I 

109TH CONGRESS 

2D SESSION H. R. 5368 

To amend the Internal Revenue Code of 1986 to provide for small business 

tax incentives, to amend the Fair Labor Standards Act of 1938 to 

increase the minimum wage and to increase the exemption for annual 

gross volume of sales made or business done by an enterprise, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 11, 2006 

Mr. ENGLISH of Pennsylvania (for himself, Mr. SIMMONS, and Mr. WELDON

of Pennsylvania) introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on 

Education and the Workforce, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for small business tax incentives, to amend the Fair 

Labor Standards Act of 1938 to increase the minimum 

wage and to increase the exemption for annual gross 

volume of sales made or business done by an enterprise, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SMALL BUSINESS TAX INCENTIVES. 

4 (a) INCREASE IN SECTION 179 EXPENSING.— 


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1 (1) INCREASE IN DOLLAR LIMITATION MADE

2 PERMANENT.—Paragraph (1) of section 179(b) of 

3 the Internal Revenue Code of 1986 (relating to dol4 lar limitation) is amended by striking ‘‘$25,000 

5 ($100,000 in the case of taxable years beginning 

6 after 2002 and before 2008)’’ and inserting 

7 ‘‘$100,000’’. 

8 (2) INCREASE IN THRESHOLD FOR REDUCTION

9 OF DOLLAR LIMITATION.—Paragraph (2) of section 

10 179(b) of such Code (relating to reduction in limita11 tion) is amended by striking ‘‘$200,000 ($400,000 

12 in the case of taxable years beginning after 2002 

13 and before 2008)’’ and inserting ‘‘$500,000’’. 

14 (3) INFLATION ADJUSTMENT.—Paragraph (5) 

15 of section 179(b) of such Code (relating to inflations 

16 adjustments) is amended to read as follows: 

17 ‘‘(5) INFLATION ADJUSTMENTS.— 

18 ‘‘(A) DOLLAR LIMITATION.—In the case of 

19 any taxable year beginning in a calendar year 

20 after 2005, the $100,000 amount in paragraph 

21 (1) shall be increased by an amount equal to— 

22 ‘‘(i) such dollar amount, multiplied by 

23 ‘‘(ii) the cost-of-living adjustment 

24 under section 1(f)(3) for the calendar year 

25 in which the taxable year begins deterVerDate Aug 31 2005 08:03 May 16, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5368.IH H5368

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1 mined by substituting ‘calendar year 2002’ 

2 for ‘calendar year 1992’ in subparagraph 

3 (B) thereof. 

4 ‘‘(B) PHASEOUT AMOUNT.—In the case of 

5 any taxable year beginning in a calendar year 

6 after 2006, the $500,000 amount in paragraph 

7 (2) shall be increased by an amount equal to— 

8 ‘‘(i) such dollar amount, multiplied by 

9 ‘‘(ii) the cost-of-living adjustment 

10 under section 1(f)(3) for the calendar year 

11 in which the taxable year begins deter12 mined by substituting ‘calendar year 2005’ 

13 for ‘calendar year 1992’ in subparagraph 

14 (B) thereof. 

15 ‘‘(C) ROUNDING.— 

16 ‘‘(i) DOLLAR LIMITATION.—If the 

17 amount in paragraph (1) as increased 

18 under subparagraph (A) is not a multiple 

19 of $1,000, such amount shall be rounded 

20 to the nearest multiple of $1,000. 

21 ‘‘(ii) PHASEOUT AMOUNT.—If the 

22 amount in paragraph (2) as increased 

23 under subparagraph (B) is not a multiple 

24 of $10,000, such amount shall be rounded 

25 to the nearest multiple of $10,000.’’. 


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1 (4) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to taxable years begin3 ning after December 31, 2005. 

4 (b) WORK OPPORTUNITY CREDIT, WELFARE-TO5 WORK CREDIT, AND RESEARCH CREDIT ALLOWED

6 AGAINST ALTERNATIVE MINIMUM TAX.— 

7 (1) IN GENERAL.—Subparagraph (B) of section 

8 38(c)(4) of the Internal Revenue Code of 1986 is 

9 amended by striking the period at the end of clause 

10 (ii)(II) and inserting a comma and by adding at the 

11 end the following new clauses: 

12 ‘‘(iii) the credit determined under sec13 tion 51, 

14 ‘‘(iv) the credit determined under sec15 tion 51A, and 

16 ‘‘(v) the credit determined under sec17 tion 41.’’. 

18 (2) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall apply to taxable years begin20 ning after December 31, 2005. 

21 SEC. 2. STANDARD HOME OFFICE DEDUCTION. 

22 (a) IN GENERAL.—Subsection (c) of section 280A of 

23 the Internal Revenue Code of 1986 (relating to disallow24 ance of certain expenses in connection with business use 


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1 of home, rental of vacation homes, etc.) is amended by 

2 adding at the end the following new paragraph: 

3 ‘‘(7) STANDARD HOME OFFICE DEDUCTION.—If 

4 the taxpayer elects (at such time and in such form 

5 and manner as the Secretary may prescribe) to have 

6 this paragraph apply for any taxable year, in the 

7 case of a use described in paragraph (1), (2), or (4), 

8 and in the case of a use described in paragraph (3) 

9 where the dwelling unit is used by the taxpayer dur10 ing the taxable year as a residence— 

11 ‘‘(A) there shall be allowed as a deduction 

12 an amount equal to $2,500, and 

13 ‘‘(B) no deduction otherwise allowable 

14 under this chapter shall be allowed with respect 

15 to such use.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall apply to taxable years beginning after 

18 the date of the enactment of this Act. 

19 SEC. 3. MINIMUM WAGE PROVISIONS. 

20 (a) EXEMPTION FOR SMALL EMPLOYERS.— 

21 (1) IN GENERAL.—Section 6 of the Fair Labor 

22 Standards Act of 1938 (29 U.S.C. 206) is amend23 ed— 


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1 (A) in subsection (a), by inserting after 

2 ‘‘Every employer’’ the following: ‘‘who employs 

3 ten or more employees’’; and 

4 (B) in subsection (b), by inserting after 

5 ‘‘Every employer’’ the following: ‘‘who employs 

6 ten or more employees’’. 

7 (2) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall apply beginning October 1, 

9 2006. 

10 (b) PHASED INCREASE.—Section 6(a) of such Act 

11 (29 U.S.C. 206(a)) is amended by striking paragraph (1) 

12 and inserting the following new paragraph: 

13 ‘‘(1) except as otherwise provided in this sec14 tion, not less than $5.15 an hour through the period 

15 ending September 30, 2006, not less than $6.00 an 

16 hour during the year beginning October 1, 2006, not 

17 less than $6.50 an hour during the year beginning 

18 October 1, 2007, not less than $7.00 an hour begin19 ning October 1, 2008, and not less than $7.50 an 

20 hour beginning October 1, 2009;’’. 


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1 SEC. 4. INCREASED EXEMPTION FOR ANNUAL GROSS VOL2 UME OF SALES MADE OR BUSINESS DONE BY 

3 AN ENTERPRISE. 

4 Section 3(s)(1)(A)(ii) of the Fair Labor Standards 

5 Act of 1938 (29 U.S.C. 203(s)(1)(A)(ii)) is amended to 

6 read as follows: 

7 ‘‘(ii) is an enterprise whose gross volume 

8 of sales made or business done during the tax9 able year (exclusive of excise taxes at the retail 

10 level that are separately stated) is not less than 

11 $500,000 in the case of taxable years ending 

12 before October 1, 2006, not less than $650,000 

13 in the case of taxable years ending during the 

14 year beginning October 1, 2006, not less than 

15 $800,000 in the case of taxable years ending 

16 during the year beginning October 1, 2007, and 

17 not less than $1,000,000 in the case of taxable 

18 years ending after September 30, 2008;’’. 

19 SEC. 5. EARNED INCOME EXCLUSION UNDER THE SSI PRO20 GRAM. 

21 (a) IN GENERAL.—Section 1612(b) of the Social Se22 curity Act (42 U.S.C. 1382a(b)) is amended— 

23 (1) by striking ‘‘and’’ at the end of paragraph 

24 (22); 

25 (2) by striking the period at the end of para26 graph (23) and inserting ‘‘; and’’; and 


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1 (3) by adding at the end the following: 

2 ‘‘(24)(A) if such individual does not have an eli3 gible spouse, the amount (if any) by which the min4 imum wage rate in effect for the month under sec5 tion 6 of the Fair Labor Standards Act of 1938 

6 multiplied by the number of hours for which such in7 dividual is gainfully employed during the month ex8 ceeds the total amount of earned income of such in9 dividual excluded by the preceding provisions of this 

10 subsection for the month; or 

11 ‘‘(B) if such individual has an eligible spouse, 

12 the amount (if any) by which the minimum wage 

13 rate in effect for the month under section 6 of the 

14 Fair Labor Standards Act of 1938 multiplied by the 

15 total number of hours for which such individual and 

16 such spouse are gainfully employed during the 

17 month exceeds the total amount of earned income of 

18 such individual and such spouse excluded by the pre19 ceding provisions of this subsection for the month.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 subsection (a) shall take effect on October 1, 2006, and 

22 shall apply to benefits for months beginning on or after 

23 such date. 

Æ 


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