147
tives, the Committee on Homeland Security and 
Governmental Affairs of the Senate, the Committees 
on Appropriations of the House of Representatives 
and the Senate, and other committees of jurisdic-
tion. 
(3) Paragraph (1) shall not apply to an agency 
or department with respect to a calendar quarter if 
no audits or other reports described in paragraph 
(1) were issued during that quarter. 
(b) SUBMISSION OF INDIVIDUAL AUDITS.—The head 
of each Federal agency or department shall provide, within 
14 days after a request in writing by the chairman or 
ranking member of any of the committees described in 
subsection (a)(2), a full and unredacted copy of any audit 
or other report described in subsection (a)(1).
TITLE VI—ELIMINATION OF SCHIP SHORTFALL 
DEPARTMENT OF HEALTH AND HUMAN 
SERVICES 
CENTERS FOR MEDICARE AND MEDICAID SERVICES 
STATE CHILDREN’S HEALTH INSURANCE FUND 
For an additional amount to provide additional allot-
ments to remaining shortfall States under section 
2104(h)(4) of the Social Security Act, as inserted by sec-
tion 6001, such sums as may be necessary, but not to ex-
ceed $750,000,000 for fiscal year 2007, to remain avail-
148
able until expended: Provided, That the amount provided 
under this heading is designated as an emergency require-
ment pursuant to section 501 of H. Con. Res. 376 (109th 
Congress), as made applicable to the House of Representa-
tives by section 511(a)(4) of H. Res. 6 (110th Congress). 
SEC. 6001. ELIMINATION OF REMAINDER OF SCHIP FUND-
ING SHORTFALLS FOR FISCAL YEAR 2007. 
(a) ELIMINATION
OF
REMAINDER
OF
FUNDING 
SHORTFALLS, TIERED MATCH, AND OTHER LIMITATION 
ON EXPENDITURES.—Section 2104(h) of the Social Secu-
rity Act (42 U.S.C. 1397dd(h)), as added by section 
201(a) of the National Institutes of Health Reform Act 
of 2006 (Public Law 109–482), is amended—
(1) in the heading for paragraph (2), by strik-
ing ‘‘REMAINDER
OF
REDUCTION’’ and inserting 
‘‘PART’’; and 
(2) by striking paragraph (4) and inserting the 
following: 
‘‘(4) ADDITIONAL AMOUNTS TO ELIMINATE RE-
MAINDER OF FISCAL YEAR 2007 FUNDING SHORT-
FALLS.—
‘‘(A) IN
GENERAL.—From the amounts 
provided in advance in appropriations Acts, the 
Secretary shall allot to each remaining shortfall 
State described in subparagraph (B) such
149
amount as the Secretary determines will elimi-
nate the estimated shortfall described in such 
subparagraph for the State for fiscal year 2007. 
‘‘(B) REMAINING SHORTFALL STATE DE-
SCRIBED.—For purposes of subparagraph (A), 
a remaining shortfall State is a State with a 
State child health plan approved under this title 
for which the Secretary estimates, on the basis 
of the most recent data available to the Sec-
retary as of the date of the enactment of this 
paragraph, that the projected Federal expendi-
tures under such plan for the State for fiscal 
year 2007 will exceed the sum of—
‘‘(i) the amount of the State’s allot-
ments for each of fiscal years 2005 and 
2006 that will not be expended by the end 
of fiscal year 2006; 
‘‘(ii) the amount of the State’s allot-
ment for fiscal year 2007; and 
‘‘(iii) the amounts, if any, that are to 
be redistributed to the State during fiscal 
year 2007 in accordance with paragraphs 
(1) and (2).’’.
150
(b) CONFORMING AMENDMENTS.—Section 2104(h) 
of such Act (42 U.S.C. 1397dd(h)) (as so added), is 
amended—
(1) in paragraph (1)(B), by striking ‘‘subject to 
paragraph (4)(B) and’’; 
(2) in paragraph (2)(B), by striking ‘‘subject to 
paragraph (4)(B) and’’; 
(3) in paragraph (5)(A), by striking ‘‘and (3)’’ 
and inserting ‘‘(3), and (4)’’; and 
(4) in paragraph (6), by striking ‘‘and (3)’’ and 
inserting ‘‘(3), and (4)’’. 
TITLE VII—MINIMUM WAGE INCREASE AND 
SMALL BUSINESS TAX RELIEF 
CHAPTER 1
SEC. 7101. SHORT TITLE. 
This chapter may be cited as the ‘‘Fair Minimum 
Wage Act of 2007’’. 
SEC. 7102. MINIMUM WAGE. 
(a) IN GENERAL.—Section 6(a)(1) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended 
to read as follows: 
‘‘(1) except as otherwise provided in this sec-
tion, not less than—
151
‘‘(A) $5.85 an hour, beginning on the 60th 
day after the date of enactment of the Fair 
Minimum Wage Act of 2007; 
‘‘(B) $6.55 an hour, beginning 12 months 
after that 60th day; and 
‘‘(C) $7.25 an hour, beginning 24 months 
after that 60th day;’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect 60 days after the date of 
enactment of this Act. 
SEC. 7103. APPLICABILITY OF MINIMUM WAGE TO THE 
COMMONWEALTH OF THE NORTHERN MAR-
IANA ISLANDS. 
(a) IN GENERAL.—Section 6 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206) shall apply to the 
Commonwealth of the Northern Mariana Islands. 
(b) TRANSITION.—Notwithstanding subsection (a), 
the minimum wage applicable to the Commonwealth of the 
Northern Mariana Islands under section 6(a)(1) of the 
Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 
shall be—
(1) $3.55 an hour, beginning on the 60th day 
after the date of enactment of this Act; and 
(2) increased by $0.50 an hour (or such lesser 
amount as may be necessary to equal the minimum
152
wage under section 6(a)(1) of such Act), beginning 
6 months after the date of enactment of this Act 
and every 6 months thereafter until the minimum 
wage applicable to the Commonwealth of the North-
ern Mariana Islands under this subsection is equal 
to the minimum wage set forth in such section. 
SEC. 7104. APPLICABILITY OF MINIMUM WAGE TO AMER-
ICAN SAMOA. 
(a) APPLICABILITY.—
(1) IN GENERAL.—Section 6 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206) shall apply 
to American Samoa. 
(2) CONFORMING
AMENDMENT.—Section 6(a) 
of the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)) is amended by striking paragraph (3) and 
redesignating paragraphs (4) and (5) as paragraphs 
(3) and (4), respectively. 
(b) TRANSITION.—
(1) IN GENERAL.—Notwithstanding subsection 
(a), the minimum wage applicable to American 
Samoa under section 6(a)(1) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(a)(1)) shall 
be—
(A) $3.55 an hour, beginning on the 60th 
day after the date of enactment of this Act; and
153
(B) increased by $0.50 an hour (or such 
lesser amount as may be necessary to equal the 
minimum wage under section 6(a)(1) of such 
Act), beginning 6 months after the date of en-
actment of this Act and every 6 months there-
after until the minimum wage applicable to 
American Samoa under this paragraph is equal 
to the minimum wage set forth in such section. 
(2) SPECIAL
RULE.—Notwithstanding para-
graph (1), if an employee is employed in an industry 
in American Samoa that, on the date of enactment 
of this Act, is required to pay a minimum wage rate 
under section 697 of title 29, Code of Federal Regu-
lations, that is higher than the minimum wage rate 
required under paragraph (1)(A), the minimum 
wage applicable to such employee shall be—
(A) the minimum wage rate required for 
such an industry under such section on the date 
of enactment of this Act; and 
(B) increased by $0.50 an hour (or such 
lesser amount as may be necessary to equal the 
minimum wage under section 6(a)(1) of such 
Act), beginning 6 months after the date of en-
actment of this Act and every 6 months there-
after until the minimum wage applicable to
154
American Samoa under this subsection is equal 
to the minimum wage set forth in such section. 
CHAPTER 2
SEC. 7201. SHORT TITLE; AMENDMENT OF 1986 CODE; 
TABLE OF CONTENTS. 
(a) SHORT TITLE.—This chapter may be cited as the 
‘‘Small Business Tax Relief Act of 2007’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this chapter an 
amendment or repeal is expressed in terms of an amend-
ment to, or repeal of, a section or other provision, the ref-
erence shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this chapter is as follows:
Sec. 7201. Short title; amendment of 1986 Code; table of contents. 
Sec. 7202. Extension and modification of work opportunity tax credit. 
Sec. 7203. Extension and increase of expensing for small business. 
Sec. 7204. Determination of credit for certain taxes paid with respect to em-
ployee cash tips. 
Sec. 7205. Waiver of individual and corporate alternative minimum tax limits 
on work opportunity credit and credit for taxes paid with re-
spect to employee cash tips. 
Sec. 7206. Family business tax simplification. 
Sec. 7207. Denial of lowest capital gains rate for certain dependents. 
Sec. 7208. Suspension of certain penalties and interest. 
Sec. 7209. Time for payment of corporate estimated taxes.
SEC. 7202. EXTENSION AND MODIFICATION OF WORK OP-
PORTUNITY TAX CREDIT. 
(a) EXTENSION.—Section 51(c)(4)(B) (relating to 
termination) is amended by striking ‘‘2007’’ and inserting 
‘‘2008’’.
155
(b) INCREASE IN MAXIMUM AGE FOR DESIGNATED 
COMMUNITY RESIDENTS.—
(1) IN
GENERAL.—Paragraph (5) of section 
51(d) is amended to read as follows: 
‘‘(5) DESIGNATED COMMUNITY RESIDENTS.—
‘‘(A) IN GENERAL.—The term ‘designated 
community resident’ means any individual who 
is certified by the designated local agency—
‘‘(i) as having attained age 18 but not 
age 40 on the hiring date, and 
‘‘(ii) as having his principal place of 
abode within an empowerment zone, enter-
prise community, or renewal community. 
‘‘(B) INDIVIDUAL MUST CONTINUE TO RE-
SIDE IN ZONE OR COMMUNITY.—In the case of 
a designated community resident, the term 
‘qualified wages’ shall not include wages paid or 
incurred for services performed while the indi-
vidual’s principal place of abode is outside an 
empowerment zone, enterprise community, or 
renewal community.’’. 
(2) CONFORMING AMENDMENT.—Subparagraph 
(D) of section 51(d)(1) is amended to read as fol-
lows: 
‘‘(D) a designated community resident,’’.
156
(c) CLARIFICATION OF TREATMENT OF INDIVIDUALS 
UNDER INDIVIDUAL WORK PLANS.—Subparagraph (B) 
of section 51(d)(6) (relating to vocational rehabilitation 
referral) is amended by striking ‘‘or’’ at the end of clause 
(i), by striking the period at the end of clause (ii) and 
inserting ‘‘, or’’, and by adding at the end the following 
new clause: 
‘‘(iii) an individual work plan devel-
oped and implemented by an employment 
network pursuant to subsection (g) of sec-
tion 1148 of the Social Security Act with 
respect to which the requirements of such 
subsection are met.’’. 
(d) TREATMENT OF DISABLED VETERANS UNDER 
THE WORK OPPORTUNITY TAX CREDIT.—
(1) DISABLED
VETERANS
TREATED
AS
MEM-
BERS OF TARGETED GROUP.—
(A) IN
GENERAL.—Subparagraph (A) of 
section 51(d)(3) (relating to qualified veteran) 
is amended by striking ‘‘agency as being a 
member of a family’’ and all that follows and 
inserting: 
‘‘agency as—
‘‘(i) being a member of a family re-
ceiving assistance under a food stamp pro-
157
gram under the Food Stamp Act of 1977 
for at least a 3-month period ending dur-
ing the 12-month period ending on the hir-
ing date, or 
‘‘(ii) entitled to compensation for a 
service-connected disability, and—
‘‘(I) having a hiring date which is 
not more that 1 year after having 
been discharged or released from ac-
tive duty in the Armed Forces of the 
United States, or 
‘‘(II) having aggregate periods of 
unemployment during the 1-year pe-
riod ending on the hiring date which 
equal or exceed 6 months.’’. 
(B) DEFINITIONS.—Paragraph (3) of sec-
tion 51(d) is amended by adding at the end the 
following new subparagraph: 
‘‘(C) OTHER DEFINITIONS.—For purposes 
of subparagraph (A), the terms ‘compensation’ 
and ‘service-connected’ have the meanings given 
such terms under section 101 of title 38, 
United States Code.’’.
158
(2) INCREASE IN AMOUNT OF WAGES TAKEN 
INTO
ACCOUNT
FOR
DISABLED
VETERANS.—Para-
graph (3) of section 51(b) is amended—
(A) by inserting ‘‘($12,000 per year in the 
case of any individual who is a qualified veteran 
by reason of subsection (d)(3)(A)(ii))’’ before 
the period at the end, and 
(B) by striking ‘‘ONLY FIRST $6,000 OF’’ in 
the heading and inserting ‘‘LIMITATION ON’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after the date of the enactment of this Act. 
SEC. 7203. EXTENSION AND INCREASE OF EXPENSING FOR 
SMALL BUSINESS. 
(a) EXTENSION.—Subsections (b)(1), (b)(2), (b)(5), 
(c)(2), and (d)(1)(A)(ii) of section 179 (relating to election 
to expense certain depreciable business assets) are each 
amended by striking ‘‘2010’’ and inserting ‘‘2011’’. 
(b) INCREASE IN LIMITATIONS.—Subsection (b) of 
section 179 is amended—
(1) by striking ‘‘$100,000 in the case of taxable 
years beginning after 2002’’ in paragraph (1) and 
inserting ‘‘$125,000 in the case of taxable years be-
ginning after 2006’’, and
159
(2) by striking ‘‘$400,000 in the case of taxable 
years beginning after 2002’’ in paragraph (2) and 
inserting ‘‘$500,000 in the case of taxable years be-
ginning after 2006’’. 
(c) INFLATION ADJUSTMENT.—Subparagraph (A) of 
section 179(b)(5) is amended—
(1) by striking ‘‘2003’’ and inserting ‘‘2007’’, 
(2) by striking ‘‘$100,000 and $400,000’’ and 
inserting ‘‘$125,000 and $500,000’’, and 
(3) by striking ‘‘2002’’ in clause (ii) and insert-
ing ‘‘2006’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 7204. DETERMINATION OF CREDIT FOR CERTAIN 
TAXES PAID WITH RESPECT TO EMPLOYEE 
CASH TIPS. 
(a) IN GENERAL.—Subparagraph (B) of section 
45B(b)(1) is amended by inserting ‘‘as in effect on Janu-
ary 1, 2007, and’’ before ‘‘determined without regard to’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to tips received for services per-
formed after December 31, 2006.
160
SEC. 7205. WAIVER OF INDIVIDUAL AND CORPORATE AL-
TERNATIVE MINIMUM TAX LIMITS ON WORK 
OPPORTUNITY CREDIT AND CREDIT FOR 
TAXES PAID WITH RESPECT TO EMPLOYEE 
CASH TIPS. 
(a) ALLOWANCE AGAINST ALTERNATIVE MINIMUM 
TAX.—Subparagraph (B) of section 38(c)(4) is amended 
by striking ‘‘and’’ at the end of clause (i), by inserting 
a comma at the end of clause (ii), and by adding at the 
end the following new clauses: 
‘‘(iii) the credit determined under sec-
tion 45B, and 
‘‘(iv) the credit determined under sec-
tion 51.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to credits determined under sec-
tions 45B and 51 of the Internal Revenue Code of 1986 
in taxable years beginning after December 31, 2006, and 
to carrybacks of such credits. 
SEC. 7206. FAMILY BUSINESS TAX SIMPLIFICATION. 
(a) IN GENERAL.—Section 761 (defining terms for 
purposes of partnerships) is amended by redesignating 
subsection (f) as subsection (g) and by inserting after sub-
section (e) the following new subsection: 
‘‘(f) QUALIFIED JOINT VENTURE.—
161
‘‘(1) IN GENERAL.—In the case of a qualified 
joint venture conducted by a husband and wife who 
file a joint return for the taxable year, for purposes 
of this title—
‘‘(A) such joint venture shall not be treat-
ed as a partnership, 
‘‘(B) all items of income, gain, loss, deduc-
tion, and credit shall be divided between the 
spouses in accordance with their respective in-
terests in the venture, and 
‘‘(C) each spouse shall take into account 
such spouse’s respective share of such items as 
if they were attributable to a trade or business 
conducted by such spouse as a sole proprietor. 
‘‘(2) QUALIFIED
JOINT
VENTURE.—For pur-
poses of paragraph (1), the term ‘qualified joint ven-
ture’ means any joint venture involving the conduct 
of a trade or business if—
‘‘(A) the only members of such joint ven-
ture are a husband and wife, 
‘‘(B) both spouses materially participate 
(within the meaning of section 469(h) without 
regard to paragraph (5) thereof) in such trade 
or business, and
162
‘‘(C) both spouses elect the application of 
this subsection.’’. 
(b) NET EARNINGS FROM SELF-EMPLOYMENT.—
(1) Subsection (a) of section 1402 (defining net 
earnings from self-employment) is amended by strik-
ing ‘‘, and’’ at the end of paragraph (15) and insert-
ing a semicolon, by striking the period at the end of 
paragraph (16) and inserting ‘‘; and’’, and by insert-
ing after paragraph (16) the following new para-
graph: 
‘‘(17) notwithstanding the preceding provisions 
of this subsection, each spouse’s share of income or 
loss from a qualified joint venture shall be taken 
into account as provided in section 761(f) in deter-
mining net earnings from self-employment of such 
spouse.’’. 
(2) Subsection (a) of section 211 of the Social 
Security Act (defining net earnings from self-em-
ployment) is amended by striking ‘‘and’’ at the end 
of paragraph (14), by striking the period at the end 
of paragraph (15) and inserting ‘‘; and’’, and by in-
serting after paragraph (15) the following new para-
graph: 
‘‘(16) Notwithstanding the preceding provisions 
of this subsection, each spouse’s share of income or
163
loss from a qualified joint venture shall be taken 
into account as provided in section 761(f) of the In-
ternal Revenue Code of 1986 in determining net 
earnings from self-employment of such spouse.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 7207. DENIAL OF LOWEST CAPITAL GAINS RATE FOR 
CERTAIN DEPENDENTS. 
(a) IN GENERAL.—Subsection (h) of section 1 is 
amended by adding at the end the following new para-
graph: 
‘‘(12) CERTAIN
INDIVIDUALS
NOT
ELIGIBLE 
FOR LOWEST RATE.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual described in subparagraph (B)—
‘‘(i) the amount determined under 
paragraph (1)(A)(ii)(II) shall not be less 
than the amount of taxable income which 
would (without regard to this subsection) 
be taxed at a rate below 15 percent, and 
‘‘(ii) the sum of the amounts deter-
mined under subparagraphs (B) and (C) of 
paragraph (1) shall be an amount equal to 
the rate of tax specified in paragraph
164
(1)(C) multiplied by so much of the ad-
justed net capital gain (or, if less, taxable 
income) as exceeds the excess (if any) of—
‘‘(I) the amount of taxable in-
come which would (without regard to 
this subsection) be taxed at a rate 
below 15 percent, over 
‘‘(II) the taxable income reduced 
by the adjusted net capital gain. 
‘‘(B) INDIVIDUALS TO WHOM PARAGRAPH 
APPLIES.—
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, an individual is described 
in this subparagraph if—
‘‘(I) such individual meets the 
age requirements of section 152(c)(3) 
(determined without regard to sub-
paragraph (B) thereof), and 
‘‘(II) such individual’s earned in-
come (as defined in section 911(d)(2)) 
for the taxable year does not exceed 
one-half of such individual’s support 
(within the meaning of section 152) 
for such taxable year.
165
‘‘(ii) SPECIAL RULES FOR JOINT RE-
TURNS.—In the case of a joint return—
‘‘(I) the taxpayer and the tax-
payer’s spouse shall be treated as a 
single individual for purposes of ap-
plying subclause (II) of clause (i), and 
‘‘(II) the taxpayer shall be treat-
ed as an individual described in this 
subparagraph only if the taxpayer and 
the taxpayer’s spouse are described in 
clause (i) (determined after applica-
tion of subclause (I)).’’. 
(b) ALTERNATIVE MINIMUM TAX.—Section 55 is 
amended by adding at the end the following new sub-
section: 
‘‘(f) CERTAIN INDIVIDUALS NOT ELIGIBLE
FOR 
LOWEST RATE.—In the case of an individual described in 
section 1(h)(12)(B), no amount shall be determined under 
subsection (b)(3)(B).’’. 
(c) COORDINATION WITH SUNSET OF PROVISIONS OF 
THE JOBS AND GROWTH TAX RELIEF RECONCILIATION 
ACT OF 2003.—Subparagraph (A) of section 1(h)(12), as 
added by this section, is amended by striking ‘‘and’’ at 
the end of clause (i), by striking the period at the end
166
of clause (ii) and inserting ‘‘, and’’, and by adding at the 
end the following new clause: 
‘‘(iii) no amount of qualified 5-year 
gain shall be taken into account under sub-
paragraph (A) of paragraph (2) (as in ef-
fect after the application of section 303 of 
the Jobs and Growth Tax Relief Reconcili-
ation Act of 2003).’’. 
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to taxable years beginning after Decem-
ber 31, 2006. 
(2) SUNSET
OF
JGTRRA.—The amendment 
made by subsection (c) shall apply to taxable years 
beginning after the date specified in section 303 of 
the Jobs and Growth Tax Relief Reconciliation Act 
of 2003. 
SEC. 7208. SUSPENSION OF CERTAIN PENALTIES AND IN-
TEREST. 
(a) IN GENERAL.—Paragraphs (1)(A) and (3)(A) of 
section 6404(g) are each amended by striking ‘‘18-month 
period’’ and inserting ‘‘22-month period’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to notices provided by the Sec-
167
retary of the Treasury, or his delegate, after the date 
which is 6 months after the date of the enactment of this 
Act. 
SEC. 7209. TIME FOR PAYMENT OF CORPORATE ESTIMATED 
TAXES. 
Subparagraph (B) of section 401(1) of the Tax In-
crease Prevention and Reconciliation Act of 2005 is 
amended by striking ‘‘106.25 percent’’ and inserting 
‘‘112.75 percent’’. 
This Act may be cited as the ‘‘U.S. Troop Readiness, 
Veterans’ Health, and Iraq Accountability Act, 2007’’.
Passed the House of Representatives March 23, 
2007. 
Attest:
Clerk.
110TH CONGRESS 
1ST SESSION 
H. R. 1591
AN ACT 
Making emergency supplemental appropriations for 
the fiscal year ending September 30, 2007, and 
for other purposes.