[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 513 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 513

To amend the Internal Revenue Code of 1986 to increase the excise taxes 
on tobacco products, and to use the resulting revenues to fund a trust 
          fund for health care reform, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                March 4 (legislative day, March 3), 1993

  Mr. Bradley introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to increase the excise taxes 
on tobacco products, and to use the resulting revenues to fund a trust 
          fund for health care reform, 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.

    This Act may be cited as the ``Tobacco Consumption Reduction and 
Health Improvement Act of 1993''.

SEC. 2. INCREASE IN TAXES ON TOBACCO PRODUCTS.

    (a) In General.--
            (1) Cigars.--Subsection (a) of section 5701 of the Internal 
        Revenue Code of 1986 (relating to rate of tax on cigars) is 
        amended--
                    (A) by striking ``$1.125 cents per thousand (93.75 
                cents per thousand on cigars removed during 1991 and 
                1992)'' in paragraph (1) and inserting ``$4.6875 per 
                thousand''; and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Large cigars.--On cigars weighing more than 3 pounds 
        per thousand, a tax equal to 50 percent of the price for which 
        sold but not more than $120 per thousand.''
            (2) Cigarettes.--Subsection (b) of section 5701 of such 
        Code (relating to rate of tax on cigarettes) is amended--
                    (A) by striking ``$12 per thousand ($10 per 
                thousand on cigarettes removed during 1991 and 1992)'' 
                in paragraph (1) and inserting ``$50 per thousand''; 
                and
                    (B) by striking ``$25.20 per thousand ($21 per 
                thousand on cigarettes removed during 1991 and 1992)'' 
                in paragraph (2) and inserting ``$105 per thousand''.
            (3) Cigarette papers.--Subsection (c) of section 5701 of 
        such Code (relating to rate of tax on cigarette papers) is 
        amended by striking ``0.75 cent (0.625 cent on cigarette papers 
        removed during 1991 or 1992)'' and inserting ``3.12 cents''.
            (4) Cigarette tubes.--Subsection (d) of section 5701 of 
        such Code (relating to rate of tax on cigarette tubes) is 
        amended by striking ``1.5 cents (1.25 cents on cigarette tubes 
        removed during 1991 or 1992)'' and inserting ``6.25 cents''.
            (5) Snuff.--Paragraph (1) of section 5701(e) of such Code 
        (relating to rate of tax on smokeless tobacco) is amended by 
        striking ``36 cents (30 cents on snuff removed during 1991 or 
        1992)'' and inserting ``$1.50''.
            (6) Chewing tobacco.--Paragraph (2) of section 5701(e) of 
        such Code is amended by striking ``12 cents (10 cents on 
        chewing tobacco removed during 1991 or 1992)'' and inserting 
        ``50 cents''.
            (7) Pipe tobacco.--Subsection (f) of section 5701 of such 
        Code (relating to rate of tax on pipe tobacco) is amended by 
        striking ``67.5 cents (56.25 cents on chewing tobacco removed 
        during 1991 or 1992)'' and inserting ``$2.8125''.
    (b) Floor Stocks.--
            (1) Imposition of tax.--On cigars, cigarettes, cigarette 
        paper, cigarette tubes, snuff, chewing tobacco, and pipe 
        tobacco manufactured in or imported into the United States 
        which is removed before January 1, 1994, and held on such date 
        for sale by any person, there shall be imposed the following 
        taxes:
                    (A) Small cigars.--On cigars, weighing not more 
                than 3 pounds per thousand, $3.5625 per thousand.
                    (B) Large cigars.--On cigars, weighing more than 3 
                pounds per thousand, a tax equal to 37.25 percent of 
                the price for which sold, but not more than $90 per 
                thousand.
                    (C) Small cigarettes.--On cigarettes, weighing not 
                more than 3 pounds per thousand, $38 per thousand.
                    (D) Large cigarettes.--On cigarettes, weighing more 
                than 3 pounds per thousand, $79.80 per thousand; except 
                that, if more than 6\1/2\ inches in length, they shall 
                be taxable at the rate prescribed for cigarettes 
                weighing not more than 3 pounds per thousand, counting 
                each 2\3/4\ inches, or fraction thereof, of the length 
                of each as one cigarette.
                    (E) Cigarette papers.--On cigarette papers, 2.37 
                cents for each 50 papers or fractional part thereof; 
                except that, if cigarette papers measure more than 6\1/
                2\ inches in length, they shall be taxable at the rate 
                prescribed, counting each 2\3/4\ inches, or fraction 
                thereof, of the length of each as one cigarette paper.
                    (F) Cigarette tubes.--On cigarette tubes, 4.75 
                cents for each 50 tubes or fractional part thereof; 
                except that, if cigarette tubes measure more than 6\1/
                2\ inches in length, they shall be taxable at the rate 
                prescribed, counting each 2\3/4\ inches, or fraction 
                thereof, of the length of each as one cigarette tube.
                    (G) Snuff.--On snuff, $1.14 per pound and a 
                proportionate tax at the like rate on all fractional 
                parts of a pound.
                    (H) Chewing tobacco.--On chewing tobacco, 38 cents 
                per pound and a proportionate tax at the like rate on 
                all fractional parts of a pound.
                    (I) Pipe tobacco.--On pipe tobacco, $2.1375 per 
                pound and a proportionate tax at the like rate on all 
                fractional parts of a pound.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding cigars, 
                cigarettes, cigarette paper, cigarette tubes, snuff, 
                chewing tobacco, and pipe tobacco on January 1, 1994, 
                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 treated as a tax imposed under 
                section 5701 of the Internal Revenue Code of 1986 and 
                shall be due and payable on February 15, 1994, in the 
                same manner as the tax imposed under such section is 
                payable with respect to cigars, cigarettes, cigarette 
                paper, cigarette tubes, snuff, chewing tobacco, and 
                pipe tobacco removed on January 1, 1994.
            (3) Cigars, cigarettes, cigarette paper, cigarette tubes, 
        snuff, chewing tobacco, and pipe tobacco.--For purposes of this 
        subsection, the terms ``cigar'', ``cigarette'', ``cigarette 
        paper'', ``cigarette tubes'', ``snuff'', ``chewing tobacco'', 
        and ``pipe tobacco'' shall have the meaning given to such terms 
        by subsections (a), (b), (e), and (g), paragraphs (2) and (3) 
        of subsection (n), and subsection (o) of section 5702 of the 
        Internal Revenue Code of 1986, respectively.
            (4) Exception for retail stocks.--The taxes imposed by 
        paragraph (1) shall not apply to cigars, cigarettes, cigarette 
        paper, cigarette tubes, snuff, chewing tobacco, and pipe 
        tobacco in retail stocks held on January 1, 1994, at the place 
        where intended to be sold at retail.
            (5) Foreign trade zones.--Notwithstanding the Act of June 
        18, 1934 (19 U.S.C. 81a et seq.) or any other provision of 
        law--
                    (A) cigars, cigarettes, cigarette paper, cigarette 
                tubes, snuff, chewing tobacco, and pipe tobacco--
                            (i) on which taxes imposed by Federal law 
                        are determined, or customs duties are 
                        liquidated, by a customs officer pursuant to a 
                        request made under the first proviso of section 
                        3(a) of the Act of June 18, 1934 (19 U.S.C. 
                        81c(a)) before January 1, 1994, and
                            (ii) which are entered into the customs 
                        territory of the United States on or after 
                        January 1, 1994, from a foreign trade zone, and
                    (B) cigars, cigarettes, cigarette paper, cigarette 
                tubes, snuff, chewing tobacco, and pipe tobacco which--
                            (i) are placed under the supervision of a 
                        customs officer pursuant to the provisions of 
                        the second proviso of section 3(a) of the Act 
                        of June 18, 1934 (19 U.S.C. 81c(a)) before 
                        January 1, 1994, and
                            (ii) are entered into the customs territory 
                        of the United States on or after January 1, 
                        1994, from a foreign trade zone,
        shall be subject to the tax imposed by paragraph (1) and such 
        cigars, cigarettes, cigarette paper, cigarette tubes, snuff, 
        chewing tobacco, and pipe tobacco shall, for purposes of 
        paragraph (1), be treated as being held on January 1, 1994, for 
        sale.
    (c) Establishment of Trust Fund.--
            (1) In General.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to trust fund code) is amended 
        by adding at the end thereof the following new section:

``SEC. 9512. HEALTH REFORM TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Health Reform 
Trust Fund' (hereafter referred to in this section as the `Trust 
Fund'), consisting of such amounts as may be appropriated or credited 
to the Trust Fund as provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--The Secretary shall transfer to the 
Trust Fund an amount equivalent to the net increase in revenues 
received in the Treasury attributable to the amendments made to section 
5701 by section 2(a) and the provisions contained in section 2(b) of 
the Tobacco Consumption Reduction and Health Reform Act of 1993, as 
estimated by the Secretary.
    ``(c) Distribution of Amounts in Trust Fund.--
            ``(1) Uninsured persons.--Eighty percent of the amounts in 
        the Trust Fund shall be available in each fiscal year, as 
        provided by appropriation Acts, to the Secretary for the 
        provision of medical care and medical insurance to persons 
        without medical insurance.
            ``(2) Other.--Twenty percent of the amounts in the Health 
        Reform Trust Fund shall be available in each fiscal year, as 
        provided by appropriation Acts, to the Secretary to--
                    ``(A) develop and implement health education 
                programs;
                    ``(B) develop and implement smoking cessation 
                programs; and
                    ``(C) distribute to each State that was required by 
                State law to decrease State taxes on the sale of 
                tobacco products (as defined in section 5702(c)) as a 
                result of the increase in the Federal excise tax on 
                such products provided for in section 2(a) of the 
                Tobacco Consumption Reduction and Health Reform Act of 
                1993.''
            (2) Clerical amendment.--The table of sections for such 
        subchapter A is amended by adding at the end thereof the 
        following new item:

                              ``Sec. 9512. Health Reform Trust Fund.''
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to cigars, cigarettes, cigarette paper, cigarette 
tubes, snuff, chewing tobacco, and pipe tobacco removed after December 
31, 1993.

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