H.R. 4698 (103^rd): To terminate price support and marketing quotas for tobacco, disallow the income tax deduction for certain advertising expenses for tobacco products, and to establish a trust fund to support anti-drugs and anti-tobacco use activities.

HR 4698 IH

103d CONGRESS

2d Session

H. R. 4698

To terminate price support and marketing quotas for tobacco, disallow the income tax deduction for certain advertising expenses for tobacco products, and to establish a trust fund to support anti-drugs and anti-tobacco use activities.

IN THE HOUSE OF REPRESENTATIVES

JUNE 30, 1994

Ms. ENGLISH of Arizona introduced the following bill; which was referred jointly to the Committees on Agriculture, Ways and Means, Energy and Commerce, and Education and Labor

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A BILL

To terminate price support and marketing quotas for tobacco, disallow the income tax deduction for certain advertising expenses for tobacco products, and to establish a trust fund to support anti-drugs and anti-tobacco use activities.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. TERMINATION OF TOBACCO PRICE SUPPORT AND MARKETING QUOTAS.

(a) TERMINATION OF TOBACCO PRICE SUPPORT- The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) is amended--

(1) in section 101 (7 U.S.C. 1441)--

(A) in subsection (a), by striking ‘tobacco (except as otherwise provided herein), corn,’ and inserting ‘corn’;

(B) by striking subsection (c); and

(C) in subsection (d)(3), by striking ‘, except tobacco,’;

(2) by striking section 106 (7 U.S.C. 1445);

(3) by striking section 106A (7 U.S.C. 1445-1);

(4) by striking section 106B (7 U.S.C. 1445-2); and

(5) in section 408 (7 U.S.C. 1428)--

(A) in subsection (c), by striking ‘tobacco,’; and

(B) in subsection (d), by adding before the period at the end the following: ‘or tobacco’.

(b) TERMINATION OF TOBACCO MARKETING QUOTAS- Part I (sections 311 through 320B) of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311-1316) is repealed.

(c) CONFORMING AMENDMENTS- (1) Section 3 of Public Law 98-59 (7 U.S.C. 625) is repealed.

(2) The Agricultural Adjustment Act of 1938 is further amended--

(A) in section 301(b) (7 U.S.C. 1301(b))--

(i) by striking paragraphs (3)(C), (10)(B), (14)(B), (14)(C), (14)(D), (15), (16)(B), and (17);

(ii) in paragraph (6)(A), by striking ‘tobacco,’

(iii) in the undesignated subparagraphs in paragraph (7), by striking

‘Tobacco (flue-cured), July 1-June 30;

‘Tobacco (other than flue-cured), October 1-September 30;’

(iv) in paragraph (11)(B), by striking ‘and tobacco’; and

(v) in paragraph (12), by striking ‘tobacco,’;

(B) in section 303 (7 U.S.C. 1303), by striking ‘rice, or tobacco’ and inserting ‘or rice’; and

(C) in section 372(b) (7 U.S.C. 1372(b)), by striking ‘Except as provided in section 320B, the amount’ in the third sentence and inserting ‘The amount’.

(3) Section 703 of Public Law 89-321 (7 U.S.C. 1316; 79 Stat. 1210) is amended by striking the second sentence.

(4) The Act of July 12, 1952 (7 U.S.C. 1315; Chapter 709; 66 Stat. 597), is repealed.

(d) EFFECTIVE DATE AND APPLICATION OF AMENDMENTS- The amendments made by this section shall take effect on January 1, 1995. Beginning on that date, the Secretary of Agriculture shall terminate all loan agreements entered into with tobacco producer associations under section 106A of the Agricultural Adjustment Act of 1938 and provide for the disposal of all funds in the No Net Cost Tobacco Fund of those associations and the No Net Cost Tobacco Account of the Commodity Credit Corporation.

(e) CONTINUED LIABILITY OF PRODUCERS- An amendment made by this section shall not affect the liability of any person under any provision of law as in effect before the effective date of this section.

SEC. 2. DISALLOWANCE OF DEDUCTION FOR CERTAIN ADVERTISING EXPENSES FOR TOBACCO PRODUCTS.

(a) DEDUCTION DISALLOWED- Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items not deductible) is amended by adding at the end the following new section:

‘SEC. 280I. DISALLOWANCE OF DEDUCTION FOR CERTAIN ADVERTISING EXPENSES FOR TOBACCO PRODUCTS.

‘(a) IN GENERAL- No deduction otherwise allowable under this chapter shall be allowed for any amount paid or incurred as a consumer sales promotion for any tobacco product.

‘(b) CONSUMER SALES PROMOTION- For purposes of this section, the term ‘consumer sales promotion’ means any of the following:

‘(1) All radio and television commercials, newspaper and magazine advertisements, billboards, posters, signs, decals, matchbook advertising, advertising in movie theaters, and point-of-purchase display material (except price information) used for--

‘(A) promoting the sale of tobacco and tobacco products, or

‘(B) informing or influencing the general public (or any segment thereof) with respect to tobacco and tobacco products.

‘(2) Any of the following incurred or provided primarily for purposes described in paragraph (1):

‘(A) Travel expenses (including meals and lodging).

‘(B) Any amount attributable to goods or services of a type generally considered to constitute entertainment, amusement, or recreation or to the use of a facility in connection with the providing of such goods or services.

‘(C) Gifts.

‘(D) Other promotion expenses.

‘(3) Advertising promotion allowances.

‘(4) Premiums and samples.

‘(5) Sponsorships of athletic, artistic, or other events under the registered brand name of a tobacco product unless the brand name is the name of a corporation in existence on July 1, 1994.

‘(6) Marketing of nontobacco products or services bearing the registered brand name or logo of a tobacco product unless the brand name is the name of a corporation in existence on July 1, 1994.

‘(7) Displaying the registered brand name or logo of a tobacco product on cars, boats, animals, or other sporting equipment or on nontobacco products or services which are sold unless the brand name is the name of a corporation in existence on July 1, 1994.

‘(8) Payment to have a registered brand name of a tobacco product appear in a movie or play unless the brand name is the name of a corporation in existence on July 1, 1994.

‘(c) TOBACCO PRODUCT- For purposes of this section, the term ‘tobacco product’ means cigarettes, cigars, smokeless tobacco, pipe tobacco, or any similar tobacco product. For purposes of the preceding sentence, the terms ‘cigarette’, ‘cigar’, and ‘smokeless tobacco’ have the respective meanings given to such terms by section 5702.’

(b) CONFORMING AMENDMENT- The table of sections for such part IX is amended by adding at the end thereof the following new item:

‘Sec. 280I. Disallowance of deduction for certain advertising expenses for tobacco products.’

(c) EFFECTIVE DATE- The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

SEC. 3. ESTABLISHMENT OF ANTI-TOBACCO USE 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. ANTI-TOBACCO USE 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 ‘Anti-Tobacco Use Trust Fund’, consisting of such amounts as may be appropriated or credited to such Trust Fund as provided in this section or section 9602(b).

‘(b) TRANSFERS TO TRUST FUND- There is hereby appropriated to the Anti-Tobacco Use Trust Fund amounts equivalent to 50 percent of the increase in revenues to the Treasury attributable to section 280I (relating to disallowance of deduction for certain advertising expenses for tobacco products).

‘(c) ANTI-DRUGS IN SCHOOLS ACCOUNT-

‘(1) IN GENERAL- There is established in the Anti-Tobacco Use Trust Fund a separate account to be known as the ‘Anti-Drugs in Schools Account’ consisting of such amounts as may be transferred or credited to such account as provided in this section or section 9602(b).

‘(2) TRANSFERS TO ACCOUNT- The Secretary of the Treasury shall transfer to the Anti-Drugs in Schools Account amounts equivalent to 50 percent of the amounts appropriated to the Anti-Tobacco Use Trust Fund under subsection (b).

‘(3) EXPENDITURES FROM ACCOUNT- Amounts in the Anti-Drugs in Schools Account shall be available, as provided in appropriation Acts, for making expenditures for purposes of carrying out the programs developed under title V of the Elementary and Secondary Education Act of 1965.

‘(d) ANTI-TOBACCO USE ADVERTISING ACCOUNT-

‘(1) IN GENERAL- There is established in the Anti-Tobacco Use Trust Fund a separate account to be known as the ‘Anti-Tobacco Use Advertising Account’, consisting of such amounts as may be transferred or credited to such account as provided in this section or section 9602(b).

‘(2) TRANSFERS TO ACCOUNT- The Secretary of the Treasury shall transfer to the Anti-Tobacco Use Advertising Account amounts equivalent to 50 percent of the amounts appropriated to the Anti-Tobacco Use Trust Fund under subsection (b).

‘(3) EXPENDITURES FROM ACCOUNT- Amounts in the Anti-Tobacco Use Advertising Account shall be available, as provided in appropriation Acts, for purposes of the program carried out under section 1709 of the Public Health Service Act.’

(b) CLERICAL AMENDMENT- The table of sections for such subchapter A is amended by adding at the end thereof the following new item:

‘Sec. 9512. Anti-Tobacco Use Trust Fund.’

SEC. 4. ESTABLISHMENT OF ANTI-TOBACCO ADVERTISING CAMPAIGN.

Title XVII of the Public Health Service Act (42 U.S.C. 300u et seq.) is amended by adding at the end the following section:

‘ANTI-TOBACCO USE ADVERTISING CAMPAIGN

‘SEC. 1709. With amounts available under section 9512(d) of the Internal Revenue Code of 1986 (relating to the Anti-Tobacco Use Trust Fund), the Secretary shall carry out a program of advertising to educate the public on the risks to health that result from the use of tobacco products.’.

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