I

104TH CONGRESS

2D SESSION H. R. 2865

To amend the Internal Revenue Code of 1986 to increase the tax on handguns

and assault weapons, to increase the license application fee for gun

dealers, and to use the proceeds from those increases to pay for medical

care for gunshot victims.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 23, 1996

Mrs. MEEK of Florida introduced the following bill; which was referred to the

Committee on Ways and Means, and in addition to the Committees on

the Judiciary and 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 tax on handguns and assault weapons, to increase

the license application fee for gun dealers, and to use

the proceeds from those increases to pay for medical

care for gunshot victims.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Firearm Victims Pre5 vention Act of 1996’’.
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1 SEC. 2. FINDINGS AND PURPOSE.

2 (a) FINDINGS.—The Congress finds that—

3 (1) according to the Centers for Disease Con4 trol, an estimated 34,000 Americans die from fire5 arm injuries each year, including 25,000 from hand6 gun violence;

7 (2) firearms rank as the 8th leading cause of

8 death in the United States and less than 5 percent

9 of fatal shootings are unintentional;

10 (3) the National Center for Health Statistics

11 reported in March 1993 that, among Americans age

12 15 through 24, firearms are the cause of more

13 deaths than all natural causes combined;

14 (4) from 1979 to 1989, the firearm homicide

15 rate among children age 15 through 19 increased 61

16 percent, while the nonfirearm homicide rate fell 29

17 percent;

18 (5) more than 135,000 students carry hand19 guns to school everyday, and an additional 270,000

20 students have carried a firearm to school at least

21 once;

22 (6) the United States leads industrialized na23 tions in the percentage of households with firearms

24 and the number of homicides with firearms;
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1 (7) according to the Centers for Disease Con2 trol, the estimated lifetime costs for firearm injuries

3 that occurred in 1985 will be $14,400,000,000;

4 (8) according to the 1991 Advisory Council on

5 Social Security, the overall annual cost of firearms

6 injury to the health care system in the United States

7 is more than $4,000,000,000;

8 (9) public funds pay for an estimated 85 per9 cent of the cost of hospitalization for firearm inju10 ries, excluding professional fees and the cost of am11 bulance, physical therapy, and other rehabilitative

12 services;

13 (10) the indirect costs of firearm-related inju14 ries, such as disability payments, legal fees, and lost

15 work time, are estimated to be 2 times the estimated

16 annual direct cost of firearm injury;

17 (11) more than 280,000 manufacturers, dealers

18 and individuals are licensed to sell firearms in the

19 United States; and

20 (12) Federal firearm licenses are inexpensive,

21 relatively easy to obtain, and may only be revoked

22 upon criminal conviction.

23 (b) PURPOSE.—The purpose of this Act is to help al24 leviate the public health care cost resulting from firearm25 related injury and death by—
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1 (1) establishing a transactional tax on the pur2 chase of the firearms and ammunition most com3 monly associated with injury and death;

4 (2) raising licensing fees for dealers who sell

5 such firearms and ammunition; and

6 (3) using funds generated from the trans7 actional tax and licensing fees to help offset the

8 health care cost resulting from firearm injury and

9 death.

10 SEC. 3. INCREASE IN TAX ON HANDGUNS AND ASSAULT

11 WEAPONS.

12 (a) INCREASE IN MANUFACTURER’S TAX.—Section

13 4181 of the Internal Revenue Code of 1986 (relating to

14 imposition of tax on firearms) is amended to read as fol15 lows:

16 ‘‘SEC. 4181. IMPOSITION OF TAX.

17 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed

18 upon the sale by the manufacturer, producer, or importer

19 of any of the following articles a tax equivalent to the spec20 ified percent of the price for which so sold:

21 ‘‘(1) ARTICLES TAXABLE AT 25 PERCENT.—

22 With respect to the following articles, the specified

23 percent is 25 percent:

24 ‘‘(A) Handguns.

25 ‘‘(B) Assault weapons.
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1 ‘‘(C) Large capacity magazines.

2 ‘‘(D) Shells and cartridges used in hand3 guns and assault weapons.

4 ‘‘(2) ARTICLES TAXABLE AT 11 PERCENT.—

5 With respect to the following articles the specified

6 percent is 11 percent:

7 ‘‘(A) Firearms (other than handguns, as8 sault weapons, and pistols or revolvers).

9 ‘‘(B) Shells and cartridges not taxable at

10 25 percent.

11 ‘‘(3) ARTICLES TAXABLE AT 10 PERCENT.—

12 With respect to pistols and revolvers not taxable at

13 25 percent under paragraph (1), the specified per14 cent is 10 percent.

15 ‘‘(b) DEFINITIONS.—For purposes of subsection

16 (a)—

17 ‘‘(1) HANDGUN.—The term ‘handgun’ means a

18 firearm which, at the time of manufacture, had a

19 barrel of less than 12 inches in length.

20 ‘‘(2) ASSAULT WEAPON.—The term ‘assault

21 weapon’ means—

22 ‘‘(A) a firearm—

23 ‘‘(i) which—

24 ‘‘(I) has a barrel of between 12

25 and 18 inches in length, and
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1 ‘‘(II) is capable of receiving am2 munition directly from a large capac3 ity ammunition magazine, or

4 ‘‘(ii) which is a semiautomatic firearm

5 which is—

6 ‘‘(I) not recognized generally as

7 particularly suitable for, or readily

8 adaptable to, sporting purposes, or

9 ‘‘(II) concealable by a person, or

10 ‘‘(B) a firearm which is substantially func11 tionally equivalent to a firearm described in

12 subparagraph (A).

13 ‘‘(3) LARGE CAPACITY AMMUNITION MAGA14 ZINE.—The term ‘large capacity ammunition maga15 zine’ means a detachable magazine, belt, drum, feed

16 strip, or similar device which has, or which may be

17 readily restored (or converted) to a device which has,

18 a capacity of 15 or more rounds of ammunition.’’

19 (b) RETAIL TAX ON SUBSEQUENT TRANSACTIONS

20 INVOLVING ASSAULT WEAPONS AND HANDGUNS.—

21 (1) IN GENERAL.—Chapter 31 of the Internal

22 Revenue Code of 1986 (relating to retail excise

23 taxes) is amended by adding at the end the following

24 new subchapter:
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1 ‘‘Subchapter D—Handguns and Assault

2 Weapons

‘‘Sec. 4056. Handguns and assault weapons.

3 ‘‘SEC. 4056. HANDGUNS AND ASSAULT WEAPONS.

4 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed

5 on any sale, transfer, or other disposition by any person

6 of a handgun, assault weapon, large capacity magazine,

7 or shell or cartridge used in handguns and assault weap8 ons a tax equal to 25 percent of the price for which sold,

9 transferred, or disposed of.

10 ‘‘(b) EXCEPTIONS.—

11 ‘‘(1) COORDINATION WITH MANUFACTURER’S

12 TAX.—If tax has been paid under section 4181 with

13 respect to any article, no tax shall be imposed under

14 subsection (a) on such article until a sale, transfer,

15 or disposition occurring after the first retail sale of

16 the article.

17 ‘‘(2) DEFENSE DEPARTMENT.—No tax shall be

18 imposed by subsection (a) on any sale described in

19 section 4182(b).

20 ‘‘(c) DEFINITIONS.—For purposes of this section, the

21 terms ‘handgun’, ‘assault weapon’, and ‘large capacity

22 magazine’ have the meanings given such terms by section

23 4181(b).’’
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1 (2) CONFORMING AMENDMENT.—The table of

2 subchapters for chapter 31 of such Code is amended

3 by adding at the end the following new item:

‘‘Subchapter D. Handguns and assault weapons.’’

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to sales, transfers, and other dis6 positions after the 30th day after the date of the enact7 ment of this Act.

8 SEC. 4. HEALTH CARE TRUST FUND.

9 (a) IN GENERAL.—Subchapter A of chapter 98 of the

10 Internal Revenue Code of 1986 (relating to establishment

11 of trust funds) is amended by adding at the end the follow12 ing new section:

13 ‘‘SEC. 9512. HEALTH CARE TRUST FUND.

14 ‘‘(a) ESTABLISHMENT OF TRUST FUND.—There is

15 established in the Treasury of the United States a trust

16 fund to be known as the ‘Health Care Trust Fund’, con17 sisting of such amounts as may be appropriated or cred18 ited to such Trust Fund as provided in this section or

19 section 9602(b).

20 ‘‘(b) TRANSFERS TO THE TRUST FUND.—There are

21 hereby appropriated to the Health Care Trust Fund

22 amounts equivalent to—

23 ‘‘(1) the taxes received in the Treasury under

24 section 4056,
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1 ‘‘(2) the taxes received in the Treasury under

2 section 4181 which are attributable to the tax on

3 articles subject to the 25-percent rate, and

4 ‘‘(3) the amounts described in the last sentence

5 of section 923(a) of title 18, United States Code.

6 ‘‘(c) EXPENDITURES FROM TRUST FUND.—Funds in

7 the Health Care Trust Fund shall be available, as pro8 vided in appropriations Acts, only for the purpose of mak9 ing grants to assist hospitals, trauma centers, or other

10 health care providers that have incurred substantial un11 compensated costs in providing medical care to gunshot

12 victims, except that no single hospital, trauma center, or

13 health care provider may receive more than one-tenth of

14 1 percent of the funds appropriated under this section.

15 ‘‘(d) ELIGIBILITY FOR TRUST FUND MONEYS.—A

16 hospital, trauma center, or other health care provider is

17 eligible to apply for grants from the Health Care Trust

18 Fund for any calendar year if the hospital, trauma center,

19 or health care provider—

20 ‘‘(1) is in compliance with Federal and State

21 certification and licensing requirements;

22 ‘‘(2) is a not-for-profit entity; and

23 ‘‘(3) has incurred substantial uncompensated

24 costs during the previous calendar year in providing

25 medical care to gunshot victims.
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1 ‘‘(e) REGULATIONS FOR TRUST FUND.—The Sec2 retary shall, not later than 60 days after the date of enact3 ment of this section and in consultation with the Secretary

4 of Health and Human Services, issue such regulations as

5 are necessary to implement the provisions of this section.’’

6 (b) CONFORMING AMENDMENT.—The table of sec7 tions for subchapter A of chapter 98 of such Code is

8 amended by adding at the end the following new item:

‘‘Sec. 9512. Health Care Trust Fund.’’

9 SEC. 5. LICENSE APPLICATION FEES FOR DEALERS IN

10 FIREARMS.

11 (a) IN GENERAL.—Section 923(a) of title 18, United

12 States Code, is amended—

13 (1) in paragraph (3)(B), by striking ‘‘$200’’

14 and all that follows through ‘‘$90 for 3 years’’ and

15 inserting ‘‘$2,500 per year’’; and

16 (2) by adding at the end the following:

17 ‘‘There are hereby appropriated to the Health Care Trust

18 Fund established under section 9512 of the Internal Reve19 nue Code of 1986 (26 U.S.C. 9512) one-half of the reve20 nue from the fees collected under paragraph (3)(B).’’

21 (b) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to license applications filed after

23 the 30th day after the date of the enactment of this Act.

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