[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1178 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1178

 To amend the Internal Revenue Code of 1986 to allow a credit against 
 income tax for medical malpractice liability insurance premiums, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 11, 2003

 Ms. Ginny Brown-Waite of Florida introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to the 
Committee on the Judiciary, 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 allow a credit against 
 income tax for medical malpractice liability insurance premiums, 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 ``Physician Relief Act of 2003''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) Medical liability insurance premiums are soaring to the 
        highest rates since the mid-1980s.
            (2) The average increase for 2001 was approximately 15 
        percent, and it is predicted that rates could rise as much as 
        50 percent this year for some specialties in some regions.
            (3) Some of the largest insurers are raising rates more 
        than 30 percent in many States.
            (4) In 1999, jury awards in claims cases jumped 7 percent 
        compared to the previous year. In addition, according to Jury 
        Verdict Research, it cost 30 percent more to settle a suit than 
        it did just a year before in 1998.
            (5) About 45 percent of the jury awards in 1998-99 were for 
        that amount or more, up from 39 percent during the preceding 12 
        months.
            (6) Physicians in West Virginia, New York, Pennsylvania, 
        Mississippi, Florida, and other southeastern States are already 
        in crisis. In New York and Florida, obstetricians, 
        gynecologists, and surgeons routinely pay more than $100,000 a 
        year for $1,000,000 coverage. Some are paying more than 
        $200,000.
    (b) Purpose.--It is the purpose of this Act to implement health 
care liability reforms designed to--
            (1) protect access of all Americans to good health care and 
        competent physicians; and
            (2) relieve the undue burden on physicians that is created 
        by excessive medical malpractice claims and judgments.

SEC. 3. PUNITIVE DAMAGES.

    (a) In General.--Punitive damages may, if otherwise permitted by 
applicable State or Federal law, be awarded against any person in a 
health care lawsuit only if it is proven by clear and convincing 
evidence that such person acted with malicious intent to injure the 
claimant, or that such person deliberately failed to avoid unnecessary 
injury that such person knew the claimant was substantially certain to 
suffer. In any health care lawsuit where no judgment for compensatory 
damages is rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand for 
punitive damages shall be included in a health care lawsuit as 
initially filed. A court may allow a claimant to file an amended 
pleading for punitive damages only upon a motion by the claimant and 
after a finding by the court, upon review of supporting and opposing 
affidavits, or after a hearing, after weighing the evidence, that the 
claimant has established by a substantial probability that the claimant 
will prevail on the claim for punitive damages. At the request of any 
party in a health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
            (1) whether punitive damages are to be awarded and the 
        amount of such award; and
            (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only to the 
claim for punitive damages, as determined by applicable State law, 
shall be inadmissible in any proceeding to determine whether 
compensatory damages are to be awarded.
    (b) Determining Amount of Punitive Damages.--
            (1) Factors considered.--In determining the amount of 
        punitive damages, the trier of fact shall consider only the 
        following:
                    (A) The severity of the harm caused by the conduct 
                of such party.
                    (B) The duration of the conduct or any concealment 
                of it by such party.
                    (C) The profitability of the conduct to such party.
                    (D) The number of products sold or medical 
                procedures rendered for compensation, as the case may 
                be, by such party, of the kind causing the harm 
                complained of by the claimant.
                    (E) Any criminal penalties imposed on such party, 
                as a result of the conduct complained of by the 
                claimant.
                    (F) The amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
            (2) Maximum award.--The amount of punitive damages awarded 
        in a health care lawsuit may be up to as much as two times the 
        amount of economic damages awarded or $250,000, whichever is 
        greater. The jury shall not be informed of this limitation.

SEC. 4. TAX CREDIT FOR MEDICAL MALPRACTICE LIABILITY INSURANCE 
              PREMIUMS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45G. MEDICAL MALPRACTICE LIABILITY INSURANCE PREMIUMS.

    ``(a) In General.--For purposes of section 38, the medical 
malpractice liability insurance premium credit determined under this 
section is the amount paid or incurred during the taxable year for 
medical malpractice liability insurance coverage for the medical 
malpractice liability of a physician who is the taxpayer or any 
employee of the taxpayer.
    ``(b) Limitation.--The credit allowed by subsection (a) for any 
taxable year shall not exceed $2,000 with respect to each covered 
physician.''
    (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
is amended by striking ``plus'' at the end of paragraph (14), by 
striking the period at the end of paragraph (15) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(16) the medical malpractice liability insurance premium 
        credit determined under section 45G(a).''.
    (c) No Carrybacks.--Subsection (d) of section 39 of such Code 
(relating to carryback and carryforward of unused credits) is amended 
by adding at the end the following:
            ``(11) No carryback of section 45g credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the medical malpractice liability 
        insurance premium credit determined under section 45G may be 
        carried back to a taxable year ending before the date of the 
        enactment of section 45G.''.
    (d) Denial of Double Benefit.--Section 280C of such Code (relating 
to certain expenses for which credits are allowable) is amended by 
adding at the end the following new subsection:
    ``(d) Credit for Medical Malpractice Liability Insurance 
Premiums.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the medical malpractice liability insurance premiums 
        otherwise allowable as a deduction for the taxable year which 
        is equal to the amount of the credit allowable for the taxable 
        year under section 45G (determined without regard to section 
        38(c)).
            ``(2) Controlled groups.--In the case of a corporation 
        which is a member of a controlled group of corporations (within 
        the meaning of section 41(f)(5)) or a trade or business which 
        is treated as being under common control with other trades or 
        business (within the meaning of section 41(f)(1)(B)), this 
        subsection shall be applied under rules prescribed by the 
        Secretary similar to the rules applicable under subparagraphs 
        (A) and (B) of section 41(f)(1).''.
    (e) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 45G. Medical malpractice liability 
                                        insurance premiums.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act in taxable years ending after such date.
                                 <all>