I 

108TH CONGRESS 

2D SESSION H. R. 5093

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 

SEPTEMBER 15, 2004

Mr. ENGLISH 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 2006)’’ 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 2006)’’ 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 2004, 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 deter-
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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 2005, 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 2004’ 

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, 2004. 

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

6 AGAINST ALTERNATIVE MINIMUM TAX.—

7 (1) IN GENERAL.—Subsection (c) of section 38 

8 of the Internal Revenue Code of 1986 (relating to 

9 limitation based on amount of tax) is amended by 

10 redesignating paragraph (4) as paragraph (7) and 

11 by inserting after paragraph (3) the following new 

12 paragraphs: 

13 ‘‘(4) SPECIAL RULES FOR WORK OPPORTUNITY

14 CREDIT.—

15 ‘‘(A) IN GENERAL.—In the case of the 

16 work opportunity credit—

17 ‘‘(i) this section and section 39 shall 

18 be applied separately with respect to such 

19 credit, and 

20 ‘‘(ii) in applying paragraph (1) to 

21 such credit—

22 ‘‘(I) subparagraph (A) shall not 

23 apply, and 

24 ‘‘(II) the limitation under para25 graph (1) (as modified by subclause 
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1 (I)) shall be reduced by the credit al2 lowed under subsection (a) for the 

3 taxable year (other than the work op4 portunity credit, the welfare-to-work 

5 credit, or the research credit). 

6 ‘‘(B) WORK OPPORTUNITY CREDIT.—For 

7 purposes of this subsection, the term ‘work op8 portunity credit’ means the credit allowable 

9 under subsection (a) by reason of section 51(a). 

10 ‘‘(5) SPECIAL RULES FOR WELFARE-TO-WORK

11 CREDIT.—

12 ‘‘(A) IN GENERAL.—In the case of the wel13 fare-to-work credit—

14 ‘‘(i) this section and section 39 shall 

15 be applied separately with respect to such 

16 credit, and 

17 ‘‘(ii) in applying paragraph (1) to 

18 such credit—

19 ‘‘(I) subparagraph (A) shall not 

20 apply, and 

21 ‘‘(II) the limitation under para22 graph (1) (as modified by subclause 

23 (I)) shall be reduced by the credit al24 lowed under subsection (a) for the 
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1 taxable year (other than the welfare2 to-work credit or the research credit). 

3 ‘‘(B) WELFARE-TO-WORK CREDIT.—For 

4 purposes of this subsection, the term ‘welfare5 to-work credit’ means the credit allowable under 

6 subsection (a) by reason of section 51A(d)(2). 

7 ‘‘(6) SPECIAL RULES FOR RESEARCH CREDIT.—

8 ‘‘(A) IN GENERAL.—In the case of the re9 search credit—

10 ‘‘(i) this section and section 39 shall 

11 be applied separately with respect to such 

12 credit, and 

13 ‘‘(ii) in applying paragraph (1) to 

14 such credit—

15 ‘‘(I) subparagraph (A) shall not 

16 apply, and 

17 ‘‘(II) the limitation under para18 graph (1) (as modified by subclause 

19 (I)) shall be reduced by the credit al20 lowed under subsection (a) for the 

21 taxable year (other than the research 

22 credit). 

23 ‘‘(B) RESEARCH CREDIT.—For purposes of 

24 this subsection, the term ‘research credit’ 
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1 means the credit allowable under subsection (a) 

2 by reason of section 41.’’. 

3 (2) CONFORMING AMENDMENTS.—

4 (A) Subclause (II) of section 

5 38(c)(2)(A)(ii) of such Code is amended—

6 (i) by striking ‘‘or’’ after ‘‘employ7 ment credit’’ and inserting a comma, and 

8 (ii) by inserting ‘‘, the work oppor9 tunity credit, the welfare-to-work credit, or 

10 the research credit’’ after ‘‘employee cred11 it’’. 

12 (B) Subclause (II) of section 

13 38(c)(3)(A)(ii) of such Code is amended by in14 serting ‘‘, the work opportunity credit, the wel15 fare-to-work, or the research credit’’ after ‘‘em16 ployee credit’’. 

17 (3) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply to taxable years begin19 ning after December 31, 2004. 

20 SEC. 2. STANDARD HOME OFFICE DEDUCTION. 

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

22 the Internal Revenue Code of 1986 (relating to disallow23 ance of certain expenses in connection with business use 

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

25 adding at the end the following new paragraph: 
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1 ‘‘(7) STANDARD HOME OFFICE DEDUCTION.—

2 In the case of a use described in paragraph (1), (2), 

3 or (4), and in the case of a use described in para4 graph (3) where the dwelling unit is used by the tax5 payer during the taxable year as a residence, the de6 ductions allowed under this chapter for the taxable 

7 year by reason of being attributed to such use shall 

8 not be less than $2,500.’’. 

9 (b) STANDARD HOME OFFICE DEDUCTION NOT SUB10 JECT TO LIMITATION.—Paragraph (5) of section 280A(c) 

11 of such Code (relating to limitation on deductions) is 

12 amended by striking ‘‘In the case of’’ and inserting ‘‘Ex13 cept as provided in paragraph (7), in the case of’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to taxable years beginning after 

16 the date of the enactment of this Act. 

17 SEC. 3. MINIMUM WAGE PROVISIONS. 

18 (a) INCREASE IN TIP INCOME.—Section 3(m)(1) of 

19 the Fair Labor Standards Act of 1938 (29 U.S.C. 

20 203(m)(1)) is amended by adding before the semicolon the 

21 following: ‘‘, except that, for purposes of this paragraph, 

22 the cash wage paid such employee shall be not less than 

23 $3.25 an hour beginning October 1, 2005’’. 

24 (b) MINIMUM WAGE.—
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1 (1) EXEMPTION FOR SMALL EMPLOYERS.—Sec2 tion 6 of the Fair Labor Standards Act of 1938 (29 

3 U.S.C. 206) is amended—

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

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

6 ten or more employees’’; and 

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

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

9 ten or more employees’’. 

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

11 Act (29 U.S.C. 206(a)) is amended by striking para12 graph (1) and inserting the following new para13 graph: 

14 ‘‘(1) except as otherwise provided in this sec15 tion, not less than $5.15 an hour through the period 

16 ending September 30, 2005, not less than $5.50 an 

17 hour during the year beginning October 1, 2005, not 

18 less than $6.00 an hour during the year beginning 

19 October 1, 2006, and not less than $6.50 an hour 

20 during the year beginning October 1, 2007.’’. 

21 (c) EFFECTIVE DATE.—The amendment made by 

22 subsection (b)(1) shall apply beginning October 1, 2005. 
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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 annual gross 

8 volume of sales made or business done, exclu9 sive of excise taxes at the retail level that are 

10 separately stated, is not less than $500,000 

11 through the period ending September 30, 2005, 

12 not less than $650,000 during the year begin13 ning October 1, 2005, not less than $800,000 

14 during the year beginning October 1, 2006, and 

15 not less than $1,000,000 during the year begin16 ning October 1, 2007.’’. 

17 SEC. 5. EARNED INCOME EXCLUSION UNDER THE SSI PRO18 GRAM. 

19 (a) IN GENERAL.—Section 1612(b) of the Social Se20 curity Act (42 U.S.C. 1382a(b)) is amended—

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

22 (22); 

23 (2) by striking the period at the end of para24 graph (23) and inserting ‘‘; and’’; and 

25 (3) by adding at the end the following: 
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1 ‘‘(24)(A) if such individual does not have an eli2 gible spouse, the amount (if any) by which the min3 imum wage rate in effect for the month under sec4 tion 6 of the Fair Labor Standards Act of 1938 

5 multiplied by the number of hours for which such in6 dividual is gainfully employed during the month ex7 ceeds the total amount of earned income of such in8 dividual excluded by the preceding provisions of this 

9 subsection for the month; or 

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

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

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

13 Fair Labor Standards Act of 1938 multiplied by the 

14 total number of hours for which such individual and 

15 such spouse are gainfully employed during the 

16 month exceeds the total amount of earned income of 

17 such individual and such spouse excluded by the pre18 ceding provisions of this subsection for the month.’’. 

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

20 subsection (a) shall take effect on October 1, 2005, and 

21 shall apply to benefits for months beginning on or after 

22 such date.

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