Detailed Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Q: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Small Business Health Care Tax
Credit Act''.

SEC. 2. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.

(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:

''SEC. 45O. EMPLOYEE HEALTH INSURANCE EXPENSES.

''(a) General Rule.--For purposes of section 38, in the case of a
qualified 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--
''(1) 50 percent in the case of an employer with less than
10 qualified employees,
''(2) 25 percent in the case of an employer with more than
9 but less than 25 qualified employees, and
''(3) 20 percent in the case of an employer with more than
24 but less than 50 qualified employees.
''(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) $4,000 for self-only coverage, and
''(2) $10,000 for family coverage.
''(d) Definitions and Special Rules.--For purposes of this
section--
''(1) Qualified small employer.--
''(A) In general.--The term 'qualified small
employer' means any small employer which--
''(i) provides eligibility for health
insurance coverage (after any waiting period
(as defined in section 9801(b)(4))) to all
qualified employees of the employer, and
''(ii) pays at least 50 percent of the cost
of such coverage for each qualified employee.
''(B) Small employer.--
''(i) In general.--For purposes of this
paragraph, the term 'small employer' means,
with respect to any taxable year, any employer
if--
''(I) the average gross receipts of
such employer for the preceding 3
taxable years does not exceed
$5,000,000, and
''(II) such employer employed an
average of more than 1 but less than 50
qualified employees on business days
during the preceding taxable year.
''(ii) Aggregate gross assets.--For
purposes of clause (i)(I), the term 'aggregate
gross assets' shall have meaning given such
term by section 1202(d)(2).
''(iii) Employers not in existence in
preceding year.--For purposes of clause
(i)(II)--
''(I) a preceding taxable year may
be taken into account only if the
employer was in existence throughout
such year, and
''(II) in the case of an employer
which was not in existence throughout
the preceding taxable year, the
determination of whether such employer
is a qualified small employer shall be
based on the average number of
employees that it is reasonably
expected such employer will employ on
business days in the current taxable
year.
''(iv) Aggregation rules.--All persons
treated as a single employer under subsection
(a) or (b) of section 52 or subsection (m) or
(o) of section 414 shall be treated as one
person for purposes of this subparagraph.
''(v) Predecessors.--The Secretary may
prescribe regulations which provide for
references in this subparagraph to an employer
to be treated as including references to
predecessors of such employer.
''(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 an employee of an employer who, with respect to
any period, is not provided health insurance coverage
under--
''(i) a health plan of the employee's
spouse,
''(ii) title XVIII, XIX, or XXI of the
Social Security Act,
''(iii) chapter 17 of title 38, United
States Code,
''(iv) chapter 55 of title 10, United
States Code,
''(v) chapter 89 of title 5, United States
Code, or
''(vi) any other provision of law.
''(B) Employee.--The term 'employee'--
''(i) means any individual, with respect to
any calendar year, who is reasonably expected
to receive not more than $50,000 of
compensation from the employer during such
year,
''(ii) does not include an employee within
the meaning of section 401(c)(1), and
''(iii) includes a leased employee within
the meaning of section 414(n).
''(C) Compensation.--The term 'compensation' means
amounts described in section 6051(a)(3).
''(D) Inflation adjustment.--
''(i) In general.--In the case of a taxable
year beginning after 2007, the $50,000 amount
in subparagraph (B)(i) shall be increased by an
amount equal to--
''(I) such dollar amount,
multiplied by
''(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting 'calendar year 2006' for
'calendar year 1992' in subparagraph
(B) thereof.
''(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $1,000,
such amount shall be rounded to the next lowest
multiple of $1,000.
''(4) No qualified employees excluded.--Subsection (a)
shall not apply to an employer for any period unless at all
times during such period health insurance coverage is available
to all qualified employees of such employer under similar
terms.
''(e) Portion of Credit Made Refundable.--
''(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the lesser of--
''(A) the credit which would be allowed under
subsection (a) without regard to this subsection and
the limitation under section 38(c), or
''(B) the amount by which the aggregate amount of
credits allowed by this subpart (determined without
regard to this subsection) would increase if the
limitation imposed by section 38(c) for any taxable
year were increased by the amount of employer payroll
taxes imposed on the taxpayer during the calendar year
in which the taxable year begins.
The amount of the credit allowed under this subsection shall
not be treated as a credit allowed under this subpart and shall
reduce the amount of the credit otherwise allowable under
subsection (a) without regard to section 38(c).
''(2) Employer payroll taxes.--For purposes of this
subsection--
''(A) In general.--The term 'employer payroll
taxes' means the taxes imposed by--
''(i) section 3111(b), and
''(ii) sections 3211(a) and 3221(a)
(determined at a rate equal to the rate under
section 3111(b)).
''(B) Special rule.--A rule similar to the rule of
section 24(d)(2)(C) shall apply for purposes of
subparagraph (A).
''(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) of
the Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ''plus'' at the end of paragraph (30),
by striking the period at the end of paragraph (31) and inserting '',
plus'', and by adding at the end the following:
''(32) the employee health insurance expenses credit
determined under section 45O.''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following:

''Sec. 45O. Employee health insurance expenses.''.
(d) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2006.
A:
Small Business Health Care Tax Credit Act - Amends the Internal Revenue Code to allow certain small business employers a partially refundable business tax credit for the health insurance costs of employees who are not otherwise covered by a spouse's insurance or by a federal health insurance program.