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erty or services if a sale of such property, or the per-
formance of such services, by the taxpayer would be 
a taxable transaction. 
‘‘(2) OWNER.—The term ‘owner’ means— 
‘‘(A) in the case of a sole proprietorship, 
the proprietor, 
‘‘(B) in the case of any other business en-
terprise, any holder of a beneficial interest in 
the corporation, partnership, or other entity, 
and 
‘‘(C) any member of the family (within the 
meaning of section 267(c)(4)) of an individual 
described in subparagraph (A) or (B). 
‘‘SEC. 3934. GIFT OF BUSINESS PROPERTY OR SERVICES. 
‘‘(a) GENERAL RULE.—In the case of any gift of 
business property or services, for purposes of this chap-
ter— 
‘‘(1) such gift shall be treated as a taxable 
transaction, and 
‘‘(2) the taxable amount shall be the amount 
determined under section 3933(b). 
‘‘(b) GIFTS RELATED TO BUSINESS PROMOTION AC-
TIVITIES.—For purposes of subsection (a), the term ‘gift’ 
includes any gift of property or services transferred in con-
nection with business promotion activities.
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‘‘SEC. 3935. SPECIAL RULES FOR DISPOSITIONS OF NON-
BUSINESS REAL PROPERTY. 
‘‘(a) IN GENERAL.—In the case of any sale of real 
property which is treated as a commercial-type transaction 
solely by reason of section 3904(b)(1)(A), for purposes of 
this chapter, the taxable amount shall be the excess (if 
any) of— 
‘‘(1) the amount realized on such sale, over 
‘‘(2) the adjusted cost to the taxpayer of such 
real property. 
‘‘(b) ADJUSTED COST.—For purposes of subsection 
(a)— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the term ‘adjusted cost’ means, with re-
spect to any property, the basis of such property in-
creased by expenditures properly chargeable to cap-
ital account (other than taxes or other carrying 
charges described in section 266) for periods during 
the holding period for such property. 
‘‘(2) TRANSITIONAL RULE.—The adjusted cost 
of any property shall include only amounts incurred 
during periods after December 31, 2005. 
‘‘(c) VALUE ADDED TAX
NOT TAKEN INTO AC-
COUNT.—For purposes of this section, the amount realized 
on any sale of real property shall not include any amount 
attributable to the tax imposed by this chapter.
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‘‘SEC. 3936. SPECIAL RULE FOR INSURANCE CONTRACTS. 
‘‘In the case of any contract of insurance, for pur-
poses of this chapter, the taxable amount is the excess 
of— 
‘‘(1) the portion of the premium attributable to 
insurance coverage, over 
‘‘(2) the actuarial cost to the insurer of pro-
viding such insurance coverage.’’ 
(b) CLERICAL AMENDMENT.—The table of chapters 
for subtitle D of the Internal Revenue Code of 1986 is 
amended by inserting before the item relating to chapter 
31 the following: 
‘‘CHAPTER 30. VALUE ADDED TAX’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions occurring after De-
cember 31, 2005. 
SEC. 1002. REVENUE FROM VALUE ADDED TAX TO FUND 
NATIONAL HEALTH CARE 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. 9511. NATIONAL HEALTH CARE TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘National Health Care Trust Fund’,
106 
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.—There are here-
by appropriated to the National Health Care Trust Fund 
amounts equivalent to amounts received in the Treasury 
from the tax imposed under section 3901 (relating to the 
value added tax). 
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts 
in the National Health Care Trust Fund shall be available 
only for purposes of making expenditures to carry out the 
program of health benefits under the National Health In-
surance Act.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for such subchapter A is amended by adding at the end 
the following new item: 
‘‘Sec. 9511. National Health Care Trust Fund.’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2005. 
TITLE XI—STUDY AND DEVELOP-
MENT 
OF 
COST 
CONTROL 
MECHANISMS 
SEC. 1101. DEVELOPMENT OF COST CONTROL MECHA-
NISMS. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study analyzing various methods
107 
to control the costs of providing personal health benefits 
under this Act, and shall include in such study an analysis 
of the effects on such costs of medical malpractice claims 
and the purchase of medical malpractice liability insurance 
by providers of the benefits. 
(b) REPORTS TO CONGRESS.—Not later than October 
1, 2007, the Secretary shall submit a report to Congress 
describing the study conducted under subsection (a), and 
shall include in the report recommendations on methods 
to control costs under this Act, including recommenda-
tions on the development of a system under which medical 
malpractice claims brought against providers of benefits 
under this Act may be resolved in an equitable and cost- 
effective manner. Not later than April 1, 2008, the Sec-
retary shall promulgate regulations to implement the rec-
ommendations made in the report. 
Æ