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(1) ESTABLISHMENT.—There is established a 
task force to conduct a nationwide campaign of edu-
cation and outreach for small business concerns re-
garding the availability of coverage for children 
through private insurance options, the Medicaid pro-
gram, 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 con-
ducted under this subsection shall include— 
(A) efforts to educate the owners of small 
business concerns about the value of health cov-
erage for children; 
(B) information regarding options available 
to the owners and employees of small business 
concerns to make insurance more affordable, in-
cluding Federal and State tax deductions and 
credits for health care-related expenses and 
health insurance expenses and Federal tax ex-
clusion for health insurance options available 
under employer-sponsored cafeteria plans under 
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HR 3963 PCS 
section 125 of the Internal Revenue Code of 
1986; 
(C) efforts to educate the owners of small 
business concerns about assistance available 
through public programs; and 
(D) efforts to educate the owners and em-
ployees of small business concerns regarding 
the availability of the hotline operated as part 
of the Insure Kids Now program of the Depart-
ment of Health and Human Services. 
(4) IMPLEMENTATION.—In carrying out this 
subsection, the task force may— 
(A) use any business partner of the Ad-
ministration, including— 
(i) a small business development cen-
ter; 
(ii) a certified development company; 
(iii) a women’s business center; and 
(iv) the Service Corps of Retired Ex-
ecutives; 
(B) enter into— 
(i) a memorandum of understanding 
with a chamber of commerce; and 
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HR 3963 PCS 
(ii) a partnership with any appro-
priate small business concern or health ad-
vocacy group; and 
(C) designate outreach programs at re-
gional 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 enroll-
ment requirements for the Medicaid program and 
State Children’s Health Insurance 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 Busi-
ness and Entrepreneurship of the Senate and 
the Committee on Small Business of the House 
of Representatives a report on the status of the 
nationwide campaign conducted under para-
graph (1). 
(B) CONTENTS.—Each report submitted 
under subparagraph (A) shall include a status 
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HR 3963 PCS 
update on all efforts made to educate owners 
and employees of small business concerns on 
options for providing health insurance for chil-
dren through public and private alternatives. 
SEC. 623. SENSE OF SENATE REGARDING ACCESS TO AF-
FORDABLE AND MEANINGFUL HEALTH IN-
SURANCE COVERAGE. 
(a) FINDINGS.—The Senate finds the following: 
(1) There are approximately 45 million Ameri-
cans 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 con-
sumer goods. 
(4) Individuals in the small group and indi-
vidual 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 coverage completely. 
(b) SENSE OF THE SENATE.—The Senate— 
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HR 3963 PCS 
(1) recognizes the necessity to improve afford-
ability and access to health insurance for all Ameri-
cans; 
(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 con-
sumers, improves access to affordable and meaning-
ful health insurance coverage for employees of small 
businesses and individuals by— 
(A) facilitating pooling mechanisms, in-
cluding pooling across State lines, and 
(B) providing assistance to small busi-
nesses and individuals, including financial as-
sistance and tax incentives, 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 Rev-
enue Code of 1986 is amended— 
(1) by striking ‘‘$1.828 cents per thousand 
($1.594 cents per thousand on cigars removed dur-
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HR 3963 PCS 
ing 2000 or 2001)’’ in paragraph (1) and inserting 
‘‘$50.00 per thousand’’, 
(2) by striking ‘‘20.719 percent (18.063 percent 
on cigars removed during 2000 or 2001)’’ in para-
graph (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 in-
serting ‘‘3.13 cents’’. 
(d) CIGARETTE TUBES.—Section 5701(d) of such 
Code is amended by striking ‘‘2.44 cents (2.13 cents on 
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HR 3963 PCS 
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore April 1, 2008. 
(4) ARTICLES
IN
FOREIGN
TRADE
ZONES.— 
Notwithstanding the Act of June 18, 1934 (com-
monly known as the Foreign Trade Zone Act, 48 
Stat. 998, 19 U.S.C. 81a et seq.) or any other provi-
sion 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 deter-
mined, or customs duties liquidated, with re-
spect to such article before such date pursuant 
to a request made under the 1st proviso of sec-
tion 3(a) of such Act, or 
(B) such article is held on such date under 
the supervision of an officer of the United 
States Customs and Border Protection of the 
Department of Homeland Security pursuant to 
the 2d proviso of such section 3(a). 
(5) DEFINITIONS.—For purposes of this sub-
section— 
(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 
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HR 3963 PCS 
the same meaning as such term has in such 
section. 
(B) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary 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 ultimate burden of the tax imposed by para-
graph (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. 
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HR 3963 PCS 
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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HR 3963 PCS 
‘‘(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 
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HR 3963 PCS 
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, 
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‘‘(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.’’. 
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HR 3963 PCS 
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 
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HR 3963 PCS 
amended by striking ‘‘114.75 percent’’ and inserting 
‘‘113.75 percent’’. 
Passed the House of Representatives October 25, 
2007. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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Calendar No. 450 
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. 
OCTOBER 26, 2007 
Read the second time and placed on the calendar 
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