(b) ALLOWABLE PERCENTAGE.—Section 274(n) is 
amended by redesignating paragraphs (2) and (3) as para-
graphs (3) and (4), respectively, and by inserting after 
paragraph (1) the following new paragraph: 
‘‘(2) ALLOWABLE PERCENTAGE.—For purposes 
of paragraph (1), the allowable percentage is— 
‘‘(A) in the case of amounts for items de-
scribed in paragraph (1)(B), 50 percent, and 
‘‘(B) in the case of expenses for food or 
beverages, 80 percent.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) The heading for subsection (n) of section 
274 is amended by striking ‘‘50 PERCENT’’ and in-
serting ‘‘LIMITED PERCENTAGES’’. 
(2) Subparagraph (A) of section 274(n)(4), as 
redesignated by this section, is amended by striking 
‘‘paragraph (1)’’ and inserting ‘‘paragraph (2)(A)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 105. ALTERNATIVE MINIMUM TAX. 
(a) REPEAL OF ALTERNATIVE MINIMUM TAX ON IN-
DIVIDUALS.—
(1) IN GENERAL.—Section 55(a) (relating to al-
ternative minimum tax) is amended by adding at the 
end the following new flush sentence: 
‘‘For purposes of this title, the tentative minimum tax on 
any taxpayer other than a corporation for any taxable year 
beginning after December 31, 2009, shall be zero.’’. 
(2) REDUCTION OF TAX ON INDIVIDUALS PRIOR 
TO REPEAL.—Section 55 is amended by adding at 
the end the following new subsection: 
‘‘(f) PHASEOUT OF TAX ON INDIVIDUALS.— 
‘‘(1) IN GENERAL.—The tax imposed by this 
section on a taxpayer other than a corporation for 
any taxable year beginning after December 31, 
2005, and before January 1, 2010, shall be the ap-
plicable percentage of the tax which would be im-
posed but for this subsection. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage shall be 
determined in accordance with the following table: 
‘‘For taxable years beginning 
The applicable 
in calendar year— 
percentage is— 
2006 ...................................................................................................
2007 ...................................................................................................
2008 ...................................................................................................
2009 ...................................................................................................
20.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2005.
(b) NONREFUNDABLE PERSONAL CREDITS FULLY 
ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.— 
(1) IN GENERAL.—Section 26(a) (relating to 
limitation based on amount of tax) is amended to 
read as follows: 
‘‘(a) LIMITATION BASED ON AMOUNT OF TAX.—The 
aggregate amount of credits allowed by this subpart for 
the taxable year shall not exceed the sum of— 
‘‘(1) the taxpayer’s regular tax liability for the 
taxable year reduced by the foreign tax credit allow-
able under section 27(a), and 
‘‘(2) the tax imposed by section 55(a) for the 
taxable year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 23(b) is amended by striking 
paragraph (4). 
(B) Section 24(b) is amended by striking 
paragraph (3). 
(C) Section 25B is amended by striking 
subsection (g). 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2005. 
(c) EXPANSION OF THE EXEMPTION FROM THE AL-
TERNATIVE MINIMUM TAX FOR SMALL CORPORATIONS.—
(1) IN GENERAL.—Section 55(e)(1)(A) (relating 
to exemption for small corporations) is amended to 
read as follows: 
‘‘(A) 
$10,000,000 
GROSS
RECEIPTS 
TEST.—The tentative minimum tax of a cor-
poration shall be zero for any taxable year if 
the corporation’s average annual gross receipts 
for all 3-taxable-year periods ending before such 
taxable year does not exceed $10,000,000. For 
purposes of the preceding sentence, only taxable 
years beginning after December 31, 200s, shall 
be taken into account.’’. 
(2) GROSS RECEIPTS TEST FOR FIRST 3-YEAR 
PERIOD.—Section 55(e)(1)(B) is amended to read as 
follows: 
‘‘(B) $7,500,000 GROSS
RECEIPTS
TEST 
FOR FIRST 3-YEAR PERIOD.—Subparagraph (A) 
shall be applied by substituting ‘$7,500,000’ for 
‘$10,000,000’ for the first 3-taxable-year period 
(or portion thereof) of the corporation which is 
taken into account under subparagraph (A).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2005.
SEC. 106. CREDIT FOR EXPENSES FOR LONG-TERM TRAIN-
ING OF EMPLOYEES IN HIGHLY SKILLED 
SMALL BUSINESS TRADES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
‘‘SEC. 45N. EXPENSES FOR LONG-TERM TRAINING OF EM-
PLOYEES IN HIGHLY SKILLED SMALL BUSI-
NESS TRADES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a small business employer, the highly skilled 
trades training credit determined under this section for 
the taxable year is $15,000 for each employee having a 
qualified training year ending with or within such taxable 
year (whether or not such employee is an employee of the 
taxpayer as of the close of such taxable year). 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) SMALL BUSINESS EMPLOYER.— 
‘‘(A) IN GENERAL.—The term ‘small busi-
ness employer’ means, with respect to any tax-
able year, any employer who employed an aver-
age of 250 or fewer employees on business days 
during such taxable year. 
‘‘(B) CONTROLLED
GROUPS.—For pur-
poses of subparagraph (A), all persons treated