Attorneys' Anti-enrichment Act of 1998

Attorneys' Anti-enrichment Act of 1998 - Amends the Internal Revenue Code to impose a tax equal to 95 percent of the excess of: (1) an attorney's tobacco settlement-related fees; over (2) the deductions allocated to such fees. Appropriates to the States revenues generated by such tax.

[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3907 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3907

To amend the Internal Revenue Code of 1986 to provide for a 95 percent 
    income tax rate on attorneys' fees paid in connection with the 
settlement (as part of the tobacco settlement agreement dated June 20, 
               1997) of any action maintained by a State.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 20, 1998

 Mr. Bryant  introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for a 95 percent 
    income tax rate on attorneys' fees paid in connection with the 
settlement (as part of the tobacco settlement agreement dated June 20, 
               1997) of any action maintained by a State.

    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 ``Attorneys' Anti-enrichment Act of 
1998''.

SEC. 2. 95 PERCENT RATE OF TAX ON TOBACCO SETTLEMENT ATTORNEYS' FEES.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 (relating to determination of tax liability) is amended by 
adding at the end the following new part:

   ``PART VIII--CERTAIN ATTORNEYS' FEES RELATED TO TOBACCO SETTLEMENT

                              ``Sec. 59B. Certain attorneys' fees 
                                        related to tobacco settlement.

SEC. 59B. CERTAIN ATTORNEYS' FEES RELATED TO TOBACCO SETTLEMENT.

    ``(a) Imposition of Tax.--In addition to any other tax imposed by 
this subtitle, there is hereby imposed a tax equal to 95 percent of the 
excess of--
            ``(1) the amount of tobacco settlement-related attorneys' 
        fees which would (but for subsection (c)) be includible in the 
        gross income of the taxpayer for the taxable year, over
            ``(2) the deductions properly apportioned or allocated to 
        such fees.
    ``(b) Tobacco Settlement-Related Attorneys' Fees.--For purposes of 
this section, the term `tobacco settlement-related attorneys' fees' 
means attorneys' fees paid in connection with the settlement of an 
action maintained by a State against 1 or more tobacco companies to 
recover tobacco-related medicaid expenditures or for other causes of 
action involved in the settlement agreement dated June 20, 1997, 
whether such fees are paid under any court order, settlement agreement, 
contingency fee arrangement, arbitration procedure, alternative dispute 
resolution procedure (including mediation), or other arrangement.
    ``(c) No Additional Income Tax.--For purposes of this chapter, 
gross income shall not include any tobacco settlement-related 
attorneys' fees, and no deduction shall be allowed which is properly 
apportioned or allocated to such fees.''
    (b) Clerical Amendment.--The table of parts of subchapter A of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

                              ``Part VIII. Certain attorneys' fees 
                                        related to tobacco 
                                        settlement.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after June 20, 1997.

SEC. 3. REVENUES APPROPRIATED BACK TO STATES PAYING ATTORNEYS' FEES.

    There is hereby appropriated (from amounts in the Treasury not 
otherwise appropriated) to each State which paid any attorneys' fees 
which are subject to tax under section 59B of the Internal Revenue Code 
of 1986 an amount equal to the revenues received in the Treasury under 
such section 59B which are attributable to attorneys' fees paid by such 
State.
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