I 
108TH CONGRESS 
2D SESSION 
H. R. 4124 
To amend the Internal Revenue Code of 1986 to allow a business credit 
for qualified expenditures for medical professional malpractice insurance. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 1, 2004 
Mr. SANDLIN (for himself, Ms. KAPTUR, Mr. FROST, Mr. BELL, Mr. CROW-
LEY, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. BERKLEY, Mr. ROSS, 
Mr. LARSON of Connecticut, Mr. CARDOZA, Mr. STRICKLAND, Mr. GON-
ZALEZ, Mr. BERRY, Mr. CLAY, Mr. ISRAEL, Mr. RUPPERSBERGER, Mr. 
MOORE, Mr. REYES, Ms. SOLIS, Mr. HONDA, Mr. LAMPSON, Mr. FORD, 
Mr. MEEKS of New York, Mr. EDWARDS, Mr. DOGGETT, Mr. TURNER 
of Texas, Mr. GREEN of Texas, Mr. BAIRD, Mr. LEWIS of Georgia, Mr. 
BOSWELL, and Mr. THOMPSON of California) 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 allow a 
business credit for qualified expenditures for medical pro-
fessional malpractice insurance. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medical Malpractice 
Relief Act of 2004’’.
SEC. 2. CREDIT FOR QUALIFIED EXPENDITURES FOR MED-
ICAL PROFESSIONAL MALPRACTICE INSUR-
ANCE. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business tax credits) is amended by add-
ing at the end the following: 
‘‘SEC. 45G. CREDIT FOR EXPENDITURES FOR MEDICAL PRO-
FESSIONAL MALPRACTICE INSURANCE. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible person, the medical malpractice 
insurance expenditure tax credit determined under this 
section for a taxable year is the amount equal to the appli-
cable percentage of qualified medical malpractice insur-
ance expenditures. 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount of qualified 
medical malpractice insurance expenditures taken 
into account under subsection (a) for a taxable year 
with respect to an eligible person shall not exceed 
the amount equal to twice the average of costs of 
qualified medical malpractice insurance for similarly 
situated eligible persons. 
‘‘(2) AVERAGE COSTS.—For purposes of para-
graph (1), the Secretary of Health and Human 
Services, after consultation with State boards of
cated within a statistical area (as defined in section 
142(k)(2)) and shall differentiate between specialty 
and subspecialty medical practices. 
‘‘(d) ELECTION NOT TO CLAIM CREDIT.—This sec-
tion shall not apply to a taxpayer for any taxable year 
if such taxpayer elects to have this section not apply for 
such taxable year. 
‘‘(e) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2005.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code (relating to current 
year business credit) 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 insurance ex-
penditure tax credit determined under section 
45G(a).’’. 
(c) LIMITATION ON CARRYBACK.—Section 39(d) of 
such Code (relating to transition rules) is amended by 
adding at the end the following new paragraph: 
‘‘(11) NO
CARRYBACK
OF
MEDICAL
MAL-
PRACTICE
INSURANCE
EXPENDITURE
TAX
CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the credit determined under section 
45G may be carried back to any taxable year begin-
ning before January 1, 2004.’’. 
(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 fol-
lowing new subsection: 
‘‘(d) CREDIT FOR MEDICAL MALPRACTICE LIABILITY 
INSURANCE PREMIUMS.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified medical mal-
practice insurance expenditures 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 sec-
tion 41(f)(1).’’. 
(e) GRANTS TO NON-PROFIT HOSPITALS, CLINICS, 
AND LONG-TERM CARE PROVIDERS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, acting through the Administrator 
of the Health Resources and Services Administra-
tion, shall award grants to eligible non-profit hos-
pitals, clinics, and long-term care providers to assist 
such hospitals, clinics, and long-term care providers 
in defraying qualified medical malpractice insurance 
expenditures. 
(2) ELIGIBLE NON-PROFIT HOSPITAL, CLINIC, 
OR LONG-TERM CARE PROVIDER.—To be eligible to 
receive a grant under paragraph (1) an entity 
shall— 
(A) be a non-profit hospital, clinic, or long- 
term care provider; 
(B) be an organization described in section 
501(c) of the Internal Revenue Code of 1986 
and exempt from tax under section 501(a) of 
such Code for the year for which an application 
is submitted under subparagraph (C); and 
(C) prepare and submit to the Secretary of 
Health and Human Services an application at
such time, in such manner, and containing such 
information as the Secretary may require. 
(3) AMOUNT
OF
GRANT.—The amount of a 
grant to a non-profit hospital, clinic, or long-term 
care provider under paragraph (1) shall equal 15 
percent of the amount of the qualified medical mal-
practice insurance expenditures of the hospital, clin-
ic, or long-term care provider for the year involved. 
(4) QUALIFIED MEDICAL MALPRACTICE INSUR-
ANCE EXPENDITURE.—In this subsection, the term 
‘‘qualified medical malpractice insurance expendi-
ture’’ means so much of any professional insurance 
premium, surcharge, payment or other cost or ex-
pense which is incurred by a non-profit hospital, 
clinic, or long-term care provider in a year for the 
sole purpose of providing or furnishing general med-
ical malpractice liability insurance for such hospital, 
clinic, or long-term care provider as does not exceed 
twice the average of such costs for similarly situated 
hospitals, clinics, or long-term care provider homes. 
(5) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection such sums as may be necessary for 
each of fiscal years 2005 and 2006.
(f) CLERICAL 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 fol-
lowing new item: 
‘‘Sec. 45G. Credit for expenditures for medical professional malpractice insur-
ance.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
Æ