H. R. 976—95 
SEC. 614. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS; GAO 
REPORT ON MEDICAID MANAGED CARE PAYMENT RATES. 
(a) IN GENERAL.—Section 9517(c)(3) of the Consolidated Omni-
bus Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), 
as added by section 4734 of the Omnibus Budget Reconciliation 
Act of 1990 and as amended by section 704 of the Medicare, Med-
icaid, and SCHIP Benefits Improvement and Protection Act of 2000, 
is amended— 
(1) in subparagraph (A), by inserting ‘‘, in the case of 
any health insuring organization described in such subpara-
graph that is operated by a public entity established by Ventura 
County, and in the case of any health insuring organization 
described in such subparagraph that is operated by a public 
entity established by Merced County’’ after ‘‘described in 
subparagraph (B)’’; and 
(2) in subparagraph (C), by striking ‘‘14 percent’’ and 
inserting ‘‘16 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall take effect on the date of the enactment of this Act. 
(c) GAO REPORT ON ACTUARIAL SOUNDNESS OF MEDICAID MAN-
AGED CARE PAYMENT RATES.—Not later than 18 months after the 
date of the enactment of this Act, the Comptroller General of 
the United States shall submit a report to the Committee on 
Finance of the Senate and the Committee on Energy and Commerce 
of the House of Representatives analyzing the extent to which 
State payment rates for medicaid managed care organizations under 
title XIX of the Social Security Act are actuarially sound. 
SEC. 615. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DIS-
REGARD AN EXTRAORDINARY EMPLOYER PENSION CON-
TRIBUTION. 
(a) IN GENERAL.—Only for purposes of computing the FMAP 
(as defined in subsection (e)) for a State for a fiscal year (beginning 
with fiscal year 2006) and applying the FMAP under title XIX 
of the Social Security Act, any significantly disproportionate 
employer pension or insurance fund contribution described in sub-
section (b) shall be disregarded in computing the per capita income 
of such State, but shall not be disregarded in computing the per 
capita income for the continental United States (and Alaska) and 
Hawaii. 
(b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER PENSION AND 
INSURANCE FUND CONTRIBUTION.— 
(1) IN GENERAL.—For purposes of this section, a signifi-
cantly disproportionate employer pension and insurance fund 
contribution described in this subsection with respect to a State 
is any identifiable employer contribution towards pension or 
other employee insurance funds that is estimated to accrue 
to residents of such State for a calendar year (beginning with 
calendar year 2003) if the increase in the amount so estimated 
exceeds 25 percent of the total increase in personal income 
in that State for the year involved. 
(2) DATA
TO
BE
USED.—For estimating and adjustment 
a FMAP already calculated as of the date of the enactment 
of this Act for a State with a significantly disproportionate 
employer pension and insurance fund contribution, the Sec-
retary shall use the personal income data set originally used 
in calculating such FMAP.
H. R. 976—96 
(3) SPECIAL ADJUSTMENT FOR NEGATIVE GROWTH.—If in any 
calendar year the total personal income growth in a State 
is negative, an employer pension and insurance fund contribu-
tion for the purposes of calculating the State’s FMAP for a 
calendar year shall not exceed 125 percent of the amount 
of such contribution for the previous calendar year for the 
State. 
(c) HOLD HARMLESS.—No State shall have its FMAP for a 
fiscal year reduced as a result of the application of this section. 
(d) REPORT.—Not later than May 15, 2008, the Secretary shall 
submit to the Congress a report on the problems presented by 
the current treatment of pension and insurance fund contributions 
in the use of Bureau of Economic Affairs calculations for the FMAP 
and for Medicaid and on possible alternative methodologies to miti-
gate such problems. 
(e) FMAP DEFINED.—For purposes of this section, the term 
‘‘FMAP’’ means the Federal medical assistance percentage, as 
defined in section 1905(b) of the Social Security Act (42 U.S.C. 
1396(d)). 
SEC. 616. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS. 
Notwithstanding any other provision of law, the Secretary of 
Health and Human Services shall not, prior to May 28, 2008, 
take any action (through promulgation of regulation, issuance of 
regulatory guidance, use of federal payment audit procedures, or 
other administrative action, policy, or practice, including a Medical 
Assistance Manual transmittal or letter to State Medicaid directors) 
to restrict coverage or payment under title XIX of the Social Security 
Act for rehabilitation services, or school-based administration, 
transportation, or medical services if such restrictions are more 
restrictive in any aspect than those applied to such coverage or 
payment as of July 1, 2007. 
SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII. 
(a) TENNESSEE.—The DSH allotments for Tennessee for each 
fiscal year beginning with fiscal year 2008 under subsection (f)(3) 
of section 1923 of the Social Security Act (42 U.S.C. 1396r–4) 
are deemed to be $30,000,000. The Secretary of Health and Human 
Services may impose a limitation on the total amount of payments 
made to hospitals under the TennCare Section 1115 waiver only 
to the extent that such limitation is necessary to ensure that 
a hospital does not receive payment in excess of the amounts 
described in subsection (f) of such section or as necessary to ensure 
that the waiver remains budget neutral. 
(b) HAWAII.—Section 1923(f)(6) (42 U.S.C. 1396r–4(f)(6)) is 
amended— 
(1) in the paragraph heading, by striking ‘‘FOR FISCAL YEAR 
2007’’; and 
(2) in subparagraph (B)— 
(A) in clause (i), by striking ‘‘Only with respect to 
fiscal year 2007’’ and inserting ‘‘With respect to each of 
fiscal years 2007 and 2008’’; 
(B) by redesignating clause (ii) as clause (iv); and 
(C) by inserting after clause (i), the following new 
clauses: 
‘‘(ii) TREATMENT
AS
A
LOW-DSH
STATE.—With 
respect to fiscal year 2009 and each fiscal year there-
after, notwithstanding the table set forth in paragraph
H. R. 976—97 
(2), the DSH allotment for Hawaii shall be increased 
in the same manner as allotments for low DSH States 
are increased for such fiscal year under clauses (ii) 
and (iii) of paragraph (5)(B). 
‘‘(iii) CERTAIN HOSPITAL PAYMENTS.—The Secretary 
may not impose a limitation on the total amount of 
payments made to hospitals under the QUEST section 
1115 Demonstration Project except to the extent that 
such limitation is necessary to ensure that a hospital 
does not receive payments in excess of the amounts 
described in subsection (g), or as necessary to ensure 
that such payments under the waiver and such pay-
ments pursuant to the allotment provided in this sec-
tion do not, in the aggregate in any year, exceed the 
amount that the Secretary determines is equal to the 
Federal medical assistance percentage component 
attributable to disproportionate share hospital pay-
ment adjustments for such year that is reflected in 
the budget neutrality provision of the QUEST Dem-
onstration Project.’’. 
SEC. 618. CLARIFICATION TREATMENT OF REGIONAL MEDICAL 
CENTER. 
(a) IN GENERAL.—Nothing in section 1903(w) of the Social 
Security Act (42 U.S.C. 1396b(w)) shall be construed by the Sec-
retary of Health and Human Services as prohibiting a State’s use 
of funds as the non-Federal share of expenditures under title XIX 
of such Act where such funds are transferred from or certified 
by a publicly-owned regional medical center located in another 
State and described in subsection (b), so long as the Secretary 
determines that such use of funds is proper and in the interest 
of the program under title XIX. 
(b) CENTER DESCRIBED.—A center described in this subsection 
is a publicly-owned regional medical center that— 
(1) provides level 1 trauma and burn care services; 
(2) provides level 3 neonatal care services; 
(3) is obligated to serve all patients, regardless of ability 
to pay; 
(4) is located within a Standard Metropolitan Statistical 
Area (SMSA) that includes at least 3 States; 
(5) provides services as a tertiary care provider for patients 
residing within a 125-mile radius; and 
(6) meets the criteria for a disproportionate share hospital 
under section 1923 of such Act (42 U.S.C. 1396r–4) in at least 
one State other than the State in which the center is located. 
SEC. 619. EXTENSION OF SSI WEB-BASED ASSET DEMONSTRATION 
PROJECT TO THE MEDICAID PROGRAM. 
(a) IN GENERAL.—Beginning on October 1, 2012, the Secretary 
of Health and Human Services shall provide for the application 
to asset eligibility determinations under the Medicaid program 
under title XIX of the Social Security Act of the automated, secure, 
web-based asset verification request and response process being 
applied for determining eligibility for benefits under the Supple-
mental Security Income (SSI) program under title XVI of such 
Act under a demonstration project conducted under the authority 
of section 1631(e)(1)(B)(ii) of such Act (42 U.S.C. 1383(e)(1)(B)(ii)).
H. R. 976—98 
(b) LIMITATION.—Such application shall only extend to those 
States in which such demonstration project is operating and only 
for the period in which such project is otherwise provided. 
(c) RULES OF APPLICATION.—For purposes of carrying out sub-
section (a), notwithstanding any other provision of law, information 
obtained from a financial institution that is used for purposes 
of eligibility determinations under such demonstration project with 
respect to the Secretary of Health and Human Services under 
the SSI program may also be shared and used by States for purposes 
of eligibility determinations under the Medicaid program. In 
applying section 1631(e)(1)(B)(ii) of the Social Security Act under 
this subsection, references to the Commissioner of Social Security 
and benefits under title XVI of such Act shall be treated as including 
a reference to a State described in subsection (b) and medical 
assistance under title XIX of such Act provided by such a State. 
Subtitle C—Other Provisions 
SEC. 621. SUPPORT FOR INJURED SERVICEMEMBERS. 
(a) SHORT TITLE.—This section may be cited as the ‘‘Support 
for Injured Servicemembers Act’’. 
(b) SERVICEMEMBER FAMILY LEAVE.— 
(1) DEFINITIONS.—Section 101 of the Family and Medical 
Leave Act of 1993 (29 U.S.C. 2611) is amended by adding 
at the end the following: 
‘‘(14) ACTIVE DUTY.—The term ‘active duty’ means duty 
under a call or order to active duty under a provision of law 
referred to in section 101(a)(13)(B) of title 10, United States 
Code. 
‘‘(15) 
COVERED
SERVICEMEMBER.—The 
term 
‘covered 
servicemember’ means a member of the Armed Forces, 
including a member of the National Guard or a Reserve, who 
is undergoing medical treatment, recuperation, or therapy, is 
otherwise in medical hold or medical holdover status, or is 
otherwise on the temporary disability retired list, for a serious 
injury or illness. 
‘‘(16) MEDICAL HOLD OR MEDICAL HOLDOVER STATUS.—The 
term ‘medical hold or medical holdover status’ means— 
‘‘(A) the status of a member of the Armed Forces, 
including a member of the National Guard or a Reserve, 
assigned or attached to a military hospital for medical 
care; and 
‘‘(B) the status of a member of a reserve component 
of the Armed Forces who is separated, whether pre-deploy-
ment or post-deployment, from the member’s unit while 
in need of health care based on a medical condition identi-
fied while the member is on active duty in the Armed 
Forces. 
‘‘(17) NEXT
OF
KIN.—The term ‘next of kin’, used with 
respect to an individual, means the nearest blood relative of 
that individual. 
‘‘(18) SERIOUS INJURY OR ILLNESS.—The term ‘serious injury 
or illness’, in the case of a member of the Armed Forces, 
means an injury or illness incurred by the member in line 
of duty on active duty in the Armed Forces that may render
H. R. 976—99 
the member medically unfit to perform the duties of the mem-
ber’s office, grade, rank, or rating.’’. 
(2) ENTITLEMENT TO LEAVE.—Section 102(a) of such Act 
(29 U.S.C. 2612(a)) is amended by adding at the end the fol-
lowing: 
‘‘(3) SERVICEMEMBER
FAMILY
LEAVE.—Subject to section 
103, an eligible employee who is the spouse, son, daughter, 
parent, or next of kin of a covered servicemember shall be 
entitled to a total of 26 workweeks of leave during a 12- 
month period to care for the servicemember. The leave described 
in this paragraph shall only be available during a single 12- 
month period. 
‘‘(4) COMBINED LEAVE TOTAL.—During the single 12-month 
period described in paragraph (3), an eligible employee shall 
be entitled to a combined total of 26 workweeks of leave under 
paragraphs (1) and (3). Nothing in this paragraph shall be 
construed to limit the availability of leave under paragraph 
(1) during any other 12-month period.’’. 
(3) REQUIREMENTS RELATING TO LEAVE.— 
(A) SCHEDULE.—Section 102(b) of such Act (29 U.S.C. 
2612(b)) is amended— 
(i) in paragraph (1), in the second sentence— 
(I) by striking ‘‘section 103(b)(5)’’ and inserting 
‘‘subsection (b)(5) or (f) (as appropriate) of section 
103’’; and 
(II) by inserting ‘‘or under subsection (a)(3)’’ 
after ‘‘subsection (a)(1)’’; and 
(ii) in paragraph (2), by inserting ‘‘or under sub-
section (a)(3)’’ after ‘‘subsection (a)(1)’’. 
(B) SUBSTITUTION OF PAID LEAVE.—Section 102(d) of 
such Act (29 U.S.C. 2612(d)) is amended— 
(i) in paragraph (1)— 
(I) by inserting ‘‘(or 26 workweeks in the case 
of leave provided under subsection (a)(3))’’ after 
‘‘12 workweeks’’ the first place it appears; and 
(II) by inserting ‘‘(or 26 workweeks, as appro-
priate)’’ after ‘‘12 workweeks’’ the second place it 
appears; and 
(ii) in paragraph (2)(B), by adding at the end the 
following: ‘‘An eligible employee may elect, or an 
employer may require the employee, to substitute any 
of the accrued paid vacation leave, personal leave, 
family leave, or medical or sick leave of the employee 
for leave provided under subsection (a)(3) for any part 
of the 26-week period of such leave under such sub-
section.’’. 
(C) NOTICE.—Section 102(e)(2) of such Act (29 U.S.C. 
2612(e)(2)) is amended by inserting ‘‘or under subsection 
(a)(3)’’ after ‘‘subsection (a)(1)’’. 
(D) SPOUSES EMPLOYED BY SAME EMPLOYER.—Section 
102(f) of such Act (29 U.S.C. 2612(f)) is amended— 
(i) by redesignating paragraphs (1) and (2) as sub-
paragraphs (A) and (B), and aligning the margins of 
the subparagraphs with the margins of section 
102(e)(2)(A); 
(ii) by striking ‘‘In any’’ and inserting the following: 
‘‘(1) IN GENERAL.—In any’’; and
H. R. 976—101 
or a Reserve, who is undergoing medical treatment, recuper-
ation, or therapy, is otherwise in medical hold or medical hold-
over status, or is otherwise on the temporary disability retired 
list, for a serious injury or illness; 
‘‘(9) the term ‘medical hold or medical holdover status’ 
means— 
‘‘(A) the status of a member of the Armed Forces, 
including a member of the National Guard or a Reserve, 
assigned or attached to a military hospital for medical 
care; and 
‘‘(B) the status of a member of a reserve component 
of the Armed Forces who is separated, whether pre-deploy-
ment or post-deployment, from the member’s unit while 
in need of health care based on a medical condition identi-
fied while the member is on active duty in the Armed 
Forces; 
‘‘(10) the term ‘next of kin’, used with respect to an indi-
vidual, means the nearest blood relative of that individual; 
and 
‘‘(11) the term ‘serious injury or illness’, in the case of 
a member of the Armed Forces, means an injury or illness 
incurred by the member in line of duty on active duty in 
the Armed Forces that may render the member medically unfit 
to perform the duties of the member’s office, grade, rank, or 
rating.’’. 
(2) ENTITLEMENT TO LEAVE.—Section 6382(a) of such title 
is amended by adding at the end the following: 
‘‘(3) Subject to section 6383, an employee who is the spouse, 
son, daughter, parent, or next of kin of a covered servicemember 
shall be entitled to a total of 26 administrative workweeks 
of 
leave 
during 
a 
12-month 
period 
to 
care 
for 
the 
servicemember. The leave described in this paragraph shall 
only be available during a single 12-month period. 
‘‘(4) During the single 12-month period described in para-
graph (3), an employee shall be entitled to a combined total 
of 26 administrative workweeks of leave under paragraphs 
(1) and (3). Nothing in this paragraph shall be construed to 
limit the availability of leave under paragraph (1) during any 
other 12-month period.’’. 
(3) REQUIREMENTS RELATING TO LEAVE.— 
(A) SCHEDULE.—Section 6382(b) of such title is 
amended— 
(i) in paragraph (1), in the second sentence— 
(I) 
by 
striking 
‘‘section 
6383(b)(5)’’ 
and 
inserting ‘‘subsection (b)(5) or (f) (as appropriate) 
of section 6383’’; and 
(II) by inserting ‘‘or under subsection (a)(3)’’ 
after ‘‘subsection (a)(1)’’; and 
(ii) in paragraph (2), by inserting ‘‘or under sub-
section (a)(3)’’ after ‘‘subsection (a)(1)’’. 
(B) SUBSTITUTION OF PAID LEAVE.—Section 6382(d) of 
such title is amended by adding at the end the following: 
‘‘An employee may elect to substitute for leave under sub-
section (a)(3) any of the employee’s accrued or accumulated 
annual or sick leave under subchapter I for any part of 
the 26-week period of leave under such subsection.’’.
H. R. 976—102 
(C) NOTICE.—Section 6382(e) of such title is amended 
by inserting ‘‘or under subsection (a)(3)’’ after ‘‘subsection 
(a)(1)’’. 
(D) CERTIFICATION.—Section 6383 of such title is 
amended by adding at the end the following: 
‘‘(f) An employing agency may require that a request for leave 
under section 6382(a)(3) be supported by a certification issued at 
such time and in such manner as the Office of Personnel Manage-
ment may by regulation prescribe.’’. 
SEC. 622. MILITARY FAMILY JOB PROTECTION. 
(a) SHORT TITLE.—This section may be cited as the ‘‘Military 
Family Job Protection Act’’. 
(b) PROHIBITION ON DISCRIMINATION IN EMPLOYMENT AGAINST 
CERTAIN FAMILY MEMBERS CARING FOR RECOVERING MEMBERS OF 
THE
ARMED
FORCES.—A 
family 
member 
of 
a 
recovering 
servicemember described in subsection (c) shall not be denied reten-
tion in employment, promotion, or any benefit of employment by 
an employer on the basis of the family member’s absence from 
employment as described in that subsection, for a period of not 
more than 52 workweeks. 
(c) COVERED FAMILY MEMBERS.—A family member described 
in this subsection is a family member of a recovering servicemember 
who is— 
(1) on invitational orders while caring for the recovering 
servicemember; 
(2) a non-medical attendee caring for the recovering 
servicemember; or 
(3) receiving per diem payments from the Department of 
Defense while caring for the recovering servicemember. 
(d) TREATMENT OF ACTIONS.—An employer shall be considered 
to have engaged in an action prohibited by subsection (b) with 
respect to a person described in that subsection if the absence 
from employment of the person as described in that subsection 
is a motivating factor in the employer’s action, unless the employer 
can prove that the action would have been taken in the absence 
of the absence of employment of the person. 
(e) DEFINITIONS.—In this section: 
(1) BENEFIT OF EMPLOYMENT.—The term ‘‘benefit of employ-
ment’’ has the meaning given such term in section 4303 of 
title 38, United States Code. 
(2) CARING FOR.—The term ‘‘caring for’’, used with respect 
to a recovering servicemember, means providing personal, med-
ical, or convalescent care to the recovering servicemember, 
under circumstances that substantially interfere with an 
employee’s ability to work. 
(3) EMPLOYER.—The term ‘‘employer’’ has the meaning 
given such term in section 4303 of title 38, United States 
Code, except that the term does not include any person who 
is not considered to be an employer under title I of the Family 
and Medical Leave Act of 1993 (29 U.S.C. 2611 et seq.) because 
the person does not meet the requirements of section 
101(4)(A)(i) of such Act (29 U.S.C. 2611(4)(A)(i)). 
(4) FAMILY
MEMBER.—The term ‘‘family member’’, with 
respect to a recovering servicemember, has the meaning given 
that term in section 411h(b) of title 37, United States Code.
H. R. 976—103 
(5) RECOVERING
SERVICEMEMBER.—The term ‘‘recovering 
servicemember’’ means a member of the Armed Forces, 
including a member of the National Guard or a Reserve, who 
is undergoing medical treatment, recuperation, or therapy, or 
is otherwise in medical hold or medical holdover status, for 
an injury, illness, or disease incurred or aggravated while on 
active duty in the Armed Forces. 
SEC. 623. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 
AVAILABLE TO CHILDREN. 
(a) DEFINITIONS.—In this section— 
(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ means 
the Small Business Administration and the Administrator 
thereof, respectively; 
(2) the term ‘‘certified development company’’ means a 
development company participating in the program under title 
V of the Small Business Investment Act of 1958 (15 U.S.C. 
695 et seq.); 
(3) the term ‘‘Medicaid program’’ means the program estab-
lished under title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.); 
(4) the term ‘‘Service Corps of Retired Executives’’ means 
the Service Corps of Retired Executives authorized by section 
8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1)); 
(5) the term ‘‘small business concern’’ has the meaning 
given that term in section 3 of the Small Business Act (15 
U.S.C. 632); 
(6) the term ‘‘small business development center’’ means 
a small business development center described in section 21 
of the Small Business Act (15 U.S.C. 648); 
(7) the term ‘‘State’’ has the meaning given that term 
for purposes of title XXI of the Social Security Act (42 U.S.C. 
1397aa et seq.); 
(8) the term ‘‘State Children’s Health Insurance Program’’ 
means the State Children’s Health Insurance Program estab-
lished under title XXI of the Social Security Act (42 U.S.C. 
1397aa et seq.); 
(9) the term ‘‘task force’’ means the task force established 
under subsection (b)(1); and 
(10) the term ‘‘women’s business center’’ means a women’s 
business center described in section 29 of the Small Business 
Act (15 U.S.C. 656). 
(b) ESTABLISHMENT OF TASK FORCE.— 
(1) ESTABLISHMENT.—There is established a task force to 
conduct a nationwide campaign of education and outreach for 
small business concerns regarding the availability of coverage 
for children through private insurance options, the Medicaid 
program, and the State Children’s Health Insurance Program. 
(2) MEMBERSHIP.—The task force shall consist of the 
Administrator, the Secretary of Health and Human Services, 
the Secretary of Labor, and the Secretary of the Treasury. 
(3) RESPONSIBILITIES.—The campaign conducted under this 
subsection shall include— 
(A) efforts to educate the owners of small business 
concerns about the value of health coverage for children; 
(B) information regarding options available to the 
owners and employees of small business concerns to make
H. R. 976—104 
insurance more affordable, including Federal and State 
tax deductions and credits for health care-related expenses 
and health insurance expenses and Federal tax exclusion 
for health insurance options available under employer- 
sponsored cafeteria plans under section 125 of the Internal 
Revenue Code of 1986; 
(C) efforts to educate the owners of small business 
concerns about assistance available through public pro-
grams; and 
(D) efforts to educate the owners and employees of 
small business concerns regarding the availability of the 
hotline operated as part of the Insure Kids Now program 
of the Department of Health and Human Services. 
(4) IMPLEMENTATION.—In carrying out this subsection, the 
task force may— 
(A) use any business partner of the Administration, 
including— 
(i) a small business development center; 
(ii) a certified development company; 
(iii) a women’s business center; and 
(iv) the Service Corps of Retired Executives; 
(B) enter into— 
(i) a memorandum of understanding with a 
chamber of commerce; and 
(ii) a partnership with any appropriate small busi-
ness concern or health advocacy group; and 
(C) designate outreach programs at regional offices 
of the Department of Health and Human Services to work 
with district offices of the Administration. 
(5) WEBSITE.—The Administrator shall ensure that links 
to information on the eligibility and enrollment requirements 
for the Medicaid program and State Children’s Health Insur-
ance Program of each State are prominently displayed on the 
website of the Administration. 
(6) REPORT.— 
(A) IN
GENERAL.—Not later than 2 years after the 
date of enactment of this Act, and every 2 years thereafter, 
the Administrator shall submit to the Committee on Small 
Business and Entrepreneurship of the Senate and the Com-
mittee on Small Business of the House of Representatives 
a report on the status of the nationwide campaign con-
ducted under paragraph (1). 
(B) CONTENTS.—Each report submitted under subpara-
graph (A) shall include a status update on all efforts made 
to educate owners and employees of small business con-
cerns on options for providing health insurance for children 
through public and private alternatives. 
SEC. 624. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE 
AND MEANINGFUL HEALTH INSURANCE COVERAGE. 
(a) FINDINGS.—The Senate finds the following: 
(1) There are approximately 45 million Americans currently 
without health insurance. 
(2) More than half of uninsured workers are employed 
by businesses with less than 25 employees or are self-employed. 
(3) Health insurance premiums continue to rise at more 
than twice the rate of inflation for all consumer goods.
H. R. 976—105 
(4) Individuals in the small group and individual health 
insurance markets usually pay more for similar coverage than 
those in the large group market. 
(5) The rapid growth in health insurance costs over the 
last few years has forced many employers, particularly small 
employers, to increase deductibles and co-pays or to drop cov-
erage completely. 
(b) SENSE OF THE SENATE.—The Senate— 
(1) recognizes the necessity to improve affordability and 
access to health insurance for all Americans; 
(2) acknowledges the value of building upon the existing 
private health insurance market; and 
(3) affirms its intent to enact legislation this year that, 
with appropriate protection for consumers, improves access to 
affordable and meaningful health insurance coverage for 
employees of small businesses and individuals by— 
(A) facilitating pooling mechanisms, including pooling 
across State lines, and 
(B) providing assistance to small businesses and 
individuals, including financial assistance and tax incen-
tives, for the purchase of private insurance coverage. 
TITLE VII—REVENUE PROVISIONS 
SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS. 
(a) CIGARS.—Section 5701(a) of the Internal Revenue Code of 
1986 is amended— 
(1) by striking ‘‘$1.828 cents per thousand ($1.594 cents 
per thousand on cigars removed during 2000 or 2001)’’ in para-
graph (1) and inserting ‘‘$50.00 per thousand’’, 
(2) by striking ‘‘20.719 percent (18.063 percent on cigars 
removed during 2000 or 2001)’’ in paragraph (2) and inserting 
‘‘52.988 percent’’, and 
(3) by striking ‘‘$48.75 per thousand ($42.50 per thousand 
on cigars removed during 2000 or 2001)’’ in paragraph (2) 
and inserting ‘‘$3.00 per cigar’’. 
(b) CIGARETTES.—Section 5701(b) of such Code is amended— 
(1) by striking ‘‘$19.50 per thousand ($17 per thousand 
on cigarettes removed during 2000 or 2001)’’ in paragraph 
(1) and inserting ‘‘$50.00 per thousand’’, and 
(2) by striking ‘‘$40.95 per thousand ($35.70 per thousand 
on cigarettes removed during 2000 or 2001)’’ in paragraph 
(2) and inserting ‘‘$105.00 per thousand’’. 
(c) CIGARETTE
PAPERS.—Section 5701(c) of such Code is 
amended by striking ‘‘1.22 cents (1.06 cents on cigarette papers 
removed during 2000 or 2001)’’ and inserting ‘‘3.13 cents’’. 
(d) CIGARETTE
TUBES.—Section 5701(d) of such Code is 
amended by striking ‘‘2.44 cents (2.13 cents on cigarette tubes 
removed during 2000 or 2001)’’ and inserting ‘‘6.26 cents’’. 
(e) SMOKELESS TOBACCO.—Section 5701(e) of such Code is 
amended— 
(1) by striking ‘‘58.5 cents (51 cents on snuff removed 
during 2000 or 2001)’’ in paragraph (1) and inserting ‘‘$1.50’’, 
and
H. R. 976—106 
(2) by striking ‘‘19.5 cents (17 cents on chewing tobacco 
removed during 2000 or 2001)’’ in paragraph (2) and inserting 
‘‘50 cents’’. 
(f) PIPE TOBACCO.—Section 5701(f) of such Code is amended 
by striking ‘‘$1.0969 cents (95.67 cents on pipe tobacco removed 
during 2000 or 2001)’’ and inserting ‘‘$2.8126 cents’’. 
(g) ROLL-YOUR-OWN TOBACCO.—Section 5701(g) of such Code 
is amended by striking ‘‘$1.0969 cents (95.67 cents on roll-your- 
own tobacco removed during 2000 or 2001)’’ and inserting ‘‘$8.8889 
cents’’. 
(h) FLOOR STOCKS TAXES.— 
(1) IMPOSITION OF TAX.—On tobacco products (other than 
cigars described in section 5701(a)(2) of the Internal Revenue 
Code of 1986) and cigarette papers and tubes manufactured 
in or imported into the United States which are removed before 
January 1, 2008, and held on such date for sale by any person, 
there is hereby imposed a tax in an amount equal to the 
excess of— 
(A) the tax which would be imposed under section 
5701 of such Code on the article if the article had been 
removed on such date, over 
(B) the prior tax (if any) imposed under section 5701 
of such Code on such article. 
(2) CREDIT AGAINST TAX.—Each person shall be allowed 
as a credit against the taxes imposed by paragraph (1) an 
amount equal to $500. Such credit shall not exceed the amount 
of taxes imposed by paragraph (1) on January 1, 2008, for 
which such person is liable. 
(3) LIABILITY FOR TAX AND METHOD OF PAYMENT.— 
(A) LIABILITY FOR TAX.—A person holding tobacco prod-
ucts, cigarette papers, or cigarette tubes on January 1, 
2008, to which any tax imposed by paragraph (1) applies 
shall be liable for such tax. 
(B) METHOD OF PAYMENT.—The tax imposed by para-
graph (1) shall be paid in such manner as the Secretary 
shall prescribe by regulations. 
(C) TIME FOR PAYMENT.—The tax imposed by para-
graph (1) shall be paid on or before April 1, 2008. 
(4) ARTICLES IN FOREIGN TRADE ZONES.—Notwithstanding 
the Act of June 18, 1934 (commonly known as the Foreign 
Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any 
other provision of law, any article which is located in a foreign 
trade zone on January 1, 2008, shall be subject to the tax 
imposed by paragraph (1) if— 
(A) internal revenue taxes have been determined, or 
customs duties liquidated, with respect to such article 
before such date pursuant to a request made under the 
1st proviso of section 3(a) of such Act, or 
(B) such article is held on such date under the super-
vision of an officer of the United States Customs and Border 
Protection of the Department of Homeland Security pursu-
ant to the 2d proviso of such section 3(a). 
(5) DEFINITIONS.—For purposes of this subsection— 
(A) IN GENERAL.—Any term used in this subsection 
which is also used in section 5702 of the Internal Revenue 
Code of 1986 shall have the same meaning as such term 
has in such section.
H. R. 976—107 
(B) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Treasury or the Secretary’s delegate. 
(6) CONTROLLED GROUPS.—Rules similar to the rules of 
section 5061(e)(3) of such Code shall apply for purposes of 
this subsection. 
(7) OTHER
LAWS
APPLICABLE.—All provisions of law, 
including penalties, applicable with respect to the taxes imposed 
by section 5701 of such Code shall, insofar as applicable and 
not inconsistent with the provisions of this subsection, apply 
to the floor stocks taxes imposed by paragraph (1), to the 
same extent as if such taxes were imposed by such section 
5701. The Secretary may treat any person who bore the ulti-
mate burden of the tax imposed by paragraph (1) as the person 
to whom a credit or refund under such provisions may be 
allowed or made. 
(i) EFFECTIVE DATE.—The amendments made by this section 
shall apply to articles removed (as defined in section 5702(j) of 
the Internal Revenue Code of 1986) after December 31, 2007. 
SEC. 702. ADMINISTRATIVE IMPROVEMENTS. 
(a) PERMIT, REPORT, AND RECORD REQUIREMENTS FOR MANU-
FACTURERS AND IMPORTERS OF PROCESSED TOBACCO.— 
(1) PERMITS.— 
(A) APPLICATION.—Section 5712 of the Internal Rev-
enue 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 tobacco’’ after ‘‘tobacco 
products’’. 
(2) INVENTORIES AND REPORTS.— 
(A) INVENTORIES.—Section 5721 of such Code is 
amended by inserting ‘‘, processed tobacco,’’ 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 TOBACCO.—Section 5702 
of such Code is amended by adding at the end the following 
new subsection: 
‘‘(p) MANUFACTURER OF PROCESSED TOBACCO.— 
‘‘(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 manufac-
turer 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 sub-
section shall take effect on January 1, 2008. 
(b) BASIS FOR DENIAL, SUSPENSION, OR REVOCATION OF PER-
MITS.— 
(1) DENIAL.—Paragraph (3) of section 5712 of such Code 
is amended to read as follows:
H. R. 976—108 
‘‘(3) such person (including, in the case of a corporation, 
any officer, director, or principal stockholder and, in the case 
of a partnership, a partner)— 
‘‘(A) is, by reason of his business experience, financial 
standing, or trade connections or by reason of previous 
or current legal proceedings involving a felony violation 
of any other provision of Federal criminal law relating 
to tobacco products, cigarette paper, or cigarette tubes, 
not likely to maintain operations in compliance with this 
chapter, 
‘‘(B) has been convicted of a felony violation of any 
provision of Federal or State criminal law relating to 
tobacco products, cigarette paper, or cigarette tubes, or 
‘‘(C) has failed to disclose any material information 
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 permit— 
‘‘(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, 
‘‘(C) has failed to disclose any material information 
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 pro-
ceedings involving a felony violation of any other provision 
of Federal criminal law relating to tobacco products, ciga-
rette paper, or cigarette tubes, not likely to maintain oper-
ations in compliance with this chapter, or 
‘‘(F) has been convicted of a felony violation of any 
provision of Federal or State criminal 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 suspended or revoked, such permit 
shall be suspended for such period as the Secretary deems 
proper or shall be revoked.’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section 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 section 6501 of the Internal Revenue Code of 
1986 (but only with respect to taxes imposed under chapters 
51 and 52 of such Code)’’.
H. R. 976—109 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section 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 Internal Revenue 
Code of 1986 is amended by inserting ‘‘or cigars, or for use 
as wrappers thereof’’ before the period at the end. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to articles removed (as defined in section 
5702(j) of the Internal Revenue Code of 1986) after December 
31, 2007. 
(e) TIME OF TAX FOR UNLAWFULLY MANUFACTURED 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 manufac-
turer 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 sub-
section 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 Increase Preven-
tion and Reconciliation Act of 2005 is amended by striking ‘‘114.75 
percent’’ and inserting ‘‘113.75 percent’’. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.