tions as determined appropriate by the SPICE
Board.
‘‘(5) RECOMMENDATIONS
REGARDING
GRANT
PROGRAM.—The SPICE Board shall provide rec-
ommendations and necessary information regarding
the SPICE drug benefit program to the Secretary in
order for the Secretary to provide health insurance
information, counseling, and assistance grants under
section 4360 of the Omnibus Budget Reconciliation
Act of 1990.
‘‘(c) MEMBERSHIP OF SPICE BOARD.—
‘‘(1) NUMBER AND APPOINTMENT.—
‘‘(A) IN
GENERAL.—The SPICE Board
shall be composed of 7 members appointed by
the President, by and with the advice and con-
sent of the Senate.
‘‘(B) 
SPECIFIC
REPRESENTATIVES.—In
making appointments under subparagraph (A),
the President shall ensure that the following
groups are represented on the SPICE Board:
‘‘(i) Consumers.
‘‘(ii) Private health plan insurers (in-
cluding insurers that offer fee-for-service
and managed care plans) with expertise in
the quality, scope, and marketing of health
care services.
‘‘(iii) The Health Care Financing Ad-
ministration.
‘‘(iv) State insurance commissioners.
‘‘(C) SECRETARY OF HHS.—The Secretary
shall be a nonvoting, ex officio member of the
SPICE Board.
‘‘(2) DEADLINE FOR INITIAL APPOINTMENT.—
The initial members of the SPICE Board shall be
appointed by not later than 6 months after the date
of enactment of this section.
‘‘(3) TERMS.—
‘‘(A) IN
GENERAL.—The terms of the
members of the SPICE Board shall be for 6
years, except that of the members first
appointed—
‘‘(i) three shall be appointed for terms
of 6 years;
‘‘(ii) two shall be appointed for terms
of 4 years; and
‘‘(iii) two shall be appointed for terms
of 2 years.
‘‘(B) VACANCIES.—Any member appointed
to fill a vacancy occurring before the expiration
of the term for which the member’s predecessor
was appointed shall be appointed only for the
remainder of that term. A member may serve
after the expiration of that member’s term until
a successor has taken office.
‘‘(4) CHAIRPERSON.—The President shall des-
ignate the chairperson of the SPICE Board, except
that the representative from the Health Care Fi-
nancing Administration may not be designated as
chairperson.
‘‘(d) OPERATION OF THE BOARD.—
‘‘(1) MEETINGS.—The SPICE Board shall meet
at the call of the chairperson or upon written re-
quest of a majority of its members.
‘‘(2) QUORUM.—A majority of the members of
the SPICE Board shall constitute a quorum, but a
lesser number of members may hold hearings.
‘‘(e) POWERS OF THE SPICE BOARD.—
‘‘(1) HEARINGS.—The SPICE Board may hold
such hearings, sit and act at such times and places,
take such testimony, and receive such evidence as
the SPICE Board considers advisable to carry out
the purposes of this part.
‘‘(2) INFORMATION
FROM
FEDERAL
AGEN-
CIES.—Upon request of the chairperson of the
SPICE Board, the head of any Federal department
or agency shall furnish such information to the
SPICE Board as is necessary to carry out the func-
tions of the SPICE Board under this part.
‘‘(3) POSTAL
SERVICES.—The SPICE Board
may use the United States mails in the same man-
ner and under the same conditions as other depart-
ments and agencies of the Federal Government.
‘‘(4) GIFTS.—The SPICE Board may accept,
use, and dispose of gifts or donations of services or
property.
‘‘(f) BOARD PERSONNEL MATTERS.—
‘‘(1) MEMBERS.—
‘‘(A) COMPENSATION.—Each member of
the SPICE Board who is not an officer or em-
ployee of the Federal Government shall be com-
pensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for
level IV of the Executive Schedule under section
5315 of title 5, United States Code, for each
day (including travel time) during which such
member is engaged in the performance of the
duties of the SPICE Board. All members of the
SPICE Board who are officers or employees of
the United States shall serve without compensa-
tion in addition to that received for their serv-
ices as officers or employees of the United
States.
‘‘(B) TRAVEL
EXPENSES.—The members
of the SPICE Board shall be allowed travel ex-
penses, including per diem in lieu of subsist-
ence, at rates authorized for employees of agen-
cies under subchapter I of chapter 57 of title 5,
United States Code, while away from their
homes or regular places of business in the per-
formance of services for the SPICE Board.
‘‘(C) REMOVAL.—The President may re-
move a member of the SPICE Board only for
neglect of duty or malfeasance in office.
‘‘(2) STAFF.—
‘‘(A) IN
GENERAL.—The chairperson of
the SPICE Board may, without regard to the
civil service laws and regulations, appoint and
terminate an executive director and such other
additional personnel as may be necessary to en-
able the SPICE Board to perform its duties.
The employment of an executive director shall
be subject to confirmation by the SPICE
Board.
‘‘(B) COMPENSATION.—The chairperson of
the SPICE Board may fix the compensation of
the executive director and other personnel with-
out regard to the provisions of chapter 51 and
subchapter III of chapter 53 of title 5, United
States Code, relating to classification of posi-
tions and General Schedule pay rates, except
that the rate of pay for the executive director
and other personnel may not exceed the rate
payable for level V of the Executive Schedule
under section 5316 of such title.
‘‘(C) DETAIL
OF
GOVERNMENT
EMPLOY-
EES.—Any Federal Government employee may
be detailed to the SPICE Board without further
reimbursement, and such detail shall be without
interruption or loss of civil service status or
privilege.
‘‘(D) PROCUREMENT OF TEMPORARY AND
INTERMITTENT SERVICES.—The chairperson of
the SPICE Board may procure temporary and
intermittent services under section 3109(b) of
title 5, United States Code, at rates for individ-
uals which do not exceed the daily equivalent of
the annual rate of basic pay prescribed for level
V of the Executive Schedule under section 5316
of such title.
‘‘SPICE TRUST FUND
‘‘SEC. 1860F. (a) CREATION OF TRUST FUND.—
There is established in the Treasury of the United States
a trust fund to be known as the ‘SPICE Trust Fund’,
consisting of such amounts as may be appropriated or
credited to the SPICE Trust Fund as provided in this sec-
tion.
‘‘(b) AMOUNTS IN SPICE TRUST FUND.—
‘‘(1) IN GENERAL.—The SPICE Trust Fund
shall consist of the following amounts:
‘‘(A) Amounts deposited in, or appro-
priated to, the SPICE Trust Fund as provided
in this section.
‘‘(B) Any gifts and bequests made to such
Trust Fund.
‘‘(2) APPROPRIATION.—
‘‘(A) AMOUNTS
FROM
TOBACCO
TAX.—
There are appropriated to the SPICE Trust
Fund amounts equivalent to the net revenues
received in the Treasury after December 31,
1999, from the taxes imposed by section 5701
of the Internal Revenue Code of 1986 to the ex-
tent attributable to increases in the rates of tax
imposed by such section over the rates which
would have been imposed if the Seniors Pre-
scription Insurance Coverage Equity (SPICE)
Act of 1999 had not been enacted.
‘‘(B) OTHER AMOUNTS.—There are hereby
authorized to be appropriated to the SPICE
Trust Fund amounts from the on-budget sur-
plus.
‘‘(3) NET
REVENUES.—For purposes of this
subsection, the term ‘net revenues’ means the
amount estimated by the Secretary of the Treasury
based on the excess of—
‘‘(A) the taxes received in the Treasury as
described in paragraph (1), over
‘‘(B) the sum of the decrease in the tax
imposed by chapter 1 of the Internal Revenue
Code of 1986 resulting from the imposition of
the taxes described in paragraph (2) and the
amount of refunds provided under subchapter A
of chapter 52 of such Code to the extent such
refunds are attributable to the revenues trans-
ferred to such Trust Fund under this section.
‘‘(4) TRANSFER.—The amounts appropriated
pursuant to paragraph (2) shall be transferred by
the Secretary of the Treasury from time to time
from the general fund in the Treasury to the SPICE
Trust Fund. The amount to be transferred under
this paragraph shall be determined on the basis of
estimates by the Secretary of the Treasury of the
taxes, described in such paragraph, paid to or depos-
ited into the Treasury. The Secretary of the Treas-
ury shall make adjustments in amounts subsequently
transferred to the extent that prior estimates were
in excess of, or were less than, such taxes.
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the SPICE Trust Fund shall only be available for mak-
ing expenditures to carry out this part, including adminis-
trative expenses of the SPICE Board.
‘‘(d) APPLICATION
OF HI TRUST FUND PROVI-
SIONS.—The provisions of subsections (b) through (e) of
section 1817 shall apply to the SPICE Board, this part,
and the SPICE Trust Fund in the same manner as they
apply to the Board of Trustees (and the Secretary and
the Health Care Financing Administration), part A, and
the Federal Hospital Insurance Trust Fund, respectively,
except that—
‘‘(1) the Board of Trustees shall be composed
of the SPICE Board and the Secretary of the Treas-
ury; and
‘‘(2) the annual report shall be submitted as
part of the annual report provided under section
1860E(b)(3).’’.
SEC. 3. CONFORMING CHANGES TO MEDIGAP.
Section 1882 of the Social Security Act (42 U.S.C.
1395ss) is amended by adding at the end the following:
‘‘(v)(1) Notwithstanding subsection (p), the benefit
packages established under such subsection shall be re-
vised (in the manner described in subsection (p)(1)(E))
so that—
‘‘(A) there is established a benefit package con-
sisting of only outpatient prescription drug benefits
that are consistent with SPICE prescription drug
coverage (as defined in section 1860B(b)) and that
are offered only through the SPICE Board and in
accordance with part D;
‘‘(B) such package shall permit coverage of out-
patient prescription drugs that exceeds the thresh-
olds established under such section;
‘‘(C) no package (except the package estab-
lished under subparagraph (A)) includes coverage of
outpatient prescription drugs provided under part D;
and
‘‘(D) other benefit packages that do not include
prescription drug coverage may be substituted for
the packages eliminated under subparagraph (C).
In this title, a medicare supplemental policy which has the
benefit package described in subparagraph (A) is referred
to as a ‘SPICE medicare supplemental policy’. The revi-
sions of benefit packages under this paragraph shall not
effect the renewal of medicare supplemental policies under
this section that are in existence on the effective date of
such revisions, and shall be designed to avoid adverse se-
lection and to be affordable.
‘‘(2) Notwithstanding subsection (d), nothing in this
section shall be construed as prohibiting or making
unlawful—
‘‘(A) the sale or issuance of a SPICE medicare
supplemental policy to an individual who has a medi-
care supplemental policy that does not provide cov-
erage of outpatient prescription drugs;
‘‘(B) the sale or issuance of a medicare supple-
mental policy that does not provide coverage of out-
patient prescription drugs to an individual who has
a SPICE medicare supplemental policy; or
‘‘(C) the sale or issuance of such a SPICE
medicare supplemental policy to an individual who is
enrolled in a Medicare+Choice plan that does not
provide coverage of outpatient prescription drugs
(not including coverage required to be provided
under part A or B).
The sale or issuance of policies under the circumstances
described in this paragraph shall be treated as not ‘dupli-
cative’ under this section.
‘‘(3)(A) No medicare supplemental policy of the in-
surer that is in effect on the effective date of the revision
under paragraph (1) and that has a benefit package classi-
fied as ‘H’, ‘I’, or ‘J’ under the standards established by
subsection (p)(2) shall be deemed to meet the standards
in subsection (c) unless the insurer—
‘‘(i) provides written notice, within a 60-day pe-
riod specified by the revisions, to the policyholder or
certificate holder (at the most recent available ad-
dress) of the offer described in clause (ii) and of the
fact that, so long as they retain coverage under such
policy, they are unable to purchase a SPICE medi-
care supplemental policy; and
‘‘(ii) offers the individual under the terms de-
scribed in subparagraph (B), during a period of at
least 180 days beginning on the date specified in
subparagraph (C), institution of coverage effective
as of a date specified by the revisions, a non-SPICE
medicare supplemental policy that the Secretary de-
termines is most comparable to the policy in which
the individual is enrolled (but for coverage of pre-
scription drugs).
‘‘(B) The terms described under this subparagraph
are terms which do not—
‘‘(i) deny or condition the issuance or effective-
ness of a medicare supplemental policy described in
subparagraph (A)(ii) that is offered and is available
for issuance to new enrollees by such issuer;
‘‘(ii) discriminate in the pricing of such policy
because of health status, claims experience, receipt
of health care, or medical condition; or
‘‘(iii) impose an exclusion of benefits based on
a pre-existing condition under such policy.
‘‘(C) The date specified in this subparagraph for a
policy issued in a State is such date as specified by the
revisions (taking into account the method used under sub-
section (n)(4) for establishing a date under that sub-
section).
‘‘(4) In applying this section with respect to SPICE
medicare supplemental policies, any reference to the ‘Sec-
retary’ is deemed a reference to the SPICE Board.’’.
SEC. 4. PROVISION OF INFORMATION ON SPICE DRUG BEN-
EFIT PROGRAM UNDER HEALTH INSURANCE
INFORMATION, COUNSELING, AND ASSIST-
ANCE GRANTS.
Section 4360(b)(2)(A)(ii) of the Omnibus Budget
Reconciliation 
Act 
of 
1990 
(42 
U.S.C. 
1395b–
4(b)(2)(A)(ii)) is amended by striking ‘‘and information’’
and inserting ‘‘, information regarding the SPICE drug
benefit program under part D of title XVIII of the Social
Security Act, and information’’.
SEC. 5. FUNDING THROUGH TAXES ON TOBACCO PROD-
UCTS.
(a) CIGARETTES.—Subsection (b) of section 5701 of
the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘$12 per thousand ($10 per
thousand on cigarettes removed during 1991 or
1992);’’ in paragraph (1) and inserting ‘‘the applica-
ble rate per thousand determined in accordance with
the following table:
The applicable
‘‘In the case of cigarettes removed
during:
rate is:
2000 and 2001 .........................................................................
$44.50
2002 and thereafter .................................................................
$47.00.’’;
and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) LARGE CIGARETTES.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), on cigarettes, weighing more
than 3 pounds per thousand, the applicable rate
per thousand determined in accordance with the
following table:
The applicable
‘‘In the case of cigarettes removed
during:
rate is:
2000 and 2001 .........................................................................
$93.45
2002 and thereafter .................................................................
$98.70.
‘‘(B) EXCEPTION.—On cigarettes more
than 61⁄2 inches in length, at the rate pre-
scribed for cigarettes weighing not more than 3
pounds per thousand, counting each 23⁄4 inches,
or fraction thereof, of the length of each as one
cigarette.’’
(b) CIGARS.—Subsection (a) of section 5701 of such
Code is amended—
(1) by striking ‘‘$1.125 cents per thousand
(93.75 cents per thousand on cigars removed during
1991 or 1992),’’ in paragraph (1) and inserting ‘‘the
applicable rate per thousand determined in accord-
ance with the following table:
‘‘In the case of cigars removed during:
The applicable
rate is:
2000 and 2001 ..................................................
$4.173 cents
2002 and thereafter ..........................................
$4.406 cents.’’;
and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) LARGE CIGARS.—On cigars, weighing more
than 3 pounds per thousand, the applicable percent-
age of the price for which sold but not more that the
applicable rate per thousand determined in accord-
ance with the following table:
‘‘In the case of
cigars re-
moved dur-
ing:
The applicable
percentage is:
The applicable rate
is:
2000 and 2001
59.458%
$139.90
2002 and
thereafter
68.201%
$160.47.’’
(c) CIGARETTE PAPERS.—Subsection (c) of section
5701 of such Code is amended to read as follows:
‘‘(c) CIGARETTE PAPERS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), on each book or set of cigarette papers
containing more than 25 papers, manufactured in or
imported into the United States, there shall be im-
posed a tax of the applicable rate for each 50 papers
or fractional part thereof as determined in accord-
ance with the following table:
The applicable
‘‘In the case of cigarette papers
removed during:
rate is:
2000 and 2001 .........................................................................
2.80 cents
2002 and thereafter .................................................................
2.90 cents.
‘‘(2) EXCEPTION.—If cigarette papers measure
more than 61⁄2 inches in length, such cigarette pa-
pers shall be taxable at the rate prescribed, counting
each 23⁄4 inches, or fraction thereof, of the length of
each as one cigarette paper.’’
(d) CIGARETTE TUBES.—Subsection (d) of section
5701 of such Code is amended to read as follows:
‘‘(d) CIGARETTE TUBES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), on cigarette tubes, manufactured in or
imported into the United States, there shall be im-
posed a tax of the applicable rate for each 50 tubes
or fractional part thereof as determined in accord-
ance with the following table:
The applicable
‘‘In the case of cigarette tubes re-
moved during:
rate is:
2000 and 2001 .........................................................................
5.60 cents
2002 and thereafter .................................................................
5.90 cents.
‘‘(2) EXCEPTION.—If cigarette tubes measure
more than 61⁄2 inches in length, such cigarette tubes
shall be taxable at the rate prescribed, counting each
23⁄4 inches, or fraction thereof, of the length of each
as one cigarette tube.’’
(e) SMOKELESS TOBACCO.—Paragraphs (1) and (2)
of subsection (e) of section 5701 are amended to read as
follows:
‘‘(1) SNUFF.—On snuff, the applicable rate per
pound determined in accordance with the following
table (and a proportionate tax at the like rate on
all fractional parts of a pound):
The applicable
‘‘In the case of snuff removed dur-
ing:
rate is:
2000 and 2001 ......................................................................... $1.335 cents
2002 and thereafter ................................................................. $1.410 cents.
‘‘(2) CHEWING TOBACCO.—On chewing tobacco,
the applicable rate per pound determined in accord-
ance with the following table (and a proportionate
tax at the like rate on all fractional parts of a
pound):
The applicable
‘‘In the case of chewing tobacco
removed during:
rate is:
2000 and 2001 .........................................................................
44.5 cents
2002 and thereafter .................................................................
47.0 cents.’’
(f) PIPE TOBACCO.—Subsection (f) of section 5701
of such Code is amended to read as follows:
‘‘(f) PIPE TOBACCO.—On pipe tobacco, manufac-
tured in or imported into the United States, there shall
be imposed a tax of the applicable rate per pound deter-
mined in accordance with the following table (and a pro-
portionate tax at the like rate on all fractional parts of
a pound):
‘‘In the case of pipe tobacco removed
during:
The applicable
rate is:
2000 and 2001 ..................................................
$2.504 cents
2002 and thereafter ..........................................
$2.644 cents.’’
(g) IMPOSITION OF EXCISE TAX ON MANUFACTURE
OR IMPORTATION OF ROLL-YOUR-OWN TOBACCO.—
(1) IN GENERAL.—Section 5701 of such Code
(relating to rate of tax) is amended by redesignating
subsection (g) as subsection (h) and by inserting
after subsection (f) the following:
‘‘(g) ROLL-YOUR-OWN TOBACCO.—On roll-your-own
tobacco, manufactured in or imported into the United
States, there shall be imposed a tax of the applicable rate
per pound determined in accordance with the following
table (and a proportionate tax at the like rate on all frac-
tional parts of a pound):
‘‘In the case of roll-your-own tobacco
removed during:
The applicable
rate is:
2000 and 2001 ..................................................
$2.504 cents
2002 and thereafter ..........................................
$2.644 cents.’’
(2) ROLL-YOUR-OWN TOBACCO.—Section 5702
of such Code (relating to definitions) is amended by
adding at the end the following:
‘‘(p) ROLL-YOUR-OWN TOBACCO.—The term ‘roll-
your-own tobacco’ means any tobacco which, because of
its appearance, type, packaging, or labeling, is suitable for
use and likely to be offered to, or purchased by, consumers
as tobacco for making cigarettes.’’
(3) TECHNICAL AMENDMENTS.—
(A) Subsection (c) of section 5702 of such
Code is amended by striking ‘‘and pipe to-
bacco’’ and inserting ‘‘pipe tobacco, and roll-
your-own tobacco’’.
(B) Subsection (d) of section 5702 of such
Code is amended—
States or any possession of the United States which
are removed before any tax increase date, 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 any preceding subsection of this section
on the article if the article had been removed on
such date, over
‘‘(B) the prior tax (if any) imposed under
such subsection 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 any tax increase date, for which
such person is liable.
‘‘(3) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
‘‘(A) LIABILITY FOR TAX.—A person hold-
ing cigarettes on any tax increase date, to
which any tax imposed by paragraph (1) applies
shall be liable for such tax.
‘‘(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such
manner as the Secretary shall prescribe by reg-
ulations.
‘‘(C) TIME FOR PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore the date which is 180 days after any tax
increase date.
‘‘(4) ARTICLES IN FOREIGN TRADE ZONES.—
Notwithstanding the Act of June 18, 1934 (48 Stat.
998, 19 U.S.C. 81a) and any other provision of law,
any article which is located in a foreign trade zone
on any tax increase date, shall be subject to the tax
imposed by paragraph (1) if—
‘‘(A) internal revenue taxes have been de-
termined, 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 a customs officer pur-
suant to the 2d proviso of such section 3(a).
‘‘(5) TAX INCREASE DATE.—The term ‘tax in-
crease date’ means January 1, 2000, and January
1, 2002.
‘‘(6) CONTROLLED GROUPS.—Rules similar to
the rules of section 5061(e)(3) shall apply for pur-
poses of this subsection.
‘‘(7) OTHER LAWS APPLICABLE.—All provisions
of law, including penalties, applicable with respect to
the taxes imposed by the preceding subsections of
this section shall, insofar as applicable and not in-
consistent 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 im-
posed by such subsections. The Secretary may treat
any person who bore the ultimate burden of the tax
imposed by paragraph (1) as the person to whom a
credit or refund under such provisions may be al-
lowed or made.
‘‘(i) APPLICATION
OF TAXES
TO U.S. POSSES-
SIONS.—Notwithstanding subsections (b) and (c) of sec-
tion 7653 and any other provision of law—
‘‘(1) IN GENERAL.—On tobacco products manu-
factured in or imported into any possession of the
United States, there is hereby imposed a tax at the
rate equal to the excess of—
‘‘(A) the rate of tax applicable under this
section to like articles manufactured in the
United States, over
‘‘(B) the rate referred to in subparagraph
(A) which would have been in effect if the
amendments made by the Seniors Prescription
Insurance Coverage Equity (SPICE) Act of
1999 had not been enacted.
‘‘(2) SHIPMENTS TO U.S. POSSESSIONS FROM
THE UNITED STATES.—Only the rates of tax which
would have been in effect if the amendments made
by the Seniors Prescription Insurance Coverage Eq-
uity (SPICE) Act of 1999 had not been enacted
shall be taken into account in determining the
amount of any exemption from, or credit or draw-
back of, any tax imposed by this section on any arti-
cle shipped to any possession of the United States
from the United States.
‘‘(3) SHIPMENTS FROM U.S. POSSESSIONS TO
THE UNITED STATES.—The rates of tax taken into
account under section 7652(a) with respect to to-
bacco products coming into the United States from
any possession of the United States shall be the
rates of tax which would have been in effect if the
amendments made by the Seniors Prescription In-
surance Coverage Equity (SPICE) Act of 1999 had
not been enacted.
‘‘(4) DISPOSITION OF REVENUES.—The provi-
sions of section 7652(a)(3) shall not apply to any
tax imposed by reason of this subsection.’’
(i) MODIFICATIONS OF CERTAIN TOBACCO TAX PRO-
VISIONS.—
(1) EXEMPTION
FOR
EXPORTED
TOBACCO
PRODUCTS AND CIGARETTE PAPERS AND TUBES TO
APPLY ONLY TO ARTICLES MARKED FOR EXPORT.—
(A) Subsection (b) of section 5704 of such
Code is amended by adding at the end the fol-
lowing: ‘‘Tobacco products and cigarette papers
and tubes may not be transferred or removed
under this subsection unless such products or
papers and tubes bear such marks, labels, or
notices as the Secretary shall by regulations
prescribe.’’
(B) Section 5761 of such Code is amended
by redesignating subsections (c) and (d) as sub-
sections (d) and (e), respectively, and by insert-
ing after subsection (b) the following:
‘‘(c) SALE OF TOBACCO PRODUCTS AND CIGARETTE
PAPERS AND TUBES FOR EXPORT.—Except as provided
in subsections (b) and (d) of section 5704—
‘‘(1) every person who sells, relands, or receives
within the jurisdiction of the United States any to-
(E)(i) Subpart F of chapter 52 of such
Code is amended by adding at the end the fol-
lowing:
‘‘SEC. 5754. RESTRICTION ON IMPORTATION OF PRE-
VIOUSLY EXPORTED TOBACCO PRODUCTS.
‘‘(a) IN GENERAL.—Tobacco products and cigarette
papers and tubes previously exported from the United
States may be imported or brought into the United States
only as provided in section 5704(d). For purposes of this
section, section 5704(d), section 5761, and such other pro-
visions as the Secretary may specify by regulations, ref-
erences to exportation shall be treated as including a ref-
erence to shipment to the Commonwealth of Puerto Rico.
‘‘(b) CROSS REFERENCE.—
‘‘For penalty for the sale of tobacco products and
cigarette papers and tubes in the United States
which are labeled for export, see section 5761(c).’’
(ii) The table of sections for subpart F of
chapter 52 of such Code is amended by adding
at the end the following:
‘‘Sec. 5754. Restriction on importation of previously exported to-
bacco products.’’
(2) IMPORTERS REQUIRED TO BE QUALIFIED.—
(A) Sections 5712, 5713(a), 5721, 5722,
5762(a)(1), and 5763 (b) and (c) of such Code
are each amended by inserting ‘‘or importer’’
after ‘‘manufacturer’’.
(B) The heading of subsection (b) of sec-
tion 5763 of such Code is amended by inserting
‘‘QUALIFIED IMPORTERS,’’ after ‘‘MANUFAC-
TURERS,’’.
(C) The heading for subchapter B of chap-
ter 52 of such Code is amended by inserting
‘‘and Importers’’ after ‘‘Manufactur-
ers’’.
(D) The item relating to subchapter B in
the table of subchapters for chapter 52 of such
Code is amended by inserting ‘‘and importers’’
after ‘‘manufacturers’’.
(3) BOOKS OF 25 OR FEWER CIGARETTE PA-
PERS SUBJECT TO TAX.—Subsection (c) of section
5701 of such Code is amended by striking ‘‘On each
book or set of cigarette papers containing more than
25 papers,’’ and inserting ‘‘On cigarette papers,’’.
(4) STORAGE
OF
TOBACCO
PRODUCTS.—Sub-
section (k) of section 5702 of such Code is amended
by inserting ‘‘under section 5704’’ after ‘‘internal
revenue bond’’.
(5) AUTHORITY TO PRESCRIBE MINIMUM MANU-
FACTURING
ACTIVITY
REQUIREMENTS.—Section
5712 of such Code is amended by striking ‘‘or’’ at
the end of paragraph (1), by redesignating para-
graph (2) as paragraph (3), and by inserting after
paragraph (1) the following:
‘‘(2) the activity proposed to be carried out at
such premises does not meet such minimum capacity
or activity requirements as the Secretary may pre-
scribe, or’’.
(j) REPEAL OF DUPLICATIVE PROVISIONS.—Section
9302 of the Balanced Budget Act of 1997 (other than sub-
section (i)(2)) and the amendments made by such section
are repealed, and the Internal Revenue Code of 1986 shall
be administered as if such section and such amendments
had not been enacted.
(k) EFFECTIVE DATE.—The amendments and repeal
made by this section shall apply to articles removed (as
defined in section 5702(k) of the Internal Revenue Code
of 1986, as amended by this section) after December 31,
1999.
Æ