457 
shall provide, under subsections (p)(1)(E) of section 1882 
of the Social Security Act (42 U.S.C. 1395s), for imple-
mentation of the changes in the NAIC model law and reg-
ulations recommended by the National Association of In-
surance Commissioners in its Model #651 (‘‘Model Regu-
lation to Implement the NAIC Medicare Supplement In-
surance Minimum Standards Model Act’’) on March 11, 
2007, as modified to reflect the changes made under this 
Act. In carrying out the previous sentence, the benefit 
packages classified as ‘‘K’’ and ‘‘L’’ shall be eliminated 
and such NAIC recommendations shall be treated as hav-
ing been adopted by such Association as of January 1, 
2008. 
(b) REQUIRED OFFERING OF A RANGE OF POLI-
CIES.— 
(1) IN GENERAL.—Subsection (o) of such sec-
tion is amended by adding at the end the following 
new paragraph: 
‘‘(4) In addition to the requirement of para-
graph (2), the issuer of the policy must make avail-
able to the individual at least medicare supplemental 
policies with benefit packages classified as ‘C’ or 
‘F’.’’. 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00457
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS
458 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to medicare supple-
mental policies issued on or after January 1, 2008. 
(c) REMOVAL OF NEW BENEFIT PACKAGES.—Such 
section is further amended— 
(1) in subsection (o)(1), by striking ‘‘(p), (v), 
and (w)’’ and inserting ‘‘(p) and (v)’’; 
(2) in subsection (v)(3)(A)(i), by striking ‘‘or a 
benefit package described in subparagraph (A) or 
(B) of subsection (w)(2)’’; and 
(3) in subsection (w)— 
(A) by striking ‘‘POLICIES’’ and all that 
follows through ‘‘The Secretary’’ and inserting 
‘‘POLICIES.—The Secretary’’; 
(B) by striking the second sentence; and 
(C) by striking paragraph (2) . 
TITLE X—REVENUES 
SEC. 1001. INCREASE IN RATE OF EXCISE TAXES ON TO-
BACCO PRODUCTS AND CIGARETTE PAPERS 
AND TUBES. 
(a) SMALL CIGARETTES.—Paragraph (1) of section 
5701(b) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘$19.50 per thousand ($17 per thousand on 
cigarettes removed during 2000 or 2001)’’ and inserting 
‘‘$42 per thousand’’. 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00458
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS
459 
(b) LARGE CIGARETTES.—Paragraph (2) of section 
5701(b) of such Code is amended by striking ‘‘$40.95 per 
thousand ($35.70 per thousand on cigarettes removed 
during 2000 or 2001)’’ and inserting ‘‘$88.20 per thou-
sand’’. 
(c) SMALL
CIGARS.—Paragraph (1) of section 
5701(a) of such Code is amended by striking ‘‘$1.828 
cents per thousand ($1.594 cents per thousand on cigars 
removed during 2000 or 2001)’’ and inserting ‘‘$42 per 
thousand’’. 
(d) LARGE
CIGARS.—Paragraph (2) of section 
5701(a) of such Code is amended— 
(1) by striking ‘‘20.719 percent (18.063 percent 
on cigars removed during 2000 or 2001)’’ and in-
serting ‘‘44.63 percent’’, and 
(2) by striking ‘‘$48.75 per thousand ($42.50 
per thousand on cigars removed during 2000 or 
2001)’’ and inserting ‘‘$1 per cigar’’. 
(e) CIGARETTE PAPERS.—Subsection (c) of section 
5701 of such Code is amended by striking ‘‘1.22 cents 
(1.06 cents on cigarette papers removed during 2000 or 
2001)’’ and inserting ‘‘2.63 cents’’. 
(f) CIGARETTE TUBES.—Subsection (d) of section 
5701 of such Code is amended by striking ‘‘2.44 cents 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00459
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS
460 
(2.13 cents on cigarette tubes removed during 2000 or 
2001)’’ and inserting ‘‘5.26 cents’’. 
(g) SNUFF.—Paragraph (1) of section 5701(e) of 
such Code is amended by striking ‘‘58.5 cents (51 cents 
on snuff removed during 2000 or 2001)’’ and inserting 
‘‘$1.26’’. 
(h) CHEWING TOBACCO.—Paragraph (2) of section 
5701(e) of such Code is amended by striking ‘‘19.5 cents 
(17 cents on chewing tobacco removed during 2000 or 
2001)’’ and inserting ‘‘42 cents’’. 
(i) PIPE TOBACCO.—Subsection (f) of section 5701 
of such Code is amended by striking ‘‘$1.0969 cents 
(95.67 cents on pipe tobacco removed during 2000 or 
2001)’’ and inserting ‘‘$2.36’’. 
(j) ROLL-YOUR-OWN TOBACCO.— 
(1) IN
GENERAL.—Subsection (g) of section 
5701 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 ‘‘$7.4667’’. 
(2) INCLUSION
OF
CIGAR
TOBACCO.—Sub-
section (o) of section 5702 of such Code is amended 
by inserting ‘‘or cigars, or for use as wrappers for 
making cigars’’ before the period at the end. 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00460
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS
461 
(k) EFFECTIVE DATE.—The amendments made by 
this section shall apply to articles removed after December 
31, 2007. 
(l) FLOOR STOCKS TAXES.— 
(1) IMPOSITION OF TAX.—On cigarettes manu-
factured 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 im-
posed a tax in an amount equal to the excess of— 
(A) the tax which would be imposed under 
section 5701 of the Internal Revenue Code of 
1986 on the article if the article had been re-
moved on such date, over 
(B) the prior tax (if any) imposed under 
section 5701 of such Code on such article. 
(2) AUTHORITY TO EXEMPT CIGARETTES HELD 
IN VENDING MACHINES.—To the extent provided in 
regulations prescribed by the Secretary, no tax shall 
be imposed by paragraph (1) on cigarettes held for 
retail sale on January 1, 2008, by any person in any 
vending machine. If the Secretary provides such a 
benefit with respect to any person, the Secretary 
may reduce the $500 amount in paragraph (3) with 
respect to such person. 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00461
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS
462 
(3) 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) for which such person is liable. 
(4) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.— 
(A) LIABILITY FOR TAX.—A person hold-
ing cigarettes 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 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 April 14, 2008. 
(5) 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 January 1, 2008, shall be subject to the tax im-
posed by paragraph (1) if— 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
Jkt 059200
PO 00000
Frm 00462
Fmt 6652
Sfmt 6201
E:\BILLS\H3162.IH
H3162
bajohnson on PROD1PC77 with BILLS