A bill to amend title XIX of the Social Security Act to prohibit the recoupment of funds recovered by States from one or more tobacco manufacturers.

Amends title XIX (Medicaid) of the Social Security Act to prohibit any Medicaid-related funds recovered or paid to a State as part of a settlement or judgment reached in litigation the State initiated or pursued against one or more tobacco companies from being treated as an overpayment.

Permits a State to use amounts recovered or paid to it as part of such a settlement or judgment for any appropriate expenditures, except with respect to any expenditure for administrative expenses incurred in initiating or pursuing tobacco litigation.