Aug 31 2005 03:17 Sep 12, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1027.RS S1027

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1 thorized to accept service on behalf of such 

2 person;’’; 

3 (C) in paragraph (2), by striking ‘‘and the 

4 quantity thereof.’’ and inserting ‘‘the quantity 

5 thereof, and the name, address, and phone 

6 number of the person delivering the shipment to 

7 the recipient on behalf of the delivery seller, 

8 with all invoice or memoranda information re9 lating to specific customers to be organized by 

10 city or town and by zip code; and’’; and 

11 (D) by adding at the end the following: 

12 ‘‘(3) with respect to each memorandum or in13 voice filed with a State under paragraph (2), also 

14 file copies of such memorandum or invoice with the 

15 tobacco tax administrators and chief law enforce16 ment officers of the local governments and Indian 

17 tribes operating within the borders of the State that 

18 apply their own local or tribal taxes on cigarettes or 

19 smokeless tobacco.’’; 

20 (3) in subsection (b)— 

21 (A) by inserting ‘‘PRESUMPTIVE EVI22 DENCE.—’’ after ‘‘(b)’’; 

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

24 ‘‘that’’; and 


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1 (C) by striking ‘‘, and (2)’’ and all that 

2 follows and inserting a period; and 

3 (4) by adding at the end the following: 

4 ‘‘(c) USE OF INFORMATION.—A tobacco tax adminis5 trator or chief law enforcement officer who receives a 

6 memorandum or invoice under paragraph (2) or (3) of 

7 subsection (a) shall use such memorandum or invoice sole8 ly for the purposes of the enforcement of this Act and the 

9 collection of any taxes owed on related sales of cigarettes 

10 and smokeless tobacco, and shall keep confidential any 

11 personal information in such memorandum or invoice not 

12 otherwise required for such purposes.’’. 

13 (c) REQUIREMENTS FOR DELIVERY SALES.—The 

14 Jenkins Act is amended by inserting after section 2 the 

15 following: 

16 ‘‘SEC. 2A. DELIVERY SALES. 

17 ‘‘(a) IN GENERAL.—With respect to delivery sales 

18 into a specific State and place, each delivery seller shall 

19 comply with— 

20 ‘‘(1) the shipping requirements set forth in sub21 section (b); 

22 ‘‘(2) the recordkeeping requirements set forth 

23 in subsection (c); 

24 ‘‘(3) all State, local, tribal, and other laws gen25 erally applicable to sales of cigarettes or smokeless 


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1 tobacco as if such delivery sales occurred entirely 

2 within the specific State and place, including laws 

3 imposing— 

4 ‘‘(A) excise taxes; 

5 ‘‘(B) licensing and tax-stamping require6 ments; 

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

8 ‘‘(D) other payment obligations or legal re9 quirements relating to the sale, distribution, or 

10 delivery of cigarettes or smokeless tobacco; and 

11 ‘‘(4) the tax collection requirements set forth in 

12 subsection (d). 

13 ‘‘(b) SHIPPING AND PACKAGING.— 

14 ‘‘(1) REQUIRED STATEMENT.—For any ship15 ping package containing cigarettes or smokeless to16 bacco, the delivery seller shall include on the bill of 

17 lading, if any, and on the outside of the shipping 

18 package, on the same surface as the delivery ad19 dress, a clear and conspicuous statement providing 

20 as follows: ‘CIGARETTES/SMOKELESS TO21 BACCO: FEDERAL LAW REQUIRES THE PAY22 MENT OF ALL APPLICABLE EXCISE TAXES, 

23 AND COMPLIANCE WITH APPLICABLE LI24 CENSING AND TAX-STAMPING OBLIGA25 TIONS’. 


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1 ‘‘(2) FAILURE TO LABEL.—Any shipping pack2 age described in paragraph (1) that is not labeled in 

3 accordance with that paragraph shall be treated as 

4 nondeliverable matter by a common carrier or other 

5 delivery service, if the common carrier or other deliv6 ery service knows or should know the package con7 tains cigarettes or smokeless tobacco. If a common 

8 carrier or other delivery service believes a package is 

9 being submitted for delivery in violation of para10 graph (1), it may require the person submitting the 

11 package for delivery to establish that it is not being 

12 sent in violation of paragraph (1) before accepting 

13 the package for delivery. Nothing in this paragraph 

14 shall require the common carrier or other delivery 

15 service to open any package to determine its con16 tents. 

17 ‘‘(3) WEIGHT RESTRICTION.—A delivery seller 

18 shall not sell, offer for sale, deliver, or cause to be 

19 delivered in any single sale or single delivery any 

20 cigarettes or smokeless tobacco weighing more than 

21 10 pounds. 

22 ‘‘(4) AGE VERIFICATION.— 

23 ‘‘(A) IN GENERAL.—Notwithstanding any 

24 other provision of law, a delivery seller who 

25 mails or ships tobacco products— 


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1 ‘‘(i) shall not sell, deliver, or cause to 

2 be delivered any tobacco products to a per3 son under the minimum age required for 

4 the legal sale or purchase of tobacco prod5 ucts, as determined by the applicable law 

6 at the place of delivery; 

7 ‘‘(ii) shall use a method of mailing or 

8 shipping that requires— 

9 ‘‘(I) the purchaser placing the 

10 delivery sale order, or an adult who is 

11 at least the minimum age required for 

12 the legal sale or purchase of tobacco 

13 products, as determined by the appli14 cable law at the place of delivery, to 

15 sign to accept delivery of the shipping 

16 container at the delivery address; and 

17 ‘‘(II) the person who signs to ac18 cept delivery of the shipping container 

19 to provide proof, in the form of a 

20 valid, government-issued identification 

21 bearing a photograph of the indi22 vidual, that the person is at least the 

23 minimum age required for the legal 

24 sale or purchase of tobacco products, 


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1 as determined by the applicable law at 

2 the place of delivery; and 

3 ‘‘(iii) shall not accept a delivery sale 

4 order from a person without— 

5 ‘‘(I) obtaining the full name, 

6 birth date, and residential address of 

7 that person; and 

8 ‘‘(II) verifying the information 

9 provided in subclause (I), through the 

10 use of a commercially available data11 base or aggregate of databases, con12 sisting primarily of data from govern13 ment sources, that are regularly used 

14 by government and businesses for the 

15 purpose of age and identity 

16 verification and authentication, to en17 sure that the purchaser is at least the 

18 minimum age required for the legal 

19 sale or purchase of tobacco products, 

20 as determined by the applicable law at 

21 the place of delivery. 

22 ‘‘(B) LIMITATION.—No database being 

23 used for age and identity verification under 

24 subparagraph (A)(iii) shall be in the possession 

25 or under the control of the delivery seller, or be 


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1 subject to any changes or supplementation by 

2 the delivery seller. 

3 ‘‘(c) RECORDS.— 

4 ‘‘(1) IN GENERAL.—Each delivery seller shall 

5 keep a record of any delivery sale, including all of 

6 the information described in section 2(a)(2), orga7 nized by the State, and within such State, by the 

8 city or town and by zip code, into which such deliv9 ery sale is so made. 

10 ‘‘(2) RECORD RETENTION.—Records of a deliv11 ery sale shall be kept as described in paragraph (1) 

12 in the year in which the delivery sale is made and 

13 for the next 4 years. 

14 ‘‘(3) ACCESS FOR OFFICIALS.—Records kept 

15 under paragraph (1) shall be made available to to16 bacco tax administrators of the States, to local gov17 ernments and Indian tribes that apply their own 

18 local or tribal taxes on cigarettes or smokeless to19 bacco, to the attorneys general of the States, to the 

20 chief law enforcement officers of such local govern21 ments and Indian tribes, and to the Attorney Gen22 eral of the United States in order to ensure the com23 pliance of persons making delivery sales with the re24 quirements of this Act. 

25 ‘‘(d) DELIVERY.— 


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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), no delivery seller may sell or deliver to 

3 any consumer, or tender to any common carrier or 

4 other delivery service, any cigarettes or smokeless to5 bacco pursuant to a delivery sale unless, in advance 

6 of the sale, delivery, or tender— 

7 ‘‘(A) any cigarette or smokeless tobacco ex8 cise tax that is imposed by the State in which 

9 the cigarettes or smokeless tobacco are to be 

10 delivered has been paid to the State; 

11 ‘‘(B) any cigarette or smokeless tobacco 

12 excise tax that is imposed by the local govern13 ment of the place in which the cigarettes or 

14 smokeless tobacco are to be delivered has been 

15 paid to the local government; and 

16 ‘‘(C) any required stamps or other indicia 

17 that such excise tax has been paid are properly 

18 affixed or applied to the cigarettes or smokeless 

19 tobacco. 

20 ‘‘(2) EXCEPTION.—Paragraph (1) does not 

21 apply to a delivery sale of smokeless tobacco if the 

22 law of the State or local government of the place 

23 where the smokeless tobacco is to be delivered re24 quires or otherwise provides that delivery sellers col25 lect the excise tax from the consumer and remit the 


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1 excise tax to the State or local government, and the 

2 delivery seller complies with the requirement. 

3 ‘‘(e) LIST OF UNREGISTERED OR NONCOMPLIANT

4 DELIVERY SELLERS.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) INITIAL LIST.—Not later than 90 

7 days after this subsection goes into effect under 

8 the Prevent All Cigarette Trafficking Act of 

9 2007, the Attorney General of the United 

10 States shall compile a list of delivery sellers of 

11 cigarettes or smokeless tobacco that have not 

12 registered with the Attorney General, pursuant 

13 to section 2(a) or that are otherwise not in 

14 compliance with this Act, and— 

15 ‘‘(i) distribute the list to— 

16 ‘‘(I) the attorney general and tax 

17 administrator of every State; 

18 ‘‘(II) common carriers and other 

19 persons that deliver small packages to 

20 consumers in interstate commerce, in21 cluding the United States Postal Serv22 ice; and 

23 ‘‘(III) at the discretion of the At24 torney General of the United States, 

25 to any other persons; and 


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1 ‘‘(ii) publicize and make the list avail2 able to any other person engaged in the 

3 business of interstate deliveries or who de4 livers cigarettes or smokeless tobacco in or 

5 into any State. 

6 ‘‘(B) LIST CONTENTS.—To the extent 

7 known, the Attorney General of the United 

8 States shall include, for each delivery seller on 

9 the list described in subparagraph (A)— 

10 ‘‘(i) all names the delivery seller uses 

11 in the transaction of its business or on 

12 packages delivered to customers; 

13 ‘‘(ii) all addresses from which the de14 livery seller does business or ships ciga15 rettes or smokeless tobacco; 

16 ‘‘(iii) the website addresses, primary 

17 e-mail address, and phone number of the 

18 delivery seller; and 

19 ‘‘(iv) any other information that the 

20 Attorney General determines would facili21 tate compliance with this subsection by re22 cipients of the list. 

23 ‘‘(C) UPDATING.—The Attorney General of 

24 the United States shall update and distribute 

25 the list at least once every 4 months, and may 


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1 distribute the list and any updates by regular 

2 mail, electronic mail, or any other reasonable 

3 means, or by providing recipients with access to 

4 the list through a nonpublic website that the 

5 Attorney General of the United States regularly 

6 updates. 

7 ‘‘(D) STATE, LOCAL, OR TRIBAL ADDI8 TIONS.—The Attorney General of the United 

9 States shall include in the list under subpara10 graph (A) any noncomplying delivery sellers 

11 identified by any State, local, or tribal govern12 ment under paragraph (5), and shall distribute 

13 the list to the attorney general or chief law en14 forcement official and the tax administrator of 

15 any government submitting any such informa16 tion and to any common carriers or other per17 sons who deliver small packages to consumers 

18 identified by any government pursuant to para19 graph (5). 

20 ‘‘(E) CONFIDENTIALITY.—The list distrib21 uted pursuant to subparagraph (A) shall be 

22 confidential, and any person receiving the list 

23 shall maintain the confidentiality of the list but 

24 may deliver the list, for enforcement purposes, 

25 to any government official or to any common 


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1 carrier or other person that delivers tobacco 

2 products or small packages to consumers. Noth3 ing in this section shall prohibit a common car4 rier, the United States Postal Service, or any 

5 other person receiving the list from discussing 

6 with the listed delivery sellers the delivery sell7 ers’ inclusion on the list and the resulting ef8 fects on any services requested by such listed 

9 delivery seller. 

10 ‘‘(2) PROHIBITION ON DELIVERY.— 

11 ‘‘(A) IN GENERAL.—Commencing on the 

12 date that is 60 days after the date of the initial 

13 distribution or availability of the list under 

14 paragraph (1)(A), no person who receives the 

15 list under paragraph (1), and no person who 

16 delivers cigarettes or smokeless tobacco to con17 sumers, shall knowingly complete, cause to be 

18 completed, or complete its portion of a delivery 

19 of any package for any person whose name and 

20 address are on the list, unless— 

21 ‘‘(i) the person making the delivery 

22 knows or believes in good faith that the 

23 item does not include cigarettes or smoke24 less tobacco; 


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1 ‘‘(ii) the delivery is made to a person 

2 lawfully engaged in the business of manu3 facturing, distributing, or selling cigarettes 

4 or smokeless tobacco; or 

5 ‘‘(iii) the package being delivered 

6 weighs more than 100 pounds and the per7 son making the delivery does not know or 

8 have reasonable cause to believe that the 

9 package contains cigarettes or smokeless 

10 tobacco. 

11 ‘‘(B) IMPLEMENTATION OF UPDATES.— 

12 Commencing on the date that is 30 days after 

13 the date of the distribution or availability of 

14 any updates or corrections to the list under 

15 paragraph (1), all recipients and all common 

16 carriers or other persons that deliver cigarettes 

17 or smokeless tobacco to consumers shall be sub18 ject to subparagraph (A) in regard to such cor19 rections or updates. 

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

21 ‘‘(A) IN GENERAL.—In the event that a 

22 common carrier or other delivery service delays 

23 or interrupts the delivery of a package it has in 

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1 livery is on a list distributed under paragraph 

2 (1)— 

3 ‘‘(i) the person ordering the delivery 

4 shall be obligated to pay— 

5 ‘‘(I) the common carrier or other 

6 delivery service as if the delivery of 

7 the package had been timely com8 pleted; and 

9 ‘‘(II) if the package is not deliv10 erable, any reasonable additional fee 

11 or charge levied by the common car12 rier or other delivery service to cover 

13 its extra costs and inconvenience and 

14 to serve as a disincentive against such 

15 noncomplying delivery orders; and 

16 ‘‘(ii) if the package is determined not 

17 to be deliverable, the common carrier or 

18 other delivery service shall, in its discre19 tion, either provide the package and its 

20 contents to a Federal, State, or local law 

21 enforcement agency or destroy the package 

22 and its contents. 

23 ‘‘(B) RECORDS.—A common carrier or 

24 other delivery service shall maintain, for a pe25 riod of 5 years, any records kept in the ordiVerDate Aug 31 2005 03:17 Sep 12, 2007 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S1027.RS S1027

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1 nary course of business relating to any deliv2 eries interrupted pursuant to this paragraph 

3 and provide that information, upon request, to 

4 the Attorney General of the United States or to 

5 the attorney general or chief law enforcement 

6 official or tax administrator of any State, local, 

7 or tribal government. 

8 ‘‘(C) CONFIDENTIALITY.—Any person re9 ceiving records under subparagraph (B) shall 

10 use such records solely for the purposes of the 

11 enforcement of this Act and the collection of 

12 any taxes owed on related sales of cigarettes 

13 and smokeless tobacco, and the person receiving 

14 records under subparagraph (B) shall keep con15 fidential any personal information in such 

16 records not otherwise required for such pur17 poses. 

18 ‘‘(4) PREEMPTION.— 

19 ‘‘(A) IN GENERAL.—No State, local, or 

20 tribal government, nor any political authority of 

21 2 or more State, local, or tribal governments, 

22 may enact or enforce any law or regulation re23 lating to delivery sales that restricts deliveries 

24 of cigarettes or smokeless tobacco to consumers 


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1 by common carriers or other delivery services 

2 on behalf of delivery sellers by— 

3 ‘‘(i) requiring that the common carrier 

4 or other delivery service verify the age or 

5 identity of the consumer accepting the de6 livery by requiring the person who signs to 

7 accept delivery of the shipping container to 

8 provide proof, in the form of a valid, gov9 ernment-issued identification bearing a 

10 photograph of the individual, that such 

11 person is at least the minimum age re12 quired for the legal sale or purchase of to13 bacco products, as determined by either 

14 State or local law at the place of delivery; 

15 ‘‘(ii) requiring that the common car16 rier or other delivery service obtain a sig17 nature from the consumer accepting the 

18 delivery; 

19 ‘‘(iii) requiring that the common car20 rier or other delivery service verify that all 

21 applicable taxes have been paid; 

22 ‘‘(iv) requiring that packages delivered 

23 by the common carrier or other delivery 

24 service contain any particular labels, no25 tice, or markings; or 


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1 ‘‘(v) prohibiting common carriers or 

2 other delivery services from making deliv3 eries on the basis of whether the delivery 

4 seller is or is not identified on any list of 

5 delivery sellers maintained and distributed 

6 by any entity other than the Federal Gov7 ernment. 

8 ‘‘(B) RELATIONSHIP TO OTHER LAWS.— 

9 Nothing in this paragraph shall be construed to 

10 prohibit, expand, restrict, or otherwise amend 

11 or modify— 

12 ‘‘(i) section 14501(c)(1) or 

13 41713(b)(4) of title 49, United States 

14 Code; 

15 ‘‘(ii) any other restrictions in Federal 

16 law on the ability of State, local, or tribal 

17 governments to regulate common carriers; 

18 or 

19 ‘‘(iii) any provision of State, local, or 

20 tribal law regulating common carriers that 

21 falls within the provisions of chapter 49 of 

22 the United States Code, sections 

23 14501(c)(2) or 41713(b)(4)(B). 

24 ‘‘(C) STATE LAWS PROHIBITING DELIVERY

25 SALES.—Nothing in the Prevent All Cigarette 


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1 Trafficking Act of 2007, or the amendments 

2 made by that Act, may be construed to preempt 

3 or supersede State laws prohibiting the delivery 

4 sale, or the shipment or delivery pursuant to a 

5 delivery sale, of cigarettes or smokeless tobacco 

6 to individual consumers. 

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

8 ‘‘(A) IN GENERAL.—Any State, local, or 

9 tribal government shall provide the Attorney 

10 General of the United States with— 

11 ‘‘(i) all known names, addresses, 

12 website addresses, and other primary con13 tact information of any delivery seller that 

14 offers for sale or makes sales of cigarettes 

15 or smokeless tobacco in or into the State, 

16 locality, or tribal land but has failed to 

17 register with or make reports to the re18 spective tax administrator, as required by 

19 this Act, or that has been found in a legal 

20 proceeding to have otherwise failed to com21 ply with this Act; and 

22 ‘‘(ii) a list of common carriers and 

23 other persons who make deliveries of ciga24 rettes or smokeless tobacco in or into the 

25 State, locality, or tribal lands. 


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1 ‘‘(B) UPDATES.—Any government pro2 viding a list to the Attorney General of the 

3 United States under subparagraph (A) shall 

4 also provide updates and corrections every 4 

5 months until such time as such government no6 tifies the Attorney General of the United States 

7 in writing that such government no longer de8 sires to submit such information to supplement 

9 the list maintained and distributed by the At10 torney General of the United States under 

11 paragraph (1). 

12 ‘‘(C) REMOVAL AFTER WITHDRAWAL.— 

13 Upon receiving written notice that a govern14 ment no longer desires to submit information 

15 under subparagraph (A), the Attorney General 

16 of the United States shall remove from the list 

17 under paragraph (1) any persons that are on 

18 the list solely because of such government’s 

19 prior submissions of its list of noncomplying de20 livery sellers of cigarettes or smokeless tobacco 

21 or its subsequent updates and corrections. 

22 ‘‘(6) DEADLINE TO INCORPORATE ADDI23 TIONS.—The Attorney General of the United States 

24 shall— 


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1 ‘‘(A) include any delivery seller identified 

2 and submitted by a State, local, or tribal gov3 ernment under paragraph (5) in any list or up4 date that is distributed or made available under 

5 paragraph (1) on or after the date that is 30 

6 days after the date on which the information is 

7 received by the Attorney General of the United 

8 States; and 

9 ‘‘(B) distribute any such list or update to 

10 any common carrier or other person who makes 

11 deliveries of cigarettes or smokeless tobacco 

12 that has been identified and submitted by an13 other government, pursuant to paragraph (5). 

14 ‘‘(7) NOTICE TO DELIVERY SELLERS.—Not 

15 later than 14 days prior to including any delivery 

16 seller on the initial list distributed or made available 

17 under paragraph (1), or on any subsequent list or 

18 update for the first time, the Attorney General of 

19 the United States shall make a reasonable attempt 

20 to send notice to the delivery seller by letter, elec21 tronic mail, or other means that the delivery seller 

22 is being placed on such list or update, with that no23 tice citing the relevant provisions of this Act. 

24 ‘‘(8) LIMITATIONS.— 


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1 ‘‘(A) IN GENERAL.—Any common carrier 

2 or other person making a delivery subject to 

3 this subsection shall not be required or other4 wise obligated to— 

5 ‘‘(i) determine whether any list dis6 tributed or made available under para7 graph (1) is complete, accurate, or up-to8 date; 

9 ‘‘(ii) determine whether a person or10 dering a delivery is in compliance with this 

11 Act; or 

12 ‘‘(iii) open or inspect, pursuant to this 

13 Act, any package being delivered to deter14 mine its contents. 

15 ‘‘(B) ALTERNATE NAMES.—Any common 

16 carrier or other person making a delivery sub17 ject to this subsection shall not be required or 

18 otherwise obligated to make any inquiries or 

19 otherwise determine whether a person ordering 

20 a delivery is a delivery seller on the list under 

21 paragraph (1) who is using a different name or 

22 address in order to evade the related delivery 

23 restrictions, but shall not knowingly deliver any 

24 packages to consumers for any such delivery 

25 seller who the common carrier or other delivery 


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1 service knows is a delivery seller who is on the 

2 list under paragraph (1) but is using a different 

3 name or address to evade the delivery restric4 tions of paragraph (2). 

5 ‘‘(C) PENALTIES.—Any common carrier or 

6 person in the business of delivering packages on 

7 behalf of other persons shall not be subject to 

8 any penalty under section 14101(a) of title 49, 

9 United States Code, or any other provision of 

10 law for— 

11 ‘‘(i) not making any specific delivery, 

12 or any deliveries at all, on behalf of any 

13 person on the list under paragraph (1); 

14 ‘‘(ii) not, as a matter of regular prac15 tice and procedure, making any deliveries, 

16 or any deliveries in certain States, of any 

17 cigarettes or smokeless tobacco for any 

18 person or for any person not in the busi19 ness of manufacturing, distributing, or 

20 selling cigarettes or smokeless tobacco; or 

21 ‘‘(iii) delaying or not making a deliv22 ery for any person because of reasonable 

23 efforts to comply with this Act. 

24 ‘‘(D) OTHER LIMITS.—Section 2 and sub25 sections (a), (b), (c), and (d) of this section 


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1 shall not be interpreted to impose any respon2 sibilities, requirements, or liability on common 

3 carriers. 

4 ‘‘(f) PRESUMPTION.—For purposes of this Act, a de5 livery sale shall be deemed to have occurred in the State 

6 and place where the buyer obtains personal possession of 

7 the cigarettes or smokeless tobacco, and a delivery pursu8 ant to a delivery sale is deemed to have been initiated or 

9 ordered by the delivery seller.’’. 

10 (d) PENALTIES.—The Jenkins Act is amended by 

11 striking section 3 and inserting the following: 

12 ‘‘SEC. 3. PENALTIES. 

13 ‘‘(a) CRIMINAL PENALTIES.— 

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2), whoever violates any provision of this Act 

16 shall be guilty of a felony and shall be imprisoned 

17 not more than 3 years, fined under title 18, United 

18 States Code, or both. 

19 ‘‘(2) EXCEPTIONS.— 

20 ‘‘(A) GOVERNMENTS.—Paragraph (1) shall 

21 not apply to a State, local, or tribal govern22 ment. 

23 ‘‘(B) DELIVERY VIOLATIONS.—A common 

24 carrier or independent delivery service, or em25 ployee of a common carrier or independent deVerDate Aug 31 2005 03:17 Sep 12, 2007 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S1027.RS S1027

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1 livery service, shall be subject to criminal pen2 alties under paragraph (1) for a violation of 

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

4 intentionally— 

5 ‘‘(i) as consideration for the receipt 

6 of, or as consideration for a promise or 

7 agreement to pay, anything of pecuniary 

8 value; or 

9 ‘‘(ii) for the purpose of assisting a de10 livery seller to violate, or otherwise evading 

11 compliance with, section 2A. 

12 ‘‘(b) CIVIL PENALTIES.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (3), whoever violates any provision of this Act 

15 shall be subject to a civil penalty in an amount not 

16 to exceed— 

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

18 greater of— 

19 ‘‘(i) $5,000 in the case of the first 

20 violation, or $10,000 for any other viola21 tion; or 

22 ‘‘(ii) for any violation, 2 percent of 

23 the gross sales of cigarettes or smokeless 

24 tobacco of such person during the 1-year 

25 period ending on the date of the violation. 


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1 ‘‘(B) in the case of a common carrier or 

2 other delivery service, $2,500 in the case of a 

3 first violation, or $5,000 for any violation with4 in 1 year of a prior violation. 

5 ‘‘(2) RELATION TO OTHER PENALTIES.—A civil 

6 penalty under paragraph (1) for a violation of this 

7 Act shall be imposed in addition to any criminal 

8 penalty under subsection (a) and any other damages, 

9 equitable relief, or injunctive relief awarded by the 

10 court, including the payment of any unpaid taxes to 

11 the appropriate Federal, State, local, or tribal gov12 ernments. 

13 ‘‘(3) EXCEPTIONS.— 

14 ‘‘(A) DELIVERY VIOLATIONS.—An em15 ployee of a common carrier or independent de16 livery service shall be subject to civil penalties 

17 under paragraph (1) for a violation of section 

18 2A(e) only if the violation is committed inten19 tionally— 

20 ‘‘(i) as consideration for the receipt 

21 of, or as consideration for a promise or 

22 agreement to pay, anything of pecuniary 

23 value; or 


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1 ‘‘(ii) for the purpose of assisting a de2 livery seller to violate, or otherwise evading 

3 compliance with, section 2A. 

4 ‘‘(B) OTHER LIMITATIONS.—No common 

5 carrier or independent delivery service shall be 

6 subject to civil penalties under paragraph (1) 

7 for a violation of section 2A(e) if— 

8 ‘‘(i) the common carrier or inde9 pendent delivery service has implemented 

10 and enforces effective policies and practices 

11 for complying with that section; or 

12 ‘‘(ii) an employee of the common car13 rier or independent delivery service who 

14 physically receives and processes orders, 

15 picks up packages, processes packages, or 

16 makes deliveries, takes actions that are 

17 outside the scope of employment of the em18 ployee in the course of the violation, or 

19 that violate the implemented and enforced 

20 policies of the common carrier or inde21 pendent delivery service described in clause 

22 (i).’’. 

23 (e) ENFORCEMENT.—The Jenkins Act is amended by 

24 striking section 4 and inserting the following: 


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1 ‘‘SEC. 4. ENFORCEMENT. 

2 ‘‘(a) IN GENERAL.—The United States district 

3 courts shall have jurisdiction to prevent and restrain viola4 tions of this Act and to provide other appropriate injunc5 tive or equitable relief, including money damages, for such 

6 violations. 

7 ‘‘(b) AUTHORITY OF THE ATTORNEY GENERAL.— 

8 The Attorney General of the United States shall admin9 ister and enforce the provisions of this Act. 

10 ‘‘(c) STATE, LOCAL, AND TRIBAL ENFORCEMENT.— 

11 ‘‘(1) IN GENERAL.— 

12 ‘‘(A) STANDING.—A State, through its at13 torney general (or a designee thereof), or a 

14 local government or Indian tribe that levies a 

15 tax subject to section 2A(a)(3), through its 

16 chief law enforcement officer (or a designee 

17 thereof), may bring an action in a United 

18 States district court to prevent and restrain vio19 lations of this Act by any person (or by any 

20 person controlling such person) or to obtain any 

21 other appropriate relief from any person (or 

22 from any person controlling such person) for 

23 violations of this Act, including civil penalties, 

24 money damages, and injunctive or other equi25 table relief. 


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1 ‘‘(B) SOVEREIGN IMMUNITY.—Nothing in 

2 this Act shall be deemed to abrogate or con3 stitute a waiver of any sovereign immunity of a 

4 State or local government or Indian tribe 

5 against any unconsented lawsuit under this Act, 

6 or otherwise to restrict, expand, or modify any 

7 sovereign immunity of a State or local govern8 ment or Indian tribe. 

9 ‘‘(2) PROVISION OF INFORMATION.—A State, 

10 through its attorney general, or a local government 

11 or Indian tribe that levies a tax subject to section 

12 2A(a)(3), through its chief law enforcement officer 

13 (or a designee thereof), may provide evidence of a 

14 violation of this Act by any person not subject to 

15 State, local, or tribal government enforcement ac16 tions for violations of this Act to the Attorney Gen17 eral of the United States or a United States attor18 ney, who shall take appropriate actions to enforce 

19 the provisions of this Act. 

20 ‘‘(3) USE OF PENALTIES COLLECTED.— 

21 ‘‘(A) IN GENERAL.—There is established a 

22 separate account in the Treasury known as the 

23 ‘PACT Anti-Trafficking Fund’. Notwith24 standing any other provision of law and subject 

25 to subparagraph (B), an amount equal to 50 


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1 percent of any criminal and civil penalties col2 lected by the United States Government in en3 forcing the provisions of this Act shall be trans4 ferred into the PACT Anti-Trafficking Fund 

5 and shall be available to the Attorney General 

6 of the United States for purposes of enforcing 

7 the provisions of this Act and other laws relat8 ing to contraband tobacco products. 

9 ‘‘(B) ALLOCATION OF FUNDS.—Of the 

10 amount available to the Attorney General under 

11 subparagraph (A), not less than 50 percent 

12 shall be made available only to the agencies and 

13 offices within the Department of Justice that 

14 were responsible for the enforcement actions in 

15 which the penalties concerned were imposed or 

16 for any underlying investigations. 

17 ‘‘(4) NONEXCLUSIVITY OF REMEDY.— 

18 ‘‘(A) IN GENERAL.—The remedies avail19 able under this section and section 3 are in ad20 dition to any other remedies available under 

21 Federal, State, local, tribal, or other law. 

22 ‘‘(B) STATE COURT PROCEEDINGS.—Noth23 ing in this Act shall be construed to expand, re24 strict, or otherwise modify any right of an au25 thorized State official to proceed in State court, 


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1 or take other enforcement actions, on the basis 

2 of an alleged violation of State or other law. 

3 ‘‘(C) TRIBAL COURT PROCEEDINGS.— 

4 Nothing in this Act shall be construed to ex5 pand, restrict, or otherwise modify any right of 

6 an authorized Indian tribal government official 

7 to proceed in tribal court, or take other enforce8 ment actions, on the basis of an alleged viola9 tion of tribal law. 

10 ‘‘(D) LOCAL GOVERNMENT ENFORCE11 MENT.—Nothing in this Act shall be construed 

12 to expand, restrict, or otherwise modify any 

13 right of an authorized local government official 

14 to proceed in State court, or take other enforce15 ment actions, on the basis of an alleged viola16 tion of local or other law. 

17 ‘‘(d) PERSONS DEALING IN TOBACCO PRODUCTS.— 

18 Any person who holds a permit under section 5712 of the 

19 Internal Revenue Code of 1986 (regarding permitting of 

20 manufacturers and importers of tobacco products and ex21 port warehouse proprietors) may bring an action in a 

22 United States district court to prevent and restrain viola23 tions of this Act by any person (or by any person control24 ling such person) other than a State, local, or tribal gov25 ernment. 


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1 ‘‘(e) NOTICE.— 

2 ‘‘(1) PERSONS DEALING IN TOBACCO PROD3 UCTS.—Any person who commences a civil action 

4 under subsection (d) shall inform the Attorney Gen5 eral of the United States of the action. 

6 ‘‘(2) STATE, LOCAL, AND TRIBAL ACTIONS.—It 

7 is the sense of Congress that the attorney general of 

8 any State, or chief law enforcement officer of any lo9 cality or tribe, that commences a civil action under 

10 this section should inform the Attorney General of 

11 the United States of the action. 

12 ‘‘(f) PUBLIC NOTICE.— 

13 ‘‘(1) IN GENERAL.—The Attorney General of 

14 the United States shall make available to the public, 

15 by posting such information on the Internet and by 

16 other appropriate means, information regarding all 

17 enforcement actions undertaken by the Attorney 

18 General or United States attorneys, or reported to 

19 the Attorney General, under this section, including 

20 information regarding the resolution of such actions 

21 and how the Attorney General and the United States 

22 attorney have responded to referrals of evidence of 

23 violations pursuant to subsection (c)(2). 

24 ‘‘(2) REPORTS TO CONGRESS.—The Attorney 

25 General shall submit to Congress each year a report 


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1 containing the information described in paragraph 

2 (1).’’. 

3 SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TO4 BACCO AS NONMAILABLE MATTER. 

5 Section 1716 of title 18, United States Code, is 

6 amended— 

7 (1) by redesignating subsections (j) and (k) as 

8 subsections (k) and (l), respectively; and 

9 (2) by inserting after subsection (i) the fol10 lowing: 

11 ‘‘(j) TOBACCO PRODUCTS.— 

12 ‘‘(1) PROHIBITION.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subparagraphs (C) and (D), all cigarettes (as 

15 that term is defined in section 1(2) of the Act 

16 of October 19, 1949 (15 U.S.C. 375; commonly 

17 referred to as the ‘Jenkins Act’)) and smokeless 

18 tobacco (as that term is defined in section 

19 1(12) of that Act), are nonmailable and shall 

20 not be deposited in or carried through the 

21 mails. The United States Postal Service shall 

22 not accept for delivery or transmit through the 

23 mails any package that it knows or has reason24 able cause to believe contains any cigarettes or 


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1 smokeless tobacco made nonmailable by this 

2 subsection. 

3 ‘‘(B) REASONABLE CAUSE TO BELIEVE.— 

4 For purposes of this section, notification to the 

5 United States Postal Service by the Attorney 

6 General, a United States attorney, or a State 

7 Attorney General that an individual or entity is 

8 primarily engaged in the business of transmit9 ting cigarettes or smokeless tobacco made non10 mailable by this section shall constitute reason11 able cause to believe that any packages pre12 sented to the United States Postal Service by 

13 such individual or entity contain nonmailable 

14 cigarettes or smokeless tobacco. 

15 ‘‘(C) CIGARS.—Subparagraph (A) shall not 

16 apply to cigars (as that term is defined in sec17 tion 5702(a) of the Internal Revenue Code of 

18 1986). 

19 ‘‘(D) GEOGRAPHIC EXCEPTION.—Subpara20 graph (A) shall not apply to mailings within or 

21 into any State that is not contiguous with at 

22 least 1 other State of the United States. For 

23 purposes of this paragraph, ‘State’ means any 

24 of the 50 States or the District of Columbia. 


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1 ‘‘(2) PACKAGING EXCEPTIONS INAPPLICABLE.— 

2 Subsection (b) shall not apply to any tobacco prod3 uct made nonmailable by this subsection. 

4 ‘‘(3) SEIZURE AND FORFEITURE.—Any ciga5 rettes or smokeless tobacco made nonmailable by 

6 this subsection that are deposited in the mails shall 

7 be subject to seizure and forfeiture, and any tobacco 

8 products so seized and forfeited shall either be de9 stroyed or retained by Government officials for the 

10 detection or prosecution of crimes or related inves11 tigations and then destroyed. 

12 ‘‘(4) ADDITIONAL PENALTIES.—In addition to 

13 any other fines and penalties imposed by this chap14 ter for violations of this section, any person violating 

15 this subsection shall be subject to an additional pen16 alty in the amount of 10 times the retail value of the 

17 nonmailable cigarettes or smokeless tobacco, includ18 ing all Federal, State, and local taxes. 

19 ‘‘(5) USE OF PENALTIES.—There is established 

20 a separate account in the Treasury known as the 

21 ‘PACT Postal Service Fund’. Notwithstanding any 

22 other provision of law, an amount equal to 50 per23 cent of any criminal and civil fines or monetary pen24 alties collected by the United States Government in 

25 enforcing the provisions of this subsection shall be 


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1 transferred into the PACT Postal Service Fund and 

2 shall be available to the Postmaster General for the 

3 purpose of enforcing the provisions of this sub4 section.’’. 

5 SEC. 4. COMPLIANCE WITH MODEL STATUTE OR QUALI6 FYING STATUTE. 

7 (a) IN GENERAL.—A Tobacco Product Manufacturer 

8 or importer may not sell in, deliver to, or place for delivery 

9 sale, or cause to be sold in, delivered to, or placed for deliv10 ery sale in a State that is a party to the Master Settlement 

11 Agreement, any cigarette manufactured by a Tobacco 

12 Product Manufacturer that is not in full compliance with 

13 the terms of the Model Statute or Qualifying Statute en14 acted by such State requiring funds to be placed into a 

15 qualified escrow account under specified conditions, or any 

16 regulations promulgated pursuant to such statute. 

17 (b) JURISDICTION TO PREVENT AND RESTRAIN VIO18 LATIONS.— 

19 (1) IN GENERAL.—The United States district 

20 courts shall have jurisdiction to prevent and restrain 

21 violations of subsection (a) in accordance with this 

22 subsection. 

23 (2) INITIATION OF ACTION.—A State, through 

24 its attorney general, may bring an action in the 

25 United States district courts to prevent and restrain 


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1 violations of subsection (a) by any person (or by any 

2 person controlling such person). 

3 (3) ATTORNEY FEES.—In any action under 

4 paragraph (2), a State, through its attorney general, 

5 shall be entitled to reasonable attorney fees from a 

6 person found to have willfully and knowingly violated 

7 subsection (a). 

8 (4) NONEXCLUSIVITY OF REMEDIES.—The rem9 edy available under paragraph (2) is in addition to 

10 any other remedies available under Federal, State, 

11 or other law. No provision of this Act or any other 

12 Federal law shall be held or construed to prohibit or 

13 preempt the Master Settlement Agreement, the 

14 Model Statute (as defined in the Master Settlement 

15 Agreement), any legislation amending or complemen16 tary to the Model Statute in effect as of June 1, 

17 2006, or any legislation substantially similar to such 

18 existing, amending, or complementary legislation 

19 hereinafter enacted. 

20 (5) OTHER ENFORCEMENT ACTIONS.—Nothing 

21 in this subsection shall be construed to prohibit an 

22 authorized State official from proceeding in State 

23 court or taking other enforcement actions on the 

24 basis of an alleged violation of State or other law. 


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1 (6) AUTHORITY OF THE ATTORNEY GEN2 ERAL.—The Attorney General of the United States 

3 may administer and enforce subsection (a). 

4 (c) DEFINITIONS.—In this section the following defi5 nitions apply: 

6 (1) DELIVERY SALE.—The term ‘‘delivery sale’’ 

7 means any sale of cigarettes or smokeless tobacco to 

8 a consumer if— 

9 (A) the consumer submits the order for 

10 such sale by means of a telephone or other 

11 method of voice transmission, the mails, or the 

12 Internet or other online service, or the seller is 

13 otherwise not in the physical presence of the 

14 buyer when the request for purchase or order is 

15 made; or 

16 (B) the cigarettes or smokeless tobacco are 

17 delivered by use of a common carrier, private 

18 delivery service, or the mails, or the seller is not 

19 in the physical presence of the buyer when the 

20 buyer obtains possession of the cigarettes or 

21 smokeless tobacco. 

22 (2) IMPORTER.—The term ‘‘importer’’ means 

23 each of the following: 

24 (A) SHIPPING OR CONSIGNING.—Any per25 son in the United States to whom nontaxpaid 


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1 tobacco products manufactured in a foreign 

2 country, Puerto Rico, the Virgin Islands, or a 

3 possession of the United States are shipped or 

4 consigned. 

5 (B) MANUFACTURING WAREHOUSES.—Any 

6 person who removes cigars or cigarettes for sale 

7 or consumption in the United States from a 

8 customs-bonded manufacturing warehouse. 

9 (C) UNLAWFUL IMPORTING.—Any person 

10 who smuggles or otherwise unlawfully brings to11 bacco products into the United States. 

12 (3) MASTER SETTLEMENT AGREEMENT.—The 

13 term ‘‘Master Settlement Agreement’’ means the 

14 agreement executed November 23, 1998, between 

15 the attorneys general of 46 States, the District of 

16 Columbia, the Commonwealth of Puerto Rico, and 4 

17 territories of the United States and certain tobacco 

18 manufacturers. 

19 (4) MODEL STATUTE; QUALIFYING STATUTE.— 

20 The terms ‘‘Model Statute’’ and ‘‘Qualifying Stat21 ute’’ means a statute as defined in section 

22 IX(d)(2)(e) of the Master Settlement Agreement. 

23 (5) TOBACCO PRODUCT MANUFACTURER.—The 

24 term ‘‘Tobacco Product Manufacturer’’ has the 


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1 meaning given that term in section II(uu) of the 

2 Master Settlement Agreement. 

3 SEC. 5. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, 

4 FIREARMS, AND EXPLOSIVES OF RECORDS 

5 OF CERTAIN CIGARETTE AND SMOKELESS 

6 TOBACCO SELLERS. 

7 (a) IN GENERAL.—Any officer of the Bureau of Alco8 hol, Tobacco, Firearms, and Explosives may, during nor9 mal business hours, enter the premises of any person de10 scribed in subsection (b) for the purposes of inspecting— 

11 (1) any records or information required to be 

12 maintained by such person under the provisions of 

13 law referred to in subsection (d); or 

14 (2) any cigarettes or smokeless tobacco kept or 

15 stored by such person at such premises. 

16 (b) COVERED PERSONS.—Subsection (a) applies to 

17 any person who engages in a delivery sale, and who ships, 

18 sells, distributes, or receives any quantity in excess of 

19 10,000 cigarettes, or any quantity in excess of 500 single20 unit consumer-sized cans or packages of smokeless to21 bacco, within a single month. 

22 (c) RELIEF.— 

23 (1) IN GENERAL.—The district courts of the 

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1 tion under this subsection to compel inspections au2 thorized by subsection (a). 

3 (2) VIOLATIONS.—Whoever violates subsection 

4 (a) or an order issued pursuant to paragraph (1) 

5 shall be subject to a civil penalty in an amount not 

6 to exceed $10,000 for each violation. 

7 (d) COVERED PROVISIONS OF LAW.—The provisions 

8 of law referred to in this subsection are— 

9 (1) the Act of October 19, 1949 (15 U.S.C. 

10 375; commonly referred to as the ‘‘Jenkins Act’’); 

11 (2) chapter 114 of title 18, United States Code; 

12 and 

13 (3) this Act. 

14 (e) DELIVERY SALE DEFINED.—In this section, the 

15 term ‘‘delivery sale’’ has the meaning given that term in 

16 2343(e) of title 18, United States Code, as amended by 

17 this Act. 

18 SEC. 6. EXCLUSIONS REGARDING INDIAN TRIBES AND 

19 TRIBAL MATTERS. 

20 (a) IN GENERAL.—Nothing in this Act or the amend21 ments made by this Act is intended nor shall be construed 

22 to affect, amend, or modify— 

23 (1) any agreements, compacts, or other inter24 governmental arrangements between any State or 

25 local government and any government of an Indian 


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1 tribe (as that term is defined in section 4(e) of the 

2 Indian Self-Determination and Education Assistance 

3 Act (25 U.S.C. 450b(e)) relating to the collection of 

4 taxes on cigarettes or smokeless tobacco sold in In5 dian country (as that term is defined in section 

6 1151 of title 18, United States Code); 

7 (2) any State laws that authorize or otherwise 

8 pertain to any such intergovernmental arrangements 

9 or create special rules or procedures for the collec10 tion of State, local, or tribal taxes on cigarettes or 

11 smokeless tobacco sold in Indian country; 

12 (3) any limitations under existing Federal law, 

13 including Federal common law and treaties, on 

14 State, local, and tribal tax and regulatory authority 

15 with respect to the sale, use, or distribution of ciga16 rettes and smokeless tobacco by or to Indian tribes 

17 or tribal members or in Indian country; 

18 (4) any existing Federal law, including Federal 

19 common law and treaties, regarding State jurisdic20 tion, or lack thereof, over any tribe, tribal members, 

21 or tribal reservations; and 

22 (5) any existing State or local government au23 thority to bring enforcement actions against persons 

24 located in Indian country. 


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S 1027 RS

1 (b) COORDINATION OF LAW ENFORCEMENT.—Noth2 ing in this Act or the amendments made by this Act shall 

3 be construed to inhibit or otherwise affect any coordinated 

4 law enforcement effort by 1 or more States or other juris5 dictions, including Indian tribes, through interstate com6 pact or otherwise, that— 

7 (1) provides for the administration of tobacco 

8 product laws or laws pertaining to interstate sales or 

9 other sales of tobacco products; 

10 (2) provides for the seizure of tobacco products 

11 or other property related to a violation of such laws; 

12 or 

13 (3) establishes cooperative programs for the ad14 ministration of such laws. 

15 (c) TREATMENT OF STATE AND LOCAL GOVERN16 MENTS.—Nothing in this Act or the amendments made 

17 by this Act is intended, and shall not be construed to, au18 thorize, deputize, or commission States or local govern19 ments as instrumentalities of the United States. 

20 (d) ENFORCEMENT WITHIN INDIAN COUNTRY.— 

21 Nothing in this Act or the amendments made by this Act 

22 is intended to prohibit, limit, or restrict enforcement by 

23 the Attorney General of the United States of the provi24 sions herein within Indian country. 


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S 1027 RS

1 (e) AMBIGUITY.—Any ambiguity between the lan2 guage of this section or its application and any other pro3 vision of this Act shall be resolved in favor of this section. 

4 SEC. 7. EFFECTIVE DATE. 

5 (a) IN GENERAL.—Except as provided in subsection 

6 (b), this Act shall take effect on the date that is 90 days 

7 after the date of enactment of this Act. 

8 (b) BATFE AUTHORITY.—Section 5 shall take effect 

9 on the date of enactment of this Act. 

10 SEC. 8. SEVERABILITY. 

11 If any provision of this, or an amendment made by 

12 this Act or the application thereof to any person or cir13 cumstance is held invalid, the remainder of the Act and 

14 the application of it to any other person or circumstance 

15 shall not be affected thereby. 


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bajohnson on PROD1PC77 with BILLS
Calendar No. 351 

110TH CONGRESS 

1ST SESSION S. 1027 

[Report No. 110

–153] 

A BILL 

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

SEPTEMBER 11, 2007 

Reported without amendment 


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