[Congressional Record Volume 153, Number 17 (Monday, January 29, 2007)]
[Senate]
[Pages S1294-S1296]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 212. Mr. PRYOR (for himself, Mr. Warner, and Mrs. Lincoln) 
submitted an amendment intended to be proposed by him to the bill H.R. 
2, to amend the Fair Labor Standards Act of 1938 to provide for an 
increase in the Federal minimum wage; which was ordered to lie on the 
table; as follows:

       At the appropriate place insert the following:

     SEC.__. EARNED INCOME INCLUDES COMBAT PAY.

       (A) Earned Income Credit.--Clause (vi) of section 
     32(c)(2)(B) is amended to read as follows:
       ``(vi) a taxpayer may elect to treat amounts excluded from 
     gross income by reason of section 112 as earned income.''.
       (b) Repeal of EGTRRA Sunset Applicability.--Section 105 of 
     the Working Families Tax Relief Act of 2004 shall not apply 
     to the amendments made by section 104(b) of such Act.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years ending after December 31, 2006.
                                 ______
                                 
  SA 213. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 100 proposed by Mr. Reid (for Mr. Baucus) to the bill 
H.R. 2, to amend the Fair Labor Standards Act of 1938 to provide for an 
increase in the Federal minimum wage; which was ordered to lie on the 
table; as follows:

       On page 4, line 21, strike ``April 1, 2008'' and insert 
     ``April 1, 2008 (January 1, 2009, if placed in service in the 
     Gulf Opportunity Zone (as defined in section 1400M(1))''.
                                 ______
                                 
  SA 214. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 100 proposed by Mr. Reid (for Mr. Baucus) to the bill 
H.R. 2, to amend the Fair Labor Standards Act of 1938 to provide for an 
increase in the Federal minimum wage; which was ordered to lie on the 
table; as follows:

       On page 6, lines 5 and 6, strike ``April 1, 2008'' and 
     insert ``April 1, 2008 (January 1, 2009, if placed in service 
     in the Gulf Opportunity Zone (as defined in section 
     1400M(1))''.
                                 ______
                                 
  SA 215. Mr. HARKIN (for himself and Mrs. Murray) submitted an 
amendment intended to be proposed to amendment SA 100 proposed by Mr. 
Reid (for Mr. Baucus) to the bill H.R. 2, to amend the Fair Labor 
Standards Act of 1938 to provide for an increase in the Federal minimum 
wage; which was ordered to lie on the table; as follows:

       Beginning on page 16, line 1, strike all through page 31, 
     line 8.
                                 ______
                                 
  SA 216. Mr. CARDIN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend the Fair Labor Standards Act of 1938 
to provide for an increase in the Federal minimum wage; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. ALLOWANCE OF DEDUCTION FOR CHARITABLE CONTRIBUTIONS 
                   FOR ELECTING SMALL BUSINESS TRUSTS.

       (a) In General.--Section 641(c)(2)(C) of the Internal 
     Revenue Code of 1986 (relating to modifications) is amended 
     by adding at the end the following new sentence: ``The 
     deduction for charitable contributions allowed under clause 
     (i) shall be determined without regard to section 642(c), and 
     the limitations imposed by section 170(b)(1) on the amount of 
     the deduction shall be applied to the electing small business 
     trust as if it were an individual.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 217. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend the Fair Labor Standards Act of 1938 
to provide for an increase in the Federal minimum wage; which was 
ordered to lie on the table; as follows:

       At the end of section 3, add the following:
       (c) Applicability to American Samoa.--Notwithstanding 
     sections 5, 6(a)(3), 8, 10, and 13(e) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 205, 206(a)(3), 208, 210, 
     213(e)), subsections (a) and (b) of this section shall apply 
     to American Samoa in the same manner as such subsections 
     apply to the Commonwealth of the Northern Mariana Islands.
                                 ______
                                 
  SA 218. Mr. THUNE (for himself and Mr. Vitter) submitted an amendment 
intended to be proposed to amendment SA 100 proposed by Mr. Reid (for 
Mr. Baucus) to the bill H.R. 2, to amend the Fair Labor Standards Act 
of 1938 to provide for an increase in the Federal minimum wage; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. SENSE OF THE SENATE CONCERNING HEALTH INSURANCE FOR 
                   SMALL BUSINESSES.

       (a) Findings.--The Senate finds that--
       (1) raising the minimum wage may have an impact on small 
     businesses and the number of employees and dependents who are 
     covered by employee based health insurance; and
       (2) the cost of health care is rising at an alarming rate 
     and that almost half of the estimated 45,000,000 uninsured 
     Americans are employees of, or are family members of, 
     employees who work for small businesses.
       (b) Sense of the Senate.--It is the Senate of the Senate 
     that, in order to address the issues described in subsection 
     (a), Congress should vote during the first session of the 
     110th Congress to provide health insurance reforms that allow 
     small businesses to purchase health insurance for their 
     employees.
                                 ______
                                 
  SA 219. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 100 proposed by Mr. Reid (for Mr. Baucus) to the bill 
H.R. 2, to amend the Fair Labor Standards Act of 1938 to provide for an 
increase in the Federal minimum wage; which was ordered to lie on the 
table; as follows:

       At the appropriate place insert the following:

     SEC. __. REDUCTION IN INCOME TAX WITHHOLDING DEPOSITS TO 
                   REFLECT FICA PAYROLL TAX CREDIT FOR CERTAIN 
                   EMPLOYERS LOCATED IN SPECIFIED PORTIONS OF THE 
                   GO ZONE DURING 2007.

       (a) General Rule.--In the case of any applicable calendar 
     quarter--
       (1) the aggregate amount of required income tax deposits of 
     an eligible employer for the calendar quarter following the 
     applicable calendar quarter shall be reduced by the payroll 
     tax credit equivalent amount for the applicable calendar 
     quarter, and
       (2) the amount of any deduction allowable to the eligible 
     employer under chapter 1 of the Internal Revenue Code of 1986 
     for taxes paid under section 3111 of such Code with respect 
     to employment during the applicable calendar quarter shall be 
     reduced by such payroll tax credit equivalent amount.

     For purposes of the Internal Revenue Code of 1986, an 
     eligible employer shall be treated as having paid, and an 
     eligible employee shall be treated as having received, any 
     wages or compensation deducted and withheld but not deposited 
     by reason of paragraph (1).
       (b) Carryovers of Unused Amounts.--If the payroll tax 
     credit equivalent amount for any applicable calendar quarter 
     exceeds the required income tax deposits for the following 
     calendar quarter--
       (1) such excess shall be added to the payroll tax credit 
     equivalent amount for the next applicable calendar quarter, 
     and
       (2) in the case of the last applicable calendar quarter, 
     such excess shall be used to reduce required income tax 
     deposits for any succeeding calendar quarter until such 
     excess is used.
       (c) Payroll Tax Credit Equivalent Amount.--For purposes of 
     this section--
       (1) In general.--The term ``payroll tax credit equivalent 
     amount'' means, with respect to any applicable calendar 
     quarter, an amount equal to 7.65 percent of the aggregate 
     amount of wages or compensation--
       (A) paid or incurred by the eligible employer with respect 
     to employment of eligible employees during the applicable 
     calendar quarter, and
       (B) subject to the tax imposed by section 3111 of the 
     Internal Revenue Code of 1986.
       (2) Trade or business requirement.--A rule similar to the 
     rule of section 51(f) of such Code shall apply for purposes 
     of this section.
       (3) Limitation on wages subject to credit.--For purposes of 
     this subsection, only wages and compensation of an eligible 
     employee in an applicable calendar quarter, when added to 
     such wages and compensation for any preceding applicable 
     calendar quarter, not exceeding $10,000 shall be taken into 
     account with respect to such employee.

[[Page S1295]]

       (d) Eligible Employer; Eligible Employee.--For purposes of 
     this section--
       (1) Eligible employer.--
       (A) In general.--The term ``eligible employer'' means any 
     employer which conducts an active trade or business in any 
     specified portion of the GO Zone and employs not more than 75 
     full-time employees on the date of the enactment of this Act.
       (B) Specified portion of the go zone.--The term ``specified 
     portion of the GO Zone'' means any portion of the GO Zone (as 
     defined in section 1400M(1) of the Internal Revenue Code of 
     1986) which is in any county or parish which is identified by 
     the Secretary of the Treasury as being a county or parish in 
     which hurricanes occurring during 2005 damaged (in the 
     aggregate) more than 60 percent of the housing units in such 
     county or parish which were occupied (determined according to 
     the 2000 Census).
       (2) Eligible employee.--The term ``eligible employee'' 
     means with respect to an eligible employer an employee whose 
     principal place of employment with such eligible employer is 
     in a specified portion of the GO Zone. Such term shall not 
     include an employee described in section 401(c)(1)(A).
       (e) Applicable Calendar Quarter.--For purposes of this 
     section, the term ``applicable calendar quarter'' means any 
     of the 4 calendar quarters beginning after date of enactment.
       (f) Special Rules.--For purposes of this section--
       (1) Required income tax deposits.--The term ``required 
     income tax deposits'' means deposits an eligible employer is 
     required to make under section 6302 of the Internal Revenue 
     Code of 1986 of taxes such employer is required to deduct and 
     withhold under section 3402 of such Code.
       (2) Aggregation rules.--Rules similar to the rules of 
     subsections (a) and (b) of section 52 of the Internal Revenue 
     Code of 1986 shall apply.
       (3) Employers not on quarterly system.--The Secretary of 
     the Treasury shall prescribe rules for the application of 
     this section in the case of an eligible employer whose 
     required income tax deposits are not made on a quarterly 
     basis.
       (4) Adjustments for certain acquisitions, etc.--Under 
     regulations prescribed by the Secretary--
       (A) Acquisitions.--If, after December 31, 2006, an employer 
     acquires the major portion of a trade or business of another 
     person (hereafter in this paragraph referred to as the 
     ``predecessor'') or the major portion of a separate unit of a 
     trade or business of a predecessor, then, for purposes of 
     applying this section for any calendar quarter ending after 
     such acquisition, the amount of wages or compensation deemed 
     paid by the employer during periods before such acquisition 
     shall be increased by so much of such wages or compensation 
     paid by the predecessor with respect to the acquired trade or 
     business as is attributable to the portion of such trade or 
     business acquired by the employer.
       (B) Dispositions.--If, after December 31, 2006--
       (i) an employer disposes of the major portion of any trade 
     or business of the employer or the major portion of a 
     separate unit of a trade or business of the employer in a 
     transaction to which paragraph (1) applies, and
       (ii) the employer furnishes the acquiring person such 
     information as is necessary for the application of 
     subparagraph (A),
     then, for purposes of applying this section for any calendar 
     quarter ending after such disposition, the amount of wages or 
     compensation deemed paid by the employer during periods 
     before such disposition shall be decreased by so much of such 
     wages as is attributable to such trade or business or 
     separate unit.
       (5) Other rules.--
       (A) Government employers.--This section shall not apply if 
     the employer is the Government of the United States, the 
     government of any State or political subdivision of the 
     State, or any agency or instrumentality of any such 
     government.
       (B) Treatment of other entities.--Rules similar to the 
     rules of subsections (d) and (e) of section 52 of such Code 
     shall apply for purposes of this section.
                                 ______
                                 
  SA 220. Mr. COLEMAN (for himself and Mr. Smith) submitted an 
amendment intended to be proposed to amendment SA 100 proposed by Mr. 
Reid (for Mr. Baucus) to the bill H.R. 2, to amend the Fair Labor 
Standards Act of 1938 to provide for an increase in the Federal minimum 
wage; which was ordered to lie on the table; as follows:

       Beginning on page 31, line 9, strike all through page 39, 
     line 10, and insert the following:

                    PART II--SUBCHAPTER S PROVISIONS

     SEC. 211. CAPITAL GAIN OF S CORPORATION NOT TREATED AS 
                   PASSIVE INVESTMENT INCOME.

       (a) In General.--Section 1362(d)(3) is amended by striking 
     subparagraphs (B), (C), (D), (E), and (F) and inserting the 
     following new subparagraph:
       ``(B) Passive investment income defined.--
       ``(i) In general.--Except as otherwise provided in this 
     subparagraph, the term `passive investment income' means 
     gross receipts derived from royalties, rents, dividends, 
     interest, and annuities.
       ``(ii) Exception for interest on notes from sales of 
     inventory.--The term `passive investment income' shall not 
     include interest on any obligation acquired in the ordinary 
     course of the corporation's trade or business from its sale 
     of property described in section 1221(a)(1).
       ``(iii) Treatment of certain lending or finance 
     companies.--If the S corporation meets the requirements of 
     section 542(c)(6) for the taxable year, the term `passive 
     investment income' shall not include gross receipts for the 
     taxable year which are derived directly from the active and 
     regular conduct of a lending or finance business (as defined 
     in section 542(d)(1)).
       ``(iv) Treatment of certain dividends.--If an S corporation 
     holds stock in a C corporation meeting the requirements of 
     section 1504(a)(2), the term `passive investment income' 
     shall not include dividends from such C corporation to the 
     extent such dividends are attributable to the earnings and 
     profits of such C corporation derived from the active conduct 
     of a trade or business.
       ``(v) Exception for banks, etc.--In the case of a bank (as 
     defined in section 581) or a depository institution holding 
     company (as defined in section 3(w)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813(w)(1)), the term `passive 
     investment income' shall not include--

       ``(I) interest income earned by such bank or company, or
       ``(II) dividends on assets required to be held by such bank 
     or company, including stock in the Federal Reserve Bank, the 
     Federal Home Loan Bank, or the Federal Agricultural Mortgage 
     Bank or participation certificates issued by a Federal 
     Intermediate Credit Bank.''.

       (b) Conforming Amendment.--Clause (i) of section 
     1042(c)(4)(A) is amended by striking ``section 
     1362(d)(3)(C)'' and inserting ``section 1362(d)(3)(B)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 212. TREATMENT OF BANK DIRECTOR SHARES.

       (a) In General.--Section 1361 (defining S corporation) is 
     amended by adding at the end the following new subsection:
       ``(f) Restricted Bank Director Stock.--
       ``(1) In general.--Restricted bank director stock shall not 
     be taken into account as outstanding stock of the S 
     corporation in applying this subchapter (other than section 
     1368(f)).

       ``(2) Restricted bank director stock.--For purposes of this 
     subsection, the term `restricted bank director stock' means 
     stock in a bank (as defined in section 581) or a depository 
     institution holding company (as defined in section 3(w)(1) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1)), if 
     such stock--
       ``(A) is required to be held by an individual under 
     applicable Federal or State law in order to permit such 
     individual to serve as a director, and
       ``(B) is subject to an agreement with such bank or company 
     (or a corporation which controls (within the meaning of 
     section 368(c)) such bank or company) pursuant to which the 
     holder is required to sell back such stock (at the same price 
     as the individual acquired such stock) upon ceasing to hold 
     the office of director.
       ``(3) Cross reference.--

``For treatment of certain distributions with respect to restricted 
              bank director stock, see section 1368(f)''.

       (b) Distributions.--Section 1368 (relating to 
     distributions) is amended by adding at the end the following 
     new subsection:
       ``(f) Restricted Bank Director Stock.--If a director 
     receives a distribution (not in part or full payment in 
     exchange for stock) from an S corporation with respect to any 
     restricted bank director stock (as defined in section 
     1361(f)), the amount of such distribution--
       ``(1) shall be includible in gross income of the director, 
     and
       ``(2) shall be deductible by the corporation for the 
     taxable year of such corporation in which or with which ends 
     the taxable year in which such amount in included in the 
     gross income of the director.''.
       (c) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2006.
       (2) Special rule for treatment as second class of stock.--
     In the case of any taxable year beginning after December 31, 
     1996, restricted bank director stock (as defined in section 
     1361(f) of the Internal Revenue Code of 1986, as added by 
     this section) shall not be taken into account in determining 
     whether an S corporation has more than 1 class of stock.

     SEC. 213. SPECIAL RULE FOR BANK REQUIRED TO CHANGE FROM THE 
                   RESERVE METHOD OF ACCOUNTING ON BECOMING S 
                   CORPORATION.

       (a) In General.--Section 1361, as amended by this Act, is 
     amended by adding at the end the following new subsection:
       ``(g) Special Rule for Bank Required to Change From the 
     Reserve Method of Accounting on Becoming S Corporation.--In 
     the case of a bank which changes from the reserve method of 
     accounting for bad debts described in section 585 or 593 for 
     its first taxable year for which an election under section 
     1362(a) is in effect, the bank may elect to take into account 
     any adjustments under section 481 by reason of such change 
     for the taxable year immediately preceding such first taxable 
     year.''.

[[Page S1296]]

       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 214. TREATMENT OF THE SALE OF INTEREST IN A QUALIFIED 
                   SUBCHAPTER S SUBSIDIARY.

       (a) In General.--Subparagraph (C) of section 1361(b)(3) 
     (relating to treatment of terminations of qualified 
     subchapter S subsidiary status) is amended--
       (1) by striking ``For purposes of this title,'' and 
     inserting the following:
       ``(i) In general.--For purposes of this title,'', and
       (2) by inserting at the end the following new clause:
       ``(ii) Termination by reason of sale of stock.--If the 
     failure to meet the requirements of subparagraph (B) is by 
     reason of the sale of stock of a corporation which is a 
     qualified subchapter S subsidiary, the sale of such stock 
     shall be treated as if--

       ``(I) the sale were a sale of an undivided interest in the 
     assets of such corporation (based on the percentage of the 
     corporation's stock sold), and
       ``(II) the sale were followed by an acquisition by such 
     corporation of all of its assets (and the assumption by such 
     corporation of all of its liabilities) in a transaction to 
     which section 351 applies.''.

       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 215. ELIMINATION OF ALL EARNINGS AND PROFITS 
                   ATTRIBUTABLE TO PRE-1983 YEARS FOR CERTAIN 
                   CORPORATIONS.

       In the case of a corporation which is--
       (1) described in section 1311(a)(1) of the Small Business 
     Job Protection Act of 1996, and
       (2) not described in section 1311(a)(2) of such Act,

     the amount of such corporation's accumulated earnings and 
     profits (for the first taxable year beginning after December 
     31, 2006) shall be reduced by an amount equal to the portion 
     (if any) of such accumulated earnings and profits which were 
     accumulated in any taxable year beginning before January 1, 
     1983, for which such corporation was an electing small 
     business corporation under subchapter S of the Internal 
     Revenue Code of 1986.

     SEC. 216. EXPANSION OF QUALIFYING BENEFICIARIES OF AN 
                   ELECTING SMALL BUSINESS TRUST.

       (a) No Look Through for Eligibility Purposes.--Clause (v) 
     of section 1361(c)(2)(B) is amended by adding at the end the 
     following new sentence: ``This clause shall not apply for 
     purposes of subsection (b)(1)(C).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.
                                 ______
                                 
  SA 221. Mr. DURBIN proposed an amendment to amendment SA 157 proposed 
by Mr. DeMint to the bill H.R. 2, to amend the Fair Labor Standards Act 
of 1938 to provide for an increase in the Federal minimum wage; as 
follows:

       At the end of the amendment add the following:
       Section 2 of the bill shall take effect one day after date 
     of enactment.

                          ____________________