Title VII, SEC. 7801. NONREFUNDABLE CREDIT FOR CERTAIN PRIMARY HEALTH SERVICES PROVIDERS. (a) In General. Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 22 the following new section: ``SEC. 23. PRIMARY HEALTH SERVICES PROVIDERS. ``(a) Allowance of Credit. There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the product of ``(1) the number of months during such taxable year ``(A) during which the taxpayer is a qualified primary health services provider, and ``(B) which are within the taxpayer's mandatory service period, and ``(2) $1,000 ($500 in the case of a qualified practitioner who is not a physician). ``(b) Qualified Primary Health Services Provider. For purposes of this section, the term `qualified primary health services provider' means, with respect to any month, any qualified practitioner who ``(1) has in effect a certification by the Bureau as a provider of primary health services and such certification is, when issued, for a health professional shortage area in which the qualified practitioner is commencing the providing of primary health services, ``(2) is providing primary health services full time in the health professional shortage area identified in such certification, and ``(3) has not received a scholarship under the National Health Service Corps Scholarship Program or any loan repayments under the National Health Service Corps Loan Repayment Program. ``For purposes of paragraph (2), a provider shall be treated as providing services in a health professional shortage area when such area ceases to be such an area if it was such an area when the provider commenced providing services in the area. ``(c) Mandatory Service Period. For purposes of this section, the term `mandatory service period' means the period of 60 consecutive calendar months beginning with the first month the taxpayer is a qualified primary health services provider. A taxpayer shall not have more than 1 mandatory service period. ``(d) Definitions and Special Rules. For purposes of this section ``(1) Bureau. The term `Bureau' means the Bureau of Primary Health Care, Health Resources and Services Administration of the United States Public Health Service. ``(2) Qualified practitioner. The term `qualified practitioner' means a physician, a physician assistant, a nurse practitioner, or a certified nurse-midwife. ``(3) Physician. The term `physician' has the meaning given to such term by section 1861(r) of the Social Security Act. ``(4) Physician assistant; nurse practitioner. The terms `physician assistant' and `nurse practitioner' have the meanings given to such terms by section 1861(aa)(5) of the Social Security Act. ``(5) Certified nurse-midwife. The term `certified nurse-midwife' has the meaning given to such term by section 1861(gg)(2) of the Social Security Act. ``(6) Primary health services. The term `primary health services' has the meaning given such term by section 330(b)(1) of the Public Health Service Act. ``(7) Health professional shortage area. The term `health professional shortage area' has the meaning given such term by section 332(a)(1)(A) of the Public Health Service Act. ``(e) Recapture of Credit. ``(1) In general. If there is a recapture event during any taxable year, then ``(A) no credit shall be allowed under subsection (a) for such taxable year and any succeeding taxable year, and ``(B) the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of ``(i) the applicable percentage, and ``(ii) the aggregate unrecaptured credits allowed to such taxpayer under this section for all prior taxable years. ``(2) Applicable recapture percentage. ``(A) In general. For purposes of this subsection, the applicable recapture percentage shall be determined from the following table: ``If the recapture The applicable recapture percentage is: event occurs during: Months 1 24 Months 25 36 Months 37 48 Months 49 60 Months 61 and thereafter ``(B) Timing. For purposes of subparagraph (A), month 1 shall begin on the first day of the mandatory service period. ``(3) Recapture event defined. ``(A) In general. For purposes of this subsection, the term `recapture event' means the failure of the taxpayer to be a qualified primary health services provider for any month during the taxpayer's mandatory service period. ``(B) Cessation of designation. The cessation of the designation of any area as a health professional shortage area after the beginning of the mandatory service period for any taxpayer shall not constitute a recapture event. ``(C) Secretarial waiver. The Secretary, in consultation with the Secretary of Health and Human Services, may waive any recapture event caused by extraordinary circumstances. ``(4) No credits against tax; minimum tax. Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part or for purposes of section 55.'' (b) Clerical Amendment. The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 22 the following new item: ``Sec. 23. Primary health services providers.'' (c) Effective Date. The amendments made by this section shall apply to taxable years beginning after December 31, 1994.