Small businesses, suppliers of vending machines and the tobacco industry plan to mount a last-ditch effort to extinguish legislation proposed by the D.C. Council last Tuesday that would ban cigarette vending machines, as well as require employers to designate special smoking areas at work.

The Tobacco Institute, which opposes the ban on vending machines as well as mandatory workplace smoking sections, said it hopes the legislation will be amended when it is taken up for a second vote next month.

"This is just another interference and one more way the city council can butt into your business," said Thomas Lauria, assistant to the president of the Tobacco Institute.

The D.C. Chamber of Commerce, which has 800 members -- mostly small businesses -- said requiring employers to "adopt, implement and maintain a written smoking policy" would simply be "another regulation put on business that could be difficult to comply with."

Gregory Davis, executive vice president of the chamber, said the group is analyzing the legislation, especially what it would cost small business to comply. Most small businesses in the District would be affected because they currently do not have policies that ban, restrict or help employees quit smoking at work.

Many of the District's larger businesses already have smoking policies and, in some cases, the legislation would be less restrictive than policies already in place.

Chesapeake & Potomac Telephone Co., for example, banned smoking in all its buildings in October 1989. C&P's 3,500 employees in the District are free to smoke outside buildings, but they do not get special smoking breaks. The company has offered and paid for a program to help employees stop that 2,587 smokers have completed, said Michel Daley, a spokesman for C&P.

But for one segment of the small-business community, the proposed legislation could be the final blow to a local industry that already is being battered by the decline in smokers and the increasing cost of cigarettes.

John Deoudes, for example, said passage of the proposal to ban the sale of cigarettes from vending machines would mean 43 years of his work up in smoke.

Deoudes is president of the D.C. Vending Co. on Kansas Avenue NW, which supplies and maintains 900 cigarette vending machines, which account for 75 percent of his business. "It puts you out of business," he said. Deoudes said he isn't against the broad intent of the legislation, which is to prevent minors from buying cigarettes in machines, but like many involved in the debate over smoking, he gets fired up over legislation that makes business and the workplace the battleground for banning smoking.

The irritant for those opposing the legislation is the Smoking Regulation Act of 1990, which was proposed by Council member Nadine P. Winter (D-Ward 6) as an amendment to a bill that dealt only with the distribution of cigarette samples in public places.

The legislation now being considered requires that any private or public employer in the District would have to designate areas where smoking would be permitted in the workplace. Those areas would have to have physical barriers and comply with District laws on ventilation. Employees would have to be notified three weeks after the policy is adopted by an employer, but the designation of smoking areas would be subject to union agreements. The law would not supersede stricter policies such as C&P's.

Other parts of the proposal include prohibiting the distribution of free cigarette samples in public places and increasing the age of those who may purchase cigarettes to 18 from 16. Fines for selling cigarettes to minors also would be increased.

"We're pretty optimistic it will pass," said Joyce Miller, legislative aide to council member Winter. "We just hope it won't be watered down."

The bill will come up for another vote at the next session of the council in December. It is expected that amendments will be offered to exclude certain businesses from the vending machine ban and to preserve tax revenues for the District.

Council member H.R. Crawford (D-Ward 7), for example, wants to amend the bill to allow the use of tokens rather than cash in vending machines. Another possibility is to exclude bars and other businesses that do not serve minors from the vending machine ban.

"It infringes on the rights of those who want to smoke," said Crawford. "It raises it to the level of a civil rights issue." He said he is worried that banning vending machines would deprive the city of about $500,000 a year in sales taxes, eliminate fees that go with licensing the machines, commissions that go to businesses that have vending machines and jobs within the vending industry.

"It's driving out another element of business in the District," said Crawford, who introduced the original bill to prohibit minors from obtaining free cigarette samples on street corners.