Rep. Sander Levin, D-Mich., said Wednesday that he plans to introduce a bill to provide tax breaks for small businesses that hire new employees or increase wages as a substitute for a bill being pushed by House Republicans to repeal the medical device tax in the health care law.

House Republican leaders plan to schedule a vote Thursday on the bill repealing the 2.3 percent excise tax on medical devices. The bill, H.R. 436, sponsored by Rep. Erik Paulsen, R-Minn., passed in the House Ways and Means Committee on Thursday, along with several companion bills (see House Panel Passes Repeal of Medical Device Tax).

One would allow people to use their health savings accounts to buy over-the-counter drugs without a prescription. Another would allow people to reclaim up to $500 of unused money from their flexible spending accounts at the end of the year instead of forfeiting the balance as they currently must do. These measures would also come up for a vote Thursday.

However, the White House has promised to veto the medical device tax repeal, and the Senate is not expected to take up the measure. The medical device tax and the ban on using health savings accounts to pay for over-the-counter medicine without a prescription were two of the funding offsets used to pay for the cost of the health care reform law.

Levin’s substitute to H.R. 436, dubbed the Small Business Jobs and Tax Relief Act, would provide hiring incentives to companies and would be offset by eliminating tax subsidies for major oil companies. The Senate is expected to vote on these job creation proposals—which include part of President Obama’s congressional to-do list—in the weeks ahead.

Levin’s bill would provide a 10 percent income tax credit on new payroll—through either hiring or increased wages—added in 2012. The bill would allow for a maximum increase in eligible wages of $5 million per employer. The amount of the credit would be capped at $500,000 in order to better target the benefits of the tax credit to small businesses.

The bill would also extend 100 percent first-year bonus depreciation for one year for qualified property acquired and placed in service before Jan. 1, 2013, or Jan. 1, 2014 for certain longer-lived and transportation property. It would also permit a business to elect to accelerate certain Alternative Minimum Tax credits in lieu of the bonus depreciation extension. Businesses would be able to write off the entire cost of their major purchases in the year they are made rather than depreciate those expenses over many years.

The bill would be paid for by denying Section 199 benefits for certain major integrated oil companies.  It would exclude gross receipts derived from the sale, exchange or other disposition of oil, natural gas, or any of their primary products from the domestic production deduction for the major oil companies.  Another offset would be prohibiting the major oil companies from using the last-in-first-out, or LIFO, inventory accounting method.