,i  #aaith ,,congress  #b;d ,session    
,h4 ,r4 #gibb  ,,in ,,the ,,house ,,of  
,,representatives  ,march #ab1 #bjbf,mr4
 ,smith of ,nebraska 7for himself1 ,mr4 
,davis of ,illinois1 and ,mr4 ,moran7   
introduced the following bill2 which was
 referred to the ,committee on ,ways and
 ,means  ,a ,,bill  ,to amend the       
,internal ,revenue ,code of #aihf to    
provide a credit to certain small       
employers for the startup costs of      
dependent care flexible spending plans4 
#a4 ,short title ,this ,act may be cited
 as the ,small ,business ,dependent     
,care ,,fsa ,opportunity ,act4  #b4     
,small employer dependent care flexible 
spending plan startup costs  7a7 ,in    
general ,subpart ,d of part ,,iv of     
subchapter ,a of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new section3  #de;,,bb4 ,small
 employer dependent care flexible       
spending plan startup costs  7a7 ,in    
general ,for purposes of section #ch1 in

 the case of an eligible employer1 the  
small employer dependent care flexible  
spending plan startup cost credit       
determined under this section for any   
taxable year is an amount equal to the  
qualified startup costs paid or incurred
 by the taxpayer during the taxable     
year4  7b7 ,dollar limitation ,the      
amount of the credit determined under   
this section for any taxable year shall 
not exceed--  7#a7 for the first credit 
year and each of the #b taxable years   
immediately following the first credit  
year1 the greater of-- 7,a7 #ejj1 or    
7,b7 the lesser of-- 7i7 #bej for each  
employee of the eligible employer who is
 not a highly compensated employee 7as  
defined in section #dad7q77 and who is  
eligible to participate in the dependent
 care flexible spending plan maintained 
by the eligible employer1 or  7ii7      
#e1jjj1 and  7#b7 zero for any other    
taxable year4  7c7 ,eligible employer   
,for purposes of this section-- 7#a7 ,in
 general ,the term eligible employer has

 the meaning given such term by section 
#djh7p77#b77;,c77i74  7#b7 ,requirement 
for new dependent care flexible spending
 plans ,such term shall not include an  
employer if1 during the #c-taxable year 
period immediately preceding the #ast   
taxable year for which the credit under 
this section is otherwise allowable for 
a dependent care flexible spending plan 
of the employer1 the employer or any    
member of any controlled group including
 the employer 7or any predecessor of    
either7 established or maintained a     
dependent care flexible spending plan   
for substantially the same employees as 
the employees for whom the dependent    
care flexible spending plan with respect
 to which such credit is otherwise      
allowable is established or maintained4 
7d7 ,other definitions ,for purposes of 
this section--  7#a7 ,in general ,the   
term qualified startup costs means any  
ordinary and necessary expenses of an   
eligible employer which are paid or     
incurred in connection with-- 7,a7 the  

establishment or administration of a    
dependent care flexible spending plan1  
or  7,b7 education of employees with    
respect to such plan4  7#b7 ,plan must  
have at least #a participant ,such term 
shall not include any expense in        
connection with a plan that does not    
have at least #a employee eligible to   
participate who is not a highly         
compensated employee 7as defined in     
section #dad7q774  7#c7  ,dependent care
 flexible spending plan  ,the term      
dependent care flexible spending plan   
means so much of any plan of an employer
 as consists of dependent care flexible 
spending arrangements4 ,for purposes of 
the preceding sentence1 an arrangement  
shall be treated as a dependent care    
flexible spending arrangement only if   
employer contributions to such          
arrangement are excludible from the     
gross income of an employee under       
section #abi4  7#d7  ,first credit year 
,the term first credit year means1 with 
respect to any qualified startup costs--

  7,a7 the taxable year which includes  
the date that the dependent care        
flexible spending plan to which such    
costs relate becomes effective1 or  7,b7
 at the election of the eligible        
employer1 the taxable year preceding the
 taxable year referred to in            
subparagraph 7,a74  7e7 ,special rules  
,rules similar to the rules of section  
#de;,e7e7 shall apply for purposes of   
this section4  4  7b7 ,credit ,to be    
part of general business credit ,section
 #ch7;b7 of such ,code is amended by    
striking plus at the end of paragraph   
7#dj71 by striking the period at the end
 of paragraph 7#da7 and inserting 1     
plus1 and by adding at the end the      
following new paragraph3  7#db7 in the  
case of an eligible employer 7as defined
 in section #de;,,bb7c771 the small     
employer dependent care flexible        
spending plan startup cost credit       
determined under section #de;,,bb4  4   
7c7 ,clerical amendment ,the table of   
sections for subpart ,d of part ,,iv of 

subchapter ,a of chapter #a of such     
,code is amended by adding at the end   
the following new item3  ,sec4 #de;,,bb4
 ,small employer dependent care flexible
 spending plan startup costs4  4  7d7   
,effective date ,the amendments made by 
this section shall apply to amounts paid
 or incurred after the date of the      
enactment of this ,act1 in taxable years
 ending after such date4