SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Universal National 
Service Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                       TITLE I--NATIONAL SERVICE

Sec. 101. Definitions.
Sec. 102. National service obligation.
Sec. 103. Induction to perform national service.
Sec. 104. Two-year period of national service.
Sec. 105. Implementation by the President.
Sec. 106. Examination and classification of persons.
Sec. 107. Deferments and postponements.
Sec. 108. Induction exemptions.
Sec. 109. Conscientious objection.
Sec. 110. Discharge following national service.
Sec. 111. Registration of females under the Military Selective Service 
                            Act.
Sec. 112. Relation of title to registration and induction authority of 
                            Military Selective Service Act.
  TITLE II--FAVORABLE TREATMENT OF COMBAT PAY UNDER EARNED INCOME TAX 
                         CREDIT MADE PERMANENT

Sec. 201. Favorable treatment of combat pay under earned income tax 
                            credit made permanent.

                       TITLE I--NATIONAL SERVICE

SEC. 101. DEFINITIONS.

    In this title:
            (1) The term ``contingency operation'' has the meaning 
        given that term in section 101(a)(13) of title 10, United 
        States Code.
            (2) The term ``military service'' means service performed 
        as a member of an active or reserve component of the uniformed 
        services.
            (3) The term ``national service'' means military service or 
        service in a civilian capacity that, as determined by the 
        President, promotes the national defense, including national or 
        community service and service related to homeland security.
            (4) The term ``Secretary concerned'' means the Secretary of 
        Defense with respect to the Army, Navy, Air Force, and Marine 
        Corps, the Secretary of Homeland Security with respect to the 
        Coast Guard, the Secretary of Commerce, with respect to the 
        National Oceanic and Atmospheric Administration, and the 
        Secretary of Health and Human Services, with respect to the 
        Public Health Service.
            (5) The term ``United States'', when used in a geographical 
        sense, means the several States, the District of Columbia, 
        Puerto Rico, the Virgin Islands, and Guam.
            (6) The term ``uniformed services'' means the Army, Navy, 
        Air Force, Marine Corps, Coast Guard, commissioned corps of the 
        National Oceanic and Atmospheric Administration, and 
        commissioned corps of the Public Health Service.

SEC. 102. NATIONAL SERVICE OBLIGATION.

    (a) Obligation for Service.--It is the obligation of every citizen 
of the United States, and every other person residing in the United 
States, who is between the ages of 18 and 42 to perform a period of 
national service as prescribed in this title unless exempted under the 
provisions of this title.
    (b) Forms of National Service.--The national service obligation 
under this title shall be performed either--
            (1) as a member of an active or reserve component of the 
        uniformed services; or
            (2) in a civilian capacity that, as determined by the 
        President, promotes the national defense, including national or 
        community service and service related to homeland security.
    (c) Age Limits.--A person may be inducted under this title only if 
the person has attained the age of 18 and has not attained the age of 
42.

SEC. 103. INDUCTION TO PERFORM NATIONAL SERVICE.

    (a) Induction Requirements.--The President shall provide for the 
induction of persons described in section 102(a) to perform their 
national service obligation.
    (b) Limitation on Induction for Military Service.--Persons 
described in section 102(a) may be inducted to perform military service 
only if--
            (1) a declaration of war is in effect;
            (2) the President declares a national emergency, which the 
        President determines necessitates the induction of persons to 
        perform military service, and immediately informs Congress of 
        the reasons for the declaration and the need to induct persons 
        for military service; or
            (3) members of the Army, Navy, Air Force, or Marine Corps 
        are engaged in a contingency operation pursuant to a 
        congressional authorization for the use of military force.
    (c) Limitation on Number of Persons Inducted for Military 
Service.--When the induction of persons for military service is 
authorized by subsection (b), the President shall determine the number 
of persons described in section 102(a) whose national service 
obligation is to be satisfied through military service based on--
            (1) the authorized end strengths of the uniformed services; 
        and
            (2) the feasibility of the uniformed services to recruit 
        sufficient volunteers to achieve such end-strength levels.
            (3) provide a mechanism for the random selection of persons 
        to be inducted to perform military service.
    (d) Selection for Induction.--
            (1) Random selection for military service.--When the 
        induction of persons for military service is authorized by 
        subsection (b), the President shall utilize a mechanism for the 
        random selection of persons to be inducted to perform military 
        service.
            (2) Civilian service.--Persons described in section 102(a) 
        who do not volunteer to perform military service or are not 
        inducted for military service shall perform their national 
        service obligation in a civilian capacity pursuant to section 
        102(b)(2).
    (e) Voluntary Service.--A person subject to induction under this 
title may--
            (1) volunteer to perform national service in lieu of being 
        inducted; or
            (2) request permission to be inducted at a time other than 
        the time at which the person is otherwise called for induction.

SEC. 104. TWO-YEAR PERIOD OF NATIONAL SERVICE.

    (a) General Rule.--Except as otherwise provided in this section, 
the period of national service performed by a person under this title 
shall be two years.
    (b) Grounds for Extension.--At the discretion of the President, the 
period of military service for a member of the uniformed services under 
this title may be extended--
            (1) with the consent of the member, for the purpose of 
        furnishing hospitalization, medical, or surgical care for 
        injury or illness incurred in line of duty; or
            (2) for the purpose of requiring the member to compensate 
        for any time lost to training for any cause.
    (c) Early Termination.--The period of national service for a person 
under this title shall be terminated before the end of such period 
under the following circumstances:
            (1) The voluntary enlistment and active service of the 
        person in an active or reserve component of the uniformed 
        services for a period of at least two years, in which case the 
        period of basic military training and education actually served 
        by the person shall be counted toward the term of enlistment.
            (2) The admission and service of the person as a cadet or 
        midshipman at the United States Military Academy, the United 
        States Naval Academy, the United States Air Force Academy, the 
        Coast Guard Academy, or the United States Merchant Marine 
        Academy.
            (3) The enrollment and service of the person in an officer 
        candidate program, if the person has signed an agreement to 
        accept a Reserve commission in the appropriate service with an 
        obligation to serve on active duty if such a commission is 
        offered upon completion of the program.
            (4) Such other grounds as the President may establish.

SEC. 105. IMPLEMENTATION BY THE PRESIDENT.

    (a) In General.--The President shall prescribe such regulations as 
are necessary to carry out this title.
    (b) Matter to Be Covered by Regulations.--Such regulations shall 
include specification of the following:
            (1) The types of civilian service that may be performed in 
        order for a person to satisfy the person's national service 
        obligation under this title.
            (2) Standards for satisfactory performance of civilian 
        service and of penalties for failure to perform civilian 
        service satisfactorily.
            (3) The manner in which persons shall be selected for 
        induction under this title, including the manner in which those 
        selected will be notified of such selection.
            (4) All other administrative matters in connection with the 
        induction of persons under this title and the registration, 
        examination, and classification of such persons.
            (5) A means to determine questions or claims with respect 
        to inclusion for, or exemption or deferment from induction 
        under this title, including questions of conscientious 
        objection.
            (6) Standards for compensation and benefits for persons 
        performing their national service obligation under this title 
        through civilian service.
            (7) Such other matters as the President determines 
        necessary to carry out this title.
    (c) Use of Prior Act.--To the extent determined appropriate by the 
President, the President may use for purposes of this title the 
procedures provided in the Military Selective Service Act (50 U.S.C. 
App. 451 et seq.), including procedures for registration, selection, 
and induction.

SEC. 106. EXAMINATION AND CLASSIFICATION OF PERSONS.

    (a) Examination.--Every person subject to induction under this 
title shall, before induction, be physically and mentally examined and 
shall be classified as to fitness to perform national service.
    (b) Different Classification Standards.--The President may apply 
different classification standards for fitness for military service and 
fitness for civilian service.

SEC. 107. DEFERMENTS AND POSTPONEMENTS.

    (a) High School Students.--A person who is pursuing a standard 
course of study, on a full-time basis, in a secondary school or similar 
institution of learning shall be entitled to have induction under this 
title postponed until the person--
            (1) obtains a high school diploma;
            (2) ceases to pursue satisfactorily such course of study; 
        or
            (3) attains the age of 20.
    (b) Hardship and Disability.--Deferments from national service 
under this title may be made for--
            (1) extreme hardship; or
            (2) physical or mental disability.
    (c) Training Capacity.--The President may postpone or suspend the 
induction of persons for military service under this title as necessary 
to limit the number of persons receiving basic military training and 
education to the maximum number that can be adequately trained.
    (d) Termination.--No deferment or postponement of induction under 
this title shall continue after the cause of such deferment or 
postponement ceases.

SEC. 108. INDUCTION EXEMPTIONS.

    (a) Qualifications.--No person may be inducted for military service 
under this title unless the person is acceptable to the Secretary 
concerned for training and meets the same health and physical 
qualifications applicable under section 505 of title 10, United States 
Code, to persons seeking original enlistment in a regular component of 
the Armed Forces.
    (b) Other Military Service.--No person shall be liable for 
induction under this title who--
            (1) is serving, or has served honorably for at least six 
        months, in any component of the uniformed services on active 
        duty; or
            (2) is or becomes a cadet or midshipman at the United 
        States Military Academy, the United States Naval Academy, the 
        United States Air Force Academy, the Coast Guard Academy, the 
        United States Merchant Marine Academy, a midshipman of a Navy 
        accredited State maritime academy, a member of the Senior 
        Reserve Officers' Training Corps, or the naval aviation college 
        program, so long as that person satisfactorily continues in and 
        completes at least two years training therein.

SEC. 109. CONSCIENTIOUS OBJECTION.

    (a) Claims as Conscientious Objector.--Nothing in this title shall 
be construed to require a person to be subject to combatant training 
and service in the uniformed services, if that person, by reason of 
sincerely held moral, ethical, or religious beliefs, is conscientiously 
opposed to participation in war in any form.
    (b) Alternative Noncombatant or Civilian Service.--A person who 
claims exemption from combatant training and service under subsection 
(a) and whose claim is sustained by the local board shall--
            (1) be assigned to noncombatant service (as defined by the 
        President), if the person is inducted into the uniformed 
        services; or
            (2) be ordered by the local board, if found to be 
        conscientiously opposed to participation in such noncombatant 
        service, to perform national civilian service for the period 
        specified in section 104(a) and subject to such regulations as 
        the President may prescribe.

SEC. 110. DISCHARGE FOLLOWING NATIONAL SERVICE.

    (a) Discharge.--Upon completion or termination of the obligation to 
perform national service under this title, a person shall be discharged 
from the uniformed services or from civilian service, as the case may 
be, and shall not be subject to any further service under this title.
    (b) Coordination With Other Authorities.--Nothing in this section 
shall limit or prohibit the call to active service in the uniformed 
services of any person who is a member of a regular or reserve 
component of the uniformed services.

SEC. 111. REGISTRATION OF FEMALES UNDER THE MILITARY SELECTIVE SERVICE 
              ACT.

    (a) Registration Required.--Section 3(a) of the Military Selective 
Service Act (50 U.S.C. 453(a)) is amended--
            (1) by striking ``male'' both places it appears;
            (2) by inserting ``or herself'' after ``himself''; and
            (3) by striking ``he'' and inserting ``the person''.
    (b) Conforming Amendment.--Section 16(a) of the Military Selective 
Service Act (50 U.S.C. App. 466(a)) is amended by striking ``men'' and 
inserting ``persons''.

SEC. 112. RELATION OF TITLE TO REGISTRATION AND INDUCTION AUTHORITY OF 
              MILITARY SELECTIVE SERVICE ACT.

    (a) Registration.--Section 4 of the Military Selective Service Act 
(50 U.S.C. App. 454) is amended by inserting after subsection (g) the 
following new subsection:
    ``(h) This section does not apply with respect to the induction of 
persons into the Armed Forces pursuant to the Universal National 
Service Act of 2007.''.
    (b) Induction.--Section 17(c) of the Military Selective Service Act 
(50 U.S.C. App. 467(c)) is amended by striking ``now or hereafter'' and 
all that follows through the period at the end and inserting ``inducted 
pursuant to the Universal National Service Act of 2007.''.

  TITLE II--FAVORABLE TREATMENT OF COMBAT PAY UNDER EARNED INCOME TAX 
                         CREDIT MADE PERMANENT

SEC. 201. FAVORABLE TREATMENT OF COMBAT PAY UNDER EARNED INCOME TAX 
              CREDIT MADE PERMANENT.

    (a) In General.--Clause (vi) of section 32(c)(2)(B) of the Internal 
Revenue Code of 1986 (defining earned income) is amended to read as 
follows:
                            ``(vi) a taxpayer may elect for any taxable 
                        year to treat amounts excluded from gross 
                        income by reason of section 112 as earned 
                        income.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years ending after December 31, 2006.
Universal National Service Act of 2007 - Declares that it is the obligation of every U.S. citizen, and every other person residing in the United States, between the ages of 18 and 42 to perform a two-year period of national service, unless exempted, either as a member of an active or reserve component of the armed forces or in a civilian capacity that promotes national defense. Requires induction into national service by the President. Allows persons to be inducted only: (1) under a declaration of war or national emergency; or (2) when members of the Armed Forces are engaged in a contingency operation. Requires each person, before induction, to be examined physically and mentally for classification for fitness to perform. Sets forth provisions governing: (1) induction deferments, postponements, and exemptions, including exemption of a conscientious objector from combatant training and military service; and (2) discharge following national service.

Amends the Military Selective Service Act to authorize the military registration of females.

Amends the Internal Revenue Code to permit combat pay otherwise excluded from gross income to be treated as earned income for purposes of the earned income tax credit.
To require all persons in the United States between the ages of 18 and 42 to perform national service, either as a member of the uniformed services or in civilian service in furtherance of the national defense and homeland security, to authorize the induction of persons in the uniformed services during wartime to meet end-strength requirements of the uniformed services, to amend the Internal Revenue Code of 1986 to make permanent the favorable treatment afforded combat pay under the earned income tax credit, and for other purposes.