I
105TH CONGRESS
1ST SESSION
H. R. 3030
To amend the Internal Revenue Code of 1986 to disallow a Federal income
tax deduction for payments to the Federal Government or any State
or local government in connection with any tobacco litigation or settle-
ment and to use any increased Federal revenues to promote public
health.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 12, 1997
Mr. GEKAS introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committees on Commerce,
and the Budget, 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 disallow
a Federal income tax deduction for payments to the
Federal Government or any State or local government
in connection with any tobacco litigation or settlement
and to use any increased Federal revenues to promote
public health.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 
1. 
DEDUCTION 
DISALLOWED 
FOR 
CERTAIN
TOBACCO COMPANY PAYMENTS.
(a) IN GENERAL.—Section 162 of the Internal Reve-
nue Code of 1986 (defining trade or business expenses)
is amended by redesignating subsection (o) as subsection
(p) and by inserting after subsection (n) the following new
subsection:
‘‘(o) CERTAIN TOBACCO COMPANY PAYMENTS NOT
DEDUCTIBLE.—
‘‘(1) IN GENERAL.—No deduction otherwise al-
lowable shall be allowed under this chapter for any
amount paid or incurred to the Federal Government
or to any State or local government pursuant to any
applicable tobacco judgment or settlement.
‘‘(2) REPORTING OF PAYMENTS.—Any taxpayer
to which paragraph (1) applies for any taxable year
shall include on its return of tax imposed by this
chapter for such taxable year the total amount of
payments for which a deduction is not allowed and
such other information as the Secretary may pre-
scribe.
‘‘(3) APPLICABLE TOBACCO JUDGMENT OR SET-
TLEMENT.—For purposes of this subsection, the
term ‘applicable tobacco judgment or settlement’
means—
‘‘(A) any judgment in any civil action seek-
ing damages in connection with the manufac-
ture or sale of any tobacco product; and
‘‘(B) any settlement agreement arising out
of any such civil action, including the tobacco
industry settlement agreement of June 20,
1997 (and any modification or successor there-
of).
Such term shall include any law enacted to imple-
ment any settlement described in subparagraph
(B).’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to any payments made on or
after September ll, 1997, pursuant to any judg-
ment entered, or settlement agreement entered into,
on or after such date.
(2) SPECIAL RULE FOR SETTLEMENT AGREE-
MENT.—In the case of the tobacco industry settle-
ment agreement of June 20, 1997, such agreement
shall be treated as entered into on the date of the
enactment of Federal legislation implementing the
agreement.
SEC. 2. NATIONAL INSTITUTES OF HEALTH 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. NATIONAL INSTITUTES OF HEALTH TRUST
FUND FOR HEALTH RESEARCH.
‘‘(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 Institutes of Health Trust
Fund for Health Research’ (hereafter referred to in this
section as the ‘Trust Fund’), consisting of such amounts
as may be appropriated or transferred to the Trust Fund
as provided in this section or section 9602(b).
‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby
appropriated to the Trust Fund an amount equivalent to
the net increase in revenues received in the Treasury at-
tributable to the application of section 162(o) as estimated
by the Secretary.
‘‘(c) OBLIGATIONS FROM TRUST FUND.—
‘‘(1) IN GENERAL.—Subject to the provisions of
paragraph (4), with respect to the amounts made
available in the Trust Fund in a fiscal year, the Sec-
retary of Health and Human Services shall distrib-
ute during any fiscal year—