[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1251 Introduced in Senate (IS)]

  1st Session
                                S. 1251

  To establish a National Fund for Health Research to expand medical 
 research programs through increased funding provided to the National 
             Institutes of Health, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 18 (legislative day, September 5), 1995

 Mr. Hatfield (for himself, Mr. Harkin, and Mrs. Boxer) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
  To establish a National Fund for Health Research to expand medical 
 research programs through increased funding provided to the National 
             Institutes of Health, 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 ``National Fund for Health Research 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Nearly 4 of 5 peer reviewed research projects deemed 
        worthy of funding by the National Institutes of Health are not 
        funded.
            (2) Less than 3 percent of the nearly one trillion dollars 
        our Nation spends on health care is devoted to health research, 
        while the defense industry spends 15 percent of its budget on 
        research.
            (3) Public opinion surveys have shown that Americans want 
        more Federal resources put into health research and are willing 
        to pay for it. Polling data consistently shows that more than 
        two-thirds of all voters support a major tobacco tax increase 
        if revenues generated are dedicated to health-related programs.
            (4) Ample evidence exists to demonstrate that health 
        research has improved the quality of health care in the United 
        States. Advances such as the development of vaccines, the cure 
        of many childhood cancers, drugs that effectively treat a host 
        of diseases and disorders, a process to protect our Nation's 
        blood supply from the HIV virus, progress against 
        cardiovascular disease including heart attack and stroke, and 
        new strategies for the early detection and treatment of 
        diseases such as colon, breast, and prostate cancer clearly 
        demonstrates the benefits of health research.
            (5) Health research which holds the promise of prevention 
        of intentional and unintentional injury and cure and prevention 
        of disease and disability, is critical to holding down costs in 
        the long term.
            (6) The state of our Nation's research facilities at the 
        National Institutes of Health and at universities is 
        deteriorating significantly. Renovation and repair of these 
        facilities are badly needed to maintain and improve the quality 
        of research.
            (7) Because the Concurrent Resolution on the Budget for 
        fiscal year 1996 (H. Con. Res. 67) freezes discretionary 
        spending for the next 5 years, the Nation's investment in 
        health research through the National Institutes of Health is 
        likely to decline in real terms unless corrective legislative 
        action is taken.
            (8) A health research fund is needed to maintain our 
        Nation's commitment to health research and to increase the 
        percentage of approved projects which receive funding at the 
        National Institutes of Health.
            (9) Each year 419,000 Americans die directly from tobacco 
        use and thousands more die from diseases caused by exposure to 
        environmental tobacco smoke. This year one out of every five 
        Americans who die will die from tobacco use.
            (10) A recent study by the Centers for Disease Control and 
        Prevention estimates that the Federal Government expended more 
        than $20,000,000,000 in 1993 alone to treat illnesses 
        associated with tobacco use.
            (11) A 25 cent increase in the tobacco tax would discourage 
        1,300,000 Americans from smoking and prevent more than 300,000 
        premature deaths.
            (12) An estimated 90 percent of all smokers start when they 
        are teenagers or younger.
            (13) Voluntary income tax checkoffs for medical research 
        for specific diseases exist in some States and have proven 
        successful in generating funds for such research.

               TITLE I--NATIONAL FUND FOR HEALTH RESEARCH

SEC. 101. ESTABLISHMENT.

    (a) Establishment.--There is established in the Treasury of the 
United States a fund, to be known as the ``National Fund for Health 
Research'' (hereafter in this section referred to as the ``Fund''), 
consisting of such amounts as are transferred to the Fund under 
subsection (b) and any interest earned on investment of amounts in the 
Fund.
    (b) Transfers to Fund.--
            (1) In general.--The Secretary of the Treasury shall 
        transfer to the Fund amounts equivalent to--
                    (A) taxes received in the Treasury under section 
                5701 of the Internal Revenue Code of 1986 (relating to 
                taxes on tobacco products) to the extent attributable 
                to the increase in such taxes resulting from the 
                amendments made by title II of the National Fund for 
                Health Research Act; and
                    (B) the amounts designated under section 6097 
                (relating to designation of overpayments and 
                contributions to the Fund).
            (2) Transfers based on estimates.--The amounts transferred 
        by paragraph (1) shall annually be transferred to the Fund 
        within 30 days after the President signs an appropriations Act 
        for the Departments of Labor, Health and Human Services, and 
        Education, and related agencies, or by the end of the first 
        quarter of the fiscal year. Proper adjustment shall be made in 
        amounts subsequently transferred to the extent prior estimates 
        were in excess of or less than the amounts required to be 
        transferred.
    (c) Obligations From Fund.--
            (1) In general.--Subject to the provisions of paragraph 
        (4), with respect to the amounts made available in the Fund in 
        a fiscal year, the Secretary of Health and Human Services shall 
        distribute--
                    (A) 2 percent of such amounts during any fiscal 
                year to the Office of the Director of the National 
                Institutes of Health to be allocated at the Director's 
                discretion for the following activities:
                            (i) for carrying out the responsibilities 
                        of the Office of the Director, including the 
                        Office of Research on Women's Health and the 
                        Office of Research on Minority Health, the 
                        Office of Alternative Medicine, the Office of 
                        Rare Disease Research, the Office of Behavioral 
                        and Social Sciences Research (for use for 
                        efforts to reduce tobacco use), the Office of 
                        Dietary Supplements, and the Office for Disease 
                        Prevention; and
                            (ii) for construction and acquisition of 
                        equipment for or facilities of or used by the 
                        National Institutes of Health;
                    (B) 2 percent of such amounts for transfer to the 
                National Center for Research Resources to carry out 
                section 1502 of the National Institutes of Health 
                Revitalization Act of 1993 concerning Biomedical and 
                Behavioral Research Facilities;
                    (C) 1 percent of such amounts during any fiscal 
                year for carrying out section 301 and part D of title 
                IV of the Public Health Service Act with respect to 
                health information communications; and
                    (D) the remainder of such amounts during any fiscal 
                year to member institutes and centers, including the 
                Office of AIDS Research, of the National Institutes of 
                Health in the same proportion to the total amount 
                received under this section, as the amount of annual 
                appropriations under appropriations Acts for each 
                member institute and Centers for the fiscal year bears 
                to the total amount of appropriations under 
                appropriations Acts for all member institutes and 
                Centers of the National Institutes of Health for the 
                fiscal year.
            (2) Plans of allocation.--The amounts transferred under 
        paragraph (1)(D) shall be allocated by the Director of the 
        National Institutes of Health or the various directors of the 
        institutes and centers, as the case may be, pursuant to 
        allocation plans developed by the various advisory councils to 
        such directors, after consultation with such directors.
            (3) Grants and contracts fully funded in first year.--With 
        respect to any grant or contract funded by amounts distributed 
        under paragraph (1), the full amount of the total obligation of 
        such grant or contract shall be funded in the first year of 
        such grant or contract, and shall remain available until 
        expended.
            (4) Trigger and release of monies and phase-in.--
                    (A) Trigger and release.--No expenditure shall be 
                made under paragraph (1) during any fiscal year in 
                which the annual amount appropriated for the National 
                Institutes of Health is less than the amount so 
                appropriated for the prior fiscal year.
                    (B) Phase-in.--The Secretary of Health and Human 
                Services shall phase-in the distributions required 
                under paragraph (1) so that--
                            (i) 25 percent of the amount in the Fund is 
                        distributed in fiscal year 1997;
                            (ii) 50 percent of the amount in the Fund 
                        is distributed in fiscal year 1998;
                            (iii) 75 percent of the amount in the Fund 
                        is distributed in fiscal year 1999; and
                            (iv) 100 percent of the amount in the Fund 
                        is distributed in fiscal year 2000 and each 
                        succeeding fiscal year.
            (5) Administrative expenses.--Amounts in the Fund shall be 
        available to pay the administrative expenses of the Department 
        of the Treasury directly allocable to--
                    (A) modifying the individual income tax return 
                forms to carry out section 6097 of the Internal Revenue 
                Code of 1986; and
                    (B) processing amounts received under such section 
                6097 and transferring such amounts to such Fund.
    (d) Budget Treatment of Amounts in Fund.--The amounts in the Fund 
shall be excluded from, and shall not be taken into account, for 
purposes of any budget enforcement procedure under the Congressional 
Budget Act of 1974 or the Balanced Budget and Emergency Deficit Control 
Act of 1985.

                     TITLE II--FINANCING PROVISIONS

SEC. 201. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Internal Revenue Code of 
1986.

SEC. 202. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

    (a) Cigarettes.--Subsection (b) of section 5701 is amended--
            (1) by striking ``$12 per thousand ($10 per thousand on 
        cigarettes removed during 1991 or 1992)'' in paragraph (1) and 
        inserting ``$24.5 per thousand'', and
            (2) by striking ``$25.20 per thousand ($21 per thousand on 
        cigarettes removed during 1991 or 1992)'' in paragraph (2) and 
        inserting ``$51.45 per thousand''.
    (b) Cigars.--Subsection (a) of section 5701 is amended--
            (1) by striking ``$1.125 cents per thousand (93.75 cents 
        per thousand on cigars removed during 1991 or 1992)'' in 
        paragraph (1) and inserting ``$13.64 per thousand'', and
            (2) by striking ``equal to'' and all that follows in 
        paragraph (2) and inserting ``equal to 26.03 percent of the 
        price for which sold but not more than $61.25 per thousand.''
    (c) Cigarette Papers.--Subsection (c) of section 5701 is amended by 
striking ``0.75 cent (0.625 cent on cigarette papers removed during 
1991 or 1992)'' and inserting ``1.53 cents''.
    (d) Cigarette Tubes.--Subsection (d) of section 5701 is amended by 
striking ``1.5 cents (1.25 cents on cigarette tubes removed during 1991 
or 1992)'' and inserting ``3.06 cents''.
    (e) Smokeless Tobacco.--Subsection (e) of section 5701 is amended--
            (1) by striking ``36 cents (30 cents on snuff removed 
        during 1991 or 1992)'' in paragraph (1) and inserting 
        ``$3.69'', and
            (2) by striking ``12 cents (10 cents on chewing tobacco 
        removed during 1991 or 1992)'' in paragraph (2) and inserting 
        ``$1.45''.
    (f) Pipe Tobacco.--Subsection (f) of section 5701 is amended by 
striking ``67.5 cents (56.25 cents on pipe tobacco removed during 1991 
or 1992)'' and inserting ``$4.85''.
    (g) Application of Tax Increase to Puerto Rico.--Section 5701 is 
amended by adding at the end the following new subsection:
    ``(h) Application to Taxes to Puerto Rico.--Notwithstanding 
subsections (b) and (c) of section 7653 and any other provision of 
law--
            ``(1) In general.--On tobacco products and cigarette papers 
        and tubes, manufactured or imported into the Commonwealth of 
        Puerto Rico, there is hereby imposed a tax at the rate equal to 
        the excess of--
                    ``(A) the rate of tax applicable under this section 
                to like articles manufactured in the United States, 
                over
                    ``(B) the rate referred to in subparagraph (A) as 
                in effect on the day before the date of the enactment 
                of the National Fund for Health Research Act.
            ``(2) Shipments to puerto rico from the united states.--
        Only the rates of tax in effect on the day before the date of 
        the enactment of this subsection shall be taken into account in 
        determining the amount of any exemption from, or credit or 
        drawback of, any tax imposed by this section on any article 
        shipped to the Commonwealth of Puerto Rico from the United 
        States.
            ``(3) Shipments from puerto rico to the united states.--The 
        rates of tax taken into account under section 7652(a) with 
        respect to tobacco products and cigarette papers and tubes 
        coming into the United States from the Commonwealth of Puerto 
        Rico shall be the rates of tax in effect on the day before the 
        date of the enactment of the National Fund for Health Research 
        Act.
            ``(4) Disposition of revenues.--The provisions of section 
        7652(a)(3) shall not apply to any tax imposed by reason of this 
        subsection.''
    (h) Effective Date.--The amendments made by this section shall 
apply to articles removed (as defined in section 5702(k) of the 
Internal Revenue Code of 1986, as amended by this Act) after December 
31, 1995.
    (i) Floor Stocks Taxes.--
            (1) Imposition of tax.--On tobacco products and cigarette 
        papers and tubes manufactured in or imported into the United 
        States or the Commonwealth of Puerto Rico which are removed 
        before January 1, 1996, and held on such date for sale by any 
        person, there is hereby imposed a tax in an amount equal to the 
        excess of--
                    (A) the tax which would be imposed under section 
                5701 of the Internal Revenue Code of 1986 on the 
                article if the article had been removed on such date, 
                over
                    (B) the prior tax (if any) imposed under section 
                5701 or 7652 of such Code on such article.
            (2) Authority to exempt cigarettes held in vending 
        machines.--To the extent provided in regulations prescribed by 
        the Secretary, no tax shall be imposed by paragraph (1) on 
        cigarettes held for retail sale on January 1, 1996, by any 
        person in any vending machine. If the Secretary provides such a 
        benefit with respect to any person, the Secretary may reduce 
        the $500 amount in paragraph (3) with respect to such person.
            (3) Credit against tax.--Each person shall be allowed as a 
        credit against the taxes imposed by paragraph (1) an amount 
equal to $500. Such credit shall not exceed the amount of taxes imposed 
by paragraph (1) on January 1, 1996, for which such person is liable.
            (4) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding cigarettes 
                on January 1, 1996, 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 paid in such manner as the 
                Secretary shall prescribe by regulations.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before April 1, 1996.
            (5) Articles in foreign trade zones.--Notwithstanding the 
        Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any 
        other provision of law, any article which is located in a 
        foreign trade zone on January 1, 1996, shall be subject to the 
        tax imposed by paragraph (1) if--
                    (A) internal revenue taxes have been determined, or 
                customs duties liquidated, with respect to such article 
                before such date pursuant to a request made under the 
                1st proviso of section 3(a) of such Act, or
                    (B) such article is held on such date under the 
                supervision of a customs officer pursuant to the 2d 
                proviso of such section 3(a).
            (6) Definitions.--For purposes of this subsection--
                    (A) In general.--Terms used in this subsection 
                which are also used in section 5702 of the Internal 
                Revenue Code of 1986 shall have the respective meanings 
                such terms have in such section, as amended by this 
                Act.
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or his delegate.
            (7) Controlled groups.--Rules similar to the rules of 
        section 5061(e)(3) of such Code shall apply for purposes of 
        this subsection.
            (8) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 5701 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply to the floor stocks taxes imposed by 
        paragraph (1), to the same extent as if such taxes were imposed 
        by such section 5701. The Secretary may treat any person who 
        bore the ultimate burden of the tax imposed by paragraph (1) as 
        the person to whom a credit or refund under such provisions may 
        be allowed or made.

SEC. 203. MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.

    (a) Exemption for Exported Tobacco Products and Cigarette Papers 
and Tubes To Apply Only to Articles Marked for Export.--
            (1) Subsection (b) of section 5704 is amended by adding at 
        the end the following new sentence: ``Tobacco products and 
        cigarette papers and tubes may not be transferred or removed 
        under this subsection unless such products or papers and tubes 
        bear such marks, labels, or notices as the Secretary shall by 
        regulations prescribe.''
            (2) Section 5761 is amended by redesignating subsections 
        (c) and (d) as subsections (d) and (e), respectively, and by 
        inserting after subsection (b) the following new subsection:
    ``(c) Sale of Tobacco Products and Cigarette Papers and Tubes for 
Export.--Except as provided in subsections (b) and (d) of section 
5704--
            ``(1) every person who sells, relands, or receives within 
        the jurisdiction of the United States any tobacco products or 
        cigarette papers or tubes which have been labeled or shipped 
        for exportation under this chapter,
            ``(2) every person who sells or receives such relanded 
        tobacco products or cigarette papers or tubes, and
            ``(3) every person who aids or abets in such selling, 
        relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this 
title, be liable for a penalty equal to the greater of $1,000 or 5 
times the amount of the tax imposed by this chapter. All tobacco 
products and cigarette papers and tubes relanded within the 
jurisdiction of the United States, and all vessels, vehicles, and 
aircraft used in such relanding or in removing such products, papers, 
and tubes from the place where relanded, shall be forfeited to the 
United States.''
            (3) Subsection (a) of section 5761 is amended by striking 
        ``subsection (b)'' and inserting ``subsection (b) or (c)''.
            (4) Subsection (d) of section 5761, as redesignated by 
        paragraph (2), is amended by striking ``The penalty imposed by 
        subsection (b)'' and inserting ``The penalties imposed by 
        subsections (b) and (c)''.
            (5)(A) Subpart F of chapter 52 is amended by adding at the 
        end the following new section:

``SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED TOBACCO 
              PRODUCTS.

    ``(a) In General.--Tobacco products and cigarette papers and tubes 
previously exported from the United States may be imported or brought 
into the United States only as provided in section 5704(d). For 
purposes of this section, section 5704(d), section 5761, and such other 
provisions as the Secretary may specify by regulations, references to 
exportation shall be treated as including a reference to shipment to 
the Commonwealth of Puerto Rico.
    ``(b) Cross Reference.--

                                ``For penalty for the sale of tobacco 
products and cigarette papers and tubes in the United States which are 
labeled for export, see section 5761(c).''
            (B) The table of sections for subpart F of chapter 52 is 
        amended by adding at the end the following new item:

                              ``Sec. 5754. Restriction on importation 
                                        of previously exported tobacco 
                                        products.''
    (b) Importers Required To Be Qualified.--
            (1) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and 
        5763 (b) and (c) are each amended by inserting ``or importer'' 
        after ``manufacturer''.
            (2) The heading of subsection (b) of section 5763 is 
        amended by inserting ``Qualified Importers,'' after 
        ``Manufacturers,''.
            (3) The heading for subchapter B of chapter 52 is amended 
        by inserting ``and Importers'' after ``Manufacturers''.
            (4) The item relating to subchapter B in the table of 
        subchapters for chapter 52 is amended by inserting ``and 
        importers'' after ``manufacturers''.
    (c) Repeal of Tax-Exempt Sales to Employees of Cigarette 
Manufacturers.--
            (1) Subsection (a) of section 5704 is amended--
                    (A) by striking ``Employee Use or'' in the heading, 
                and
                    (B) by striking ``for use or consumption by 
                employees or'' in the text.
            (2) Subsection (e) of section 5723 is amended by striking 
        ``for use or consumption by their employees, or for 
        experimental purposes'' and inserting ``for experimental 
        purposes''.
    (d) Repeal of Tax-Exempt Sales to United States.--Subsection (b) of 
section 5704 is amended by striking ``and manufacturers may similarly 
remove such articles for use of the United States;''.
    (e) Books of 25 or Fewer Cigarette Papers Subject to Tax.--
Subsection (c) of section 5701 is amended by striking ``On each book or 
set of cigarette papers containing more than 25 papers,'' and inserting 
``On cigarette papers,''.
    (f) Storage of Tobacco Products.--Subsection (k) of section 5702 is 
amended by inserting ``under section 5704'' after ``internal revenue 
bond''.
    (g) Authority To Prescribe Minimum Manufacturing Activity 
Requirements.--Section 5712 is amended by striking ``or'' at the end of 
paragraph (1), by redesignating paragraph (2) as paragraph (3), and by 
inserting after paragraph (1) the following new paragraph:
            ``(2) the activity proposed to be carried out at such 
        premises does not meet such minimum capacity or activity 
        requirements as the Secretary may prescribe, or''.
    (h) Special Rules Relating to Puerto Rico and the Virgin Islands.--
Section 7652 is amended by adding at the end the following new 
subsection:
    ``(h) Limitation on Cover Over of Tax on Tobacco Products.--For 
purposes of this section, with respect to taxes imposed under section 
5701 or this section on any tobacco product or cigarette paper or tube, 
the amount covered into the treasuries of Puerto Rico and the Virgin 
Islands shall not exceed the rate of tax under section 5701 in effect 
on the article on the day before the date of the enactment of the 
Health Partnership Act of 1995.''
    (i) Effective Date.--The amendments made by this section shall 
apply to articles removed (as defined in section 5702(k) of the 
Internal Revenue Code of 1986, as amended by this Act) after December 
31, 1995.

SEC. 204. IMPOSITION OF EXCISE TAX ON MANUFACTURE OR IMPORTATION OF 
              ROLL-YOUR-OWN TOBACCO.

    (a) In General.--Section 5701 (relating to rate of tax), as amended 
by section 701, is amended by redesignating subsections (g) and (h) as 
subsections (h) and (i) and by inserting after subsection (f) the 
following new subsection:
    ``(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco, 
manufactured in or imported into the United States, there shall be 
imposed a tax of $4.85 per pound (and a proportionate tax at the like 
rate on all fractional parts of a pound).''
    (b) Roll-Your-Own Tobacco.--Section 5702 (relating to definitions) 
is amended by adding at the end the following new subsection:
    ``(p) Roll-Your-Own Tobacco.--The term `roll-your-own tobacco' 
means any tobacco which, because of its appearance, type, packaging, or 
labeling, is suitable for use and likely to be offered to, or purchased 
by, consumers as tobacco for making cigarettes.''
    (c) Technical Amendments.--
            (1) Subsection (c) of section 5702 is amended by striking 
        ``and pipe tobacco'' and inserting ``pipe tobacco, and roll-
        your-own tobacco''.
            (2) Subsection (d) of section 5702 is amended--
                    (A) in the material preceding paragraph (1), by 
                striking ``or pipe tobacco'' and inserting ``pipe 
                tobacco, or roll-your-own tobacco'', and
                    (B) by striking paragraph (1) and inserting the 
                following new paragraph:
            ``(1) a person who produces cigars, cigarettes, smokeless 
        tobacco, pipe tobacco, or roll-your-own tobacco solely for the 
        person's own personal consumption or use, and''.
            (3) The chapter heading for chapter 52 is amended to read 
        as follows:

    ``CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES''.

            (4) The table of chapters for subtitle E is amended by 
        striking the item relating to chapter 52 and inserting the 
        following new item:

                              ``Chapter 52. Tobacco products and 
                                        cigarette papers and tubes.''
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to roll-your-own tobacco removed (as defined in section 
        5702(k) of the Internal Revenue Code of 1986, as amended by 
        this Act) after December 31, 1995.
            (2) Transitional rule.--Any person who--
                    (A) on the date of the enactment of this Act is 
                engaged in business as a manufacturer of roll-your-own 
                tobacco or as an importer of tobacco products or 
                cigarette papers and tubes, and
                    (B) before January 1, 1996, submits an application 
                under subchapter B of chapter 52 of such Code to engage 
                in such business,
        may, notwithstanding such subchapter B, continue to engage in 
        such business pending final action on such application. Pending 
        such final action, all provisions of such chapter 52 shall 
        apply to such applicant in the same manner and to the same 
        extent as if such applicant were a holder of a permit under 
        such chapter 52 to engage in such business.

SEC. 205. DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE 
              NATIONAL FUND FOR HEALTH RESEARCH.

    (a) In General.--Subchapter A of chapter 61 (relating to returns 
and records) is amended by adding at the end the following new part:

   ``PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE 
                   NATIONAL FUND FOR HEALTH RESEARCH

``Sec. 6097. Amounts for the National Fund for Health Research.

``SEC. 6097. AMOUNTS FOR THE NATIONAL FUND FOR HEALTH RESEARCH.

    ``(a) In General.--Every individual (other than a nonresident 
alien) may designate that--
            ``(1) a portion (not less than $1) of any overpayment of 
        the tax imposed by chapter 1 for the taxable year, and
            ``(2) a cash contribution (not less than $1),
be paid over to the National Fund for Health Research. In the case of a 
joint return of a husband and wife, each spouse may designate one-half 
of any such overpayment of tax (not less than $2).
    ``(b) Manner and Time of Designation.--Any designation under 
subsection (a) may be made with respect to any taxable year only at the 
time of filing the original return of the tax imposed by chapter 1 for 
such taxable year. Such designation shall be made either on the 1st 
page of the return or on the page bearing the taxpayer's signature.
    ``(c) Overpayments Treated as Refunded.--For purposes of this 
section, any overpayment of tax designated under subsection (a) shall 
be treated as being refunded to the taxpayer as of the last day 
prescribed for filing the return of tax imposed by chapter 1 
(determined with regard to extensions) or, if later, the date the 
return is filed.
    ``(d) Designated Amounts Not Deductible.--No amount designated 
pursuant to subsection (a) shall be allowed as a deduction under 
section 170 or any other section for any taxable year.
    ``(e) Termination.--This section shall not apply to taxable years 
beginning in a calendar year after a determination by the Secretary 
that the sum of all designations under subsection (a) for taxable years 
beginning in the second and third calendar years preceding the calendar 
year is less than $5,000,000.''
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 61 is amended by adding at the end the following new item:

                              ``Part IX. Designation of overpayments 
                                        and contributions for the 
                                        National Fund for Health 
                                        Research.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.
                                 <all>
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