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Statement on Introduced Bill (Senate - September 18, 1995)By Mr. HATFIELD (for himself, Mr. Harkin, and Mrs. Boxer):S. 1251. A bill to establish a national fund for health research to expand medical research programs through increased funding provided to the National Institutes of Health, and for other purposes; to the Committee on Finance. The National Fund For Health Research Act Mr. HATFIELD: Mr. President, this week finds us at the height of the appropriations process, as the end of the fiscal year rapidly approaches. It has been a season of difficult fiscal decisions which must be made to conform to the constraints of our balanced budget agreement. Never are the tradeoffs as vivid as when we consider spending levels for health and education programs, as we did this morning when the Senate Appropriations Committee completed action on the fiscal year 1996 Labor, HHS, and Education appropriations bill. I am pleased to report that the committee provided nearly $1.5 billion more than the House for education programs. In addition, we provided a 2.7 percent increase for health research at the National Institutes of Health. While this level is less than that provided by the House, I believe it represents a fair balance between the vitally important issues of health and education. But clearly, my preference would have been to provide a much larger increase for medical research so that the engine which drives the quality of medical care and reduced health costs could run at full tilt. The current reality is, however, that available funds for discretionary spending are decreasing. We cannot continue to look solely to the appropriations process for the necessary resources to keep our biomedical research enterprise growing at a rate which takes advantage of the myriad medical breakthroughs on the horizon. We must look for a funding source to supplement annual appropriations to the National Institutes of Health. Today I am pleased to unite with my friend and colleague, Senator Harkin, in introducing legislation to establish the national fund for medical research. We joined forces in this effort last year and worked hard to see that medical research was a part of the health care reform debates. At the end of the process, although the issue was ultimately unresolved, we had received the attention and support of many Members in this Chamber. We introduce this bill today, with the support of Senator Boxer of California, with the intention of building on the momentum of last year to gain the support of our many colleagues in this body who are committed to the biomedical research infrastructure. Our legislation proposes to create a new fund in the U.S. Treasury, financed by an increase in Federal tobacco taxes and income generated through a voluntary Federal income tax checkoff. By raising the Federal tax on cigarettes by 25 cents per package, as well as raising the tax to an equivalent level on smokeless tobacco products, the Joint Committee on Taxation has estimated annual income for the fund of approximately $4.2 billion. These funds will be distributed on a phased-in basis to the National Institutes of Health to supplement, not replace, the funds the organization receives each year in the appropriations process. Funds will be distributed in accordance with the proportion of funds each of the member institutes and centers receive in the appropriations process, after 5 percent has been divided between the Office of the Director, the National Center for Research Resources, and the National Library of Medicine. Funds raised through this proposal will increase the budget of the NIH by 35 percent over the fiscal year 1995 appropriated level. This will allow many more research grant applications to be funded so that scientific opportunities of merit can be pursued and ultimately translated into cost-effective treatments and cures which will improve our national quality of life. I know of no better investment for the Federal Government than one which strengthens our human capital--be it in education or health research, our greatest strength is a healthy, and thus wealthy, populous. Mr. President, my good friend, the great philanthropist, Mary Lasker once said, "If you think research is expensive, try disease." Diseases cost this country hundreds of billions of dollars annually. Last year, federally supported research on Alzheimer's disease totalled $300 million, yet it is estimated that $90 billion is expended annually on care. Federally supported research on diabetes totals $290 million, yet it is estimated that $25 billion is expended annually on care. Federally supported research on mental health totals $613 million, yet it is estimated that $130 billion is expended annually on care. As we struggle in the coming months to achieve a balanced budget, we must embrace policies that enable us to make the most out of our scarce Federal dollars. Federal funding for medical research should be a top priority because without new knowledge to develop new strategies to prevent disease, new treatments to delay the progression of disease and new interventions to cure disease; health care costs will continue to spiral out of control. Disease drives the cost of health care. A concerted Federal assault on disease will not only save precious funds, but it will provide hope to the afflicted. Watching a medical catastrophe affect a family or individual is one of the greatest tragedies we face in this country. The impacts are accentuated when this misfortune comes in the form of an incurable disease. Loved ones are left with no hope, and feeling powerless as they watch the debilitating effects of disease overcome the individual. I know many of my colleagues in the Senate have experienced this sense of powerlessness. They have watched helplessly while family members deteriorate from the effects of a deadly disease. The vibrant individual that they knew and loved is reduced to a withering shell of a human being. The one thing, and the only thing that provides comfort to the afflicted and to their loved ones, is hope. Hope for an end to the suffering. Hope for a return to a normal life. Hope for a cure. This hope does not have to be great, even the faintest glimmer brings happiness to someone faced with a fatal future. Medical research is the sole hope we can provide to millions of Americans who will experience disease and disability either in their own lives or in their families. We can care for them in our hospitals and clinics but we cannot alleviate their pain or end their suffering without cures and preventative treatments. Cures are the direct result of our investment in medical research. This legislation is important because it will help provide a more sustainable funding base for medical research. During the debate on the budget resolution, I offered an amendment to restore $7 billion of the nearly $8 billion cut for the NIH proposed by the Senate budget resolution over the next 7 years. This amendment passed by a vote of 85-14. While this was a short-term victory for the NIH, it demonstrates the need for a stable endowment for medical research. The war against disease can not be fully waged if medical researchers have to engage in yearly squabbles with Congress over funding levels. As most of my colleagues know, I am a practical man. I do not underestimate the difficulty any tax increase has in the current political climate, but I submit we must listen to the people who put the new Republican majority in power. A recent Harris Poll has shown that Americans strongly support health research and are willing to put their money behind their words. The poll asked Americans which type of scientific research they favored--66 percent favored medical research and a pitiful 4 percent preferred defense research. This same poll determined that if assured that the funds would be spent for medical research, 74 percent of Americans are willing to spend $1 more in taxes. Other polling data consistently shows that more than two-thirds of Republican and Democratic voters, including voters in tobacco-growing States, favor raising tobacco taxes. These results make it clear that our constituents desire a strong Federal commitment to medical research, even if it means an increase in taxes. An increase in tobacco taxes is easily the most appropriate source of funding for this bill. The Centers for Disease Control and Prevention reports that the Federal Government spends more than $20 billion per year to pay for the direct health care costs caused by tobacco. Tobacco taxes will help offset and reduce the economic costs of smoking. Taxes on tobacco products are a proven source of revenue around the world. Most major industrialized nations tax tobacco at $2 to $3.60 per package. The increase in the tobacco tax will provide extensive health benefits. Tobacco use is the greatest cause of preventable death in America. About 1.3 million children and adults will be discouraged from smoking by a 25-cent tobacco tax. Because about half of all long-term smokers die of diseases caused by smoking, a 25-cent tobacco tax will save the lives of more than 300,000 Americans alive today. I hope these heart-wrenching statistics will put an end to the congressional coddling of the almighty tobacco lobby. Tobacco use imposes a great price on our society, and those who profit from tobacco use should contribute their fair share to this devastation. This legislation has everything to do with providing our Nation with a brighter future. While sustainable resources for medical research are essential for our Nation's prosperity, our young people will ultimately determine the future of our Nation. Zenia Kim, a finalist in the Miss Oregon Pageant, and an aspiring medical researcher, provides me with a personal impetus to progress on this legislation. Like many Zenia had not given disease or medical research much thought until a close relative was stricken with cancer. After seeing her family member experience the terrors of chemotherapy, she dedicated her life to finding a cure to cancer. Zenia has vigorously pursued this pledge by working during her college summers at Oregon Health Sciences University. It was here, at one of our Nation's top academic medical centers, that she encountered the problems of insufficient funds for medical research. This inspired her to develop a comprehensive proposal to cure cancer. The main component of this proposal is research. Kim writes, "as a future medical scientist, I would like to know that there will be enough funding available to pursue my research endeavors." I would like Zenia to someday realize her goal and find a cure for cancer. I would like to assure Zenia, that when she graduates from medical school, we will have adequate funding for medical research. I urge my colleagues to support the National Fund for Medical Research to help Zenia and others like her to provide hope for those tormented by disease and disabilities. I ask unanimous consent to include in the Record, a copy of the bill, a question and answer summary, a sample of letters of support, and a list of nearly 200 organizations supporting this effort. There being no objection, the material was ordered to be printed in the Record, as follows:
104th CONGRESS
1st Session
S. 1251
To establish a National Fund for Health Research to expand medical
research programs through increased funding provided to the National
Institutes of Health, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 18 (legislative day, September 5), 1995
Mr. Hatfield (for himself, Mr. Harkin, and Mrs. Boxer) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To establish a National Fund for Health Research to expand medical
research programs through increased funding provided to the National
Institutes of Health, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "National Fund for Health Research
Act".
SEC. 2. FINDINGS.
Congress finds the following:
(1) Nearly 4 of 5 peer reviewed research projects deemed
worthy of funding by the National Institutes of Health are not
funded.
(2) Less than 3 percent of the nearly one trillion dollars
our Nation spends on health care is devoted to health research,
while the defense industry spends 15 percent of its budget on
research.
(3) Public opinion surveys have shown that Americans want
more Federal resources put into health research and are willing
to pay for it. Polling data consistently shows that more than
two-thirds of all voters support a major tobacco tax increase
if revenues generated are dedicated to health-related programs.
(4) Ample evidence exists to demonstrate that health
research has improved the quality of health care in the United
States. Advances such as the development of vaccines, the cure
of many childhood cancers, drugs that effectively treat a host
of diseases and disorders, a process to protect our Nation's
blood supply from the HIV virus, progress against
cardiovascular disease including heart attack and stroke, and
new strategies for the early detection and treatment of
diseases such as colon, breast, and prostate cancer clearly
demonstrates the benefits of health research.
(5) Health research which holds the promise of prevention
of intentional and unintentional injury and cure and prevention
of disease and disability, is critical to holding down costs in
the long term.
(6) The state of our Nation's research facilities at the
National Institutes of Health and at universities is
deteriorating significantly. Renovation and repair of these
facilities are badly needed to maintain and improve the quality
of research.
(7) Because the Concurrent Resolution on the Budget for
fiscal year 1996 (H. Con. Res. 67) freezes discretionary
spending for the next 5 years, the Nation's investment in
health research through the National Institutes of Health is
likely to decline in real terms unless corrective legislative
action is taken.
(8) A health research fund is needed to maintain our
Nation's commitment to health research and to increase the
percentage of approved projects which receive funding at the
National Institutes of Health.
(9) Each year 419,000 Americans die directly from tobacco
use and thousands more die from diseases caused by exposure to
environmental tobacco smoke. This year one out of every five
Americans who die will die from tobacco use.
(10) A recent study by the Centers for Disease Control and
Prevention estimates that the Federal Government expended more
than $20,000,000,000 in 1993 alone to treat illnesses
associated with tobacco use.
(11) A 25 cent increase in the tobacco tax would discourage
1,300,000 Americans from smoking and prevent more than 300,000
premature deaths.
(12) An estimated 90 percent of all smokers start when they
are teenagers or younger.
(13) Voluntary income tax checkoffs for medical research
for specific diseases exist in some States and have proven
successful in generating funds for such research.
TITLE I--NATIONAL FUND FOR HEALTH RESEARCH
SEC. 101. ESTABLISHMENT.
(a) Establishment.--There is established in the Treasury of the
United States a fund, to be known as the "National Fund for Health
Research" (hereafter in this section referred to as the "Fund"),
consisting of such amounts as are transferred to the Fund under
subsection (b) and any interest earned on investment of amounts in the
Fund.
(b) Transfers to Fund.--
(1) In general.--The Secretary of the Treasury shall
transfer to the Fund amounts equivalent to--
(A) taxes received in the Treasury under section
5701 of the Internal Revenue Code of 1986 (relating to
taxes on tobacco products) to the extent attributable
to the increase in such taxes resulting from the
amendments made by title II of the National Fund for
Health Research Act; and
(B) the amounts designated under section 6097
(relating to designation of overpayments and
contributions to the Fund).
(2) Transfers based on estimates.--The amounts transferred
by paragraph (1) shall annually be transferred to the Fund
within 30 days after the President signs an appropriations Act
for the Departments of Labor, Health and Human Services, and
Education, and related agencies, or by the end of the first
quarter of the fiscal year. Proper adjustment shall be made in
amounts subsequently transferred to the extent prior estimates
were in excess of or less than the amounts required to be
transferred.
(c) Obligations From Fund.--
(1) In general.--Subject to the provisions of paragraph
(4), with respect to the amounts made available in the Fund in
a fiscal year, the Secretary of Health and Human Services shall
distribute--
(A) 2 percent of such amounts during any fiscal
year to the Office of the Director of the National
Institutes of Health to be allocated at the Director's
discretion for the following activities:
(i) for carrying out the responsibilities
of the Office of the Director, including the
Office of Research on Women's Health and the
Office of Research on Minority Health, the
Office of Alternative Medicine, the Office of
Rare Disease Research, the Office of Behavioral
and Social Sciences Research (for use for
efforts to reduce tobacco use), the Office of
Dietary Supplements, and the Office for Disease
Prevention; and
(ii) for construction and acquisition of
equipment for or facilities of or used by the
National Institutes of Health;
(B) 2 percent of such amounts for transfer to the
National Center for Research Resources to carry out
section 1502 of the National Institutes of Health
Revitalization Act of 1993 concerning Biomedical and
Behavioral Research Facilities;
(C) 1 percent of such amounts during any fiscal
year for carrying out section 301 and part D of title
IV of the Public Health Service Act with respect to
health information communications; and
(D) the remainder of such amounts during any fiscal
year to member institutes and centers, including the
Office of AIDS Research, of the National Institutes of
Health in the same proportion to the total amount
received under this section, as the amount of annual
appropriations under appropriations Acts for each
member institute and Centers for the fiscal year bears
to the total amount of appropriations under
appropriations Acts for all member institutes and
Centers of the National Institutes of Health for the
fiscal year.
(2) Plans of allocation.--The amounts transferred under
paragraph (1)(D) shall be allocated by the Director of the
National Institutes of Health or the various directors of the
institutes and centers, as the case may be, pursuant to
allocation plans developed by the various advisory councils to
such directors, after consultation with such directors.
(3) Grants and contracts fully funded in first year.--With
respect to any grant or contract funded by amounts distributed
under paragraph (1), the full amount of the total obligation of
such grant or contract shall be funded in the first year of
such grant or contract, and shall remain available until
expended.
(4) Trigger and release of monies and phase-in.--
(A) Trigger and release.--No expenditure shall be
made under paragraph (1) during any fiscal year in
which the annual amount appropriated for the National
Institutes of Health is less than the amount so
appropriated for the prior fiscal year.
(B) Phase-in.--The Secretary of Health and Human
Services shall phase-in the distributions required
under paragraph (1) so that--
(i) 25 percent of the amount in the Fund is
distributed in fiscal year 1997;
(ii) 50 percent of the amount in the Fund
is distributed in fiscal year 1998;
(iii) 75 percent of the amount in the Fund
is distributed in fiscal year 1999; and
(iv) 100 percent of the amount in the Fund
is distributed in fiscal year 2000 and each
succeeding fiscal year.
(5) Administrative expenses.--Amounts in the Fund shall be
available to pay the administrative expenses of the Department
of the Treasury directly allocable to--
(A) modifying the individual income tax return
forms to carry out section 6097 of the Internal Revenue
Code of 1986; and
(B) processing amounts received under such section
6097 and transferring such amounts to such Fund.
(d) Budget Treatment of Amounts in Fund.--The amounts in the Fund
shall be excluded from, and shall not be taken into account, for
purposes of any budget enforcement procedure under the Congressional
Budget Act of 1974 or the Balanced Budget and Emergency Deficit Control
Act of 1985.
TITLE II--FINANCING PROVISIONS
SEC. 201. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
SEC. 202. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.
(a) Cigarettes.--Subsection (b) of section 5701 is amended--
(1) by striking "$12 per thousand ($10 per thousand on
cigarettes removed during 1991 or 1992)" in paragraph (1) and
inserting "$24.5 per thousand", and
(2) by striking "$25.20 per thousand ($21 per thousand on
cigarettes removed during 1991 or 1992)" in paragraph (2) and
inserting "$51.45 per thousand".
(b) Cigars.--Subsection (a) of section 5701 is amended--
(1) by striking "$1.125 cents per thousand (93.75 cents
per thousand on cigars removed during 1991 or 1992)" in
paragraph (1) and inserting "$13.64 per thousand", and
(2) by striking "equal to" and all that follows in
paragraph (2) and inserting "equal to 26.03 percent of the
price for which sold but not more than $61.25 per thousand."
(c) Cigarette Papers.--Subsection (c) of section 5701 is amended by
striking "0.75 cent (0.625 cent on cigarette papers removed during
1991 or 1992)" and inserting "1.53 cents".
(d) Cigarette Tubes.--Subsection (d) of section 5701 is amended by
striking "1.5 cents (1.25 cents on cigarette tubes removed during 1991
or 1992)" and inserting "3.06 cents".
(e) Smokeless Tobacco.--Subsection (e) of section 5701 is amended--
(1) by striking "36 cents (30 cents on snuff removed
during 1991 or 1992)" in paragraph (1) and inserting
"$3.69", and
(2) by striking "12 cents (10 cents on chewing tobacco
removed during 1991 or 1992)" in paragraph (2) and inserting
"$1.45".
(f) Pipe Tobacco.--Subsection (f) of section 5701 is amended by
striking "67.5 cents (56.25 cents on pipe tobacco removed during 1991
or 1992)" and inserting "$4.85".
(g) Application of Tax Increase to Puerto Rico.--Section 5701 is
amended by adding at the end the following new subsection:
"(h) Application to Taxes to Puerto Rico.--Notwithstanding
subsections (b) and (c) of section 7653 and any other provision of
law--
"(1) In general.--On tobacco products and cigarette papers
and tubes, manufactured or imported into the Commonwealth of
Puerto Rico, there is hereby imposed a tax at the rate equal to
the excess of--
"(A) the rate of tax applicable under this section
to like articles manufactured in the United States,
over
"(B) the rate referred to in subparagraph (A) as
in effect on the day before the date of the enactment
of the National Fund for Health Research Act.
"(2) Shipments to puerto rico from the united states.--
Only the rates of tax in effect on the day before the date of
the enactment of this subsection shall be taken into account in
determining the amount of any exemption from, or credit or
drawback of, any tax imposed by this section on any article
shipped to the Commonwealth of Puerto Rico from the United
States.
"(3) Shipments from puerto rico to the united states.--The
rates of tax taken into account under section 7652(a) with
respect to tobacco products and cigarette papers and tubes
coming into the United States from the Commonwealth of Puerto
Rico shall be the rates of tax in effect on the day before the
date of the enactment of the National Fund for Health Research
Act.
"(4) Disposition of revenues.--The provisions of section
7652(a)(3) shall not apply to any tax imposed by reason of this
subsection."
(h) Effective Date.--The amendments made by this section shall
apply to articles removed (as defined in section 5702(k) of the
Internal Revenue Code of 1986, as amended by this Act) after December
31, 1995.
(i) Floor Stocks Taxes.--
(1) Imposition of tax.--On tobacco products and cigarette
papers and tubes manufactured in or imported into the United
States or the Commonwealth of Puerto Rico which are removed
before January 1, 1996, and held on such date for sale by any
person, there is hereby imposed a tax in an amount equal to the
excess of--
(A) the tax which would be imposed under section
5701 of the Internal Revenue Code of 1986 on the
article if the article had been removed on such date,
over
(B) the prior tax (if any) imposed under section
5701 or 7652 of such Code on such article.
(2) Authority to exempt cigarettes held in vending
machines.--To the extent provided in regulations prescribed by
the Secretary, no tax shall be imposed by paragraph (1) on
cigarettes held for retail sale on January 1, 1996, by any
person in any vending machine. If the Secretary provides such a
benefit with respect to any person, the Secretary may reduce
the $500 amount in paragraph (3) with respect to such person.
(3) Credit against tax.--Each person shall be allowed as a
credit against the taxes imposed by paragraph (1) an amount
equal to $500. Such credit shall not exceed the amount of taxes imposed
by paragraph (1) on January 1, 1996, for which such person is liable.
(4) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding cigarettes
on January 1, 1996, to which any tax imposed by
paragraph (1) applies shall be liable for such tax.
(B) Method of payment.--The tax imposed by
paragraph (1) shall be paid in such manner as the
Secretary shall prescribe by regulations.
(C) Time for payment.--The tax imposed by paragraph
(1) shall be paid on or before April 1, 1996.
(5) Articles in foreign trade zones.--Notwithstanding the
Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any
other provision of law, any article which is located in a
foreign trade zone on January 1, 1996, shall be subject to the
tax imposed by paragraph (1) if--
(A) internal revenue taxes have been determined, or
customs duties liquidated, with respect to such article
before such date pursuant to a request made under the
1st proviso of section 3(a) of such Act, or
(B) such article is held on such date under the
supervision of a customs officer pursuant to the 2d
proviso of such section 3(a).
(6) Definitions.--For purposes of this subsection--
(A) In general.--Terms used in this subsection
which are also used in section 5702 of the Internal
Revenue Code of 1986 shall have the respective meanings
such terms have in such section, as amended by this
Act.
(B) Secretary.--The term "Secretary" means the
Secretary of the Treasury or his delegate.
(7) Controlled groups.--Rules similar to the rules of
section 5061(e)(3) of such Code shall apply for purposes of
this subsection.
(8) Other laws applicable.--All provisions of law,
including penalties, applicable with respect to the taxes
imposed by section 5701 of such Code shall, insofar as
applicable and not inconsistent with the provisions of this
subsection, apply to the floor stocks taxes imposed by
paragraph (1), to the same extent as if such taxes were imposed
by such section 5701. The Secretary may treat any person who
bore the ultimate burden of the tax imposed by paragraph (1) as
the person to whom a credit or refund under such provisions may
be allowed or made.
SEC. 203. MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.
(a) Exemption for Exported Tobacco Products and Cigarette Papers
and Tubes To Apply Only to Articles Marked for Export.--
(1) Subsection (b) of section 5704 is amended by adding at
the end the following new sentence: "Tobacco products and
cigarette papers and tubes may not be transferred or removed
under this subsection unless such products or papers and tubes
bear such marks, labels, or notices as the Secretary shall by
regulations prescribe."
(2) Section 5761 is amended by redesignating subsections
(c) and (d) as subsections (d) and (e), respectively, and by
inserting after subsection (b) the following new subsection:
"(c) Sale of Tobacco Products and Cigarette Papers and Tubes for
Export.--Except as provided in subsections (b) and (d) of section
5704--
"(1) every person who sells, relands, or receives within
the jurisdiction of the United States any tobacco products or
cigarette papers or tubes which have been labeled or shipped
for exportation under this chapter,
"(2) every person who sells or receives such relanded
tobacco products or cigarette papers or tubes, and
"(3) every person who aids or abets in such selling,
relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this
title, be liable for a penalty equal to the greater of $1,000 or 5
times the amount of the tax imposed by this chapter. All tobacco
products and cigarette papers and tubes relanded within the
jurisdiction of the United States, and all vessels, vehicles, and
aircraft used in such relanding or in removing such products, papers,
and tubes from the place where relanded, shall be forfeited to the
United States."
(3) Subsection (a) of section 5761 is amended by striking
"subsection (b)" and inserting "subsection (b) or (c)".
(4) Subsection (d) of section 5761, as redesignated by
paragraph (2), is amended by striking "The penalty imposed by
subsection (b)" and inserting "The penalties imposed by
subsections (b) and (c)".
(5)(A) Subpart F of chapter 52 is amended by adding at the
end the following new section:
"SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED TOBACCO
PRODUCTS.
"(a) In General.--Tobacco products and cigarette papers and tubes
previously exported from the United States may be imported or brought
into the United States only as provided in section 5704(d). For
purposes of this section, section 5704(d), section 5761, and such other
provisions as the Secretary may specify by regulations, references to
exportation shall be treated as including a reference to shipment to
the Commonwealth of Puerto Rico.
"(b) Cross Reference.--
"For penalty for the sale of tobacco
products and cigarette papers and tubes in the United States which are
labeled for export, see section 5761(c)."
(B) The table of sections for subpart F of chapter 52 is
amended by adding at the end the following new item:
"Sec. 5754. Restriction on importation
of previously exported tobacco
products."
(b) Importers Required To Be Qualified.--
(1) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and
5763 (b) and (c) are each amended by inserting "or importer"
after "manufacturer".
(2) The heading of subsection (b) of section 5763 is
amended by inserting "Qualified Importers," after
"Manufacturers,".
(3) The heading for subchapter B of chapter 52 is amended
by inserting "and Importers" after "Manufacturers".
(4) The item relating to subchapter B in the table of
subchapters for chapter 52 is amended by inserting "and
importers" after "manufacturers".
(c) Repeal of Tax-Exempt Sales to Employees of Cigarette
Manufacturers.--
(1) Subsection (a) of section 5704 is amended--
(A) by striking "Employee Use or" in the heading,
and
(B) by striking "for use or consumption by
employees or" in the text.
(2) Subsection (e) of section 5723 is amended by striking
"for use or consumption by their employees, or for
experimental purposes" and inserting "for experimental
purposes".
(d) Repeal of Tax-Exempt Sales to United States.--Subsection (b) of
section 5704 is amended by striking "and manufacturers may similarly
remove such articles for use of the United States;".
(e) Books of 25 or Fewer Cigarette Papers Subject to Tax.--
Subsection (c) of section 5701 is amended by striking "On each book or
set of cigarette papers containing more than 25 papers," and inserting
"On cigarette papers,".
(f) Storage of Tobacco Products.--Subsection (k) of section 5702 is
amended by inserting "under section 5704" after "internal revenue
bond".
(g) Authority To Prescribe Minimum Manufacturing Activity
Requirements.--Section 5712 is amended by striking "or" at the end of
paragraph (1), by redesignating paragraph (2) as paragraph (3), and by
inserting after paragraph (1) the following new paragraph:
"(2) the activity proposed to be carried out at such
premises does not meet such minimum capacity or activity
requirements as the Secretary may prescribe, or".
(h) Special Rules Relating to Puerto Rico and the Virgin Islands.--
Section 7652 is amended by adding at the end the following new
subsection:
"(h) Limitation on Cover Over of Tax on Tobacco Products.--For
purposes of this section, with respect to taxes imposed under section
5701 or this section on any tobacco product or cigarette paper or tube,
the amount covered into the treasuries of Puerto Rico and the Virgin
Islands shall not exceed the rate of tax under section 5701 in effect
on the article on the day before the date of the enactment of the
Health Partnership Act of 1995."
(i) Effective Date.--The amendments made by this section shall
apply to articles removed (as defined in section 5702(k) of the
Internal Revenue Code of 1986, as amended by this Act) after December
31, 1995.
SEC. 204. IMPOSITION OF EXCISE TAX ON MANUFACTURE OR IMPORTATION OF
ROLL-YOUR-OWN TOBACCO.
(a) In General.--Section 5701 (relating to rate of tax), as amended
by section 701, is amended by redesignating subsections (g) and (h) as
subsections (h) and (i) and by inserting after subsection (f) the
following new subsection:
"(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco,
manufactured in or imported into the United States, there shall be
imposed a tax of $4.85 per pound (and a proportionate tax at the like
rate on all fractional parts of a pound)."
(b) Roll-Your-Own Tobacco.--Section 5702 (relating to definitions)
is amended by adding at the end the following new subsection:
"(p) Roll-Your-Own Tobacco.--The term 'roll-your-own tobacco'
means any tobacco which, because of its appearance, type, packaging, or
labeling, is suitable for use and likely to be offered to, or purchased
by, consumers as tobacco for making cigarettes."
(c) Technical Amendments.--
(1) Subsection (c) of section 5702 is amended by striking
"and pipe tobacco" and inserting "pipe tobacco, and roll-
your-own tobacco".
(2) Subsection (d) of section 5702 is amended--
(A) in the material preceding paragraph (1), by
striking "or pipe tobacco" and inserting "pipe
tobacco, or roll-your-own tobacco", and
(B) by striking paragraph (1) and inserting the
following new paragraph:
"(1) a person who produces cigars, cigarettes, smokeless
tobacco, pipe tobacco, or roll-your-own tobacco solely for the
person's own personal consumption or use, and".
(3) The chapter heading for chapter 52 is amended to read
as follows:
"CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES".
(4) The table of chapters for subtitle E is amended by
striking the item relating to chapter 52 and inserting the
following new item:
"Chapter 52. Tobacco products and
cigarette papers and tubes."
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to roll-your-own tobacco removed (as defined in section
5702(k) of the Internal Revenue Code of 1986, as amended by
this Act) after December 31, 1995.
(2) Transitional rule.--Any person who--
(A) on the date of the enactment of this Act is
engaged in business as a manufacturer of roll-your-own
tobacco or as an importer of tobacco products or
cigarette papers and tubes, and
(B) before January 1, 1996, submits an application
under subchapter B of chapter 52 of such Code to engage
in such business,
may, notwithstanding such subchapter B, continue to engage in
such business pending final action on such application. Pending
such final action, all provisions of such chapter 52 shall
apply to such applicant in the same manner and to the same
extent as if such applicant were a holder of a permit under
such chapter 52 to engage in such business.
SEC. 205. DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE
NATIONAL FUND FOR HEALTH RESEARCH.
(a) In General.--Subchapter A of chapter 61 (relating to returns
and records) is amended by adding at the end the following new part:
"PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE
NATIONAL FUND FOR HEALTH RESEARCH
"Sec. 6097. Amounts for the National Fund for Health Research.
"SEC. 6097. AMOUNTS FOR THE NATIONAL FUND FOR HEALTH RESEARCH.
"(a) In General.--Every individual (other than a nonresident
alien) may designate that--
"(1) a portion (not less than $1) of any overpayment of
the tax imposed by chapter 1 for the taxable year, and
"(2) a cash contribution (not less than $1),
be paid over to the National Fund for Health Research. In the case of a
joint return of a husband and wife, each spouse may designate one-half
of any such overpayment of tax (not less than $2).
"(b) Manner and Time of Designation.--Any designation under
subsection (a) may be made with respect to any taxable year only at the
time of filing the original return of the tax imposed by chapter 1 for
such taxable year. Such designation shall be made either on the 1st
page of the return or on the page bearing the taxpayer's signature.
"(c) Overpayments Treated as Refunded.--For purposes of this
section, any overpayment of tax designated under subsection (a) shall
be treated as being refunded to the taxpayer as of the last day
prescribed for filing the return of tax imposed by chapter 1
(determined with regard to extensions) or, if later, the date the
return is filed.
"(d) Designated Amounts Not Deductible.--No amount designated
pursuant to subsection (a) shall be allowed as a deduction under
section 170 or any other section for any taxable year.
"(e) Termination.--This section shall not apply to taxable years
beginning in a calendar year after a determination by the Secretary
that the sum of all designations under subsection (a) for taxable years
beginning in the second and third calendar years preceding the calendar
year is less than $5,000,000."
(b) Clerical Amendment.--The table of parts for subchapter A of
chapter 61 is amended by adding at the end the following new item:
"Part IX. Designation of overpayments
and contributions for the
National Fund for Health
Research."
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1995.
<all>
S 1251 IS----2
National Fund for Health Research Act--Questions and AnswersWhat does the proposal call for?A National Fund For Health Research would be established to provide additional resources for health research over and above those provided to the National Institutes of Health (NIH) in the annual appropriations process. The Fund would greatly enhance the quality of health care by investing more resources in finding preventive measures, cures and cost effective treatments for the major illnesses and conditions that strike Americans. Financing for the Fund comes from an increase in federal tobacco taxes--25 cents per pack of cigarettes and an equivalent tax on other tobacco products. This tax would raise an estimated $4.2 billion annually. In addition to providing revenue for the Fund, raising tobacco taxes will protect children and save lives. Every day more than 3,000 children become smokers and more than 1,000 of them will eventually die as a result of smoking. Raising tobacco taxes is a highly effective way to reduce tobacco use by children. A 25-cent tax will discourage an estimated 1.3 million children and adults from smoking and will save the lives of more than 300,000 Americans alive today. Each year amounts within the Fund would automatically be allotted to each of the NIH Institutes and Centers. Five percent of the monies would be directed to extramural construction and renovation of research facilities, the National Library of Medicine, and the Office of the Director. So that an appropriate range of basic and applied research is supported, each Institute and Center would receive the same percentage of the remaining Fund monies as they received of the total NIH appropriation for that fiscal year. In order to insure that the additional funds generated do not simply replace regularly appropriated NIH funds, monies from the Fund would be released only if the total appropriated for the NIH in that year equal or exceed the prior year appropriations. Additional monies for the Fund would be generated by a voluntary federal income tax check-off. Every year, when filing their Federal income tax returns, Americans would have the opportunity to designate tax overpayments and contributions for health research. Monies from the check-off would be deposited in the Fund.
Why is this proposal necessary?
Will the Fund simply replace existing monies appropriated to NIH?
How would money from the Fund be allocated among research priorities?
Isn't research a major reason why the cost of health care is so high in this country? Won't an increase in research funding lead to an increase in health care costs?
Do the American people support increases in tobacco taxes to pay for increases in health research?
Does the proposal include prevention research?
Cancer Understanding and Research Efforts(Statement of Zenia Kim)The CURE program is designed to focus on two areas of cancer treatment: prevention and research. Introduction I remember when I was attending Junior High and High School, I never really learned about cancer or the risk factors involved. When I was a senior in high school, a very close relative of mine became very ill and was diagnosed with cancer. She started chemotherapy treatment but things got worse. I promised myself at that moment that I was going to perform my own research on cancer. What caused this disease and why wasn't my loved one getting better? I began volunteering at our local hospital in the Pathology lab, where I observed doctors examining various forms of cancers. I learned how to spot cancers of all sorts. As I continued my education at Brigham Young University, I continued with my cancer research. I worked with a Chemistry professor by the name of Dr. James Thorne, and he assisted me in understanding the chemical aspect of cancer research. We worked on a treatment called Photodynamic Therapy. This form of cancer treatment became very appealing because it did not have as many negative side effects that chemotherapy had. I became so involved with the research that I wrote my own paper on Photodynamic Therapy. I am still continuing my research with Dr. Thorne for the third year, and hope that this is our real breakthrough in curing cancer. While I was performing research on Photodynamic Therapy, I really wanted to continue my volunteer work in a hospital setting. I volunteered at Utah Valley Regional Medical Center in the Oncology Department. Here, I got to experience the other side, the patient's side. I remember talking with many cancer patients and listening to their distress, their hopeless feelings. I became so determined . . . that I was going to find a cure for cancer. As my research continued at BYU, I discovered that research funds were very limited. The national funding organizations can hardly support any of the proposals coming in. As a future medical research specialist, I became disheartened. Over the summer, I worked at Oregon Health Sciences University Medical School performing medical cancer research, and there too discovered the limited funding available for research. This is why I became so inspired to develop my own program called the CURE. Cancer understanding and research efforts
The CURE focuses on two areas of cancer treatment. The first is prevention. I believe that if many students learned about the risks involved with cancer as a junior high or high school student, there would be a significant decrease in the incidents of cancer. I would like to see a unit integrated within the health curriculum that emphasizes the risks of cancer. Furthermore, I would like to invite guest speakers, perhaps one who has fought and recovered from cancer or the loved ones of a cancer victim, to tell about their side of their story. I think that by personalizing a real situation, students feel more sensitive and more in tune with the problem. That is exactly what we need. We need students to feel realistic, sad, or even scared so that they won't associate with any of the risks involved with cancer. The decisions that students in their junior high and high school years make can indefinitely affect the course of their lives. Furthermore, this is the time that they opt to engage in such acts as smoking, using tobacco, sun tanning, etc. So, by integrating a cancer unit within secondary education, the hope is that the future generations will choose to stay risk free and beat the battle against cancer. As Miss Tri-Valley, I have actually had the opportunity to speak to students in junior high and high schools throughout the Beaverton/Portland area. I always emphasize these two important points that I have established in the CURE Program: Prevention and Research--these are our two means of defeating cancer. American Lung Association,
September 14, 1995. Dear Senator Hatfield: The American Lung Association strongly endorses the legislation you are introducing today, Research Trust Fund Act. Enactment of the Research Trust Fund Act will be a win-win proposition for the health and well-being of the American people. The Research Trust Fund Act will save lives through prevention. Each year 419,000 Americans die from causes directly related to tobacco use and thousands more die from diseases caused by exposure to environmental tobacco smoke. These preventable deaths represents a huge human loss to our society. The proposed $0.25 increase in the federal excise tax on tobacco products will help reduce the number of people who smoke. It is estimated that for every $0.25 increased in the federal tobacco tax, about one million people living today will be discouraged from smoking and 200,000 to 300,000 premature deaths will be prevented. The Research Trust Fund Act will save health care dollars. The cost of treating people who suffer from tobacco related illnesses places a staggering financial burden on the American health care system. Although smokers tend to die younger, over the course of their life, current and former smokers generate an estimated $501 billion in excess health care costs. Treating tobacco related illnesses cost the $21 billion per year, with an additional estimated cost of $47 billion in lost productivity. Reducing the number of people who use tobacco products by increasing the federal tobacco tax will help reduce the economic burden tobacco consumption places on the U.S. health care system. The Research Trust Fund Act will save lives through improved treatments and cures. The estimated $4 billion to $5 billion generated by the Research Trust Fund will provided needed additional funding for biomedical research sponsored by the National Institutes of Health. Through increased support of basic and clinical biomedical research at the National Institutes of Health, researchers will continue to broaden our understanding of life sciences and develop new approaches to preventing, treating, and curing disease. The American Lung Association and its volunteers stand ready to work with you and Congress to enact this important legislation. I would also like to take this opportunity to commend you for your leadership and foresight in introducing the Research Trust Fund Act. The Research Trust Fund will go a long way to improving the health of all Americans.
Sincerely, Federation of American Societies for Experimental Biology,
Bethesda, MD, September 11, 1995. Dear Mr. Chairman: The Federation of American Societies for Experimental Biology (FASEB) supports with enthusiasm your efforts to provide supplemental resources for NIH and biomedical research. The Federation concurs that the federal commitment to health research is grossly underfunded. Less than 3 percent of the nearly one trillion dollars our Nation spends on health care is devoted to health research, while the defense industry spends 15 percent of its budget on research. Ample evidence exists to demonstrate that health research has improved the quality of health care in the United States, and is one of the best methods of health care cost containment. Therefore, FASEB supports the proposal to create an additional source of biomedical funding, such as through the National Fund for Health Research Act. We are confident that these additional funds would not be used to offset regular appropriations.
Sincerely,
National Committee To Preserve Social Security and Medicare, Dear Senator Hatfield: On behalf of the nearly six million members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing in strong support of your legislation to increase medical research funding to the National Institutes of Health (NIH). Increased research into the causes and potential cures of many diseases related to aging could have a profound impact on the lives of older Americans and their families. Alzheimer's disease, a degenerative brain disorder, afflicts about 4 million people in the United States, and costs the nation an estimated $80 billion to $100 billion a year. Osteoporosis, which causes fragile bones and painfully crippling fractures, costs an estimated $10 billion a year. When families can no longer meet the care needs of relatives with these illnesses, disabled people often end up in nursing homes, where bills totaled $69.6 billion in 1993. The Hatfield/Harkin Research Fund legislation to be introduced today is a significant step forward to find cures or better treatments, save lives and dollars. We commend you on your long-time commitment to medical research.
Sincerely, Association of American Medical Colleges,
Washington, DC, September 15, 1995.
Hon. Tom Harkin, Dear Senators Hatfield and Harkin: The Association of American Medical Colleges (AAMC) strongly endorses your proposal to create a National Fund for Health Research. The debate on this year's budget makes it clear that we must identify additional, sustainable sources of funding to supplement the regular appropriation for the National Institutes of Health [NIH] if we are to continue to rely upon scientific discovery to improve the health and quality of life for all Americans. In addition, sustained support for the NIH is needed if the United States is to maintain its position as the world's leader in biomedical and behavioral research. The fund you propose is an innovative and necessary complement to NIH funding. The Federal Government plays a necessary role in the support of this nation's biomedical and behavioral research efforts. The investment that the Federal Government has made in the NIH has produced a comprehensive network of scientists, physicians, and technicians at more than 1,700 institutions across the United States dedicated to the continued pursuit of fundamental knowledge and the application of this information to the prevention, diagnosis, and treatment of disease. NIH-supported scientists have made enormous contributions to the nation's health. In addition, NIH-sponsored research has made significant economic contributions, both locally and nationally. The role that the U.S. biotechnology industry plays globally is just one example of the economic benefits to be derived from NIH research. Moreover, your proposal addresses a major cause of disease and death in this country: tobacco. As health professionals, we must do everything in our power to reduce the use of tobacco in this country, particularly among children and teenagers. Your bill is an important part of that strategy. We will work with you to urge all health-related organizations and institutions to support this proposal and to encourage other Senators to cosponsor it. Finally, on behalf of the Association's members, I wish to thank you for your leadership and unfailing commitment to a strong, vital medical research effort in this country. We appreciate the continued support and trust that you have placed in the NIH, and by implication in our institutions and faculty. We look forward to continuing to work with you to sustain this national treasure that is so critically important to the nation's health.
Very sincerely yours, American Cancer Society, National Public Issues Office,
Washington, DC, September 15, 1995. Dear Senator Hatfield: On behalf of more than two million American Cancer Society volunteers, I am writing to commend you and Senator Harkin for your leadership in introducing the National Fund for Health Research Act. Your proposal combines two critical initiatives: increasing biomedical research funding and protecting children from tobacco addiction by raising tobacco taxes. The American Cancer Society strongly supports this bill. Increasing funding for biomedical research is a top priority for all health organizations that understand the role such research plays in treating diseases, reducing suffering, improving the efficiency of our health care system and improving the health status of the entire nation. The American Cancer Society is particularly concerned about the rise in cancer rates. Cancer will become the leading cause of death in the United States by the year 2000. Biomedical research performed by the National Institutes of Health is of vital importance in the fight against cancer. The United States currently devotes less than 3 percent of health care spending to research. This amount is unacceptably low as a matter of health and economics. There is no more appropriate way to finance this bill than through a tobacco tax increase. By itself, this tax will discourage about 1.3 million children and adults from smoking and will ultimately save the lives of more than 300,000 Americans alive today. Raising tobacco taxes is one of the most important measures we can take to reduce the current epidemic of tobacco use by teenagers. More than two-thirds of Republican and Democratic voters, including voters from tobacco-growing states, supports raising tobacco taxes for health-related purposes such as this. You have our full support. We look forward to working with you and your staff.
Sincerely, Medical Research and Health Care Concerns: A Survey of the American Public (Conducted by Louis Harris & Associates, June 1995)
A nationwide Harris telephone poll was conducted of 1004 adults in the United States from June 8-11, 1995. Figures for age, sex, race, education, and region were weighted where necessary to bring them into line with their actual proportions in the population. The margin of error for the survey is approximately 3.1 percent. HIGHLIGHTS
1. Americans oppose cuts in medical research dollars.
2. Americans would pay higher taxes to support medical research.
3. Americans urge Congress to provide tax incentives for private industry to conduct medical research.
4. Americans are willing to designate tax refund dollars for medical research.
5. Americans overwhelmingly value maintaining the United States' position as a leader in medical research.
6. Americans heartily endorse having the Federal Government support basic science research.
7. Medical research takes second place only to national, defense for tax dollar value.
8. Americans want more information about medical research in the print and broadcast media. Organizations Endorsing the Hatfield-Harkin Research Fund Proposal as of September 14, 1995
Academy of Radiology Research. Mr. HARKIN: Mr. President, I rise today with Senator Hatfield to introduce the Fund for Health Research Act. This legislation is similar to legislation that the two of us introduced during the last Congress which gained broad bipartisan support in both the House and Senate. Our proposal would establish a national fund for health research to provide additional resources for health research over and above those provided to the National Institutes of Health [NIH] in the annual appropriations process. The fund would greatly enhance the quality of health care by investing more in finding preventive measures, cures and more cost effective treatments for the major illnesses and conditions that strike Americans. The fund would be financed by a 25-cent tax on each pack of cigarettes and an equivalent tax on other tobacco products such as snuff and chewing tobacco. This tax would raise an estimated $4.2 billion annually. Mr. President, in addition to providing revenue for health research, raising tobacco taxes will protect children and save lives. Every day more than 3,000 children become smokers and more than 1,000 of them will eventually die as a result of smoking. Raising tobacco taxes is a highly effective way to reduce tobacco use by children. A 25-cent tax will discourage an estimated 1.3 million children and adults from smoking and will save the lives of more than 300,000 Americans alive today. Additional moneys for the fund would be generated by a voluntary Federal income tax check-off. Every year, when filing their Federal income tax returns, Americans would be given the opportunity to designate tax overpayments and contributions for health research. Moneys from the check-off would be deposited in the fund. Each year under our proposal amounts within the national fund for health research would automatically be allocated to each of the NIH institutes and centers. Each institute and center would receive the same percentage as they received of the total NIH appropriation for that fiscal year. Last year Senator Hatfield and I argued that any health care reform plan should include additional funding for health research. Health care reform has been taken off the front burner but the need to increase our Nation's commitment to health research has not diminished. While health care spending devours nearly $1 trillion annually our medical research budget is dying of starvation. The United States devotes less than 2 percent of its total health care budget to health research. The Defense Department spends 15 percent of its budget on research. Does this make sense? The cold war is over but the war against disease and disability continues. Increased investment in health research is key to reducing health costs in the long run. If we can find the cure for a disease like Alzheimer's the savings would be enormous. Today, federally supported funding for research on Alzheimer's disease totals $300 million yet it is estimated that nearly $100 billion is expended annually on caring for people with Alzheimer's. Gene therapy and treatments for cystic fibrosis and Parkinson's could eliminate years of chronic care costs, while saving lives and improving patients' quality of life. Mr. President, Senator Hatfield and I do everything we can to increase funding for NIH through the appropriations process. But, given the current budget situation and freeze in discretionary spending what we can do is limited. Without action, our investment in medical research through the NIH is likely to continue to decline in real terms. The NIH is not able to fund even 25 percent of competing research projects or grant applications deemed worthy of funding. This is compared to rates of 30 percent or more just a decade ago. Science and cutting edge medical research is being put on hold. We may be giving up possible cures for diabetes, Alzheimer's, Parkinson's, and countless other diseases. Our lack of investment in research may also be discouraging our young people from pursuing careers in medical research. The number of people under the age of 36 even apply for NIH grants dropped by 54 percent between 1985 and 1993. This is due to a host of factors but I'm afraid that the lower success rates among all applicants is making biomedical research less and less attractive to young people. If the perception is that funding for research is impossible to obtain, young people that may have chosen medical research 10 years ago will choose other career paths. Mr. President, I am pleased that over 130 groups representing patients, hospitals, medical schools, researchers, and millions of Americans have already endorsed our proposal. And, polling data consistently show that more than two-thirds of Republican and Democratic voters, including votes in tobacco-growing States, favor raising tobacco taxes if funds will be devoted to health related programs. Mr. President, health research is an investment in our future--it is an investment in our children and grandchildren. It holds the promise of cure or treatment for millions of Americans.
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