Children's Health Insurance Program Reauthorization Act of 2009 (P.L. 111-3)
Children's Health Insurance Program Reauthorization Act of 2009 (P.L. 111-3)
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- LanguageEnglish
H.R. 2, Enrolled Bill
H.R.2
One Hundred Eleventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,the sixth day of January, two thousand and nine
An Act
To amend title XXI of the Social Security Act to extend and improve the Children's Health Insurance Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES; TABLE OF CONTENTS.
(a) SHORT TITLE.--This Act may be cited as the "Children's Health Insurance Program Reauthorization Act of 2009".
(b) AMENDMENTS TO SOCIAL SECURITY ACT.--Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act.
(c) REFERENCES TO CHIP; MEDICAID; SECRETARY.--In this Act:
(1) CHIP.--The term "CHIP" means the State Children's Health Insurance Program established under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.).
(2) MEDICAID.--The term "Medicaid" means the program for medical assistance established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(3) SECRETARY.--The term "Secretary" means the Secretary of Health and Human Services.
(d) TABLE OF CONTENTS.--The table of contents of this Act is as follows:
TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE
* * * * * * *
Subtitle B--Coordinating Premium Assistance With Private Coverage
TITLE VII--REVENUE PROVISIONS
Sec. 702. Administrative improvements.
Sec. 703. Treasury study concerning magnitude of tobacco smuggling in the United States.
It is the purpose of this Act to provide dependable and stable funding for children's health insurance under titles XXI and XIX of the Social Security Act in order to enroll all six million uninsured children who are eligible, but not enrolled, for coverage today through such titles.
SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE LEGISLATION; CONTINGENT EFFECTIVE DATE; RELIANCE ON LAW.
(a) GENERAL EFFECTIVE DATE.--Unless otherwise provided in this Act, subject to subsections (b) through (d), this Act (and the amendments made by this Act) shall take effect on April 1, 2009, and shall apply to child health assistance and medical assistance provided on or after that date.
(b) EXCEPTION FOR STATE LEGISLATION.--In the case of a State plan under title XIX or State child health plan under XXI of the Social Security Act, which the Secretary of Health and Human Services determines requires State legislation in order for the respective plan to meet one or more additional requirements imposed by amendments made by this Act, the respective plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet such an additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session shall be considered to be a separate regular session of the State legislature.
(c) COORDINATION OF CHIP FUNDING FOR FISCAL YEAR 2009.--Notwithstanding any other provision of law, insofar as funds have been appropriated under section 2104(a)(11), 2104(k), or 2104(l) of the Social Security Act, as amended by section 201 of Public Law 110-173, to provide allotments to States under CHIP for fiscal year 2009--
(1) any amounts that are so appropriated that are not so allotted and obligated before April 1, 2009 are rescinded; and
(2) any amount provided for CHIP allotments to a State under this Act (and the amendments made by this Act) for such fiscal year shall be reduced by the amount of such appropriations so allotted and obligated before such date.
(d) RELIANCE ON LAW.--With respect to amendments made by this Act (other than title VII) that become effective as of a date--
(1) such amendments are effective as of such date whether or not regulations implementing such amendments have been issued; and
(2) Federal financial participation for medical assistance or child health assistance furnished under title XIX or XXI, respectively, of the Social Security Act on or after such date by a State in good faith reliance on such amendments before the date of promulgation of final regulations, if any, to carry out such amendments (or before the date of guidance, if any, regarding the implementation of such amendments) shall not be denied on the basis of the State's failure to comply with such regulations or guidance.
TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE
* * * * * * *
Subtitle B--Coordinating Premium Assistance With Private Coverage
SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS IN CASE OF TERMINATION OF MEDICAID OR CHIP COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN PURCHASE OF EMPLOYMENT-BASED COVERAGE; COORDINATION OF COVERAGE.
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.--Section 9801(f) of the Internal Revenue Code of 1986 (relating to special enrollment periods) is amended by adding at the end the following new paragraph:
"(3) SPECIAL RULES RELATING TO MEDICAID AND CHIP.--
"(A) IN GENERAL.--A group health plan shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if either of the following conditions is met:
"(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.--The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act and coverage of the employee or dependent under such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan not later than 60 days after the date of termination of such coverage.
"(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE UNDER MEDICAID OR CHIP.--The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan under such Medicaid plan or State child health plan (including under any waiver or demonstration project conducted under or in relation to such a plan), if the employee requests coverage under the group health plan not later than 60 days after the date the employee or dependent is determined to be eligible for such assistance.
"(B) EMPLOYEE OUTREACH AND DISCLOSURE.--
"(i) OUTREACH TO EMPLOYEES REGARDING AVAILABILITY OF MEDICAID AND CHIP COVERAGE.--
"(I) IN GENERAL.--Each employer that maintains a group health plan in a State that provides medical assistance under a State Medicaid plan under title XIX of the Social Security Act, or child health assistance under a State child health plan under title XXI of such Act, in the form of premium assistance for the purchase of coverage under a group health plan, shall provide to each employee a written notice informing the employee of potential opportunities then currently available in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee's dependents. For purposes of compliance with this clause, the employer may use any State-specific model notice developed in accordance with section 701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)(3)(B)(i)(II)).
"(II) OPTION TO PROVIDE CONCURRENT WITH PROVISION OF PLAN MATERIALS TO EMPLOYEE.--An employer may provide the model notice applicable to the State in which an employee resides concurrent with the furnishing of materials notifying the employee of health plan eligibility, concurrent with materials provided to the employee in connection with an open season or election process conducted under the plan, or concurrent with the furnishing of the summary plan description as provided in section 104(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024).
"(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENEFITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDIVIDUALS.--In the case of a participant or beneficiary of a group health plan who is covered under a Medicaid plan of a State under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act, the plan administrator of the group health plan shall disclose to the State, upon request, information about the benefits available under the group health plan in sufficient specificity, as determined under regulations of the Secretary of Health and Human Services in consultation with the Secretary that require use of the model coverage coordination disclosure form developed under section 311(b)(1)(C) of the Children's Health Insurance Program Reauthorization Act of 2009, so as to permit the State to make a determination (under paragraph (2)(B), (3), or (10) of section 2105(c) of the Social Security Act or otherwise) concerning the cost-effectiveness of the State providing medical or child health assistance through premium assistance for the purchase of coverage under such group health plan and in order for the State to provide supplemental benefits required under paragraph (10)(E) of such section or other authority.".
(1) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT.--
(A) IN GENERAL.--Section 701(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)) is amended by adding at the end the following new paragraph:
"(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID AND CHIP.--
"(A) IN GENERAL.--A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if either of the following conditions is met:
"(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.--The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act and coverage of the employee or dependent under such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan (or health insurance coverage) not later than 60 days after the date of termination of such coverage.
"(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE UNDER MEDICAID OR CHIP.--The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan or health insurance coverage, under such Medicaid plan or State child health plan (including under any waiver or demonstration project conducted under or in relation to such a plan), if the employee requests coverage under the group health plan or health insurance coverage not later than 60 days after the date the employee or dependent is determined to be eligible for such assistance.
"(B) COORDINATION WITH MEDICAID AND CHIP.--
"(i) OUTREACH TO EMPLOYEES REGARDING AVAILABILITY OF MEDICAID AND CHIP COVERAGE.--
"(I) IN GENERAL.--Each employer that maintains a group health plan in a State that provides medical assistance under a State Medicaid plan under title XIX of the Social Security Act, or child health assistance under a State child health plan under title XXI of such Act, in the form of premium assistance for the purchase of coverage under a group health plan, shall provide to each employee a written notice informing the employee of potential opportunities then currently available in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee's dependents.
"(II) MODEL NOTICE.--Not later than 1 year after the date of enactment of the Children's Health Insurance Program Reauthorization Act of 2009, the Secretary and the Secretary of Health and Human Services, in consultation with Directors of State Medicaid agencies under title XIX of the Social Security Act and Directors of State CHIP agencies under title XXI of such Act, shall jointly develop national and State-specific model notices for purposes of subparagraph (A). The Secretary shall provide employers with such model notices so as to enable employers to timely comply with the requirements of subparagraph (A). Such model notices shall include information regarding how an employee may contact the State in which the employee resides for additional information regarding potential opportunities for such premium assistance, including how to apply for such assistance.
"(III) OPTION TO PROVIDE CONCURRENT WITH PROVISION OF PLAN MATERIALS TO EMPLOYEE.--An employer may provide the model notice applicable to the State in which an employee resides concurrent with the furnishing of materials notifying the employee of health plan eligibility, concurrent with materials provided to the employee in connection with an open season or election process conducted under the plan, or concurrent with the furnishing of the summary plan description as provided in section 104(b).
"(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENEFITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDIVIDUALS.--In the case of a participant or beneficiary of a group health plan who is covered under a Medicaid plan of a State under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act, the plan administrator of the group health plan shall disclose to the State, upon request, information about the benefits available under the group health plan in sufficient specificity, as determined under regulations of the Secretary of Health and Human Services in consultation with the Secretary that require use of the model coverage coordination disclosure form developed under section 311(b)(1)(C) of the Children's Health Insurance Program Reauthorization Act of 2009, so as to permit the State to make a determination (under paragraph (2)(B), (3), or (10) of section 2105(c) of the Social Security Act or otherwise) concerning the cost-effectiveness of the State providing medical or child health assistance through premium assistance for the purchase of coverage under such group health plan and in order for the State to provide supplemental benefits required under paragraph (10)(E) of such section or other authority.".
(B) CONFORMING AMENDMENT.--Section 102(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1022(b)) is amended--
(i) by striking "and the remedies" and inserting ", the remedies"; and
(ii) by inserting before the period the following: ", and if the employer so elects for purposes of complying with section 701(f)(3)(B)(i), the model notice applicable to the State in which the participants and beneficiaries reside".
(C) WORKING GROUP TO DEVELOP MODEL COVERAGE COORDINATION DISCLOSURE FORM.--
(i) MEDICAID, CHIP, AND EMPLOYER-SPONSORED COVERAGE COORDINATION WORKING GROUP.--
(I) IN GENERAL.--Not later than 60 days after the date of enactment of this Act, the Secretary of Health and Human Services and the Secretary of Labor shall jointly establish a Medicaid, CHIP, and Employer- Sponsored Coverage Coordination Working Group (in this subparagraph referred to as the "Working Group"). The purpose of the Working Group shall be to develop the model coverage coordination disclosure form described in subclause (II) and to identify the impediments to the effective coordination of coverage available to families that include employees of employers that maintain group health plans and members who are eligible for medical assistance under title XIX of the Social Security Act or child health assistance or other health benefits coverage under title XXI of such Act.
(II) MODEL COVERAGE COORDINATION DISCLOSURE FORM DESCRIBED.--The model form described in this subclause is a form for plan administrators of group health plans to complete for purposes of permitting a State to determine the availability and cost-effectiveness of the coverage available under such plans to employees who have family members who are eligible for premium assistance offered under a State plan under title XIX or XXI of such Act and to allow for coordination of coverage for enrollees of such plans. Such form shall provide the following information in addition to such other information as the Working Group determines appropriate:
(bb) The name and contract information of the plan administrator of the group health plan.
(cc) The benefits offered under the plan.
(dd) The premiums and cost-sharing required under the plan.
(ee) Any other information relevant to coverage under the plan.
(I) the Department of Labor;
(II) the Department of Health and Human Services;
(III) State directors of the Medicaid program under title XIX of the Social Security Act;
(IV) State directors of the State Children's Health Insurance Program under title XXI of the Social Security Act;
(V) employers, including owners of small businesses and their trade or industry representatives and certified human resource and payroll professionals;
(VI) plan administrators and plan sponsors of group health plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974);
(VII) health insurance issuers; and
(VIII) children and other beneficiaries of medical assistance under title XIX of the Social Security Act or child health assistance or other health benefits coverage under title XXI of such Act.
(iii) COMPENSATION.--The members of the Working Group shall serve without compensation.
(iv) ADMINISTRATIVE SUPPORT.--The Department of Health and Human Services and the Department of Labor shall jointly provide appropriate administrative support to the Working Group, including technical assistance. The Working Group may use the services and facilities of either such Department, with or without reimbursement, as jointly determined by such Departments.
(v) REPORT.--
(I) REPORT BY WORKING GROUP TO THE SECRETARIES.-- Not later than 18 months after the date of the enactment of this Act, the Working Group shall submit to the Secretary of Labor and the Secretary of Health and Human Services the model form described in clause (i)(II) along with a report containing recommendations for appropriate measures to address the impediments to the effective coordination of coverage between group health plans and the State plans under titles XIX and XXI of the Social Security Act.
(II) REPORT BY SECRETARIES TO THE CONGRESS.--Not later than 2 months after receipt of the report pursuant to subclause (I), the Secretaries shall jointly submit a report to each House of the Congress regarding the recommendations contained in the report under such subclause.
(vi) TERMINATION.--The Working Group shall terminate 30 days after the date of the issuance of its report under clause (v).
(D) EFFECTIVE DATES.--The Secretary of Labor and the Secretary of Health and Human Services shall develop the initial model notices under section 701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974, and the Secretary of Labor shall provide such notices to employers, not later than the date that is 1 year after the date of enactment of this Act, and each employer shall provide the initial annual notices to such employer's employees beginning with the first plan year that begins after the date on which such initial model notices are first issued. The model coverage coordination disclosure form developed under subparagraph (C) shall apply with respect to requests made by States beginning with the first plan year that begins after the date on which such model coverage coordination disclosure form is first issued.
(E) ENFORCEMENT.--Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is amended--
(i) in subsection (a)(6), by striking "or (8)" and inserting "(8), or (9)"; and
(ii) in subsection (c), by redesignating paragraph (9) as paragraph (10), and by inserting after paragraph (8) the following:
"(B) The Secretary may assess a civil penalty against any plan administrator of up to $100 a day from the date of the plan administrator's failure to timely provide to any State the information required to be disclosed under section 701(f)(3)(B)(ii). For purposes of this subparagraph, each violation with respect to any single participant or beneficiary shall be treated as a separate violation.".
(2) AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.--Section 2701(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) is amended by adding at the end the following new paragraph:
"(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID AND CHIP.--
"(A) IN GENERAL.--A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if either of the following conditions is met:
"(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.--The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act and coverage of the employee or dependent under such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan (or health insurance coverage) not later than 60 days after the date of termination of such coverage.
"(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE UNDER MEDICAID OR CHIP.--The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan or health insurance coverage, under such Medicaid plan or State child health plan (including under any waiver or demonstration project conducted under or in relation to such a plan), if the employee requests coverage under the group health plan or health insurance coverage not later than 60 days after the date the employee or dependent is determined to be eligible for such assistance.
"(B) COORDINATION WITH MEDICAID AND CHIP.--
"(i) OUTREACH TO EMPLOYEES REGARDING AVAILABILITY OF MEDICAID AND CHIP COVERAGE.--
"(I) IN GENERAL.--Each employer that maintains a group health plan in a State that provides medical assistance under a State Medicaid plan under title XIX of the Social Security Act, or child health assistance under a State child health plan under title XXI of such Act, in the form of premium assistance for the purchase of coverage under a group health plan, shall provide to each employee a written notice informing the employee of potential opportunities then currently available in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee's dependents. For purposes of compliance with this subclause, the employer may use any State-specific model notice developed in accordance with section 701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)(3)(B)(i)(II)).
"(II) OPTION TO PROVIDE CONCURRENT WITH PROVISION OF PLAN MATERIALS TO EMPLOYEE.--An employer may provide the model notice applicable to the State in which an employee resides concurrent with the furnishing of materials notifying the employee of health plan eligibility, concurrent with materials provided to the employee in connection with an open season or election process conducted under the plan, or concurrent with the furnishing of the summary plan description as provided in section 104(b) of the Employee Retirement Income Security Act of 1974.
"(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENEFITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDIVIDUALS.--In the case of an enrollee in a group health plan who is covered under a Medicaid plan of a State under title XIX of the Social Security Act or under a State child health plan under title XXI of such Act, the plan administrator of the group health plan shall disclose to the State, upon request, information about the benefits available under the group health plan in sufficient specificity, as determined under regulations of the Secretary of Health and Human Services in consultation with the Secretary that require use of the model coverage coordination disclosure form developed under section 311(b)(1)(C) of the Children's Health Insurance Reauthorization Act of 2009, so as to permit the State to make a determination (under paragraph (2)(B), (3), or (10) of section 2105(c) of the Social Security Act or otherwise) concerning the cost- effectiveness of the State providing medical or child health assistance through premium assistance for the purchase of coverage under such group health plan and in order for the State to provide supplemental benefits required under paragraph (10)(E) of such section or other authority.".
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 paragraph (1) and inserting "$50.33 per thousand",
(2) by striking "20.719 percent (18.063 percent on cigars removed during 2000 or 2001)" in paragraph (2) and inserting "52.75 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 "40.26 cents 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 "$50.33 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 "$105.69 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 "3.15 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 "6.30 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 "$1.51", and
(2) by striking "19.5 cents (17 cents on chewing tobacco removed during 2000 or 2001)" in paragraph (2) and inserting "50.33 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 "$2.8311 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 "$24.78".
(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 April 1, 2009, 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 April 1, 2009, for which such person is liable.
(3) LIABILITY FOR TAX AND METHOD OF PAYMENT.--
(A) LIABILITY FOR TAX.--A person holding tobacco products, cigarette papers, or cigarette tubes on April 1, 2009, to which any tax imposed by paragraph (1) applies shall be liable for such tax.
(B) METHOD OF PAYMENT.--The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe by regulations.
(C) TIME FOR PAYMENT.--The tax imposed by paragraph (1) shall be paid on or before August 1, 2009.
(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 April 1, 2009, 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 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 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.
(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 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 March 31, 2009.
SEC. 702. ADMINISTRATIVE IMPROVEMENTS.
(a) PERMIT, INVENTORIES, REPORTS, AND RECORDS REQUIREMENTS FOR MANUFACTURERS AND IMPORTERS OF PROCESSED TOBACCO.--
(1) PERMIT.--
(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 tobacco" after "tobacco products".
(2) INVENTORIES, REPORTS, AND PACKAGES.--
(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".
(C) PACKAGES, MARKS, LABELS, AND NOTICES.--Section 5723 of such Code is amended by inserting ", processed tobacco," after "tobacco products" each place it appears.
(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 manufacturer of tobacco products or processed tobacco.".
(5) CONFORMING AMENDMENTS.--
(A) Section 5702(h) of such Code is amended by striking "tobacco products and cigarette papers and tubes" and inserting "tobacco products or cigarette papers or tubes or any processed tobacco".
(B) Sections 5702(j) and 5702(k) of such Code are each amended by inserting ", or any processed tobacco," after "tobacco products or cigarette papers or tubes".
(6) EFFECTIVE DATE.--The amendments made by this subsection shall take effect on April 1, 2009.
(b) BASIS FOR DENIAL, SUSPENSION, OR REVOCATION 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 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 tobacco products, processed tobacco, 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 tobacco products, processed tobacco, 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 proceedings involving a felony violation of any other provision of Federal criminal law relating tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter, or
"(F) has been convicted of a felony violation of any provision of Federal or State criminal law relating tobacco products, processed tobacco, 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 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 section 6501 of the Internal Revenue Code of 1986 (but only with respect to taxes imposed under chapters 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 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 subsection shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after March 31, 2009.
(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 manufactured 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 immediately upon manufacture.".
(2) EFFECTIVE DATE.--The amendment made by this subsection shall take effect on the date of the enactment of this Act.
(f) DISCLOSURE.--
(1) IN GENERAL.--Paragraph (1) of section 6103(o) of such Code is amended by designating the text as subparagraph (A), moving such text 2 ems to the right, striking "Returns" and inserting "(a) in general.--Returns", and by inserting after subparagraph (A) (as so redesignated) the following new subparagraph:
"(B) USE IN CERTAIN PROCEEDINGS.--Returns and return information disclosed to a Federal agency under subparagraph (A) may be used in an action or proceeding (or in preparation for such action or proceeding) brought under section 625 of the American Jobs Creation Act of 2004 for the collection of any unpaid assessment or penalty arising under such Act.".
(2) CONFORMING AMENDMENT.--Section 6103(p)(4) of such Code is amended by striking "(o)(1)" both places it appears and inserting "(o)(1)(A)".
(3) EFFECTIVE DATE.--The amendments made by this subsection shall apply on or after the date of the enactment of this Act.
(g) TRANSITIONAL RULE.--Any person who--
(1) on April 1, 2009 is engaged in business as a manufacturer of processed tobacco or as an importer of processed tobacco, and
(2) before the end of the 90-day period beginning on such date, submits an application under subchapter B of chapter 52 of such Code to engage in such business, may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such final action, all provisions of such chapter 52 shall apply to such applicant in the same manner and to the same extent as if such applicant were a holder of a permit under such chapter 52 to engage in such business.
Not later than one year after the date of the enactment of this Act, the Secretary of the Treasury shall conduct a study concerning the magnitude of tobacco smuggling in the United States and submit to Congress recommendations for the most effective steps to reduce tobacco smuggling. Such study shall also include a review of the loss of Federal tax receipts due to illicit tobacco trade in the United States and the role of imported tobacco products in the illicit tobacco trade in the United States.
SEC. 704. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 0.5 percentage point.
Speaker of the House of Representatives.
Vice President of the United States and President of the Senate.
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- LanguageEnglish
