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SEC. 702. ADMINISTRATIVE IMPROVEMENTS. 
(a) PERMIT, REPORT, AND RECORD REQUIREMENTS 
FOR MANUFACTURERS AND IMPORTERS OF PROCESSED 
TOBACCO.— 
(1) PERMITS.— 
(A) APPLICATION.—Section 5712 of the 
Internal Revenue Code of 1986 is amended by 
inserting ‘‘or processed tobacco’’ after ‘‘tobacco 
products’’. 
(B) ISSUANCE.—Section 5713(a) of such 
Code is amended by inserting ‘‘or processed to-
bacco’’ after ‘‘tobacco products’’. 
(2) INVENTORIES AND REPORTS.— 
(A) INVENTORIES.—Section 5721 of such 
Code is amended by inserting ‘‘, processed to-
bacco,’’ after ‘‘tobacco products’’. 
(B) REPORTS.—Section 5722 of such Code 
is amended by inserting ‘‘, processed tobacco,’’ 
after ‘‘tobacco products’’. 
(3) RECORDS.—Section 5741 of such Code is 
amended by inserting ‘‘, processed tobacco,’’ after 
‘‘tobacco products’’. 
(4) 
MANUFACTURER
OF
PROCESSED
TO-
BACCO.—Section 5702 of such Code is amended by 
adding at the end the following new subsection: 
‘‘(p) MANUFACTURER OF PROCESSED TOBACCO.—
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‘‘(1) IN GENERAL.—The term ‘manufacturer of 
processed tobacco’ means any person who processes 
any tobacco other than tobacco products. 
‘‘(2) PROCESSED TOBACCO.—The processing of 
tobacco shall not include the farming or growing of 
tobacco or the handling of tobacco solely for sale, 
shipment, or delivery to a manufacturer of tobacco 
products or processed tobacco.’’. 
(5) 
CONFORMING
AMENDMENT.—Section 
5702(k) of such Code is amended by inserting ‘‘, or 
any processed tobacco,’’ after ‘‘nontaxpaid tobacco 
products or cigarette papers or tubes’’. 
(6) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on January 1, 
2008. 
(b) BASIS FOR DENIAL, SUSPENSION, OR REVOCA-
TION OF PERMITS.— 
(1) DENIAL.—Paragraph (3) of section 5712 of 
such Code is amended to read as follows: 
‘‘(3) such person (including, in the case of a 
corporation, any officer, director, or principal stock-
holder and, in the case of a partnership, a part-
ner)— 
‘‘(A) is, by reason of his business experi-
ence, financial standing, or trade connections or
289 
by reason of previous or current legal pro-
ceedings involving a felony violation of any 
other provision of Federal criminal law relating 
to tobacco products, cigarette paper, or ciga-
rette tubes, not likely to maintain operations in 
compliance with this chapter, 
‘‘(B) has been convicted of a felony viola-
tion of any provision of Federal or State crimi-
nal law relating to tobacco products, cigarette 
paper, or cigarette tubes, or 
‘‘(C) has failed to disclose any material in-
formation required or made any material false 
statement in the application therefor.’’. 
(2) SUSPENSION OR REVOCATION.—Subsection 
(b) of section 5713 of such Code is amended to read 
as follows: 
‘‘(b) SUSPENSION OR REVOCATION.— 
‘‘(1) SHOW CAUSE HEARING.—If the Secretary 
has reason to believe that any person holding a per-
mit— 
‘‘(A) has not in good faith complied with 
this chapter, or with any other provision of this 
title involving intent to defraud, 
‘‘(B) has violated the conditions of such 
permit,
290 
‘‘(C) has failed to disclose any material in-
formation required or made any material false 
statement in the application for such permit, 
‘‘(D) has failed to maintain his premises in 
such manner as to protect the revenue, 
‘‘(E) is, by reason of previous or current 
legal proceedings involving a felony violation of 
any other provision of Federal criminal law re-
lating to tobacco products, cigarette paper, or 
cigarette tubes, not likely to maintain oper-
ations in compliance with this chapter, or 
‘‘(F) has been convicted of a felony viola-
tion of any provision of Federal or State crimi-
nal law relating to tobacco products, cigarette 
paper, or cigarette tubes, 
the Secretary shall issue an order, stating the facts 
charged, citing such person to show cause why his 
permit should not be suspended or revoked. 
‘‘(2) ACTION FOLLOWING HEARING.—If, after 
hearing, the Secretary finds that such person has 
not shown cause why his permit should not be sus-
pended or revoked, such permit shall be suspended 
for such period as the Secretary deems proper or 
shall be revoked.’’.
291 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the date of the 
enactment of this Act. 
(c) APPLICATION
OF INTERNAL REVENUE CODE 
STATUTE OF LIMITATIONS FOR ALCOHOL AND TOBACCO 
EXCISE TAXES.— 
(1) IN GENERAL.—Section 514(a) of the Tariff 
Act of 1930 (19 U.S.C. 1514(a)) is amended by 
striking ‘‘and section 520 (relating to refunds)’’ and 
inserting ‘‘section 520 (relating to refunds), and sec-
tion 6501 of the Internal Revenue Code of 1986 
(but only with respect to taxes imposed under chap-
ters 51 and 52 of such Code)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to articles imported 
after the date of the enactment of this Act. 
(d) EXPANSION OF DEFINITION OF ROLL-YOUR-OWN 
TOBACCO.— 
(1) IN GENERAL.—Section 5702(o) of the In-
ternal Revenue Code of 1986 is amended by insert-
ing ‘‘or cigars, or for use as wrappers thereof’’ be-
fore the period at the end. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to articles removed (as
292 
defined in section 5702(j) of the Internal Revenue 
Code of 1986) after December 31, 2007. 
(e) TIME
OF TAX
FOR UNLAWFULLY MANUFAC-
TURED TOBACCO PRODUCTS.— 
(1) IN GENERAL.—Section 5703(b)(2) of such 
Code is amended by adding at the end the following 
new subparagraph: 
‘‘(F) SPECIAL
RULE
FOR
UNLAWFULLY 
MANUFACTURED TOBACCO PRODUCTS.—In the 
case of any tobacco products, cigarette paper, 
or cigarette tubes produced in the United 
States at any place other than the premises of 
a manufacturer of tobacco products, cigarette 
paper, or cigarette tubes that has filed the bond 
and obtained the permit required under this 
chapter, tax shall be due and payable imme-
diately upon manufacture.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect on the date of the 
enactment of this Act. 
SEC. 703. TIME FOR PAYMENT OF CORPORATE ESTIMATED 
TAXES. 
Subparagraph (B) of section 401(1) of the Tax In-
crease Prevention and Reconciliation Act of 2005 is
293 
amended by striking ‘‘114.75 percent’’ and inserting 
‘‘113.75 percent’’. 
Passed the House of Representatives October 25, 
2007. 
Attest: 
Clerk.
110TH CONGRESS 
1ST SESSION 
H. R. 3963 
AN ACT 
To amend title XXI of the Social Security Act to 
extend and improve the Children’s Health Insur-
ance Program, and for other purposes.