[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[Senate]
[Pages 18851-18854]
[From the U.S. Government Publishing Office, www.gpo.gov]



                      TAXPAYERS REFUND ACT OF 1999

                                 ______
                                 

                 ROTH (AND MOYNIHAN) AMENDMENT NO. 1496

  Mr. ROTH (for himself and Mr. Moynihan) proposed an amendment to the 
bill, S. 1429, supra; as follows:

       On page 10, strike the matter between lines 19 and 20 (as 
     added by the Hutchison amendment), and insert:

                                                             Applicable
``Calendar year:                                         dollar amount:
  2006......................................................$4,000 ....

  2007 and thereafter......................................$5,000. ....

       On page 11, strike the matter before line 1 (as added by 
     the Hutchison amendment), and insert:

                                                             Applicable
``Calendar year:                                         dollar amount:
  2006......................................................$2,000 ....

  2007 and thereafter......................................$2,500. ....

       On page 11, line 3, strike ``2008'' (as added by the 
     Hutchison amendment) and insert ``2007''.
       On page 11, line 11, strike ``2007'' (as added by the 
     Hutchison amendment) and insert ``2006''.
       On page 19, line 7, strike ``50'' and insert ``40''.
       In the section at the end of title II relating to expansion 
     of adoption expenses (as added by the Landrieu amendment), 
     strike ``$7,500'' and insert ``$10,000''.
       On page 75, line 6, strike ``section 401(a)(11)'' and 
     insert ``sections 401(a)(11) and 411(b)(1)(H)''.
       On page 87, line 3, strike ``Section'' and insert ``Except 
     as provided in subsection (b)(4)(A), section''.
       On page 153, strike lines 17 and 18, and insert:
       ``(2) an individual account plan which is subject to the 
     funding standards of section 412.

     Such term shall not include a governmental plan (within the 
     meaning of section 414(d)) or a church plan (within the 
     meaning of section 414(e)) with respect to which an election 
     under section 410(d) has not been made.''
       On page 158, strike lines 8 and 9, and insert:
       ``(B) an individual account plan which is subject to the 
     funding standards of section 302.

     Such term shall not include a governmental plan (within the 
     meaning of section 3(32)) or a church plan (within the 
     meaning of section 3(33)) with respect to which an election 
     under section 410(d) of the Internal Revenue Code of 1986 has 
     not been made.''
       On page 161, after line 23, insert:

     SEC. __. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND 
                   APPLIED TO ALL DEFINED BENEFIT PLANS.

       (a) In General.--Subparagraph (D) of section 404(a)(1) 
     (relating to special rule in case of certain plans) is 
     amended to read as follows:
       ``(D) Special rule in case of certain plans.--
       ``(i) In general.--In the case of any defined benefit plan, 
     except as provided in regulations, the maximum amount 
     deductible under the limitations of this paragraph shall not 
     be less than the unfunded termination liability (determined 
     as if the proposed termination date referred to in section 
     4041(b)(2)(A)(i)(II) of the Employee Retirement Income 
     Security Act of 1974 were the last day of the plan year).
       ``(ii) Plans with less than 100 participants.--For purposes 
     of this subparagraph,

[[Page 18852]]

     in the case of a plan which has less than 100 participants 
     for the plan year, termination liability shall not include 
     the liability attributable to benefit increases for highly 
     compensated employees (as defined in section 414(q)) 
     resulting from a plan amendment which is made or becomes 
     effective, whichever is later, within the last 2 years before 
     the termination date.
       ``(iii) Rule for determining number of participants.--For 
     purposes of determining whether a plan has more than 100 
     participants, all defined benefit plans maintained by the 
     same employer (or any member of such employer's controlled 
     group (within the meaning of section 412(l)(8)(C))) shall be 
     treated as 1 plan, but only employees of such member or 
     employer shall be taken into account.
       ``(iv) Plans established and maintain by professional 
     service employers.--Clause (i) shall not apply to a plan 
     described in section 4021(b)(13) of the Employee Retirement 
     Income Security Act of 1974.''.
       (b) Conforming Amendment.--Paragraph (6) of section 4972(c) 
     is amended to read as follows:
       ``(6) Exceptions.--In determining the amount of 
     nondeductible contributions for any taxable year, there shall 
     not be taken into account so much of the contributions to 1 
     or more defined contribution plans which are not deductible 
     when contributed solely because of section 404(a)(7) as does 
     not exceed the greater of--
       ``(A) the amount of contributions not in excess of 6 
     percent of compensation (within the meaning of section 
     404(a)) paid or accrued (during the taxable year for which 
     the contributions were made) to beneficiaries under the 
     plans, or
       ``(B) the sum of--
       ``(i) the amount of contributions described in section 
     401(m)(4)(A), plus
       ``(ii) the amount of contributions described in section 
     402(g)(3)(A).

     For purposes of this paragraph, the deductible limits under 
     section 404(a)(7) shall first be applied to amounts 
     contributed to a defined benefit plan and then to amounts 
     described in subparagraph (B).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2000.

     SEC. __. INCREASE IN SECTION 415 EARLY RETIREMENT LIMIT FOR 
                   GOVERNMENTAL AND OTHER PLANS.

       (a) In General.--Subclause (II) of section 415(b)(2)(F)(i), 
     as amended by section 346(c), is amended--
       (1) by striking ``$75,000'' and inserting ``80 percent of 
     the dollar amount in effect under paragraph (1)(A)'', and
       (2) by striking ``the $75,000 limitation'' and inserting 
     ``80 percent of such dollar amount''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 1999.
       On page 180, after line 24, insert:

     SEC. 370A. REPORTING SIMPLIFICATION.

       (a) Simplified Annual Filing Requirement for Owners and 
     Their Spouses.--
       (1) In general.--The Secretary of the Treasury shall modify 
     the requirements for filing annual returns with respect to 
     one-participant retirement plans to ensure that such plans 
     with assets of $500,000 or less as of the close of the plan 
     year need not file a return for that year.
       (2) One-participant retirement plan defined.--For purposes 
     of this subsection, the term ``one-participant retirement 
     plan'' means a retirement plan that--
       (A) on the first day of the plan year--
       (i) covered only the employer (and the employer's spouse) 
     and the employer owned the entire business (whether or not 
     incorporated), or
       (ii) covered only one or more partners (and their spouses) 
     in a business partnership (including partners in an S or C 
     corporation),
       (B) meets the minimum coverage requirements of section 
     410(b) of the Internal Revenue Code of 1986 without being 
     combined with any other plan of the business that covers the 
     employees of the business,
       (C) does not provide benefits to anyone except the employer 
     (and the employer's spouse) or the partners (and their 
     spouses),
       (D) does not cover a business that is a member of an 
     affiliated service group, a controlled group of corporations, 
     or a group of businesses under common control, and
       (E) does not cover a business that leases employees.
       (3) Other definitions.--Terms used in paragraph (2) which 
     are also used in section 414 of the Internal Revenue Code of 
     1986 shall have the respective meanings given such terms by 
     such section.
       (b) Simplified Annual Filing Requirement for Plans With 
     Fewer Than 25 Employees.--In the case of a retirement plan 
     which covers less than 25 employees on the 1st day of the 
     plan year and meets the requirements described in 
     subparagraphs (B), (D), and (E) of subsection (a)(2), the 
     Secretary of the Treasury shall provide for the filing of a 
     simplified annual return that is substantially similar to the 
     annual return required to be filed by a one-participant 
     retirement plan.
       (c) Effective Date.--The provisions of this section shall 
     take effect on January 1, 2001.
       On page 195, strike lines 4 through 9, and insert:

     SEC. 404. EXTENSION OF EXCLUSION FOR EMPLOYER-PROVIDED 
                   EDUCATIONAL ASSISTANCE.

       (a) In General.--Section 127(d) (relating to termination of 
     exclusion for educational assistance programs) is amended by 
     striking ``May 31, 2000'' and inserting ``December 31, 
     2003''.
       On page 202, between lines 9 and 10, insert:

     SEC. __. CERTAIN EDUCATIONAL BENEFITS PROVIDED BY AN EMPLOYER 
                   TO CHILDREN OF EMPLOYEES EXCLUDABLE FROM GROSS 
                   INCOME AS A SCHOLARSHIP.

       (a) In General.--Section 117 (relating to qualified 
     scholarships) is amended by adding at the end the following:
       ``(e) Employer-Provided Educational Benefits Provided to 
     Children of Employees.--
       ``(1) In general.--In determining whether any amount is a 
     qualified scholarship for purposes of subsection (a), the 
     fact that such amount is provided in connection with an 
     employment relationship shall be disregarded if--
       ``(A) such amount is provided by the employer to a child 
     (as defined in section 161(c)(3)) of an employee of such 
     employer,
       ``(B) such amount is provided pursuant to a plan which 
     meets the nondiscrimination requirements of subsection 
     (d)(3), and
       ``(C) amounts provided under such plan are in addition to 
     any other compensation payable to employees and such plan 
     does not provide employees with a choice between such amounts 
     and any other benefit.

     For purposes of subparagraph (C), the business practices of 
     the employer (as well as such plan) shall be taken into 
     account.
       ``(2) Dollar limitations.--
       ``(A) Per child.--The amount excluded from the gross income 
     of the employee by reason of paragraph (1) for a taxable year 
     with respect to amounts provided to each child of such 
     employee shall not exceed $2,000.
       ``(B) Aggregate limit.--The amount excluded from the gross 
     income of the employee by reason of paragraph (1) for a 
     taxable year (after the application of subparagraph (A)) 
     shall not exceed the excess of the dollar amount contained in 
     section 127(a)(2) over the amount excluded from the 
     employee's gross income under section 127 for such year.
       ``(3) Principal shareholders and owners.--Paragraph (1) 
     shall not apply to any amount provided to any child of any 
     individual if such individual (or such individual's spouse) 
     owns (on any day of the year) more than 5 percent of the 
     stock or of the capital or profits interest in the employer.
       ``(4) Degree requirement not to apply.--In the case of an 
     amount which is treated as a qualified scholarship by reason 
     of this subsection, subsection (a) shall be applied without 
     regard to the requirement that the recipient be a candidate 
     for a degree.
       ``(5) Certain other rules to apply.--Rules similar to the 
     rules of paragraphs (4), (5), and (7) of section 127(c) shall 
     apply for purposes of this subsection.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of 
     enactment of this Act.
       On page 216, line 1, insert ``and fishing'' after ``farm''.
       On page 225, after line 24, insert:

     SEC. __. INCREASE IN ESTATE TAX DEDUCTION FOR FAMILY-OWNED 
                   BUSINESS INTEREST.

       (a) In General.--Section 2057(a)(2) (relating to maximum 
     deduction) is amended by striking ``$675,000'' and inserting 
     ``$1,975,000''.
       (b) Conforming Amendments.--Section 2057(a)(3)(B) (relating 
     to coordination with unified credit) is amended by striking 
     ``$675,000'' each place it appears in the text and heading 
     and inserting ``$1,975,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying after December 31, 
     2000.

     SEC. __. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.

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

     ``SEC. 45E. EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a small employer, the employee health insurance 
     expenses credit determined under this section is an amount 
     equal to the applicable percentage of the amount paid by the 
     taxpayer during the taxable year for qualified employee 
     health insurance expenses.
       ``(b) Applicable Percentage.--For purposes of subsection 
     (a), the applicable percentage is equal to--
       ``(1) 60 percent in the case of self-only coverage, and
       ``(2) 70 percent in the case of family coverage (as defined 
     in section 220(c)(5)).
       ``(c) Per Employee Dollar Limitation.--The amount of 
     qualified employee health insurance expenses taken into 
     account under subsection (a) with respect to any qualified 
     employee for any taxable year shall not exceed--
       ``(1) $1,000 in the case of self-only coverage, and

[[Page 18853]]

       ``(2) $1,715 in the case of family coverage (as so 
     defined).
       ``(d) Definitions.--For purposes of this section--
       ``(1) Small employer.--
       ``(A) In general.--The term `small employer' means, with 
     respect to any calendar year, any employer if such employer 
     employed an average of 9 or fewer employees on business days 
     during either of the 2 preceding calendar years. For purposes 
     of the preceding sentence, a preceding calendar year may be 
     taken into account only if the employer was in existence 
     throughout such year.
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     1st preceding calendar year, the determination under 
     subparagraph (A) shall be based on the average number of 
     employees that it is reasonably expected such employer will 
     employ on business days in the current calendar year.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage to the extent such amount is 
     attributable to coverage provided to any employee while such 
     employee is a qualified employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term by 
     section 9832(b)(1).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, an employee of an employer if the 
     total amount of wages paid or incurred by such employer to 
     such employee at an annual rate during the taxable year 
     exceeds $5,000 but does not exceed $16,000.
       ``(B) Treatment of certain employees.--For purposes of 
     subparagraph (A), the term `employee'--
       ``(i) shall not include an employee within the meaning of 
     section 401(c)(1), but
       ``(ii) shall include a leased employee within the meaning 
     of section 414(n).
       ``(C) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(D) Inflation adjustment.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2001, the $16,000 amount 
     contained in subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     determined by substituting `calendar year 2000' for `calendar 
     year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any increase determined under clause 
     (i) is not a multiple of $100, such amount shall be rounded 
     to the nearest multiple of $100.
       ``(e) Certain rules made applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(f) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to qualified employee health insurance expenses 
     taken into account under subsection (a).''
       (b) Credit To Be Part of General Business Credit.--Section 
     38(b) (relating to current year business credit) is amended 
     by striking ``plus'' at the end of paragraph (13), by 
     striking the period at the end of paragraph (14) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(15) the employee health insurance expenses credit 
     determined under section 45E.''
       (c) No Carrybacks.--Subsection (d) of section 39 (relating 
     to carryback and carryforward of unused credits) is amended 
     by adding at the end the following:
       ``(10) No carryback of section 45E credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the employee health 
     insurance expenses credit determined under section 45E may be 
     carried back to a taxable year ending before January 1, 
     2001.''
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following:

``Sec. 45E. Employee health insurance expenses.''
       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2000.
       On page 268, between lines 3 and 4, insert the following:

     SEC. __. HOLDING PERIOD REDUCED TO 12 MONTHS FOR PURPOSES OF 
                   DETERMINING WHETHER HORSES ARE SECTION 1231 
                   ASSETS.

       (a) In General.--Subparagraph (A) of section 1231(b)(3) 
     (relating to definition of property used in the trade or 
     business) is amended by striking ``and horses''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
       On page 318, line 20, strike ``increased'' and insert 
     ``decreased''.
       On page 321, between lines 4 and 5, insert the following 
     flush sentence:

     Notwithstanding the preceding sentence, such securities shall 
     be taken into account in determining whether such trust fails 
     to meet the requirements of section 856(c)(4)(B) of such Code 
     (as amended by such amendments) if such trust acquires or 
     receives securities to which the preceding sentence does not 
     apply.
       On page 337, line 15, insert ``on or'' before ``before''.
       On page 341, between lines 23 and 24, insert:
       ``(C) Earnings and profits.--The earnings and profits of 
     any Native Corporation making a contribution to a Settlement 
     Trust shall not be reduced on account thereof at the time of 
     such contribution, but such earnings and profits shall be 
     reduced (up to the amount of such contribution) as 
     distributions are thereafter made by the Settlement Trust 
     which exceed the sum of--
       ``(i) such Trust's total undistributed net income for all 
     prior years during which an election under paragraph (2) is 
     in effect, and
       ``(ii) such Trust's distributable net income.
       On page 364, beginning on line 15, strike ``under section 
     1216 of the Transportation Equity Act for the 21st Century, 
     as in effect on July 21, 1999,''.
       On page 371, between lines 16 and 17, insert the following:

     SEC. __. CAPITAL GAIN TREATMENT UNDER SECTION 631(B) TO APPLY 
                   TO OUTRIGHT SALES BY LAND OWNER.

       (a) In General.--Subsection (b) of section 631 (relating to 
     disposal of timber with a retained economic interest) is 
     amended--
       (1) by inserting ``and Outright Sales of Timber'' after 
     ``Economic Interest'' in the subsection heading, and
       (2) by adding before the last sentence the following new 
     sentence: ``The requirement in the first sentence of this 
     subsection to retain an economic interest in timber shall not 
     apply to an outright sale of such timber by the owner thereof 
     if such owner owned the land (at the time of such sale) from 
     which the timber is cut.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to sales after the date of the enactment of this 
     Act.

     SEC. __. CREDIT FOR CLINICAL TESTING RESEARCH EXPENSES 
                   ATTRIBUTABLE TO CERTAIN QUALIFIED ACADEMIC 
                   INSTITUTIONS INCLUDING TEACHING HOSPITALS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by inserting after section 41 the following:

     ``SEC. 41A. CREDIT FOR MEDICAL INNOVATION EXPENSES.

       ``(a) General Rule.--For purposes of section 38, the 
     medical innovation credit determined under this section for 
     the taxable year shall be an amount equal to 40 percent of 
     the excess (if any) of--
       ``(1) the qualified medical innovation expenses for the 
     taxable year, over
       ``(2) the medical innovation base period amount.
       ``(b) Qualified Medical Innovation Expenses.--For purposes 
     of this section--
       ``(1) In general.--The term `qualified medical innovation 
     expenses' means the amounts which are paid or incurred by the 
     taxpayer during the taxable year directly or indirectly to 
     any qualified academic institution for clinical testing 
     research activities.
       ``(2) Clinical testing research activities.--
       ``(A) In general.--The term `clinical testing research 
     activities' means human clinical testing conducted at any 
     qualified academic institution in the development of any 
     product, which occurs before--
       ``(i) the date on which an application with respect to such 
     product is approved under section 505(b), 506, or 507 of the 
     Federal Food, Drug, and Cosmetic Act (as in effect on the 
     date of the enactment of this section),
       ``(ii) the date on which a license for such product is 
     issued under section 351 of the Public Health Service Act (as 
     so in effect), or
       ``(iii) the date classification or approval of such product 
     which is a device intended for human use is given under 
     section 513, 514, or 515 of the Federal Food, Drug, and 
     Cosmetic Act (as so in effect).
       ``(B) Product.--The term `product' means any drug, 
     biologic, or medical device.
       ``(3) Qualified academic institution.--The term `qualified 
     academic institution' means any of the following 
     institutions:
       ``(A) Educational institution.--A qualified organization 
     described in section 170(b)(1)(A)(iii) which is owned by, or 
     affiliated with, an institution of higher education (as 
     defined in section 3304(f)).
       ``(B) Teaching hospital.--A teaching hospital which--
       ``(i) is publicly supported or owned by an organization 
     described in section 501(c)(3), and
       ``(ii) is affiliated with an organization meeting the 
     requirements of subparagraph (A).
       ``(C) Foundation.--A medical research organization 
     described in section 501(c)(3) (other than a private 
     foundation) which is affiliated with, or owned by--

[[Page 18854]]

       ``(i) an organization meeting the requirements of 
     subparagraph (A), or
       ``(ii) a teaching hospital meeting the requirements of 
     subparagraph (B).
       ``(D) Charitable research hospital.--A hospital that is 
     designated as a cancer center by the National Cancer 
     Institute.
       ``(4) Exclusion for amounts funded by grants, etc.--The 
     term `qualified medical innovation expenses' shall not 
     include any amount to the extent such amount is funded by any 
     grant, contract, or otherwise by another person (or any 
     governmental entity).
       ``(c) Medical Innovation Base Period Amount.--For purposes 
     of this section, the term `medical innovation base period 
     amount' means the average annual qualified medical innovation 
     expenses paid by the taxpayer during the 3-taxable year 
     period ending with the taxable year immediately preceding the 
     first taxable year of the taxpayer beginning after December 
     31, 1998.
       ``(d) Special Rules.--
       ``(1) Limitation on foreign testing.--No credit shall be 
     allowed under this section with respect to any clinical 
     testing research activities conducted outside the United 
     States.
       ``(2) Certain rules made applicable.--Rules similar to the 
     rules of subsections (f) and (g) of section 41 shall apply 
     for purposes of this section.
       ``(3) Election.--This section shall apply to any taxpayer 
     for any taxable year only if such taxpayer elects to have 
     this section apply for such taxable year.
       ``(4) Coordination with credit for increasing research 
     expenditures and with credit for clinical testing expenses 
     for certain drugs for rare diseases.--Any qualified medical 
     innovation expense for a taxable year to which an election 
     under this section applies shall not be taken into account 
     for purposes of determining the credit allowable under 
     section 41 or 45C for such taxable year.''
       (b) Credit To Be Part of General Business Credit.--
       (1) In general.--Section 38(b) (relating to current year 
     business credits), as amended by this Act, 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:
       ``(16) the medical innovation expenses credit determined 
     under section 41A(a).''.
       (2) Transition rule.--Section 39(d), as amended by this 
     Act, is amended by adding at the end the following new 
     paragraph:
       ``(11) No carryback of section 41a credit before 
     enactment.--No portion of the unused business credit for any 
     taxable year which is attributable to the medical innovation 
     credit determined under section 41A may be carried back to a 
     taxable year beginning before January 1, 1999.''.
       (c) Denial of Double Benefit.--Section 280C, as amended by 
     this Act, is amended by adding at the end the following new 
     subsection:
       ``(e) Credit for Increasing Medical Innovation Expenses.--
       ``(1) In general.--No deduction shall be allowed for that 
     portion of the qualified medical innovation expenses (as 
     defined in section 41A(b)) otherwise allowable as a deduction 
     for the taxable year which is equal to the amount of the 
     credit determined for such taxable year under section 41A(a).
       ``(2) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (2), (3), and (4) of subsection (c) shall apply 
     for purposes of this subsection.''.
       (d) Deduction for Unused Portion of Credit.--Section 196(c) 
     (defining qualified business credits) is amended by 
     redesignating paragraphs (5) through (8) as paragraphs (6) 
     through (9), respectively, and by inserting after paragraph 
     (4) the following new paragraph:
       ``(5) the medical innovation expenses credit determined 
     under section 41A(a) (other than such credit determined under 
     the rules of section 280C(d)(2)),''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     adding after the item relating to section 41 the following:

``Sec. 41A. Credit for medical innovation expenses.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

                          ____________________