This bill places xylazine into Schedule III of the Controlled Substances Act (CSA) to regulate its distribution and combat illicit use. It specifically amends the definition of an "ultimate user" for xylazine, allowing lawful possession by individuals who obtain it from a registered veterinarian or pharmacy for animal care, including government animal-control and wildlife programs. This ensures that legitimate veterinary and animal care uses are preserved while addressing public health concerns. To ease the transition, the bill provides delayed implementation for certain Schedule III requirements, such as a one-year delay for labeling and packaging, and a 60-day delay for practitioner registration. It exempts existing manufacturers from immediate capital expenditure security standards and clarifies that lawful "ultimate users" do not need to register under the CSA. The legislation also mandates ARCOS tracking for xylazine and directs the U.S. Sentencing Commission to review and potentially amend sentencing guidelines for related offenses. Finally, it requires the Attorney General and FDA Commissioner to submit reports to Congress on the prevalence, diversion, and impact of illicit xylazine use.