[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 609 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 609

  To amend the Internal Revenue Code of 1986 to limit deductions for 
 advertising and promotional expenses for tobacco products, and to use 
    the resulting revenues for advertising expenditures to persuade 
    individuals not to use tobacco products and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 17 (legislative day, March 3), 1993

Mr. Harkin (for himself, Mr. Bradley, and Mr. Bingaman) 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 limit deductions for 
 advertising and promotional expenses for tobacco products, and to use 
    the resulting revenues for advertising expenditures to persuade 
    individuals not to use tobacco products 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. ADVERTISING AND PROMOTIONAL EXPENSES RELATING TO TOBACCO 
              PRODUCT USE.

    (a) Limitation on Deduction.--
            (1) In general.--Part IX of subchapter B of chapter 1 of 
        subtitle A of the Internal Revenue Code of 1986 (relating to 
        items not deductible) is amended by adding at the end thereof 
        the following new section:

``SEC. 280I. LIMITATION ON DEDUCTION FOR TOBACCO ADVERTISING AND 
              PROMOTIONAL EXPENSES.

    The amount allowable as a deduction under this chapter for expenses 
relating to advertising or promoting cigars, cigarettes, smokeless 
tobacco, pipe tobacco, or any similar tobacco product shall not exceed 
50 percent of the amount of such expenses which would (but for this 
section) be allowable as a deduction under this chapter. For purposes 
of this section, any term used in this section which is also used in 
section 5702 shall have the same meaning given such term by section 
5702.''
            (2) Conforming amendment.--The table of sections for such 
        part IX is amended by adding after the item relating to section 
        280H the following new item:

                                  ``Sec. 280I. Limitation on deduction 
                                        for tobacco advertising and 
                                        promotion expenses.''
    (b) 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. TRUST FUND TO REDUCE TOBACCO USE.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Trust Fund to 
Reduce Tobacco Use' (hereafter referred to in this section as the 
`Trust Fund'), consisting of such amounts as may be appropriated or 
transferred 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 40 percent of the net increase in 
revenues received in the Treasury attributable to section 280I, as 
estimated by the Secretary.
    ``(c) Distribution of Amounts in Trust Fund.--
            ``(1) In general.--The amounts in the Trust Fund shall be 
        available in each fiscal year, as provided by appropriation 
        Acts, to the Secretary to distribute to each State based upon 
        such State's population in relation to the population of all 
        the States, as determined by using the most recent decennial 
        census data.
            ``(2) Use of distributions.--Each State, through its agency 
        responsible for public health, may use its distribution to fund 
        advertising programs designed to persuade individuals 
        (especially children, pregnant women, and minorities) not to 
        use cigars, cigarettes, smokeless tobacco, pipe tobacco, or any 
        similar tobacco product. For purposes of this paragraph, any 
        term used in this paragraph which is also used in section 5702 
        shall have the same meaning given such term by section 5702.
            ``(3) Limitation on administrative costs.--Each State may 
        use not more than 3 percent of the amount described in 
        paragraph (2) for administrative expenses.''
            (2) Conforming amendment.--The table of sections for such 
        subchapter A is amended by adding at the end thereof the 
        following new item:

                              ``Sec. 9512. Trust Fund to Reduce Tobacco 
                                        Use.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1993.

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