[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2585 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2585

To amend the Internal Revenue Code of 1986 to increase the excise taxes 
 on smokeless tobacco to an amount equivalent to the tax on cigarettes 
and to use the resulting revenues to fund a trust fund for programs to 
                  reduce the use of smokeless tobacco.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 6, 1995

   Mrs. Schroeder (for herself, Mr. Ackerman, Mr. Durbin, Mr. Romero-
  Barcelo, Mr. Evans, Mr. LaFalce, Mr. Lipinski, and Miss Collins of 
  Michigan) introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
Commerce, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to increase the excise taxes 
 on smokeless tobacco to an amount equivalent to the tax on cigarettes 
and to use the resulting revenues to fund a trust fund for programs to 
                  reduce the use of smokeless tobacco.

    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 ``Smokeless Tobacco Consumption 
Reduction and Education Act of 1995''.

SEC. 2. INCREASE IN TAXES ON SMOKELESS TOBACCO PRODUCTS.

    (a) In General.--
            (1) Snuff.--Paragraph (1) of section 5701(e) of the 
        Internal Revenue Code of 1986 (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 
        ``$4.25''.
            (2) 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 
        ``$1.12''.
            (3) Adjustment for subsequent increases in cigarette tax.--
        Subsection (e) of section 5701 of such Code is amended by 
        adding at the end thereof the following new sentences:
``If after the date of the enactment of this sentence there is an 
increase in the rate of the tax imposed under subsection (b)(1), 
effective on and after the date on which such increase takes effect, 
the rate of the tax imposed by paragraph (1) of this subsection shall 
be an amount per pound (as determined by the Secretary) which is the 
same percentage of the national average wholesale price per pound for 
snuff (as so determined) as the tax imposed by subsection (b)(1) is of 
the national average wholesale price for cigarettes (as so determined). 
A similar adjustment shall be made to the rate of the tax imposed under 
paragraph (2) of this subsection.''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (c) Floor Stocks.--
            (1) Imposition of tax.--On snuff and chewing tobacco 
        manufactured in or imported into the United States which is 
        removed before the date of the enactment of this Act, and held 
        on such date for sale by any person, there shall be imposed the 
        following taxes:
                    (A) Snuff.--On snuff, $3.87 per pound and a 
                proportionate tax at the like rate on all fractional 
                parts of a pound.
                    (B) Chewing tobacco.--On chewing tobacco, $1.00 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 snuff and 
                chewing tobacco on the date of the enactment of this 
                Act 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 the day 45 days after the 
                date of the enactment of this Act, in the same manner 
                as the tax imposed under such section is payable with 
                respect to snuff and chewing tobacco, removed on the 
                date of the enactment of this Act.
            (3) Snuff and chewing tobacco.--For purposes of this 
        subsection, the terms ``snuff'' and ``chewing tobacco'' have 
        the respective meanings given to such terms by section 5702 of 
        the Internal Revenue Code of 1986.
            (4) Exception for retail stocks.--The taxes imposed by 
        paragraph (1) shall not apply to snuff and chewing tobacco in 
        retail stocks held on the date of the enactment of this Act 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) snuff and chewing 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 the date of the enactment of 
                        this Act, and
                            (ii) which are entered into the customs 
                        territory of the United States on or after such 
                        date of enactment, from a foreign trade zone, 
                        and
                    (B) snuff and chewing 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 such 
                        date of enactment, and
                            (ii) are entered into the customs territory 
                        of the United States on or after such date of 
                        enactment, from a foreign trade zone,
        shall be subject to the tax imposed by paragraph (1) and such 
        snuff and chewing tobacco shall, for purposes of paragraph (1), 
        be treated as being held on such date of enactment for sale.

SEC. 3. ESTABLISHMENT OF TRUST FUND.

    (a) 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 the following new section:

``SEC. 9512. SMOKELESS TOBACCO EDUCATION AND PREVENTION 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 `Smokeless Tobacco 
Education and Prevention 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 10 percent of the net increase 
in revenues received in the Treasury by reason of the amendments made 
to section 5701 by section 2(a), and the provisions contained in 
section 2(c), of the Smokeless Tobacco Consumption Reduction and 
Education Act of 1995, as estimated by the Secretary.
    ``(c) Expenditures From Trust Fund.--Amounts in the Trust Fund 
shall be available, as provided in appropriation Acts, for programs of 
public education regarding the risks of smokeless tobacco and other 
programs to reduce the consumption of smokeless tobacco.''
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end the following new item:

                              ``Sec. 9512. Smokeless Tobacco Education 
                                        and Prevention Trust Fund.''
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