SA 228. Mr. SMITH submitted an amendment intended to be proposed to amendment SA 166 submitted by Mr. SMITH and intended to be proposed to the bill H.R. 2, to amend the Fair Labor Standards Act of 1938 to provide an increase in the Federal minimum wage; which was ordered to lie on the table; as follows:

Beginning on page 1, strike line 2 and all that follows through page 4, line 2, and insert the following:
SEC. __. EXPANSION OF DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.
(a) In General.--Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows:
``(1) ALLOWANCE OF DEDUCTION.--In the case of a taxpayer who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the sum of--
``(A) the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents, and
``(B) in the case of any taxable year beginning in 2008, the amount paid during the taxable year for insurance which constitutes medical care for--
``(i) any individual--
``(I) who was not the spouse, determined without regard to section 7703, of the taxpayer at any time during the taxable year of the taxpayer,
``(II) who has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins or who is a student who has not attained the age of 24 as of the close of such calendar year,
``(III) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer's household, and
``(IV) with respect to whom the taxpayer provides over one-half of the individual's support for the calendar year in which the taxpayer's taxable year begins, and
``(ii) an individual--
``(I) who is designated by the taxpayer for purposes of this paragraph,
``(II) who is not the spouse of the taxpayer and does not bear any relationship to the taxpayer described in subparagraphs (A) through (G) of section 152(d)(2), and
``(III) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer's household.

For purposes of subparagraph (B)(ii), not more than 1 person may be designated by the taxpayer for any taxable year.''.
(b) Technical Amendment.--Subparagraph (B) of section 162(l)(2) of the Internal Revenue Code of 1986 is amended to read as follows:
``(B) OTHER COVERAGE.--
``(i) IN GENERAL.--Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any eligible subsidized health plan.
``(ii) APPLICATION OF SUBPARAGRAPH.--Clause (i) shall be applied separately with respect to--
``(I) plans which include coverage for qualified long-term care services (as defined in section 7702B(c)) or are qualified long-term care insurance contracts (as defined in section 7702B(b)), and
``(II) plans which do not include such coverage and are not such contracts.
``(iii) ELIGIBLE SUBSIDIZED HEALTH PLAN.--For purposes of this subparagraph, the term `eligible subsidized health plan' means a subsidized health plan maintained by any employer of--
``(I) the taxpayer or the taxpayer's spouse, or
``(II) in the case of any taxable year beginning in 2008, any individual described in paragraph (1)(B).''.
(As printed in the Congressional Record for the Senate on Jan 30, 2007.)