I

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 antitobacco 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

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.

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

3 SECTION 1. TERMINATION OF TOBACCO PRICE SUPPORT

4 AND MARKETING QUOTAS.

5 (a) TERMINATION OF TOBACCO PRICE SUPPORT.—

6 The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) is

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

2 (A) in subsection (a), by striking ‘‘tobacco

3 (except as otherwise provided herein), corn,’’

4 and inserting ‘‘corn’’;

5 (B) by striking subsection (c); and

6 (C) in subsection (d)(3), by striking ‘‘, ex7 cept tobacco,’’;

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

9 (3) by striking section 106A (7 U.S.C. 1445–

10 1);

11 (4) by striking section 106B (7 U.S.C. 1445–

12 2); and

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

14 (A) in subsection (c), by striking ‘‘to15 bacco,’’; and

16 (B) in subsection (d), by adding before the

17 period at the end the following: ‘‘or tobacco’’.

18 (b) TERMINATION OF TOBACCO MARKETING

19 QUOTAS.—Part I (sections 311 through 320B) of subtitle

20 B of title III of the Agricultural Adjustment Act of 1938

21 (7 U.S.C. 1311–1316) is repealed.

22 (c) CONFORMING AMENDMENTS.—(1) Section 3 of

23 Public Law 98–59 (7 U.S.C. 625) is repealed.

24 (2) The Agricultural Adjustment Act of 1938 is fur25 ther amended—
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1 (A) in section 301(b) (7 U.S.C. 1301(b))—

2 (i) by striking paragraphs (3)(C), (10)(B),

3 (14)(B), (14)(C), (14)(D), (15), (16)(B), and

4 (17);

5 (ii) in paragraph (6)(A), by striking ‘‘to6 bacco,’’

7 (iii) in the undesignated subparagraphs in

8 paragraph (7), by striking

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

10 ‘‘Tobacco (other than flue-cured), October

11 1–September 30;’’

12 (iv) in paragraph (11)(B), by striking ‘‘and

13 tobacco’’; and

14 (v) in paragraph (12), by striking ‘‘to15 bacco,’’;

16 (B) in section 303 (7 U.S.C. 1303), by striking

17 ‘‘rice, or tobacco’’ and inserting ‘‘or rice’’; and

18 (C) in section 372(b) (7 U.S.C. 1372(b)), by

19 striking ‘‘Except as provided in section 320B, the

20 amount’’ in the third sentence and inserting ‘‘The

21 amount’’.

22 (3) Section 703 of Public Law 89–321 (7 U.S.C.

23 1316; 79 Stat. 1210) is amended by striking the second

24 sentence.
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1 (4) The Act of July 12, 1952 (7 U.S.C. 1315; Chap2 ter 709; 66 Stat. 597), is repealed.

3 (d) EFFECTIVE DATE AND APPLICATION OF AMEND4 MENTS.—The amendments made by this section shall take

5 effect on January 1, 1995. Beginning on that date, the

6 Secretary of Agriculture shall terminate all loan agree7 ments entered into with tobacco producer associations

8 under section 106A of the Agricultural Adjustment Act

9 of 1938 and provide for the disposal of all funds in the

10 No Net Cost Tobacco Fund of those associations and the

11 No Net Cost Tobacco Account of the Commodity Credit

12 Corporation.

13 (e) CONTINUED LIABILITY OF PRODUCERS.—An

14 amendment made by this section shall not affect the liabil15 ity of any person under any provision of law as in effect

16 before the effective date of this section.

17 SEC. 2. DISALLOWANCE OF DEDUCTION FOR CERTAIN AD18 VERTISING EXPENSES FOR TOBACCO PROD19 UCTS.

20 (a) DEDUCTION DISALLOWED.—Part IX of sub21 chapter B of chapter 1 of the Internal Revenue Code of

22 1986 (relating to items not deductible) is amended by add23 ing at the end the following new section:
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1 ‘‘SEC. 280I. DISALLOWANCE OF DEDUCTION FOR CERTAIN

2 ADVERTISING EXPENSES FOR TOBACCO

3 PRODUCTS.

4 ‘‘(a) IN GENERAL.—No deduction otherwise allow5 able under this chapter shall be allowed for any amount

6 paid or incurred as a consumer sales promotion for any

7 tobacco product.

8 ‘‘(b) CONSUMER SALES PROMOTION.—For purposes

9 of this section, the term ‘consumer sales promotion’ means

10 any of the following:

11 ‘‘(1) All radio and television commercials, news12 paper and magazine advertisements, billboards, post13 ers, signs, decals, matchbook advertising, advertising

14 in movie theaters, and point-of-purchase display ma15 terial (except price information) used for—

16 ‘‘(A) promoting the sale of tobacco and to17 bacco products, or

18 ‘‘(B) informing or influencing the general

19 public (or any segment thereof) with respect to

20 tobacco and tobacco products.

21 ‘‘(2) Any of the following incurred or provided

22 primarily for purposes described in paragraph (1):

23 ‘‘(A) Travel expenses (including meals and

24 lodging).

25 ‘‘(B) Any amount attributable to goods or

26 services of a type generally considered to con-
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1 stitute entertainment, amusement, or recreation

2 or to the use of a facility in connection with the

3 providing of such goods or services.

4 ‘‘(C) Gifts.

5 ‘‘(D) Other promotion expenses.

6 ‘‘(3) Advertising promotion allowances.

7 ‘‘(4) Premiums and samples.

8 ‘‘(5) Sponsorships of athletic, artistic, or other

9 events under the registered brand name of a tobacco

10 product unless the brand name is the name of a cor11 poration in existence on July 1, 1994.

12 ‘‘(6) Marketing of nontobacco products or serv13 ices bearing the registered brand name or logo of a

14 tobacco product unless the brand name is the name

15 of a corporation in existence on July 1, 1994.

16 ‘‘(7) Displaying the registered brand name or

17 logo of a tobacco product on cars, boats, animals, or

18 other sporting equipment or on nontobacco products

19 or services which are sold unless the brand name is

20 the name of a corporation in existence on July 1,

21 1994.

22 ‘‘(8) Payment to have a registered brand name

23 of a tobacco product appear in a movie or play un24 less the brand name is the name of a corporation in

25 existence on July 1, 1994.
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1 ‘‘(c) TOBACCO PRODUCT.—For purposes of this sec2 tion, the term ‘tobacco product’ means cigarettes, cigars,

3 smokeless tobacco, pipe tobacco, or any similar tobacco

4 product. For purposes of the preceding sentence, the

5 terms ‘cigarette’, ‘cigar’, and ‘smokeless tobacco’ have the

6 respective meanings given to such terms by section 5702.’’

7 (b) CONFORMING AMENDMENT.—The table of sec8 tions for such part IX is amended by adding at the end

9 thereof the following new item:

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

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

11 this section shall apply to amounts paid or incurred after

12 the date of the enactment of this Act.

13 SEC. 3. ESTABLISHMENT OF ANTI-TOBACCO USE TRUST

14 FUND.

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

16 Internal Revenue Code of 1986 (relating to trust fund

17 code) is amended by adding at the end the following new

18 section:

19 ‘‘SEC. 9512. ANTI-TOBACCO USE TRUST FUND.

20 ‘‘(a) CREATION OF TRUST FUND.—There is estab21 lished in the Treasury of the United States a trust fund

22 to be known as the ‘Anti-Tobacco Use Trust Fund’, con23 sisting of such amounts as may be appropriated or cred-
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1 ited to such Trust Fund as provided in this section or sec2 tion 9602(b).

3 ‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby

4 appropriated to the Anti-Tobacco Use Trust Fund

5 amounts equivalent to 50 percent of the increase in reve6 nues to the Treasury attributable to section 280I (relating

7 to disallowance of deduction for certain advertising ex8 penses for tobacco products).

9 ‘‘(c) ANTI-DRUGS IN SCHOOLS ACCOUNT.—

10 ‘‘(1) IN GENERAL.—There is established in the

11 Anti-Tobacco Use Trust Fund a separate account to

12 be known as the ‘Anti-Drugs in Schools Account’

13 consisting of such amounts as may be transferred or

14 credited to such account as provided in this section

15 or section 9602(b).

16 ‘‘(2) TRANSFERS TO ACCOUNT.—The Secretary

17 of the Treasury shall transfer to the Anti-Drugs in

18 Schools Account amounts equivalent to 50 percent of

19 the amounts appropriated to the Anti-Tobacco Use

20 Trust Fund under subsection (b).

21 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

22 Amounts in the Anti-Drugs in Schools Account shall

23 be available, as provided in appropriation Acts, for

24 making expenditures for purposes of carrying out
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1 the programs developed under title V of the Elemen2 tary and Secondary Education Act of 1965.

3 ‘‘(d) ANTI-TOBACCO USE ADVERTISING ACCOUNT.—

4 ‘‘(1) IN GENERAL.—There is established in the

5 Anti-Tobacco Use Trust Fund a separate account to

6 be known as the ‘Anti-Tobacco Use Advertising Ac7 count’, consisting of such amounts as may be trans8 ferred or credited to such account as provided in this

9 section or section 9602(b).

10 ‘‘(2) TRANSFERS TO ACCOUNT.—The Secretary

11 of the Treasury shall transfer to the Anti-Tobacco

12 Use Advertising Account amounts equivalent to 50

13 percent of the amounts appropriated to the Anti-To14 bacco Use Trust Fund under subsection (b).

15 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

16 Amounts in the Anti-Tobacco Use Advertising Ac17 count shall be available, as provided in appropriation

18 Acts, for purposes of the program carried out under

19 section 1709 of the Public Health Service Act.’’

20 (b) CLERICAL AMENDMENT.—The table of sections

21 for such subchapter A is amended by adding at the end

22 thereof the following new item:

‘‘Sec. 9512. Anti-Tobacco Use Trust Fund.’’
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1 SEC. 4. ESTABLISHMENT OF ANTI-TOBACCO ADVERTISING

2 CAMPAIGN.

3 Title XVII of the Public Health Service Act (42

4 U.S.C. 300u et seq.) is amended by adding at the end

5 the following section:

6 ‘‘ANTI-TOBACCO USE ADVERTISING CAMPAIGN

7 ‘‘SEC. 1709. With amounts available under section

8 9512(d) of the Internal Revenue Code of 1986 (relating

9 to the Anti-Tobacco Use Trust Fund), the Secretary shall

10 carry out a program of advertising to educate the public

11 on the risks to health that result from the use of tobacco

12 products.’’.

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