PACT Act Passes Congress

Roughly one week after the U.S. Senate unanimously passed its version of the Prevent All Cigarette Trafficking Act (PACT Act), the U.S. House passed that version in a 387-25 vote, sending the proposal to President Barack Obama for action.

The PACT Act would prohibit the U.S. Postal Service from delivering cigarettes ordered over the Internet, in an effort to lessen tax evasion and youth access to tobacco.

The bill — which originally passed the House in May — is authored by Sen. Herb Kohl of Wisconsin and co-sponsored by a bipartisan group of 20 senators.
The passage out of the Senate was a “major win” for c-store retailers, NACS Senior Vice President of Government Relations Lyle Beckwith said when the Senate passed the bill earlier this week.

“NACS has been working for over 10 years to pass legislation to regulate Internet and mail-order tobacco sales,” Beckwith said in a statement. “[That] vote brings us closer to achieving our goal than we have ever been. We will continue to pressure the House to take the final step necessary for passage and enactment.”

With the passage of the bill out of Congress, convenience store associations and other organizations applauded the action, along with the effort of their lawmakers and members working to pass the bill.

“Law-abiding mom-and-pop retailers are especially grateful to Congressman Anthony Weiner of New York, the House sponsor, and Senators Charles Schumer and Kirsten Gillibrand of New York for their courageous leadership on this issue of fairness and child health protection,” James Calvin, president of the New York Association of Convenience Stores (NYACS), said in a statement. “Congress made a sensible choice to have them sold in a controlled environment where there is verifiable compliance with tax, age verification and other laws designed to protect public health.”

The Coalition to Stop Contraband Tobacco also praised the action.

“In passing the PACT Act, Congress has made a definitive statement about its commitment to help eliminate underage access to tobacco on the Internet, curtail associated illegal activities and capture lost state excise tax revenues,” Scott Ramminger, AWMA president and CEO and coalition spokesperson, said in a statement. “This bill is a win for law enforcement, retailers, state tax advocates and public health groups.”

He added: “We hope that President Obama will act swiftly to sign this common sense legislation into law so that we can put an end to the illegal sale of tobacco products.”
With the bill still needing to be signed by President Obama, the National Association of Tobacco Outlets (NATO) urged its members to call the White House Comment Line and leave a message asking the President to sign the bill into law.

However, not all tobacco retailers approved of the bill. Native American tribal leaders have called the passage a “sucker punch” to treaty rights, BusinessWeek reported.

“This is a sucker punch to our federal treaty rights,” Seneca Nation President Barry Snyder Sr. said in the report. “This is a direct assault on our economy and our people. And it will have a devastating ripple effect on the Western New York economy.”

Numerous tribes sell tobacco products around the country, but the Senecas — with dozens of Web sites offering cigarettes at discount prices — have a lot at stake. The post office has been the primary means of delivery since UPS, DHL and FedEx previously agreed with the New York Attorney General to not ship cigarettes nationwide, the report stated.

The tobacco business accounts for about half of the tribe’s $1.1 billion economy, said Snyder. The tribes opposing the bill claimed it would threaten 1,000 Indian and non-Indian jobs in the state.

NYACS’ Calvin countered that this argument assumes all Native American tobacco customers will stop buying cigarettes altogether, as opposed to the more likely shift in sales and jobs back to licensed, regulated retail outlets. “It’s ludicrous for anyone to claim that helping smokers circumvent tax and age verification laws is a form of economic development,” he said in a statement.

For Native American tobacco businesses, the result of the PACT Act will be a reining in of cigarette sales by reservations, according to Lance Morgan, a Winnebago Indian who runs a tribal corporation that deals in Native American goods.

“The businesses will become marginalized and very localized, and most reservations are in the middle of nowhere,” Morgan said in the BusinessWeek report. “It will go back to being a very small piece of what you do.”


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