article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Medicare/Medicaid Solvency Act''. SEC. 2. FINDINGS AND PURPOSE. (a) Findings.--The Congress finds that-- (1) illnesses and diseases that result from the use of tobacco products cost Federal Government health care programs billions of dollars, including $10,200,000,000 in the medicare program, $5,100,000,000 in the medicaid program, and $4,700,000,000 in other Federal health programs in fiscal year 1993; (2) in April 1994, the trustees of the medicare trust funds concluded that such funds may be insolvent in 2001; (3) such insolvency would severely affect the ability of the medicare trust funds to continue to protect the health of America's senior citizens; and (4) the medicare population has a significantly higher risk of contracting illnesses and diseases that result from the use of tobacco products than younger age groups. (b) Purpose.--The purpose of this Act is to insure the long-term viability of the medicare, medicaid, and other federal health programs by establishing a dedicated trust fund to reimburse the government for the health care costs of individuals with diseases attributable to the use of tobacco products. SEC. 3. TOBACCO PRODUCT MANUFACTURERS CONTRIBUTION TO HEALTH CARE COST REIMBURSEMENT TRUST FUND. (a) In General.--The Internal Revenue Code of 1986 is amended by adding at the end the following new subtitle: ``Subtitle K--Tobacco Product Manufacturers Contribution to Health Care Cost Reimbursement Trust Fund. ``Chapter 100. Tobacco Product Manufacturers Contribution to Health Care Cost Reimbursement Trust Fund. ``CHAPTER 100--TOBACCO PRODUCT MANUFACTURERS CONTRIBUTION TO HEALTH CARE COST REIMBURSEMENT TRUST FUND. ``Sec. 9801. Establishment of Tobacco Product Health Care Cost Reimbursement Trust Fund. ``Sec. 9802. Contributions to Trust Fund. ``SEC. 9801. ESTABLISHMENT OF TOBACCO PRODUCT HEALTH CARE COST REIMBURSEMENT TRUST FUND. ``(a) Creation of Trust Fund.--There is established in the Treasury of the United States a trust fund to be known as the `Tobacco Product Health Care Cost Reimbursement Trust Fund' (hereafter referred to in this chapter 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.--The Secretary shall transfer to the Trust Fund an amount equivalent to contributions received in the Treasury under section 9802. ``(c) Distribution of Amounts in Trust Fund.-- ``(1) In general.--The amounts in the Trust Fund shall be available in each fiscal year (beginning with fiscal year 1997), as provided by appropriation Acts, to the Secretary-- ``(A) to distribute to each particular Secretary responsible for the expenditure of Federal funds for that fiscal year under title XVIII or XIX of the Social Security Act or any other Federal program for the payment of health care costs of individuals with diseases attributable to the use of tobacco products, and ``(B) to pay all expenses of administration incurred by the Department of the Treasury in administering this chapter and the Trust Fund. ``(2) Determination of distribution.--Each particular Secretary described in paragraph (1)(A) shall submit to the Secretary of the Treasury such documentation as the Secretary requires to determine the appropriate distribution under paragraph (1)(A). ``(3) Use of distributions.--In any case in which an expenditure of Federal funds described in paragraph (1)(A) was made from a trust fund, the distribution under paragraph (1)(A) reimbursing such expenditure shall be made to such trust fund. ``(4) State medicaid expenditures.--For purposes of this section, the Secretary of Health and Human Services shall include in the Secretary's submission under paragraph (2) the expenditure of State funds under State plans under title XIX of the Social Security Act for the payment of health care costs of individuals with diseases attributable to the use of tobacco products, and to the extent the distribution to the Secretary under paragraph (1)(A) is attributable to such expenditure, shall reimburse the various States for such expenditures. ``(d) Administrative Rules.--For purposes of this section, the rules of subchapter B of chapter 98 shall apply. ``(e) Tobacco Products.--For purposes of this chapter, the term `tobacco products' has the meaning given such term by section 5702(c). ``SEC. 9802. CONTRIBUTIONS TO TRUST FUND. ``(a) Annual Premiums.--Each manufacturer of tobacco products shall pay to the Trust Fund, an annual contribution equal to the product of the amount determined under subsection (b) for each fiscal year (beginning with fiscal year 1997) and the manufacturer's market share percentage determined under subsection (c) for the calendar year preceding such fiscal year. ``(b) Determination of Funding Levels.-- ``(1) In general.--Not later than the date the President is required to submit the budget of the United States for a fiscal year to Congress, the Director of the Centers for Disease Control and Prevention, after consultation with the Directors of the National Institutes of Health, the National Cancer Institute, and the National Heart, Lung, and Blood Institute, shall make an estimate of-- ``(A) the amount of Federal expenditures for that fiscal year under titles XVIII and XIX of the Social Security Act and other Federal programs, and ``(B) the amount of State expenditures for that fiscal year under State plans under title XIX of the Social Security Act, for payment of health care costs of individuals with diseases attributable to the use of tobacco products. ``(2) Disclosure of estimate methodology.--The Director of the Centers for Disease Control and Prevention shall publish in the Federal Register all relevant documentation considered and the methodology used in making the estimate described in paragraph (1). ``(3) Report in budget.--The President shall include the estimate described in paragraph (1) in the budget for the fiscal year. ``(c) Market Share Percentage.-- ``(1) In general.--Not later than July 1, the Secretary shall determine and publish the market share percentage for the preceding calendar year for each manufacturer of tobacco products by determining such manufacturer's percentage share of the total amount of tobacco products sold in the United States during such calendar year. ``(2) Information.--Not later than April 1, each manufacturer of tobacco products shall furnish to the Secretary such information as the Secretary may require to determine any market share percentage under this subsection for the preceding calendar year. ``(d) Payment of Contributions.--The annual contribution under subsection (a) for any fiscal year shall be payable in 12 monthly installments, due on the twenty-fifth day of each calendar month in the fiscal year. ``(e) Enforcement.--For penalties and other general and administrative provisions applicable to this section, see subtitle F. ``(f) Manufacturer of Tobacco Products.--For purposes of this section, the term `manufacturer of tobacco products' has the meaning given such term by section 5702(d).'' (b) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
summary: Medicare/Medicaid Solvency Act - Amends the Internal Revenue Code to establish in the Treasury the Tobacco Product Health Care Cost Reimbursement Trust Fund. Directs the Secretary of the Treasury to: (1) distribute amounts in the Fund to each Secretary responsible for the expenditure of Federal funds for that fiscal year (beginning with FY 1997) under titles XXVIII (Medicare) and XIX (Medicaid) of the Social Security Act or any other Federal program for the payment of health care costs for individuals with diseases attributable to the use of tobacco products; and (2) pay administrative expenses of the Fund. Requires each manufacturer of tobacco products to pay to the Fund an annual contribution based on the total amount of tobacco-related Federal health care costs in proportion to that manufacturer's share of the tobacco market.