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115th Congress    }                                   {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                   {       115-801

======================================================================




              TRIBAL SOCIAL SECURITY FAIRNESS ACT OF 2018

                                _______
                                

 June 29, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6124]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 6124) to amend title II of the Social Security Act 
to authorize voluntary agreements for coverage of Indian tribal 
council members, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.


















115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      115-801

======================================================================



 
              TRIBAL SOCIAL SECURITY FAIRNESS ACT OF 2018

                                _______
                                

 June 29, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6124]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 6124) to (1) amend the Social Security Act to allow 
Indian tribal governments to enter into agreements with the 
Commissioner of Social Security to obtain Social Security and 
Medicare coverage with respect to the services of tribal 
council leaders and members in their capacity as tribal council 
members and (2) amend the Internal Revenue Code of 1986 (IRC) 
to provide that such tribal council members covered by an 
agreement under the bill are employees for Federal Insurance 
Contributions Act (FICA) tax purposes, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND...........................................4
 II. EXPLANATION OF THE BILL..........................................6
        A. Voluntary Agreements for Coverage of Services by 
            American Indian Tribal Council Members (sec. 2 of the 
            bill and sec. 3121 of the Internal Revenue Code of 
            1986 and new sec. 218A of Title II of the Social 
            Security Act)........................................     6
III. VOTES OF THE COMMITTEE...........................................8
 IV. BUDGET EFFECTS OF THE BILL.......................................9
        A. Committee Estimate of Budgetary Effects...............     9
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................     9
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     9
  V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......10
        A. Committee Oversight Findings and Recommendations......    10
        B. Statement of General Performance Goals and Objectives.    10
        C. Information Relating to Unfunded Mandates.............    10
        D. Applicability of House Rule XXI 5(b)..................    10
        E. Tax Complexity Analysis...............................    13
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................    13
        G. Duplication of Federal Programs.......................    13
        H. Disclosure of Directed Rule Makings...................    13
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........13
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................    13
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    14

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Tribal Social Security Fairness Act of 
2018''.

SEC. 2. VOLUNTARY AGREEMENTS FOR COVERAGE OF SERVICES BY AMERICAN 
                    INDIAN TRIBAL COUNCIL MEMBERS.

  (a) In General.--Title II of the Social Security Act (42 U.S.C. 401 
et seq.) is amended by inserting after section 218 the following new 
section:
  ``voluntary agreements for coverage of indian tribal council members

                         ``Purpose of Agreement

  ``Sec. 218A. (a)(1) The Commissioner of Social Security shall, at the 
request of any Indian tribe, enter into an agreement with such Indian 
tribe for the purpose of extending the insurance system established by 
this title to services performed by individuals as members of such 
Indian tribe's tribal council. Any agreement with an Indian tribe under 
this section applies to all members of the tribal council, and shall 
include all services performed by individuals in their capacity as 
council members.
  ``(2) Notwithstanding section 210(a), for the purposes of this title, 
the term `employment' includes any service included under an agreement 
entered into under this section.

                             ``Definitions

  ``(b) For the purposes of this section:
          ``(1) The term `member' means, with respect to a tribal 
        council, an individual appointed or elected to serve as a 
        member or the head of the tribal council.
          ``(2) The term `tribal council' means the appointed or 
        elected governing body of a federally recognized Indian tribe.

                     ``Effective Date of Agreement

  ``(c)(1) Any agreement under this section shall be effective with 
respect to services performed after an effective date specified in such 
agreement, provided that such date may not be earlier than the first 
day of the next calendar month after the month in which the agreement 
is executed by both parties.
  ``(2) At the request of the Indian tribe at the time of the 
agreement, such agreement may apply with respect to services performed 
before such effective date for which there were timely paid in good 
faith (and not subsequently refunded) to the Secretary of the Treasury 
amounts equivalent to the sum of the taxes which would have been 
imposed by sections 3101 and 3111 of the Internal Revenue Code of 1986 
had such services constituted employment for purposes of chapter 21 of 
such Code. No agreement under this section may require payment to be 
made after the effective date specified in such agreement of any taxes 
with respect to services performed before such effective date.

                        ``Duration of Agreement

  ``(d) No agreement under this section may be terminated on or after 
the effective date of the agreement.''.
  (b) Conforming Amendments.--
          (1) Social security act.--Section 210(a) of the Social 
        Security Act (42 U.S.C. 410(a)) is amended--
                  (A) in paragraph (20), by striking ``or'' at the end;
                  (B) in paragraph (21), by striking the period at the 
                end and inserting ``; or''; and
                  (C) by inserting after paragraph (21) the following 
                new paragraph:
          ``(22) Service performed by members of Indian tribal councils 
        as tribal council members in the employ of an Indian tribal 
        government, except that this paragraph shall not apply in the 
        case of service included under an agreement under section 
        218A.''.
          (2) Internal revenue code of 1986.--The Internal Revenue Code 
        of 1986 is amended--
                  (A) in section 3121(b)--
                          (i) in paragraph (20), by striking ``or'' at 
                        the end;
                          (ii) in paragraph (21), by striking the 
                        period at the end and inserting ``; or''; and
                          (iii) by inserting after paragraph (21) the 
                        following new paragraph:
          ``(22) service performed by members of Indian tribal councils 
        as tribal council members in the employ of an Indian tribal 
        government, except that this paragraph shall not apply in the 
        case of service included under an agreement under section 218A 
        of the Social Security Act.''; and
                  (B) in section 3121(d)(4), by inserting ``or 218A'' 
                after ``section 218''.
  (c) Rule of Construction.--Nothing in this Act or the amendments made 
by this Act shall be construed to affect application of any Federal 
income tax withholding requirements under the Internal Revenue Code of 
1986.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 6124, as reported by the Committee on Ways and Means, 
seeks to give tribal council members the ability to elect 
Social Security coverage. The bill amends Title II of the 
Social Security Act to allow tribal councils to voluntarily 
enter into coverage agreements with the Social Security 
Administration (SSA). The bill also allows tribal council 
members to receive Social Security credit for FICA taxes paid 
erroneously, prior to the establishment of the coverage 
agreement, if these taxes were paid timely and not subsequently 
refunded.

                 B. Background and Need for Legislation

    When Social Security was established, state and local 
government employees were excluded from Social Security 
coverage due to concerns that the 10th Amendment prohibited the 
federal government from requiring states to join Social 
Security. The Social Security Amendments of 1950 added Section 
218 to the Social Security Act, which allowed state and local 
governments to extend Social Security (and later Medicare) 
coverage to their employees through a voluntary agreement, 
known as a 218 agreement, between the state and the SSA. Under 
Section 218, the state/local government may only extend 
coverage following a vote by members of the retirement system 
through a referendum process. The agreements generally cover 
all positions within a coverage group, not just specific 
individuals. Once a group is covered, the employer may not 
revoke coverage and employees filling the covered positions may 
not decline coverage.
    The services performed by members of tribal councils are 
not covered by Social Security. In 1959, the Internal Revenue 
Service (IRS) ruled that services performed by tribal council 
members in their role as council members do not constitute 
``employment'' for FICA tax purposes, meaning that these 
earnings are not subject to Social Security and Medicare taxes.
    In the early 2000s, the SSA began receiving inquiries 
regarding the Social Security coverage status of tribal council 
members, as some members may have been paying Social Security 
taxes erroneously and believed their earnings would count 
toward future benefits. In 2006, the SSA updated its program 
instructions to clarify that tribal council members' earnings 
do not count toward Social Security benefits, consistent with 
the 1959 revenue ruling. The SSA's instructions state that the 
SSA will provide benefit credits for payroll taxes paid 
erroneously prior to 2006. However, some tribal council members 
may have paid payroll taxes after this date.
    In 2015, Representatives David Reichert (R-WA) and Derek 
Kilmer (D-WA) exchanged letters with the Acting Commissioner of 
Social Security and the Commissioner of the IRS requesting 
additional information about the agencies' policies regarding 
Social Security coverage for tribal council members. They also 
asked whether the SSA had explored extending optional Social 
Security coverage to tribal councils through administrative 
action. In response, the Acting Commissioner of Social Security 
indicated that the SSA does not have statutory authority to 
allow tribal council members to opt into Social Security 
coverage.
    To give tribal council members the same ability to elect 
Social Security coverage that state and local government 
employees have, H.R. 6124 allows tribal councils to voluntarily 
enter 1 into coverage agreements with the SSA. To address any 
remaining confusion from the IRS's 1959 revenue ruling and the 
SSA's 2006 policy clarification, the bill also allows tribal 
council members to receive Social Security credit for FICA 
taxes paid erroneously, prior to the establishment of the 
coverage agreement, if these taxes were paid timely and not 
subsequently refunded.

                         C. Legislative History


Background

    H.R. 6124 was introduced on June 15, 2018 and was referred 
to the Committee on Ways and Means. A previous version of this 
bill, H.R. 2860, was introduced on June 8, 2017 and referred to 
the Committee on Ways and Means.

Committee action

    The Committee on Ways and Means marked up H.R. 6124, the 
``Tribal Social Security Fairness Act of 2018,'' on June 21, 
2018, and ordered the bill, as amended, favorably reported 
(with a quorum being present).

Committee hearings

    On June 29, 2017, Social Security Subcommittee Chairman Sam 
Johnson and Oversight Subcommittee Chairman Vern Buchanan held 
a joint hearing entitled ``Complexities and Challenges of 
Social Security Coverage and Payroll Tax Compliance for State 
and Local Governments.'' The hearing focused on the roles and 
responsibilities of the SSA, the IRS, and State Social Security 
Administrators in administering Social Security coverage for 
state and local governments. The Subcommittees received 
testimony from: (i) Marianna LaCanfora, Acting Deputy 
Commissioner, Office of Retirement and Disability Policy, SSA; 
(ii) Sunita Lough, Commissioner, Tax Exempt and Government 
Entities Division, IRS; and (iii) Maryann Motza, Legislative 
Committee Chair and Past President, National Conference of 
State Social Security Administrators. Members discussed how the 
SSA, IRS, and State Social Security Administrators can improve 
coordination to ensure proper administration of Section 218 
agreements and increase payroll tax compliance. Members also 
questioned the lack of Social Security coverage for tribal 
council members and discussed H.R. 2860 (an earlier version of 
H.R. 6124) with the SSA and IRS witnesses.

                      II. EXPLANATION OF THE BILL


  A. Voluntary Agreements for Coverage of Services by American Indian 
                         Tribal Council Members


(sec. 2 of the bill and sec. 3121 of the Internal Revenue Code of 1986, 
  as amended and new sec. 218A of Title II of the Social Security Act)


                              PRESENT LAW

Federal Insurance Contributions Act

    Federal Insurance Contributions Act (FICA) taxes on 
employers and employees finance the Old-Age, Survivors, and 
Disability Insurance (OASDI, also referred to as Social 
Security) and Hospital Insurance (HI, also referred to as 
Medicare) programs.\1\ The OASDI tax rate is 6.2 percent on 
both the employee and employer (for a total rate of 12.4 
percent) and applies to employee wages up to the OASDI wage 
base ($128,400 for calendar year 2018). The HI tax rate is 1.45 
percent on both the employee and the employer (for a total rate 
of 2.9 percent) and applies to all wages.\2\
---------------------------------------------------------------------------
    \1\Sections 3101-3128 of the Internal Revenue Code of 1986, as 
amended (IRC). Statutory references herein are to IRC unless otherwise 
indicated. The employee portion of the taxes is collected through 
withholding by the employer.
    \2\The employee portion of the HI tax (not the employer portion) is 
increased by an additional tax of 0.9 percent on wages received in 
excess of a threshold amount. The threshold amount is $250,000 in the 
case of a joint return, $125,000 in the case of a married individual 
filing a separate return, and $200,000 in any other case.
---------------------------------------------------------------------------
    FICA taxes (and coverage under the Social Security and 
Medicare programs) generally are mandatory, that is, employers 
and employees generally cannot choose whether FICA taxes apply. 
However, as discussed below, in the case of State and local 
government employees covered by a State or local government 
retirement system, a State may enter into an agreement with the 
SSA to cover one or more groups of such employees under the 
Social Security and Medicare programs. In that case, services 
of such employees constitute employment for FICA tax purposes 
and their wages are subject to FICA taxes.\3\
---------------------------------------------------------------------------
    \3\Sec. 3121(b)(7)(E). In addition, under section 3121(b)(7)(F), 
State and local government employees who are not covered by a 
retirement system are generally subject to FICA taxes. Also, generally 
State and local government employees are subject to the Medicare tax 
unless an exception applies (for example, section 3121(u)(2)(C) 
provides a continuing employment exception with various requirements, 
including employment prior to April 1, 1986).
---------------------------------------------------------------------------
    FICA taxes apply to wages, defined as remuneration for 
employment, which in turn is defined as service performed by an 
employee.\4\ Remuneration for service performed by an 
individual who is not an employee does not constitute wages for 
FICA tax purposes and is not subject to FICA taxes. Guidance 
issued by the IRS holds that services performed by members of 
Indian tribal councils in their capacities as such do not 
constitute employment for FICA tax purposes.\5\ As a result, 
amounts paid to members of tribal councils for services as 
council members are not wages subject to FICA taxes.
---------------------------------------------------------------------------
    \4\Sec. 3121(a) and (b). Employee is defined in section 3121(d).
    \5\Rev. Rul. 59-354, 1959-2 C.B. 24. In 2006, the SSA updated its 
program instructions to clarify that earnings of Indian tribal council 
members do not count toward Social Security and Medicare benefits. 
However, the program instructions include a note stating that earnings 
posted for members of Indian tribal councils for tax years prior to 
2006 should remain on earnings records and be used in applicable 
benefit computations. SSA POMS: RS 01901.700.
---------------------------------------------------------------------------

Social Security and Medicare benefits

    The OASDI program under the Social Security Act provides 
for the payment of benefits (Social Security benefits) to 
individuals based on wages earned as an employee and credited 
to the employee's earnings record.\6\ Eligibility for Medicare 
coverage under the Social Security Act generally is based on 
eligibility for Social Security benefits and, thus, on wages 
credited to an employee's earnings record.\7\ Similar 
definitions of wages and employment apply for benefit purposes 
as for FICA tax purposes.\8\ Thus, remuneration for service 
performed by an individual who is not an employee does not 
constitute wages for purposes of earning credits for Social 
Security or Medicare benefits.
---------------------------------------------------------------------------
    \6\OASDI (Social Security) benefits are provided under Title II of 
the Social Security Act (42 U.S.C. secs. 401ff.).
    \7\Sec. 226 of the Social Security Act (42 U.S.C. sec. 426).
    \8\Secs. 209 and 210 of the Social Security Act (42 U.S.C. secs. 
409 and 410).
---------------------------------------------------------------------------
    Coverage under the Social Security and Medicare programs 
generally is mandatory. However, coverage generally does not 
apply in the case of State and local government employees 
covered by a State or local government retirement system. In 
that case, if a referendum process and certain criteria are 
met, then at the request of a State, the Commissioner of Social 
Security will enter into an agreement with the State with 
respect to one or more coverage groups of such employees under 
the Social Security and Medicare programs.\9\ Generally, such 
an agreement encompasses all positions within such a coverage 
group and once covered, the employer may not revoke such 
coverage and employees filling such covered positions may not 
decline coverage.
---------------------------------------------------------------------------
    \9\Generally, the State or local government may only extend 
coverage following a referendum process in which a vote occurs that 
satisfies various conditions, and if the governor of the State, or an 
official of the State designated for this purpose, certifies to the 
Commissioner of Social Security that such conditions have been met. 
Sec. 218 of the Social Security Act (42 U.S.C. sec. 418).
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee believes that the provision would correct a 
longstanding inequity in the Social Security Act that currently 
prevents tribal council leaders and members (collectively, 
members) from contributing to and accessing Social Security and 
Medicare benefits with respect to services performed in their 
capacity as members of the tribal council. The bill would amend 
the Social Security Act and the IRC to allow tribal governments 
to opt into Social Security and Medicare, pay the related FICA 
taxes, and receive Social Security and Medicare benefits.

                        EXPLANATION OF PROVISION

    The provision amends the Social Security Act to provide 
that, at the request of an Indian tribal government, the 
Commissioner of Social Security will enter into an agreement 
with the Indian tribe to cover services performed by 
individuals as members of the Indian tribe's tribal council 
under the Social Security and Medicare programs. Accordingly, 
service of a member of a tribal council under such an agreement 
constitutes employment. For purposes of the provision, the term 
``tribal council'' means the appointed or elected governing 
body of a Federally recognized Indian tribe. In addition, the 
term ``member'' means, with respect to a tribal council, an 
individual who is appointed or elected to serve as a member or 
the head of the tribal council.
    An agreement with an Indian tribal government under the 
provision applies to all members of the tribal council and must 
include all services performed by individuals in their capacity 
as members of the tribal council. An agreement will be 
effective with respect to services performed after an effective 
date specified in the agreement, provided that the date may not 
be earlier than the first day of the next calendar month after 
the month in which the agreement is executed by both parties. 
At the request of the Indian tribal government at the time of 
the agreement, the agreement may apply with respect to services 
performed before the effective date for which there were timely 
paid in good faith (and not subsequently refunded) to the 
Secretary of the Treasury amounts equivalent to the sum of the 
employee and employer Social Security and Medicare taxes (that 
is, the FICA taxes) which would have been imposed by the IRC 
had such services constituted employment for purposes of the 
IRC. No agreement under the provision may require payment to be 
made after the effective date of any taxes with respect to 
services performed before the effective date. No agreement 
under the provision may be terminated on or after the effective 
date of the agreement.
    The provision also amends the IRC to provide that a tribal 
council member covered by an agreement under the provision is 
an employee for FICA tax purposes. Therefore, services of a 
tribal council member covered by an agreement constitute 
employment for FICA tax purposes, and wages of the tribal 
council member are subject to FICA taxes.\10\
---------------------------------------------------------------------------
    \10\Nothing in the provision is to be construed to affect the 
application of any Federal income tax withholding requirements.
---------------------------------------------------------------------------

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 6124, the ``Tribal Social Security 
Fairness Act of 2018,'' on June 21, 2018.
    The bill, H.R. 6124, as amended, was ordered favorably 
reported to the House of Representatives by a voice vote (with 
a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 6124, as 
reported.
    The following presents the estimated Federal fiscal year 
budget receipts of the bill, H.R. 6124, as reported:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, in millions of dollars--
                          Item                          ------------------------------------------------------------------------------------------------
                                                           2018    2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2018-23  2018-28
--------------------------------------------------------------------------------------------------------------------------------------------------------
H.R. 6124\1\...........................................    - - -    \2\      1      1      1      1      1      2      2      2      2       4       13
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: Details do not add to totals due to rounding.
\1\Estimate contains the following budget effects:


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           2018    2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2018-23  2018-28
--------------------------------------------------------------------------------------------------------------------------------------------------------
On-budget..............................................    - - -    \2\    \2\    \2\    \2\    \2\    \2\    \2\    \2\    \2\    \2\       1        3
Off-budget.............................................    - - -    \2\      1      1      1      1      1      1      1      1      1       3       10
--------------------------------------------------------------------------------------------------------------------------------------------------------
\2\Gain of less than $500,000.

    Pursuant to clause 8 of rule XIII of the Rules of the House 
of Representatives, the following statement is made by the 
Joint Committee on Taxation with respect to the provisions of 
the bill amending the Internal Revenue Code of 1986: The gross 
budgetary effect (before incorporating macroeconomic effects) 
in any fiscal year is less than 0.25 percent of the current 
projected gross domestic product of the United States for that 
fiscal year; therefore, the bill is not ``major legislation'' 
for purposes of requiring that the estimate include the 
budgetary effects of changes in economic output, employment, 
capital stock, and other macroeconomic variables.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee further states that the revenue-increasing tax 
provision involves no new tax expenditure.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 28, 2018.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6124, the Tribal 
Social Security Fairness Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Noah 
Meyerson.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 6124--Tribal Social Security Fairness Act of 2018

    Summary: H.R. 6124 would allow Indian tribes to enter into 
agreements with the Social Security Administration (SSA) to 
provide Social Security and Medicare Hospital Insurance 
coverage for members of tribal councils.
    CBO and the staff of the Joint Committee on Taxation (JCT) 
estimate that enacting H.R. 6124 would increase revenues by $13 
million and would increase direct spending by an insignificant 
amount over the 2019-2028 period. Because enacting HR. 6124 
would affect direct spending and revenues, pay-as-you-go 
procedures apply.
    CBO estimates that enacting H.R. 6124 would not increase 
net direct spending or on-budget deficits by more than $5 
billion in any of the four consecutive 10-year periods 
beginning in 2029.
    CBO and the staff of JCT have not reviewed H.R. 6124 for 
intergovernmental or private-sector mandates. Section 4 of the 
Unfunded Mandates Reform Act (UMRA) excludes from the 
application of that act any legislative provisions that relates 
to the old-age, survivors, and disability insurance program 
under title II of the Social Security Act (including taxes 
imposed by sections 3101(a) and 311(a) of the Internal Revenue 
Code of 1986). CBO and the staff of JCT have determined that 
H.R. 6124 falls within that exclusion.
    Estimated cost to the Federal Government: The estimated 
budgetary effects of H.R. 6124 are shown in the following 
table. The costs of the legislation fall within budget function 
650 (Social Security).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2018   2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority...........................      0      0      *      *      *      *      *      *      *      *      *        *          *
Estimated Outlays....................................      0      0      *      *      *      *      *      *      *      *      *        *          *
 
                                                                  INCREASES IN REVENUES
 
Estimated Revenues...................................      0      *      1      1      1      1      1      2      2      2      2        4         13
    On-budget........................................      0      *      *      *      *      *      *      *      *      *      *        1          3
    Off-budget.......................................      0      *      1      1      1      1      1      1      1      2      2        3         10
 
                                                             NET DECREASE (-) IN THE DEFICIT
 
Effect on the Deficit................................      0      *     -1     -1     -1     -1     -1     -2     -2     -2     -2       -4        -13
    On-budget........................................      0      *      *      *      *      *      *      *      *      *      *       -1         -3
    Off-budget.......................................      0      *     -1     -1     -1     -1     -1     -1     -1     -2     -2       -3        -10
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between -$500,000 and $500,000.

    Basis of estimate: Under current law, the earnings of 
members of tribal councils of federally recognized Indian 
tribes are not subject to Social Security or Medicare payroll 
taxes under the Federal Insurance Contributions Act (FICA), and 
their earnings are not credited toward eligibility for Social 
Security or Medicare benefits.
    H.R. 6124 would amend the Social Security Act to allow 
Indian tribal governments to enter into agreements with SSA to 
obtain Social Security and Medicare coverage for tribal council 
leaders and members. It also would amend the Internal Revenue 
Code to include tribal council members as employees for FICA 
tax purposes if they are covered by an agreement under the 
bill.
    CBO and JCT expect that under the bill, by 2028, less than 
a tenth of eligible tribal members would choose to be covered, 
and an additional $13 million in payroll tax revenues would be 
collected over the 2019-2028 period. Of that amount, $3 million 
would consist of on-budget revenues from Medicare taxes and $10 
million would be off-budget revenues from Social Security 
taxes.
    The additional coverage also would result in higher Social 
Security and Medicare outlays over the lifetime of the affected 
council members, although few of them would become eligible for 
Medicare or Social Security by 2028. CBO estimates that such 
outlays over the 10-year period would be insignificant.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table. Only on-budget changes to outlays or revenues 
are subject to pay-as-you-go procedures.

            CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 6124 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAY AND MEANS ON JUNE 21, 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2018   2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT
 
Statutory Pay-As-You-Go Effect.......................      0      0      0      0      0      0      0      0      0      0      0       -1         -3
Memorandum:
    Changes in Outlays...............................      0      0      0      0      0      0      0      0      0      0      0        0          0
    Changes in Revenues..............................      0      0      0      0      0      0      0      0      0      0      0        1          3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 6124 would not increase net direct 
spending by more than $2.5 billion or on-budget deficits by 
more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2029.
    Mandates: CBO and the staff of JCT have not reviewed H.R. 
6124 for intergovernmental or private-sector mandates. Section 
4 of UMRA excludes from the application of that act any 
legislative provisions that relates to the old-age, survivors, 
and disability insurance program under title II of the Social 
Security Act (including taxes imposed by sections 3101(a) and 
311(a) of the Internal Revenue Code of 1986). CBO and the staff 
of JCT have determined that H.R. 6124 falls within that 
exclusion.
    Estimate prepared by: Federal Costs: Noah Meyerson; Federal 
Revenues: Staff of the Joint Committee on Taxation; Mandates: 
Rachel Austin.
    Estimate reviewed by: Sheila Dacey, Chief, Income Security 
and Education Cost Estimates Unit; Leo Lex, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated into 
the description portions of this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                D. Applicability of House Rule XXI 5(b)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the bill and states that the bill does not 
involve any Federal income tax rate increases within the 
meaning of the rule.

                       E. Tax Complexity Analysis

    Section 4022(b) of the Internal Revenue Service 
Restructuring and Reform Act of 1998 (``IRS Reform Act'') 
requires the staff of the Joint Committee on Taxation (in 
consultation with the Internal Revenue Service and the Treasury 
Department) to provide a tax complexity analysis. The 
complexity analysis is required for all legislation reported by 
the Senate Committee on Finance, the House Committee on Ways 
and Means, or any committee of conference if the legislation 
includes a provision that directly or indirectly amends the 
Internal Revenue Code of 1986 and has widespread applicability 
to individuals or small businesses.
    Pursuant to clause 3(h)(1) of rule XIII of the Rules of the 
House of Representatives, the staff of the Joint Committee on 
Taxation has determined that a complexity analysis is not 
required under section 4022(b) of the IRS Reform Act because 
the bill contains no provisions that amend the Internal Revenue 
Code of 1986 and that have ``widespread applicability'' to 
individuals or small businesses, within the meaning of the 
rule.

  F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   G. Duplication of Federal Programs

    In compliance with Sec. 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program, (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139, or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to section 6104 of 
title 31, United States Code.

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee advises that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED


  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT




           *       *       *       *       *       *       *
TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

           *       *       *       *       *       *       *



                        definition of employment

  Sec. 210. For the purposes of this title--

                               Employment

  (a) The term ``employment'' means any service performed after 
1936 and prior to 1951 which was employment for the purposes of 
this title under the law applicable to the period in which such 
service was performed, and any service, of whatever nature, 
performed after 1950 (A) by an employee for the person 
employing him, irrespective of the citizenship or residence of 
either, (i) within the United States, or (ii) on or in 
connection with an American vessel or American aircraft under a 
contract of service which is entered into within the United 
States or during the performance of which and while the 
employee is employed on the vessel or aircraft it touches at a 
port in the United States, if the employee is employed on and 
in connection with such vessel or aircraft when outside the 
United States, or (B) outside the United States by a citizen or 
resident of the United States as an employee (i) of an American 
employer (as defined in subsection (e) of this section), or 
(ii) of a foreign affiliate (as defined in section 3121(l)(6) 
of the Internal Revenue Code of 1986 of an American employer 
during any period for which there is in effect an agreement, 
entered into pursuant to section 3121(l) of such Code, with 
respect to such affiliate, or (C) if it is service, regardless 
of where or by whom performed, which is designated as 
employment or recognized as equivalent to employment under an 
agreement entered into under section 233; except that, in the 
case of service performed after 1950, such term shall not 
include--
          (1) Service performed by foreign agricultural workers 
        lawfully admitted to the United States from the 
        Bahamas, Jamaica, and the other British West Indies, or 
        from any other foreign country or possession thereof, 
        on a temporary basis to perform agricultural labor;
          (2) Domestic service performed in a local college 
        club, or local chapter of a college fraternity or 
        sorority, by a student who is enrolled and is regularly 
        attending classes at a school, college, or university;
          (3)(A) Service performed by a child under the age of 
        18 in the employ of his father or mother;
          (B) Service not in the course of the employer's trade 
        or business, or domestic service in a private home of 
        the employer, performed by an individual under the age 
        of 21 in the employ of his father or mother, or 
        performed by an individual in the employ of his spouse 
        or son or daughter; except that the provisions of this 
        subparagraph shall not be applicable to such domestic 
        service performed by an individual in the employ of his 
        son or daughter if--
                  (i) the employer is a surviving spouse or a 
                divorced individual and has not remarried, or 
                has a spouse living in the home who has a 
                mental or physical condition which results in 
                such spouse's being incapable of caring for a 
                son, daughter, stepson, or stepdaughter 
                (referred to in clause (ii)) for at least 4 
                continuous weeks in the calendar quarter in 
                which the service is rendered, and
                  (ii) a son, daughter, stepson, or 
                stepdaughter of such employer is living in the 
                home, and
                  (iii) the son, daughter, stepson, or 
                stepdaughter (referred to in clause (ii)) has 
                not attained age 18 or has a mental or physical 
                condition which requires the personal care and 
                supervision of an adult for at least 4 
                continuous weeks in the calendar quarter in 
                which the service is rendered;
          (4) Service performed by an individual on or in 
        connection with a vessel not an American vessel, or on 
        or in connection with an aircraft not an American 
        aircraft, if (A) the individual is employed on and in 
        connection with such vessel or aircraft when outside 
        the United States and (B)(i) such individual is not a 
        citizen of the United States or (ii) the employer is 
        not an American employer;
          (5) Service performed in the employ of the United 
        States or any instrumentality of the United States, if 
        such service--
                  (A) would be excluded from the term 
                ``employment'' for purposes of this title if 
                the provisions of paragraphs (5) and (6) of 
                this subsection as in effect in January 1983 
                had remained in effect, and
                  (B) is performed by an individual who--
                          (i) has been continuously performing 
                        service described in subparagraph (A) 
                        since December 31, 1983, and for 
                        purposes of this clause--
                                  (I) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after being separated therefrom 
                                for a period of less than 366 
                                consecutive days, regardless of 
                                whether the period began 
                                before, on, or after December 
                                31, 1983, then such service 
                                shall be considered continuous,
                                  (II) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after being detailed or 
                                transferred to an international 
                                organization as described under 
                                section 3343 of subchapter III 
                                of chapter 33 of title 5, 
                                United States Code, or under 
                                section 3581 of chapter 35 of 
                                such title, then the service 
                                performed for that organization 
                                shall be considered service 
                                described in subparagraph (A),
                                  (III) if an individual 
                                performing service described in 
                                subparagraph (A) is reemployed 
                                or reinstated after being 
                                separated from such service for 
                                the purpose of accepting 
                                employment with the American 
                                Institute of Taiwan as provided 
                                under section 3310 of chapter 
                                48 of title 22, United States 
                                Code, then the service 
                                performed for that Institute 
                                shall be considered service 
                                described in subparagraph (A),
                                  (IV) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after performing service as a 
                                member of a uniformed service 
                                (including, for purposes of 
                                this clause, service in the 
                                National Guard and temporary 
                                service in the Coast Guard 
                                Reserve) and after exercising 
                                restoration or reemployment 
                                rights as provided under 
                                chapter 43 of title 38, United 
                                States Code, then the service 
                                so performed as a member of a 
                                uniformed service shall be 
                                considered service described in 
                                subparagraph (A), and
                                  (V) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after employment (by a tribal 
                                organization) to which section 
                                104(e)(2) of the Indian Self-
                                Determination Act applies, then 
                                the service performed for that 
                                tribal organization shall be 
                                considered service described in 
                                subparagraph (A); or
                          (ii) is receiving an annuity from the 
                        Civil Service Retirement and Disability 
                        Fund, or benefits (for service as an 
                        employee) under another retirement 
                        system established by a law of the 
                        United States for employees of the 
                        Federal Government (other than for 
                        members of the uniformed services);
        except that this paragraph shall not apply with respect 
        to any such service performed on or after any date on 
        which such individual performs--
                  (C) service performed as the President or 
                Vice President of the United States,
                  (D) service performed--
                          (i) in a position placed in the 
                        Executive Schedule under sections 5312 
                        through 5317 of title 5, United States 
                        Code,
                          (ii) as a noncareer appointee in the 
                        Senior Executive Service or a noncareer 
                        member of the Senior Foreign Service, 
                        or
                          (iii) in a position to which the 
                        individual is appointed by the 
                        President (or his designee) or the Vice 
                        President under section 105(a)(1), 
                        106(a)(1), or 107(a)(1) or (b)(1) of 
                        title 3, United States Code, if the 
                        maximum rate of basic pay for such 
                        position is at or above the rate for 
                        level V of the Executive Schedule,
                  (E) service performed as the Chief Justice of 
                the United States, an Associate Justice of the 
                Supreme Court, a judge of a United States court 
                of appeals, a judge of a United States district 
                court (including the district court of a 
                territory), a judge of the United States Claims 
                Court, a judge of the United States Court of 
                International Trade, a judge of the United 
                States Tax Court, a United States magistrate, 
                or a referee in bankruptcy or United States 
                bankruptcy judge,
                  (F) service performed as a Member, Delegate, 
                or Resident Commissioner of or to the Congress,
                  (G) any other service in the legislative 
                branch of the Federal Government if such 
                service--
                          (i) is performed by an individual who 
                        was not subject to subchapter III of 
                        chapter 83 of title 5, United States 
                        Code, or to another retirement system 
                        established by a law of the United 
                        States for employees of the Federal 
                        Government (other than for members of 
                        the uniformed services), on December 
                        31, 1983, or
                          (ii) is performed by an individual 
                        who has, at any time after December 31, 
                        1983, received a lump-sum payment under 
                        section 8342(a) of title 5, United 
                        States Code, or under the corresponding 
                        provision of the law establishing the 
                        other retirement system described in 
                        clause (i), or
                          (iii) is performed by an individual 
                        after such individual has otherwise 
                        ceased to be subject to subchapter III 
                        of chapter 83 of title 5, United States 
                        Code (without having an application 
                        pending for coverage under such 
                        subchapter), while performing service 
                        in the legislative branch (determined 
                        without regard to the provisions of 
                        subparagraph (B) relating to continuity 
                        of employment), for any period of time 
                        after December 31, 1983,
                and for purposes of this subparagraph (G) an 
                individual is subject to such subchapter III or 
                to any such other retirement system at any time 
                only if (a) such individual's pay is subject to 
                deductions, contributions, or similar payments 
                (concurrent with the service being performed at 
                that time) under section 8334(a) of such title 
                5 or the corresponding provision of the law 
                establishing such other system, or (in a case 
                to which section 8332(k)(1) of such title 
                applies) such individual is making payments of 
                amounts equivalent to such deductions, 
                contributions, or similar payments while on 
                leave without pay, or (b) such individual is 
                receiving an annuity from the Civil Service 
                Retirement and Disability Fund, or is receiving 
                benefits (for service as an employee) under 
                another retirement system established by a law 
                of the United States for employees of the 
                Federal Government (other than for members of 
                the uniformed services), or
                  (H) service performed by an individual--
                          (i) on or after the effective date of 
                        an election by such individual, under 
                        section 301 of the Federal Employees' 
                        Retirement System Act of 1986, section 
                        307 of the Central Intelligence Agency 
                        Retirement Act (50 U.S.C. 2157), or the 
                        Federal Employees' Retirement System 
                        Open Enrollment Act of 1997 to become 
                        subject to the Federal Employees' 
                        Retirement System provided in chapter 
                        84 of title 5, United States Code, or
                          (ii) on or after the effective date 
                        of an election by such individual, 
                        under regulations issued under section 
                        860 of the Foreign Service Act of 1980, 
                        to become subject to the Foreign 
                        Service Pension System provided in 
                        subchapter II of chapter 8 of title I 
                        of such Act;
          (6) Service performed in the employ of the United 
        States or any instrumentality of the United States if 
        such service is performed--
                  (A) in a penal institution of the United 
                States by an inmate thereof;
                  (B) by any individual as an employee included 
                under section 5351(2) of title 5, United States 
                Code (relating to certain interns, student 
                nurses, and other student employees of 
                hospitals of the Federal Government), other 
                than as a medical or dental intern or a medical 
                or dental resident in training; or
                  (C) by any individual as an employee serving 
                on a temporary basis in case of fire, storm, 
                earthquake, flood, or other similar emergency;
          (7) Service performed in the employ of a State, or 
        any political subdivision thereof, or any 
        instrumentality of any one or more of the foregoing 
        which is wholly owned thereby, except that this 
        paragraph shall not apply in the case of--
                  (A) service included under an agreement under 
                section 218,
                  (B) service which, under subsection (k), 
                constitutes covered transportation service,
                  (C) service in the employ of the Government 
                of Guam or the Government of American Samoa or 
                any political subdivision thereof, or of any 
                instrumentality of any one or more of the 
                foregoing which is wholly owned thereby, 
                performed by an officer or employee thereof 
                (including a member of the legislature of any 
                such Government or political subdivision), and, 
                for purposes of this title--
                          (i) any person whose service as such 
                        an officer or employee is not covered 
                        by a retirement system established by a 
                        law of the United States shall not, 
                        with respect to such service, be 
                        regarded as an officer or employee of 
                        the United States or any agency or 
                        instrumentality thereof, and
                          (ii) the remuneration for service 
                        described in clause (i) (including fees 
                        paid to a public official) shall be 
                        deemed to have been paid by the 
                        Government of Guam or the Government of 
                        American Samoa or by a political 
                        subdivision thereof or an 
                        instrumentality of any one or more of 
                        the foregoing which is wholly owned 
                        thereby, whichever is appropriate,
                  (D) service performed in the employ of the 
                District of Columbia or any instrumentality 
                which is wholly owned thereby, if such service 
                is not covered by a retirement system 
                established by a law of the United States 
                (other than the Federal Employees Retirement 
                System provided in chapter 84 of title 5, 
                United States Code); except that the provisions 
                of this subparagraph shall not be applicable to 
                service performed--
                          (i) in a hospital or penal 
                        institution by a patient or inmate 
                        thereof;
                          (ii) by any individual as an employee 
                        included under section 5351(2) of title 
                        5, United States Code (relating to 
                        certain interns, student nurses, and 
                        other student employees of hospitals of 
                        the District of Columbia Government), 
                        other than as a medical or dental 
                        intern or as a medical or dental 
                        resident in training;
                          (iii) by any individual as an 
                        employee serving on a temporary basis 
                        in case of fire, storm, snow, 
                        earthquake, flood, or other similar 
                        emergency; or
                          (iv) by a member of a board, 
                        committee, or council of the District 
                        of Columbia, paid on a per diem, 
                        meeting, or other fee basis,
                  (E) service performed in the employ of the 
                Government of Guam (or any instrumentality 
                which is wholly owned by such Government) by an 
                employee properly classified as a temporary or 
                intermittent employee, if such service is not 
                covered by a retirement system established by a 
                law of Guam; except that (i) the provisions of 
                this subparagraph shall not be applicable to 
                services performed by an elected official or a 
                member of the legislature or in a hospital or 
                penal institution by a patient or inmate 
                thereof, and (ii) for purposes of this 
                subparagraph, clauses (i) and (ii) of 
                subparagraph (C) shall apply, or
                  (F) service in the employ of a State (other 
                than the District of Columbia, Guam, or 
                American Samoa), of any political subdivision 
                thereof, or of any instrumentality of any one 
                or more of the foregoing which is wholly owned 
                thereby, by an individual who is not a member 
                of a retirement system of such State, political 
                subdivision, or instrumentality, except that 
                the provisions of this subparagraph shall not 
                be applicable to service performed--
                          (i) by an individual who is employed 
                        to relieve such individual from 
                        unemployment;
                          (ii) in a hospital, home, or other 
                        institution by a patient or inmate 
                        thereof;
                          (iii) by any individual as an 
                        employee serving on a temporary basis 
                        in case of fire, storm, snow, 
                        earthquake, flood, or other similar 
                        emergency;
                          (iv) by an election official or 
                        election worker if the remuneration 
                        paid in a calendar year for such 
                        service is less than $1,000 with 
                        respect to service performed during any 
                        calendar year commencing on or after 
                        January 1, 1995, ending on or before 
                        December 31, 1999, and the adjusted 
                        amount determined under section 
                        218(c)(8)(B) for any calendar year 
                        commencing on or after January 1, 2000, 
                        with respect to service performed 
                        during such calendar year; or
                          (v) by an employee in a position 
                        compensated solely on a fee basis which 
                        is treated pursuant to section 
                        211(c)(2)(E) as a trade or business for 
                        purposes of inclusion of such fees in 
                        net earnings from self employment;
                for purposes of this subparagraph, except as 
                provided in regulations prescribed by the 
                Secretary of the Treasury, the term 
                ``retirement system'' has the meaning given 
                such term by section 218(b)(4).
          (8)(A) Service performed by a duly ordained, 
        commissioned, or licensed minister of a church in the 
        exercise of his ministry or by a member of a religious 
        order in the exercise of duties required by such order, 
        except that this subparagraph shall not apply to 
        service performed by a member of such an order in the 
        exercise of such duties, if an election of coverage 
        under section 3121(r) of the Internal Revenue Code of 
        1986 is in effect with respect to such order, or with 
        respect to the autonomous subdivision thereof to which 
        such member belongs;
          (B) Service performed in the employ of a church or 
        qualified church-controlled organization if such church 
        or organization has in effect an election under section 
        3121(w) of the Internal Revenue Code of 1986, other 
        than service in an unrelated trade or business (within 
        the meaning of section 513(a) of such Code);
          (9) Service performed by an individual as an employee 
        or employee representative as defined in section 3231 
        of the Internal Revenue Code of 1986;
          (10) Service performed in the employ of--
                  (A) a school, college, or university, or
                  (B) an organization described in section 
                509(a)(3) of the Internal Revenue Code of 1986 
                if the organization is organized, and at all 
                times thereafter is operated, exclusively for 
                the benefit of, to perform the functions of, or 
                to carry out the purposes of a school, college, 
                or university and is operated, supervised, or 
                controlled by or in connection with such 
                school, college, or university, unless it is a 
                school, college, or university of a State or a 
                political subdivision thereof and the services 
                in its employ performed by a student referred 
                to in section 218(c)(5) are covered under the 
                agreement between the Commissioner of Social 
                Security and such State entered into pursuant 
                to section 218;
        if such service is performed by a student who is 
        enrolled and regularly attending classes at such 
        school, college, or university;
          (11) Service performed in the employ of a foreign 
        government (including service as a consular or other 
        officer or employee or a nondiplomatic representative);
          (12) Service performed in the employ of an 
        instrumentality wholly owned by a foreign government--
                  (A) If the service is of a character similar 
                to that performed in foreign countries by 
                employees of the United States Government or of 
                an instrumentality thereof; and
                  (B) If the Secretary of State shall certify 
                to the Secretary of the Treasury that the 
                foreign government, with respect to whose 
                instrumentality and employees thereof exemption 
                is claimed, grants an equivalent exemption with 
                respect to similar service performed in the 
                foreign country by employees of the United 
                States Government and of instrumentalities 
                thereof;
          (13) Service performed as a student nurse in the 
        employ of a hospital or a nurses' training school by an 
        individual who is enrolled and is regularly attending 
        classes in a nurses' training school chartered or 
        approved pursuant to State law;
          (14)(A) Service performed by an individual under the 
        age of eighteen in the delivery or distribution of 
        newspapers or shopping news, not including delivery or 
        distribution to any point for subsequent delivery or 
        distribution;
          (B) Service performed by an individual in, and at the 
        time of, the sale of newspapers or magazines to 
        ultimate consumers, under an arrangement under which 
        the newspapers or magazines are to be sold by him at a 
        fixed price, his compensation being based on the 
        retention of the excess of such price over the amount 
        at which the newspapers or magazines are charged to 
        him, whether or not he is guaranteed a minimum amount 
        of compensation for such service, or is entitled to be 
        credited with the unsold newspapers or magazines turned 
        back;
          (15) Service performed in the employ of an 
        international organization entitled to enjoy 
        privileges, exemptions, and immunities as an 
        international organization under the International 
        Organizations Immunities Act (59 Stat. 669), except 
        service which constitutes ``employment'' under 
        subsection (r);
          (16) Service performed by an individual under an 
        arrangement with the owner or tenant of land pursuant 
        to which--
                  (A) such individual undertakes to produce 
                agricultural or horticultural commodities 
                (including livestock, bees, poultry, and fur-
                bearing animals and wildlife) on such land,
                  (B) the agricultural or horticultural 
                commodities produced by such individual, or the 
                proceeds therefrom, are to be divided between 
                such individual and such owner or tenant, and
                  (C) the amount of such individual's share 
                depends on the amount of the agricultural or 
                horticultural commodities produced;
          (18) Service performed in Guam by a resident of the 
        Republic of the Philippines while in Guam on a 
        temporary basis as a nonimmigrant alien admitted to 
        Guam pursuant to section 101(a)(15)(H)(ii) of the 
        Immigration and Nationality Act (8 U.S.C. 
        1101(a)(15)(H)(ii));
          (19) Service which is performed by a nonresident 
        alien individual for the period he is temporarily 
        present in the United States as a nonimmigrant under 
        subparagraph (F), (J), (M), or (Q) of section 
        101(a)(15) of the Immigration and Nationality Act, as 
        amended, and which is performed to carry out the 
        purpose specified in subparagraph (F), (J), (M), or (Q) 
        as the case may be;
          (20) Service (other than service described in 
        paragraph (3)(A)) performed by an individual on a boat 
        engaged in catching fish or other forms of aquatic 
        animal life under an arrangement with the owner or 
        operator of such boat pursuant to which--
                  (A) such individual does not receive any 
                additional compensation other than as provided 
                in subparagraph (B) and other than case 
                remuneration--
                          (i) which does not exceed $100 per 
                        trip;
                          (ii) which is contingent on a minimum 
                        catch; and
                          (iii) which is paid solely for 
                        additional duties (such as mate, 
                        engineer, or cook) for which additional 
                        cash remuneration is traditional in the 
                        industry,
                  (B) such individual receives a share of the 
                boat's (or the boats' in the case of a fishing 
                operation involving more than one boat) catch 
                of fish or other forms of aquatic animal life 
                or a share of the proceeds from the sale of 
                such catch, and
                  (C) the amount of such individual's share 
                depends on the amount of the boat's (or boats' 
                in the case of a fishing operation involving 
                more than one boat) catch of fish or other 
                forms of aquatic animal life,
        but only if the operating crew of such boat (or each 
        boat from which the individual receives a share in the 
        case of a fishing operation involving more than one 
        boat) is normally made up of fewer than 10 individuals; 
        [or]
          (21) Domestic service in a private home of the 
        employer which--
                  (A) is performed in any year by an individual 
                under the age of 18 during any portion of such 
                year; and
                  (B) is not the principal occupation of such 
                employee[.]; or
          (22) Service performed by members of Indian tribal 
        councils as tribal council members in the employ of an 
        Indian tribal government, except that this paragraph 
        shall not apply in the case of service included under 
        an agreement under section 218A.
        For purposes of paragraph (20), the operating crew of a 
        boat shall be treated as normally made up of fewer than 
        10 individuals if the average size of the operating 
        crew on trips made during the preceding 4 calendar 
        quarters consisted of fewer than 10 individuals.

                     Included and Excluded Service

  (b) If the services performed during one-half or more of any 
pay period by an employee for the person employing him 
constitute employment, all the services of such employee for 
such period shall be deemed to be employment; but if the 
services performed during more than one-half of any such pay 
period by an employee for the person employing him do not 
constitute employment, then none of the services of such 
employee for such period shall be deemed to be employment. As 
used in this subsection, the term ``pay period'' means a period 
(of not more than thirty-one consecutive days) for which a 
payment of remuneration is ordinarily made to the employee by 
the person employing him. This subsection shall not be 
applicable with respect to services performed in a pay period 
by an employee for the person employing him, where any of such 
service is excepted by paragraph (9) of subsection (a).

                            American Vessel

  (c) The term ``American vessel'' means any vessel documented 
or numbered under the laws of the United States; and includes 
any vessel which is neither documented or numbered under the 
laws of the United States nor documented under the laws of any 
foreign country, if its crew is employed solely by one or more 
citizens or residents of the United States or corporations 
organized under the laws of the United States or of any State.

                           American Aircraft

  (d) The term ``American aircraft'' means an aircraft 
registered under the laws of the United States.

                           American Employer

  (e)(1) The term ``American employer'' means an employer which 
is (A) the United States or any instrumentality thereof, (B) a 
State or any political subdivision thereof, or any 
instrumentality of any one or more of the foregoing, (C) an 
individual who is a resident of the United States, (D) a 
partnership, if two-thirds or more of the partners are 
residents of the United States, (E) a trust, if all of the 
trustees are residents of the United States, or (F) a 
corporation organized under the laws of the United States or of 
any State.
  (2)(A) If any employee of a foreign person is performing 
services in connection with a contract between the United 
States Government (or any instrumentality thereof) and any 
member of any domestically controlled group of entities which 
includes such foreign person, such foreign person shall be 
treated as an American employer with respect to such services 
performed by such employee.
  (B) For purposes of this paragraph--
          (i) The term ``domestically controlled group of 
        entities'' means a controlled group of entities the 
        common parent of which is a domestic corporation.
          (ii) The term ``controlled group of entities'' means 
        a controlled group of corporations as defined in 
        section 1563(a)(1) of the Internal Revenue Code of 
        1986, except that--
                  (I) ``more than 50 percent'' shall be 
                substituted for ``at least 80 percent'' each 
                place it appears therein, and
                  (II) the determination shall be made without 
                regard to subsections (a)(4) and (b)(2) of 
                section 1563 of such Code.
        A partnership or any other entity (other than a 
        corporation) shall be treated as a member of a 
        controlled group of entities if such entity is 
        controlled (within the meaning of section 954(d)(3) of 
        such Code) by members of such group (including any 
        entity treated as a member of such group by reason of 
        this sentence).
  (C) Subparagraph (A) shall not apply to any services to which 
paragraph (1) of section 3121(z) of the Internal Revenue Code 
of 1986 does not apply by reason of paragraph (4) of such 
section.

                           Agricultural Labor

  (f) The term ``agricultural labor'' includes all service 
performed--
          (1) On a farm, in the employ of any person, in 
        connection with cultivating the soil, or in connection 
        with raising or harvesting any agricultural or 
        horticultural commodity, including the raising, 
        shearing, feeding, caring for, training, and management 
        of livestock, bees, poultry, and fur-bearing animals 
        and wildlife.
          (2) In the employ of the owner or tenant or other 
        operator of a farm, in connection with the operation, 
        management, conservation, improvement, or maintenance 
        of such farm and its tools and equipment, or in 
        salvaging timber or clearing land of brush and other 
        debris left by a hurricane, if the major part of such 
        service is performed on a farm.
          (3) In connection with the production or harvesting 
        of any commodity defined as an agricultural commodity 
        in section 15(g) of the Agricultural Marketing Act, as 
        amended, or in connection with the ginning of cotton, 
        or in connection with the operation or maintenance of 
        ditches, canals, reservoirs, or waterways, not owned or 
        operated for profit, used exclusively for supplying and 
        storing water for farming purposes.
          (4)(A) In the employ of the operator of a farm in 
        handling, planting, drying, packing, packaging, 
        processing, freezing, grading, storing, or delivering 
        to storage or to market or to a carrier for 
        transportation to market, in its unmanufactured state, 
        any agricultural or horticultural commodity; but only 
        if such operator produced more than one-half of the 
        commodity with respect to which such service is 
        performed.
          (B) In the employ of a group of operators of farms 
        (other than a cooperative organization) in the 
        performance of service described in subparagraph (A), 
        but only if such operators produced all of the 
        commodity with respect to which such service is 
        performed. For the purposes of this subparagraph, any 
        unincorporated group of operators shall be deemed a 
        cooperative organization if the number of operators 
        comprising such group is more than twenty at any time 
        during the calendar year in which such service is 
        performed.
          (5) On a farm operated for profit if such service is 
        not in the course of the employer's trade or business.
The provisions of subparagraphs (A) and (B) of paragraph (4) 
shall not be deemed to be applicable with respect to service 
performed in connection with commercial canning or commercial 
freezing or in connection with any agricultural or 
horticultural commodity after its delivery to a terminal market 
for distribution for consumption.

                                  Farm

  (g) The term ``farm'' includes stock, dairy, poultry, fruit, 
fur-bearing animal, and truck farms, plantations, ranches, 
nurseries, ranges, greenhouses or other similar structures used 
primarily for the raising of agricultural or horticultural 
commodities, and orchards.

                                 State

  (h) The term ``State'' includes the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
American Samoa.

                             United States

  (i) The term ``United States'' when used in a geographical 
sense means the States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
American Samoa.

                                Employee

  (j) The term ``employee'' means--
          (1) any officer of a corporation; or
          (2) any individual who, under the usual common law 
        rules applicable in determining the employer-employee 
        relationship, has the status of an employee; or
          (3) any individual (other than an individual who is 
        an employee under paragraph (1) or (2) of this 
        subsection) who performs services for remuneration for 
        any person--
                  (A) as an agent-driver or commission-driver 
                engaged in distributing meat products, 
                vegetable products, fruit products, bakery 
                products, beverages (other than milk), or 
                laundry or dry-cleaning services, for his 
                principal;
                  (B) as a full-time life insurance salesman;
                  (C) as a home worker performing work, 
                according to specifications furnished by the 
                person for whom the services are performed, on 
                materials or goods furnished by such person 
                which are required to be returned to such 
                person or a person designated by him; or
                  (D) as a traveling or city salesman, other 
                than as an agent-driver or commission-driver, 
                engaged upon a full-time basis in the 
                solicitation on behalf of, and the transmission 
                to, his principal (except for side-line sales 
                activities on behalf of some other person) of 
                orders from wholesalers, retailers, 
                contractors, or operators of hotels, 
                restaurants, or other similar establishments 
                for merchandise for resale or supplies for use 
                in their business operations;
        if the contract of service contemplates that 
        substantially all of such services are to be performed 
        personally by such individual; except that an 
        individual shall not be included in the term 
        ``employee'' under the provisions of this paragraph if 
        such individual has a substantial investment in 
        facilities used in connection with the performance of 
        such services (other than in facilities for 
        transportation), or if the services are in the nature 
        of a single transaction not part of a continuing 
        relationship with the person for whom the services are 
        performed.

                     Covered Transportation Service

  (k)(1) Except as provided in paragraph (2), all service 
performed in the employ of a State or political subdivision in 
connection with its operation of a public transportation system 
shall constitute covered transportation service if any part of 
the transportation system was acquired from private ownership 
after 1936 and prior to 1951.
  (2) Service performed in the employ of a State or political 
subdivision in connection with the operation of its public 
transportation system shall not constitute covered 
transportation service if--
          (A) any part of the transportation system was 
        acquired from private ownership after 1936 and prior to 
        1951, and substantially all service in connection with 
        the operation of the transportation system is, on 
        December 31, 1950, covered under a general retirement 
        system providing benefits which, by reason of a 
        provision of the State constitution dealing 
        specifically with retirement systems of the State or 
        political subdivisions thereof, cannot be diminished or 
        impaired; or
          (B) no part of the transportation system operated by 
        the State or political subdivision on December 31, 
        1950, was acquired from private ownership after 1936 
        and prior to 1951;
except that if such State or political subdivision makes an 
acquisition after 1950 from private ownership of any part of 
its transportation system, then, in the case of any employee 
who--
          (C) became an employee of such State or political 
        subdivision in connection with and at the time of its 
        acquisition after 1950 of such part, and
          (D) prior to such acquisition rendered service in 
        employment in connection with the operation of such 
        part of the transportation system acquired by the State 
        or political subdivision,
the service of such employee in connection with the operation 
of the transportation system shall constitute covered 
transportation service, commencing with the first day of the 
third calendar quarter following the calendar quarter in which 
the acquisition of such part took place, unless on such first 
day such service of such employee is covered by a general 
retirement system which does not, with respect to such 
employee, contain special provisions applicable only to 
employees described in subparagraph (C).
  (3) All service performed in the employ of a State or 
political subdivision thereof in connection with its operation 
of a public transportation system shall constitute covered 
transportation service if the transportation system was not 
operated by the State or political subdivision prior to 1951 
and, at the time of its first acquisition (after 1950) from 
private ownership of any part of its transportation system, the 
State or political subdivision did not have a general 
retirement system covering substantially all service performed 
in connection with the operation of the transportation system.
  (4) For the purposes of this subsection--
          (A) The term ``general retirement system'' means any 
        pension, annuity, retirement, or similar fund or system 
        established by a State or by a political subdivision 
        thereof for employees of the State, political 
        subdivision, or both; but such term shall not include 
        such a fund or system which covers only service 
        performed in positions connected with the operation of 
        its public transportation system.
          (B) A transportation system or a part thereof shall 
        be considered to have been acquired by a State or 
        political subdivision from private ownership if prior 
        to the acquisition service performed by employees in 
        connection with the operation of the system or part 
        thereof acquired constituted employment under this 
        title, and some of such employees became employees of 
        the State or political subdivision in connection with 
        and at the time of such acquisition.
          (C) The term ``political subdivision'' includes an 
        instrumentality of (i) a State, (ii) one or more 
        political subdivisions of a State, or (iii) a State and 
        one or more of its political subdivisions.

                   Service in the Uniformed Services

  (l)(1) Except as provided in paragraph (4), the term 
``employment'' shall, notwithstanding the provisions of 
subsection (a) of this section, include--
          (A) service performed after December 1956 by an 
        individual as a member of a uniformed service on active 
        duty, but such term shall not include any such service 
        which is performed while on leave without pay, and
          (B) service performed after December 1987 by an 
        individual as a member of a uniformed service on 
        inactive duty training.
  (2) The term ``active duty'' means ``active duty'' as 
described in paragraph (21) of section 101 of title 38, United 
States Code, except that it shall also include ``active duty 
for training'' as described in paragraph (22) of such section.
  (3) The term ``inactive duty training'' means ``inactive duty 
training'' as described in paragraph (23) of such section 101.
  (4)(A) Paragraph (1) of this subsection shall not apply in 
the case of any service, performed by an individual as a member 
of a uniformed service, which is creditable under section 3(i) 
of the Railroad Retirement Act of 1974. The Railroad Retirement 
Board shall notify the Commissioner of Social Security, with 
respect to all such service which is so creditable.
  (B) In any case where benefits under this title are already 
payable on the basis of such individual's wages and self-
employment income at the time such notification (with respect 
to such individual) is received by the Commissioner of Social 
Security, the Commissioner of Social Security shall certify no 
further benefits for payment under this title on the basis of 
such individual's wages and self-employment income, or shall 
recompute the amount of any further benefits payable on the 
basis of such wages and self-employment income, as may be 
required as a consequence of subparagraph (A) of this 
paragraph. No payment of a benefit to any person on the basis 
of such individual's wages and self-employment income, 
certified by the Commissioner of Social Security prior to the 
end of the month in which the Commissioner receives such 
notification from the Railroad Retirement Board, shall be 
deemed by reason of this subparagraph to have been an erroneous 
payment or a payment to which such person was not entitled. The 
Commissioner of Social Security shall, as soon as possible 
after the receipt of such notification from the Railroad 
Retirement Board, advise such Board whether or not any such 
benefit will be reduced or terminated by reason of subparagraph 
(A), and if any such benefit will be so reduced or terminated, 
specify the first month with respect to which such reduction or 
termination will be effective.

                     Member of a Uniformed Service

  (m) The term ``member of a uniformed service'' means any 
person appointed, enlisted, or inducted in a component of the 
Army, Navy, Air Force, Marine Corps, or Coast Guard (including 
a reserve component as defined in section 101(27) of title 38, 
United States Code), or in one of those services without 
specification of component, or as a commissioned officer of the 
Coast and Geodetic Survey, the National Oceanic and Atmospheric 
Administration Corps, or the Regular or Reserve Corps of the 
Public Health Service, and any person serving in the Army or 
Air Force under call or conscription. The term includes--
          (1) a retired member of any of those services;
          (2) a member of the Fleet Reserve or Fleet Marine 
        Corps Reserve;
          (3) a cadet at the United States Military Academy, a 
        midshipman at the United States Naval Academy, and a 
        cadet at the United States Coast Guard Academy or 
        United States Air Force Academy;
          (4) a member of the Reserve Officers' Training Corps, 
        the Naval Reserve Officers' Training Corps, or the Air 
        Force Reserve Officers' Training Corps, when ordered to 
        annual training duty for fourteen days or more, and 
        while performing authorized travel to and from that 
        duty; and
          (5) any person while en route to or from, or at, a 
        place for final acceptance or for entry upon active 
        duty in the military, naval, or air service--
                  (A) who has been provisionally accepted for 
                such duty; or
                  (B) who, under the Military Selective Service 
                Act, has been selected for active military, 
                naval, or air service;
        and has been ordered or directed to proceed to such 
        place.
The term does not include a temporary member of the Coast Guard 
Reserve.

                              Crew Leader

  (n) The term ``crew leader'' means an individual who 
furnishes individuals to perform agricultural labor for another 
person, if such individual pays (either on his own behalf or on 
behalf of such person) the individuals so furnished by him for 
the agricultural labor performed by them and if such individual 
has not entered into a written agreement with such person 
whereby such individual has been designated as an employee of 
such person; and such individuals furnished by the crew leader 
to perform agricultural labor for another person shall be 
deemed to be the employees of such crew leader. A crew leader 
shall, with respect to services performed in furnishing 
individuals to perform agricultural labor for another person 
and service performed as a member of the crew, be deemed not to 
be an employee of such other person.

                     Peace Corps Volunteer Service

  (o) The term ``employment'' shall, notwithstanding the 
provisions of subsection (a), include service performed by an 
individual as a volunteer or volunteer leader within the 
meaning of the Peace Corps Act.

                Medicare Qualified Government Employment

  (p)(1) For purposes of sections 226 and 226A, the term 
``medicare qualified government employment'' means any service 
which would constitute ``employment'' as defined in subsection 
(a) of this section but for the application of the provisions 
of--
          (A) subsection (a)(5), or
          (B) subsection (a)(7), except as provided in 
        paragraphs (2) and (3).
  (2) Service shall not be treated as employment by reason of 
paragraph (1)(B) if the service is performed--
          (A) by an individual who is employed by a State or 
        political subdivision thereof to relieve him from 
        unemployment,
          (B) in a hospital, home, or other institution by a 
        patient or inmate thereof as an employee of a State or 
        political subdivision thereof or of the District of 
        Columbia,
          (C) by an individual, as an employee of a State or 
        political subdivision thereof or of the District of 
        Columbia, serving on a temporary basis in case of fire, 
        storm, snow, earthquake, flood or other similar 
        emergency,
          (D) by any individual as an employee included under 
        section 5351(2) of title 5, United States Code 
        (relating to certain interns, student nurses, and other 
        student employees of hospitals of the District of 
        Columbia Government), other than as a medical or dental 
        intern or a medical or dental resident in training, or
          (E) by an election official or election worker if the 
        remuneration paid in a calendar year for such service 
        is less than $1,000 with respect to service performed 
        during any calendar year commencing on or after January 
        1, 1995, ending on or before December 31, 1999, and the 
        adjusted amount determined under section 218(c)(8)(B) 
        for any calendar year commencing on or after January 1, 
        2000, with respect to service performed during such 
        calendar year.
As used in this paragraph, the terms ``State'' and ``political 
subdivision'' have the meanings given those terms in section 
218(b).
  (3) Service performed for an employer shall not be treated as 
employment by reason of paragraph (1)(B) if--
          (A) such service would be excluded from the term 
        ``employment'' for purposes of this section if 
        paragraph (1)(B) did not apply;
          (B) such service is performed by an individual--
                  (i) who was performing substantial and 
                regular service for remuneration for that 
                employer before April 1, 1986,
                  (ii) who is a bona fide employee of that 
                employer on March 31, 1986, and
                  (iii) whose employment relationship with that 
                employer was not entered into for purposes of 
                meeting the requirements of this subparagraph; 
                and
          (C) the employment relationship with that employer 
        has not been terminated after March 31, 1986.
  (4) For purposes of paragraph (3), under regulations 
(consistent with regulations established under section 
3121(u)(2)(D) of the Internal Revenue Code of 1954)--
          (A) all agencies and instrumentalities of a State (as 
        defined in section 218(b)) or of the District of 
        Columbia shall be treated as a single employer, and
          (B) all agencies and instrumentalities of a political 
        subdivision of a State (as so defined) shall be treated 
        as a single employer and shall not be treated as 
        described in subparagraph (A).

           Treatment of Real Estate Agents and Direct Sellers

  (q) Notwithstanding any other provision of this title, the 
rules of section 3508 of the Internal Revenue Code of 1986 
shall apply for purposes of this title.

    Service in the Employ of International Organizations by Certain 
                     Transferred Federal Employees

  (r)(1) For purposes of this title, service performed in the 
employ of an international organization by an individual 
pursuant to a transfer of such individual to such international 
organization pursuant to section 3582 of title 5, United States 
Code, shall constitute ``employment'' if--
          (A) immediately before such transfer, such individual 
        performed service with a Federal agency which 
        constituted ``employment'' as defined in subsection 
        (a), and
          (B) such individual would be entitled, upon 
        separation from such international organization and 
        proper application, to reemployment with such Federal 
        agency under such section 3582.
  (2) For purposes of this subsection:
          (A) The term ``Federal agency'' means an agency, as 
        defined in section 3581(1) of title 5, United States 
        Code.
          (B) The term ``international organization'' has the 
        meaning provided such term by section 3581(3) of title 
        5, United States Code.

           *       *       *       *       *       *       *


   VOLUNTARY AGREEMENTS FOR COVERAGE OF INDIAN TRIBAL COUNCIL MEMBERS

                          Purpose of agreement

  Sec. 218A. (a)(1) The Commissioner of Social Security shall, 
at the request of any Indian tribe, enter into an agreement 
with such Indian tribe for the purpose of extending the 
insurance system established by this title to services 
performed by individuals as members of such Indian tribe's 
tribal council. Any agreement with an Indian tribe under this 
section applies to all members of the tribal council, and shall 
include all services performed by individuals in their capacity 
as council members.
  (2) Notwithstanding section 210(a), for the purposes of this 
title, the term ``employment'' includes any service included 
under an agreement entered into under this section.

                              Definitions

  (b) For the purposes of this section:
          (1) The term ``member'' means, with respect to a 
        tribal council, an individual appointed or elected to 
        serve as a member or the head of the tribal council.
          (2) The term ``tribal council'' means the appointed 
        or elected governing body of a federally recognized 
        Indian tribe.

                      Effective date of agreement

  (c)(1) Any agreement under this section shall be effective 
with respect to services performed after an effective date 
specified in such agreement, provided that such date may not be 
earlier than the first day of the next calendar month after the 
month in which the agreement is executed by both parties.
  (2) At the request of the Indian tribe at the time of the 
agreement, such agreement may apply with respect to services 
performed before such effective date for which there were 
timely paid in good faith (and not subsequently refunded) to 
the Secretary of the Treasury amounts equivalent to the sum of 
the taxes which would have been imposed by sections 3101 and 
3111 of the Internal Revenue Code of 1986 had such services 
constituted employment for purposes of chapter 21 of such Code. 
No agreement under this section may require payment to be made 
after the effective date specified in such agreement of any 
taxes with respect to services performed before such effective 
date.

                         Duration of agreement

  (d) No agreement under this section may be terminated on or 
after the effective date of the agreement.

           *       *       *       *       *       *       *

                              ----------                              


                     INTERNAL REVENUE CODE OF 1986



           *       *       *       *       *       *       *
Subtitle C--Employment Taxes

           *       *       *       *       *       *       *


CHAPTER 21--FEDERAL INSURANCE CONTRIBUTIONS ACT

           *       *       *       *       *       *       *


                    Subchapter C--General Provisions

SEC. 3121. DEFINITIONS.

  (a) Wages.--For purposes of this chapter, the term ``wages'' 
means all remuneration for employment, including the cash value 
of all remuneration (including benefits) paid in any medium 
other than cash; except that such term shall not include--
          (1) in the case of the taxes imposed by sections 
        3101(a) and 3111(a) that part of the remuneration 
        which, after remuneration (other than remuneration 
        referred to in the succeeding paragraphs of this 
        subsection) equal to the contribution and benefit base 
        (as determined under section 230 of the Social Security 
        Act) with respect to employment has been paid to an 
        individual by an employer during the calendar year with 
        respect to which such contribution and benefit base is 
        effective, is paid to such individual by such employer 
        during such calendar year. If an employer (hereinafter 
        referred to as successor employer) during any calendar 
        year acquires substantially all the property used in a 
        trade or business of another employer (hereinafter 
        referred to as a predecessor), or used in a separate 
        unit of a trade or business of a predecessor, and 
        immediately after the acquisition employs in his trade 
        or business an individual who immediately prior to the 
        acquisition was employed in the trade or business of 
        such predecessor, then, for the purpose of determining 
        whether the successor employer has paid remuneration 
        (other than remuneration referred to in the succeeding 
        paragraphs of this subsection) with respect to 
        employment equal to the contribution and benefit base 
        (as determined under section 230 of the Social Security 
        Act) to such individual during such calendar year, any 
        remuneration (other than remuneration referred to in 
        the succeeding paragraphs of this subsection) with 
        respect to employment paid (or considered under this 
        paragraph as having been paid) to such individual by 
        such predecessor during such calendar year and prior to 
        such acquisition shall be considered as having been 
        paid by such successor employer;
          (2) the amount of any payment (including any amount 
        paid by an employer for insurance or annuities, or into 
        a fund, to provide for any such payment) made to, or on 
        behalf of, an employee or any of his dependents under a 
        plan or system established by an employer which makes 
        provision for his employees generally (or for his 
        employees generally and their dependents) or for a 
        class or classes of his employees (or for a class or 
        classes of his employees and their dependents), on 
        account of--
                  (A) sickness or accident disability (but, in 
                the case of payments made to an employee or any 
                of his dependents, this subparagraph shall 
                exclude from the term ``wages'' only payments 
                which are received under a workman's 
                compensation law), or
                  (B) medical or hospitalization expenses in 
                connection with sickness or accident 
                disability, or
                  (C) death, except that this paragraph does 
                not apply to a payment for group-term life 
                insurance to the extent that such payment is 
                includible in the gross income of the employee;
          (4) any payment on account of sickness or accident 
        disability, or medical or hospitalization expenses in 
        connection with sickness or accident disability, made 
        by an employer to, or on behalf of, an employee after 
        the expiration of 6 calendar months following the last 
        calendar month in which the employee worked for such 
        employer;
          (5) any payment made to, or on behalf of, an employee 
        or his beneficiary--
                  (A) from or to a trust described in section 
                401(a) which is exempt from tax under section 
                501(a) at the time of such payment unless such 
                payment is made to an employee of the trust as 
                remuneration for services rendered as such 
                employee and not as a beneficiary of the trust,
                  (B) under or to an annuity plan which, at the 
                time of such payment, is a plan described in 
                section 403(a),
                  (C) under a simplified employee pension (as 
                defined in section 408(k)(1)), other than any 
                contributions described in section 408(k)(6),
                  (D) under or to an annuity contract described 
                in section 403(b), other than a payment for the 
                purchase of such contract which is made by 
                reason of a salary reduction agreement (whether 
                evidenced by a written instrument or 
                otherwise),
                  (E) under or to an exempt governmental 
                deferred compensation plan (as defined in 
                subsection (v)(3)),
                  (F) to supplement pension benefits under a 
                plan or trust described in any of the foregoing 
                provisions of this paragraph to take into 
                account some portion or all of the increase in 
                the cost of living (as determined by the 
                Secretary of Labor) since retirement but only 
                if such supplemental payments are under a plan 
                which is treated as a welfare plan under 
                section 3(2)(B)(ii) of the Employee Retirement 
                Income Security Act of 1974,
                  (G) under a cafeteria plan (within the 
                meaning of section 125) if such payment would 
                not be treated as wages without regard to such 
                plan and it is reasonable to believe that (if 
                section 125 applied for purposes of this 
                section) section 125 would not treat any wages 
                as constructively received,
                  (H) under an arrangement to which section 
                408(p) applies, other than any elective 
                contributions under paragraph (2)(A)(i) 
                thereof, or
                  (I) under a plan described in section 
                457(e)(11)(A)(ii) and maintained by an eligible 
                employer (as defined in section 457(e)(1));
          (6) the payment by an employer (without deduction 
        from the remuneration of the employee)--
                  (A) of the tax imposed upon an employee under 
                section 3101, or
                  (B) of any payment required from an employee 
                under a State unemployment compensation law,
        with respect to remuneration paid to an employee for 
        domestic service in a private home of the employer or 
        for agricultural labor;
          (7)(A) remuneration paid in any medium other than 
        cash to an employee for service not in the course of 
        the employer's trade or business or for domestic 
        service in a private home of the employer;
                  (B) cash remuneration paid by an employer in 
                any calendar year to an employee for domestic 
                service in a private home of the employer 
                (including domestic service on a farm operated 
                for profit), if the cash remuneration paid in 
                such year by the employer to the employee for 
                such service is less than the applicable dollar 
                threshold (as defined in subsection (x)) for 
                such year;
                  (C) cash remuneration paid by an employer in 
                any calendar year to an employee for service 
                not in the course of the employer's trade or 
                business, if the cash remuneration paid in such 
                year by the employer to the employee for such 
                service is less than $100. As used in this 
                subparagraph, the term ``service not in the 
                course of the employer's trade or business'' 
                does not include domestic service in a private 
                home of the employer and does not include 
                service described in subsection (g)(5);
          (8)(A) remuneration paid in any medium other than 
        cash for agricultural labor;
                  (B) cash remuneration paid by an employer in 
                any calendar year to an employee for 
                agricultural labor unless--
                          (i) the cash remuneration paid in 
                        such year by the employer to the 
                        employee for such labor is $150 or 
                        more, or
                          (ii) the employer's expenditures for 
                        agricultural labor in such year equal 
                        or exceed $2,500,
                except that clause (ii) shall not apply in 
                determining whether remuneration paid to an 
                employee constitutes ``wages'' under this 
                section if such employee (I) is employed as a 
                hand harvest laborer and is paid on a piece 
                rate basis in an operation which has been, and 
                is customarily and generally recognized as 
                having been, paid on a piece rate basis in the 
                region of employment, (II) commutes daily from 
                his permanent residence to the farm on which he 
                is so employed, and (III) has been employed in 
                agriculture less than 13 weeks during the 
                preceding calendar year;
          (10) remuneration paid by an employer in any calendar 
        year to an employee for service described in subsection 
        (d)(3)(C) (relating to home workers), if the cash 
        remuneration paid in such year by the employer to the 
        employee for such service is less than $100;
          (11) remuneration paid to or on behalf of an employee 
        if (and to the extent that) at the time of the payment 
        of such remuneration it is reasonable to believe that a 
        corresponding deduction is allowable under section 217 
        (determined without regard to section 274(n));
          (12)(A) tips paid in any medium other than cash;
                  (B) cash tips received by an employee in any 
                calendar month in the course of his employment 
                by an employer unless the amount of such cash 
                tips is $20 or more;
          (13) any payment or series of payments by an employer 
        to an employee or any of his dependents which is paid--
                  (A) upon or after the termination of an 
                employee's employment relationship because of 
                (i) death, or (ii) retirement for disability, 
                and
                  (B) under a plan established by the employer 
                which makes provision for his employees 
                generally or a class or classes of his 
                employees (or for such employees or class or 
                classes of employees and their dependents),
        other than any such payment or series of payments which 
        would have been paid if the employee's employment 
        relationship had not been so terminated;
          (14) any payment made by an employer to a survivor or 
        the estate of a former employee after the calendar year 
        in which such employee died;
          (15) any payment made by an employer to an employee, 
        if at the time such payment is made such employee is 
        entitled to disability insurance benefits under section 
        223(a) of the Social Security Act and such entitlement 
        commenced prior to the calendar year in which such 
        payment is made, and if such employee did not perform 
        any services for such employer during the period for 
        which such payment is made;
          (16) remuneration paid by an organization exempt from 
        income tax under section 501(a) (other than an 
        organization described in section 401(a)) or under 
        section 521 in any calendar year to an employee for 
        service rendered in the employ of such organization, if 
        the remuneration paid in such year by the organization 
        to the employee for such service is less than $100;
          (18) any payment made, or benefit furnished, to or 
        for the benefit of an employee if at the time of such 
        payment or such furnishing it is reasonable to believe 
        that the employee will be able to exclude such payment 
        or benefit from income under section 127, 129, 
        134(b)(4), or 134(b)(5);
          (19) the value of any meals or lodging furnished by 
        or on behalf of the employer if at the time of such 
        furnishing it is reasonable to believe that the 
        employee will be able to exclude such items from income 
        under section 119;
          (20) any benefit provided to or on behalf of an 
        employee if at the time such benefit is provided it is 
        reasonable to believe that the employee will be able to 
        exclude such benefit from income under section 74(c), 
        108(f)(4), 117, or 132;
          (21) in the case of a member of an Indian tribe, any 
        remuneration on which no tax is imposed by this chapter 
        by reason of section 7873 (relating to income derived 
        by Indians from exercise of fishing rights);
          (22) remuneration on account of--
                  (A) a transfer of a share of stock to any 
                individual pursuant to an exercise of an 
                incentive stock option (as defined in section 
                422(b)) or under an employee stock purchase 
                plan (as defined in section 423(b)), or
                  (B) any disposition by the individual of such 
                stock; or (23) any benefit or payment which is 
                excludable from the gross income of the 
                employee under section 139B(b).
Nothing in the regulations prescribed for purposes of chapter 
24 (relating to income tax withholding) which provides an 
exclusion from ``wages'' as used in such chapter shall be 
construed to require a similar exclusion from ``wages'' in the 
regulations prescribed for purposes of this chapter. Except as 
otherwise provided in regulations prescribed by the Secretary, 
any third party which makes a payment included in wages solely 
by reason of the parenthetical matter contained in subparagraph 
(A) of paragraph (2) shall be treated for purposes of this 
chapter and chapter 22 as the employer with respect to such 
wages.
  (b) Employment.--For purposes of this chapter, the term 
``employment'' means any service, of whatever nature, performed 
(A) by an employee for the person employing him, irrespective 
of the citizenship or residence of either, (i) within the 
United States, or (ii) on or in connection with an American 
vessel or American aircraft under a contract of service which 
is entered into within the United States or during the 
performance of which and while the employee is employed on the 
vessel or aircraft it touches at a port in the United States, 
if the employee is employed on and in connection with such 
vessel or aircraft when outside the United States, or (B) 
outside the United States by a citizen or resident of the 
United States as an employee for an American employer (as 
defined in subsection (h)), or (C) if it is service, regardless 
of where or by whom performed, which is designated as 
employment or recognized as equivalent to employment under an 
agreement entered into under section 233 of the Social Security 
Act; except that such term shall not include--
          (1) service performed by foreign agricultural workers 
        lawfully admitted to the United States from the 
        Bahamas, Jamaica, and the other British West Indies, or 
        from any other foreign country or possession thereof, 
        on a temporary basis to perform agricultural labor;
          (2) domestic service performed in a local college 
        club, or local chapter of a college fraternity or 
        sorority, by a student who is enrolled and is regularly 
        attending classes at a school, college, or university;
          (3)(A) service performed by a child under the age of 
        18 in the employ of his father or mother;
                  (B) service not in the course of the 
                employer's trade or business, or domestic 
                service in a private home of the employer, 
                performed by an individual under the age of 21 
                in the employ of his father or mother, or 
                performed by an individual in the employ of his 
                spouse or son or daughter; except that the 
                provisions of this subparagraph shall not be 
                applicable to such domestic service performed 
                by an individual in the employ of his son or 
                daughter if--
                          (i) the employer is a surviving 
                        spouse or a divorced individual and has 
                        not remarried, or has a spouse living 
                        in the home who has a mental or 
                        physical condition which results in 
                        such spouse's being incapable of caring 
                        for a son, daughter, stepson, or 
                        stepdaughter (referred to in clause 
                        (ii)) for at least 4 continuous weeks 
                        in the calendar quarter in which the 
                        service is rendered, and
                          (ii) a son, daughter, stepson, or 
                        stepdaughter of such employer is living 
                        in the home, and
                          (iii) the son, daughter, stepson, or 
                        stepdaughter (referred to in clause 
                        (ii)) has not attained age 18 or has a 
                        mental or physical condition which 
                        requires the personal care and 
                        supervision of an adult for at least 4 
                        continuous weeks in the calendar 
                        quarter in which the service is 
                        rendered;
          (4) service performed by an individual on or in 
        connection with a vessel not an American vessel, or on 
        or in connection with an aircraft not an American 
        aircraft, if (A) the individual is employed on and in 
        connection with such vessel or aircraft, when outside 
        the United States and (B)(i) such individual is not a 
        citizen of the United States or (ii) the employer is 
        not an American employer;
          (5) service performed in the employ of the United 
        States or any instrumentality of the United States, if 
        such service--
                  (A) would be excluded from the term 
                ``employment'' for purposes of this title if 
                the provisions of paragraphs (5) and (6) of 
                this subsection as in effect in January 1983 
                had remained in effect, and
                  (B) is performed by an individual who--
                          (i) has been continuously performing 
                        service described in subparagraph (A) 
                        since December 31, 1983, and for 
                        purposes of this clause--
                                  (I) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after being separated therefrom 
                                for a period of less than 366 
                                consecutive days, regardless of 
                                whether the period began 
                                before, on, or after December 
                                31, 1983, then such service 
                                shall be considered continuous,
                                  (II) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after being detailed or 
                                transferred to an international 
                                organization as described under 
                                section 3343 of subchapter III 
                                of chapter 33 of title 5, 
                                United States Code, or under 
                                section 3581 of chapter 35 of 
                                such title, then the service 
                                performed for that organization 
                                shall be considered service 
                                described in subparagraph (A),
                                  (III) if an individual 
                                performing service described in 
                                subparagraph (A) is reemployed 
                                or reinstated after being 
                                separated from such service for 
                                the purpose of accepting 
                                employment with the American 
                                Institute in Taiwan as provided 
                                under section 3310 of chapter 
                                48 of title 22, United States 
                                Code, then the service 
                                performed for that Institute 
                                shall be considered service 
                                described in subparagraph (A),
                                  (IV) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after performing service as a 
                                member of a uniformed service 
                                (including, for purposes of 
                                this clause, service in the 
                                National Guard and temporary 
                                service in the Coast Guard 
                                Reserve) and after exercising 
                                restoration or reemployment 
                                rights as provided under 
                                chapter 43 of title 38, United 
                                States Code, then the service 
                                so performed as a member of a 
                                uniformed service shall be 
                                considered service described in 
                                subparagraph (A), and
                                  (V) if an individual 
                                performing service described in 
                                subparagraph (A) returns to the 
                                performance of such service 
                                after employment (by a tribal 
                                organization) to which section 
                                104(e)(2) of the Indian Self-
                                Determination Act applies, then 
                                the service performed for that 
                                tribal organization shall be 
                                considered service described in 
                                subparagraph (A); or
                          (ii) is receiving an annuity from the 
                        Civil Service Retirement and Disability 
                        Fund, or benefits (for service as an 
                        employee) under another retirement 
                        system established by a law of the 
                        United States for employees of the 
                        Federal Government (other than for 
                        members of the uniformed service);
        except that this paragraph shall not apply with respect 
        to any such service performed on or after any date on 
        which such individual performs--
                  (C) service performed as the President or 
                Vice President of the United States,
                  (D) service performed--
                          (i) in a position placed in the 
                        Executive Schedule under sections 5312 
                        through 5317 of title 5, United States 
                        Code,
                          (ii) as a noncareer appointee in the 
                        Senior Executive Service or a noncareer 
                        member of the Senior Foreign Service, 
                        or
                          (iii) in a position to which the 
                        individual is appointed by the 
                        President (or his designee) or the Vice 
                        President under section 105(a)(1), 
                        106(a)(1), or 107 (a)(1) or (b)(1) of 
                        title 3, United States Code, if the 
                        maximum rate of basic pay for such 
                        position is at or above the rate for 
                        level V of the Executive Schedule,
                  (E) service performed as the Chief Justice of 
                the United States, an Associate Justice of the 
                Supreme Court, a judge of a United States court 
                of appeals, a judge of a United States district 
                court (including the district court of a 
                territory), a judge of the United States Court 
                of Federal Claims, a judge of the United States 
                Court of International Trade, a judge of the 
                United States Tax Court, a United States 
                magistrate judge, or a referee in bankruptcy or 
                United States bankruptcy judge,
                  (F) service performed as a Member, Delegate, 
                or Resident Commissioner of or to the Congress,
                  (G) any other service in the legislative 
                branch of the Federal Government if such 
                service--
                          (i) is performed by an individual who 
                        was not subject to subchapter III of 
                        chapter 83 of title 5, United States 
                        Code, or to another retirement system 
                        established by a law of the United 
                        States for employees of the Federal 
                        Government (other than for members of 
                        the uniformed services), on December 
                        31, 1983, or
                          (ii) is performed by an individual 
                        who has, at any time after December 31, 
                        1983, received a lump-sum payment under 
                        section 8342(a) of title 5, United 
                        States Code, or under the corresponding 
                        provision of the law establishing the 
                        other retirement system described in 
                        clause (i), or
                          (iii) is performed by an individual 
                        after such individual has otherwise 
                        ceased to be subject to subchapter III 
                        of chapter 83 of title 5, United States 
                        Code (without having an application 
                        pending for coverage under such 
                        subchapter), while performing service 
                        in the legislative branch (determined 
                        without regard to the provisions of 
                        subparagraph (B) relating to continuity 
                        of employment), for any period of time 
                        after December 31, 1983,
                and for purposes of this subparagraph (G) an 
                individual is subject to such subchapter III or 
                to any such other retirement system at any time 
                only if (a) such individual's pay is subject to 
                deductions, contributions, or similar payments 
                (concurrent with the service being performed at 
                that time) under section 8334(a) of such title 
                5 or the corresponding provision of the law 
                establishing such other system, or (in a case 
                to which section 8332(k)(1) of such title 
                applies) such individual is making payments of 
                amounts equivalent to such deductions, 
                contributions, or similar payments while on 
                leave without pay, or (b) such individual is 
                receiving an annuity from the Civil Service 
                Retirement and Disability Fund, or is receiving 
                benefits (for service as an employee) under 
                another retirement system established by a law 
                of the United States for employees of the 
                Federal Government (other than for members of 
                the uniformed services), or
                  (H) service performed by an individual--
                          (i) on or after the effective date of 
                        an election by such individual, under 
                        section 301 of the Federal Employees' 
                        Retirement System Act of 1986, section 
                        307 of the Central Intelligence Agency 
                        Retirement Act (50 U.S.C. 2157), or the 
                        Federal Employees' Retirement System 
                        Open Enrollment Act of 1997, to become 
                        subject to the Federal Employees' 
                        Retirement System provided in chapter 
                        84 of title 5, United States Code, or
                          (ii) on or after the effective date 
                        of an election by such individual, 
                        under regulations issued under section 
                        860 of the Foreign Service Act of 1980, 
                        to become subject to the Foreign 
                        Service Pension System provided in 
                        subchapter II of chapter 8 of title I 
                        of such Act;
          (6) service performed in the employ of the United 
        States or any instrumentality of the United States if 
        such service is performed--
                  (A) in a penal institution of the United 
                States by an inmate thereof;
                  (B) by any individual as an employee included 
                under section 5351(2) of title 5, United States 
                Code (relating to certain interns, student 
                nurses, and other student employees of 
                hospitals of the Federal Government), other 
                than as a medical or dental intern or a medical 
                or dental resident in training; or
                  (C) by any individual as an employee serving 
                on a temporary basis in case of fire, storm, 
                earthquake, flood, or other similar emergency;
          (7) service performed in the employ of a State, or 
        any political subdivision thereof, or any 
        instrumentality of any one or more of the foregoing 
        which is wholly owned thereby, except that this 
        paragraph shall not apply in the case of--
                  (A) service which, under subsection (j), 
                constitutes covered transportation service,
                  (B) service in the employ of the Government 
                of Guam or the Government of American Samoa or 
                any political subdivision thereof, or of any 
                instrumentality of any one or more of the 
                foregoing which is wholly owned thereby, 
                performed by an officer or employee thereof 
                (including a member of the legislature of any 
                such Government or political subdivision), and, 
                for purposes of this title with respect to the 
                taxes imposed by this chapter--
                          (i) any person whose service as such 
                        an officer or employee is not covered 
                        by a retirement system established by a 
                        law of the United States shall not, 
                        with respect to such service, be 
                        regarded as an employee of the United 
                        States or any agency or instrumentality 
                        thereof, and
                          (ii) the remuneration for service 
                        described in clause (i) (including fees 
                        paid to a public official) shall be 
                        deemed to have been paid by the 
                        Government of Guam or the Government of 
                        American Samoa or by a political 
                        subdivision thereof or an 
                        instrumentality of any one or more of 
                        the foregoing which is wholly owned 
                        thereby, whichever is appropriate,
                  (C) service performed in the employ of the 
                District of Columbia or any instrumentality 
                which is wholly owned thereby, if such service 
                is not covered by a retirement system 
                established by a law of the United States 
                (other than the Federal Employees Retirement 
                System provided in chapter 84 of title 5, 
                United States Code); except that the provisions 
                of this subparagraph shall not be applicable to 
                service performed--
                          (i) in a hospital or penal 
                        institution by a patient or inmate 
                        thereof;
                          (ii) by any individual as an employee 
                        included under section 5351(2) of title 
                        5, United States Code (relating to 
                        certain interns, student nurses, and 
                        other student employees of hospitals of 
                        the District of Columbia Government), 
                        other than as a medical or dental 
                        intern or as a medical or dental 
                        resident in training;
                          (iii) by any individual as an 
                        employee serving on a temporary basis 
                        in case of fire, storm, snow, 
                        earthquake, flood or other similar 
                        emergency; or
                          (iv) by a member of a board, 
                        committee, or council of the District 
                        of Columbia, paid on a per diem, 
                        meeting, or other fee basis,
                  (D) service performed in the employ of the 
                Government of Guam (or any instrumentality 
                which is wholly owned by such Government) by an 
                employee properly classified as a temporary or 
                intermittent employee, if such service is not 
                covered by a retirement system established by a 
                law of Guam; except that (i) the provisions of 
                this subparagraph shall not be applicable to 
                services performed by an elected official or a 
                member of the legislature or in a hospital or 
                penal institution by a patient or inmate 
                thereof, and (ii) for purposes of this 
                subparagraph, clauses (i) and (ii) of 
                subparagraph (B) shall apply,
                  (E) service included under an agreement 
                entered into pursuant to section 218 of the 
                Social Security Act, or
                  (F) service in the employ of a State (other 
                than the District of Columbia, Guam, or 
                American Samoa), of any political subdivision 
                thereof, or of any instrumentality of any one 
                or more of the foregoing which is wholly owned 
                thereby, by an individual who is not a member 
                of a retirement system of such State, political 
                subdivision, or instrumentality, except that 
                the provisions of this subparagraph shall not 
                be applicable to service performed--
                          (i) by an individual who is employed 
                        to relieve such individual from 
                        unemployment;
                          (ii) in a hospital, home, or other 
                        institution by a patient or inmate 
                        thereof;
                          (iii) by any individual as an 
                        employee serving on a temporary basis 
                        in case of fire, storm, snow, 
                        earthquake, flood, or other similar 
                        emergency;
                          (iv) by an election official or 
                        election worker if the remuneration 
                        paid in a calendar year for such 
                        service is less than $1,000 with 
                        respect to service performed during any 
                        calendar year commencing on or after 
                        January 1, 1995, ending on or before 
                        December 31, 1999, and the adjusted 
                        amount determined under section 
                        218(c)(8)(B) of the Social Security Act 
                        for any calendar year commencing on or 
                        after January 1, 2000, with respect to 
                        service performed during such calendar 
                        year; or
                          (v) by an employee in a position 
                        compensated solely on a fee basis which 
                        is treated pursuant to section 
                        1402(c)(2)(E) as a trade or business 
                        for purposes of inclusion of such fees 
                        in net earnings from self-employment;
                for purposes of this subparagraph, except as 
                provided in regulations prescribed by the 
                Secretary, the term ``retirement system'' has 
                the meaning given such term by section 
                218(b)(4) of the Social Security Act;
          (8)(A) service performed by a duly ordained, 
        commissioned, or licensed minister of a church in the 
        exercise of his ministry or by a member of a religious 
        order in the exercise of duties required by such order, 
        except that this subparagraph shall not apply to 
        service performed by a member of such an order in the 
        exercise of such duties, if an election of coverage 
        under subsection (r) is in effect with respect to such 
        order, or with respect to the autonomous subdivision 
        thereof to which such member belongs;
                  (B) service performed in the employ of a 
                church or qualified church-controlled 
                organization if such church or organization has 
                in effect an election under subsection (w), 
                other than service in an unrelated trade or 
                business (within the meaning of section 
                513(a));
          (9) service performed by an individual as an employee 
        or employee representative as defined in section 3231;
          (10) service performed in the employ of--
                  (A) a school, college, or university, or
                  (B) an organization described in section 
                509(a)(3) if the organization is organized, and 
                at all times thereafter is operated, 
                exclusively for the benefit of, to perform the 
                functions of, or to carry out the purposes of a 
                school, college, or university and is operated, 
                supervised, or controlled by or in connection 
                with such school, college, or university, 
                unless it is a school, college, or university 
                of a State or a political subdivision thereof 
                and the services performed in its employ by a 
                student referred to in section 218(c)(5) of the 
                Social Security Act are covered under the 
                agreement between the Commissioner of Social 
                Security and such State entered into pursuant 
                to section 218 of such Act;
        if such service is performed by a student who is 
        enrolled and regularly attending classes at such 
        school, college, or university;
          (11) service performed in the employ of a foreign 
        government (including service as a consular or other 
        officer or employee or a nondiplomatic representative);
          (12) service performed in the employ of an 
        instrumentality wholly owned by a foreign government--
                  (A) if the service is of a character similar 
                to that performed in foreign countries by 
                employees of the United States Government or of 
                an instrumentality thereof; and
                  (B) if the Secretary of State shall certify 
                to the Secretary of the Treasury that the 
                foreign government, with respect to whose 
                instrumentality and employees thereof exemption 
                is claimed, grants an equivalent exemption with 
                respect to similar service performed in the 
                foreign country by employees of the United 
                States Government and of instrumentalities 
                thereof;
          (13) service performed as a student nurse in the 
        employ of a hospital or a nurses' training school by an 
        individual who is enrolled and is regularly attending 
        classes in a nurses' training school chartered or 
        approved pursuant to State law;
          (14)(A) service performed by an individual under the 
        age of 18 in the delivery or distribution of newspapers 
        or shopping news, not including delivery or 
        distribution to any point for subsequent delivery or 
        distribution;
                  (B) service performed by an individual in, 
                and at the time of, the sale of newspapers or 
                magazines to ultimate consumers, under an 
                arrangement under which the newspapers or 
                magazines are to be sold by him at a fixed 
                price, his compensation being based on the 
                retention of the excess of such price over the 
                amount at which the newspapers or magazines are 
                charged to him, whether or not he is guaranteed 
                a minimum amount of compensation for such 
                service, or is entitled to be credited with the 
                unsold newspapers or magazines turned back;
          (15) service performed in the employ of an 
        international organization, except service which 
        constitutes ``employment'' under subsection (y);
          (16) service performed by an individual under an 
        arrangement with the owner or tenant of land pursuant 
        to which--
                  (A) such individual undertakes to produce 
                agricultural or horticultural commodities 
                (including livestock, bees, poultry, and fur-
                bearing animals and wildlife) on such land,
                  (B) the agricultural or horticultural 
                commodities produced by such individual, or the 
                proceeds therefrom, are to be divided between 
                such individual and such owner or tenant, and
                  (C) the amount of such individual's share 
                depends on the amount of the agricultural or 
                horticultural commodities produced;
          (18) service performed in Guam by a resident of the 
        Republic of the Philippines while in Guam on a 
        temporary basis as a nonimmigrant alien admitted to 
        Guam pursuant to section 101(a)(15)(H)(ii) of the 
        Immigration and Nationality Act (8 U.S.C. 
        1101(a)(15)(H)(ii));
          (19) Service which is performed by a nonresident 
        alien individual for the period he is temporarily 
        present in the United States as a nonimmigrant under 
        subparagraph (F), (J), (M), or (Q) of section 
        101(a)(15) of the Immigration and Nationality Act, as 
        amended, and which is performed to carry out the 
        purpose specified in subparagraph (F), (J), (M), or 
        (Q), as the case may be;
          (20) service (other than service described in 
        paragraph (3)(A)) performed by an individual on a boat 
        engaged in catching fish or other forms of aquatic 
        animal life under an arrangement with the owner or 
        operator of such boat pursuant to which--
                  (A) such individual does not receive any cash 
                remuneration other than as provided in 
                subparagraph (B) and other than cash 
                remuneration--
                          (i) which does not exceed $100 per 
                        trip;
                          (ii) which is contingent on a minimum 
                        catch; and
                          (iii) which is paid solely for 
                        additional duties (such as mate, 
                        engineer, or cook) for which additional 
                        cash remuneration is traditional in the 
                        industry,
                  (B) such individual receives a share of the 
                boat's (or the boats' in the case of a fishing 
                operation involving more than one boat) catch 
                of fish or other forms of aquatic animal life 
                or a share of the proceeds from the sale of 
                such catch, and
                  (C) the amount of such individual's share 
                depends on the amount of the boat's (or the 
                boats' in the case of a fishing operation 
                involving more than one boat) catch of fish or 
                other forms of aquatic animal life,
        but only if the operating crew of such boat (or each 
        boat from which the individual receives a share in the 
        case of a fishing operation involving more than one 
        boat) is normally made up of fewer than 10 individuals; 
        [or]
          (21) domestic service in a private home of the 
        employer which--
                  (A) is performed in any year by an individual 
                under the age of 18 during any portion of such 
                year; and
                  (B) is not the principal occupation of such 
                employee[.]; or
          (22) service performed by members of Indian tribal 
        councils as tribal council members in the employ of an 
        Indian tribal government, except that this paragraph 
        shall not apply in the case of service included under 
        an agreement under section 218A of the Social Security 
        Act.
For purposes of paragraph (20), the operating crew of a boat 
shall be treated as normally made up of fewer than 10 
individuals if the average size of the operating crew on trips 
made during the preceding 4 calendar quarters consisted of 
fewer than 10 individuals.
  (c) Included and Excluded Service.--For purposes of this 
chapter, if the services performed during one-half or more of 
any pay period by an employee for the person employing him 
constitute employment, all the services of such employee for 
such period shall be deemed to be employment; but if the 
services performed during more than one-half of any such pay 
period by an employee for the person employing him do not 
constitute employment, then none of the services of such 
employee for such period shall be deemed to be employment. As 
used in this subsection, the term ``pay period'' means a period 
(of not more than 31 consecutive days) for which a payment of 
remuneration is ordinarily made to the employee by the person 
employing him. This subsection shall not be applicable with 
respect to services performed in a pay period by an employee 
for the person employing him, where any of such service is 
excepted by subsection (b)(9).
  (d) Employee.--For purposes of this chapter, the term 
``employee'' means--
          (1) any officer of a corporation; or
          (2) any individual who, under the usual common law 
        rules applicable in determining the employer-employee 
        relationship, has the status of an employee; or
          (3) any individual (other than an individual who is 
        an employee under paragraph (1) or (2)) who performs 
        services for remuneration for any person--
                  (A) as an agent-driver or commission-driver 
                engaged in distributing meat products, 
                vegetable products, fruit products, bakery 
                products, beverages (other than milk), or 
                laundry or dry-cleaning services, for his 
                principal;
                  (B) as a full-time life insurance salesman;
                  (C) as a home worker performing work, 
                according to specifications furnished by the 
                person for whom the services are performed, on 
                materials or goods furnished by such person 
                which are required to be returned to such 
                person or a person designated by him; or
                  (D) as a traveling or city salesman, other 
                than as an agent-driver or commission-driver, 
                engaged upon a full-time basis in the 
                solicitation on behalf of, and the transmission 
                to, his principal (except for side-line sales 
                activities on behalf of some other person) of 
                orders from wholesalers, retailers, 
                contractors, or operators of hotels, 
                restaurants, or other similar establishments 
                for merchandise for resale or supplies for use 
                in their business operations;
        if the contract of service contemplates that 
        substantially all of such services are to be performed 
        personally by such individual; except that an 
        individual shall not be included in the term 
        ``employee'' under the provisions of this paragraph if 
        such individual has a substantial investment in 
        facilities used in connection with the performance of 
        such services (other than in facilities for 
        transportation), or if the services are in the nature 
        of a single transaction not part of a continuing 
        relationship with the person for whom the services are 
        performed; or
          (4) any individual who performs services that are 
        included under an agreement entered into pursuant to 
        section 218 or 218A of the Social Security Act.
  (e) State, United States, and Citizen.--For purposes of this 
chapter--
          (1) State.--The term ``State'' includes the District 
        of Columbia, the Commonwealth of Puerto Rico, the 
        Virgin Islands, Guam, and American Samoa.
          (2) United States.--The term ``United States'' when 
        used in a geographical sense includes the Commonwealth 
        of Puerto Rico, the Virgin Islands, Guam, and American 
        Samoa.
An individual who is a citizen of the Commonwealth of Puerto 
Rico (but not otherwise a citizen of the United States) shall 
be considered, for purposes of this section, as a citizen of 
the United States.
  (f) American Vessel and Aircraft.--For purposes of this 
chapter, the term ``American vessel'' means any vessel 
documented or numbered under the laws of the United States; and 
includes any vessel which is neither documented or numbered 
under the laws of the United States nor documented under the 
laws of any foreign country, if its crew is employed solely by 
one or more citizens or residents of the United States or 
corporations organized under the laws of the United States or 
of any State; and the term ``American aircraft'' means an 
aircraft registered under the laws of the United States.
  (g) Agricultural Labor.--For purposes of this chapter, the 
term ``agricultural labor'' includes all service performed--
          (1) on a farm, in the employ of any person, in 
        connection with cultivating the soil, or in connection 
        with raising or harvesting any agricultural or 
        horticultural commodity, including the raising, 
        shearing, feeding, caring for, training, and management 
        of livestock, bees, poultry, and fur-bearing animals 
        and wildlife;
          (2) in the employ of the owner or tenant or other 
        operator of a farm, in connection with the operation, 
        management, conservation, improvement, or maintenance 
        of such farm and its tools and equipment, or in 
        salvaging timber or clearing land of brush and other 
        debris left by a hurricane, if the major part of such 
        service is performed on a farm;
          (3) in connection with the production or harvesting 
        of any commodity defined as an agricultural commodity 
        in section 15(g) of the Agricultural Marketing Act, as 
        amended (12 U.S.C. 1141j), or in connection with the 
        ginning of cotton, or in connection with the operation 
        or maintenance of ditches, canals, reservoirs, or 
        waterways, not owned or operated for profit, used 
        exclusively for supplying and storing water for farming 
        purposes;
          (4)(A) in the employ of the operator of a farm in 
        handling, planting, drying, packing, packaging, 
        processing, freezing, grading, storing, or delivering 
        to storage or to market or to a carrier for 
        transportation to market, in its unmanufactured state, 
        any agricultural or horticultural commodity; but only 
        if such operator produced more than one-half of the 
        commodity with respect to which such service is 
        performed;
                  (B) in the employ of a group of operators of 
                farms (other than a cooperative organization) 
                in the performance of service described in 
                subparagraph (A), but only if such operators 
                produced all of the commodity with respect to 
                which such service is performed. For purposes 
                of this subparagraph, any unincorporated group 
                of operators shall be deemed a cooperative 
                organization if the number of operators 
                comprising such group is more than 20 at any 
                time during the calendar year in which such 
                service is performed;
                  (C) the provisions of subparagraphs (A) and 
                (B) shall not be deemed to be applicable with 
                respect to service performed in connection with 
                commercial canning or commercial freezing or in 
                connection with any agricultural or 
                horticultural commodity after its delivery to a 
                terminal market for distribution for 
                consumption; or
          (5) on a farm operated for profit if such service is 
        not in the course of the employer's trade or business.
As used in this subsection, the term ``farm'' includes stock, 
dairy, poultry, fruit, fur-bearing animal, and truck farms, 
plantations, ranches, nurseries, ranges, greenhouses or other 
similar structures used primarily for the raising of 
agricultural or horticultural commodities, and orchards.
  (h) American Employer.--For purposes of this chapter, the 
term ``American employer'' means an employer which is--
          (1) the United States or any instrumentality thereof,
          (2) an individual who is a resident of the United 
        States,
          (3) a partnership, if two-thirds or more of the 
        partners are residents of the United States,
          (4) a trust, if all of the trustees are residents of 
        the United States, or
          (5) a corporation organized under the laws of the 
        United States or of any State.
  (i) Computation of Wages in Certain Cases.--
          (1) Domestic service.--For purposes of this chapter, 
        in the case of domestic service described in subsection 
        (a)(7)(B), any payment of cash remuneration for such 
        service which is more or less than a whole-dollar 
        amount shall, under such conditions and to such extent 
        as may be prescribed by regulations made under this 
        chapter, be computed to the nearest dollar. For the 
        purpose of the computation to the nearest dollar, the 
        payment of a fractional part of a dollar shall be 
        disregarded unless it amounts to one-half dollar or 
        more, in which case it shall be increased to $1. The 
        amount of any payment of cash remuneration so computed 
        to the nearest dollar shall, in lieu of the amount 
        actually paid, be deemed to constitute the amount of 
        cash remuneration for purposes of subsection (a)(7)(B).
          (2) Service in the uniformed services.--For purposes 
        of this chapter, in the case of an individual 
        performing service, as a member of a uniformed service, 
        to which the provisions of subsection (m)(1) are 
        applicable, the term ``wages'' shall, subject to the 
        provisions of subsection (a)(1) of this section, 
        include as such individual's remuneration for such 
        service only (A) his basic pay as described in chapter 
        3 and section 1009 of title 37, United States Code, in 
        the case of an individual performing service to which 
        subparagraph (A) of such subsection (m)(1) applies, or 
        (B) his compensation for such service as determined 
        under section 206(a) of title 37, United States Code, 
        in the case of an individual performing service to 
        which subparagraph (B) of such subsection (m)(1) 
        applies.
          (3) Peace Corps volunteer service.--For purposes of 
        this chapter, in the case of an individual performing 
        service, as a volunteer or volunteer leader within the 
        meaning of the Peace Corps Act, to which the provisions 
        of section 3121(p) are applicable, the term ``wages'' 
        shall, subject to the provisions of subsection (a)(1) 
        of this section, include as such individual's 
        remuneration for such service only amounts paid 
        pursuant to section 5(c) or 6(1) of the Peace Corps 
        Act.
          (4) Service performed by certain members of religious 
        orders.--For purposes of this chapter, in any case 
        where an individual is a member of a religious order 
        (as defined in subsection (r)(2)) performing service in 
        the exercise of duties required by such order, and an 
        election of coverage under subsection (r) is in effect 
        with respect to such order or with respect to the 
        autonomous subdivision thereof to which such member 
        belongs, the term ``wages'' shall, subject to the 
        provisions of subsection (a)(1), include as such 
        individual's remuneration for such service the fair 
        market value of any board, lodging, clothing, and other 
        perquisites furnished to such member by such order or 
        subdivision thereof or by any other person or 
        organization pursuant to an agreement with such order 
        or subdivision, except that the amount included as such 
        individual's remuneration under this paragraph shall 
        not be less than $100 a month.
          (5) Service performed by certain retired justices and 
        judges.--For purposes of this chapter, in the case of 
        an individual performing service under the provisions 
        of section 294 of title 28, United States Code 
        (relating to assignment of retired justices and judges 
        to active duty), the term ``wages'' shall not include 
        any payment under section 371(b) of such title 28 which 
        is received during the period of such service.
  (j) Covered Transportation Service.--For purposes of this 
chapter--
          (1) Existing transportation systems - General rule.--
        Except as provided in paragraph (2), all service 
        performed in the employ of a State or political 
        subdivision in connection with its operation of a 
        public transportation system shall constitute covered 
        transportation service if any part of the 
        transportation system was acquired from private 
        ownership after 1936 and prior to 1951.
          (2) Existing transportation systems - Cases in which 
        no transportation employees, or only certain employees, 
        are covered.--Service performed in the employ of a 
        State or political subdivision in connection with the 
        operation of its public transportation system shall not 
        constitute covered transportation service if--
                  (A) any part of the transportation system was 
                acquired from private ownership after 1936 and 
                prior to 1951, and substantially all service in 
                connection with the operation of the 
                transportation system was, on December 31, 
                1950, covered under a general retirement system 
                providing benefits which, by reason of a 
                provision of the State constitution dealing 
                specifically with retirement systems of the 
                State or political subdivisions thereof, cannot 
                be diminished or impaired; or
                  (B) no part of the transportation system 
                operated by the State or political subdivision 
                on December 31, 1950, was acquired from private 
                ownership after 1936 and prior to 1951;
        except that if such State or political subdivision 
        makes an acquisition after 1950 from private ownership 
        of any part of its transportation system, then, in the 
        case of any employee who--
                  (C) became an employee of such State or 
                political subdivision in connection with and at 
                the time of its acquisition after 1950 of such 
                part, and
                  (D) prior to such acquisition rendered 
                service in employment (including as employment 
                service covered by an agreement under section 
                218 of the Social Security Act) in connection 
                with the operation of such part of the 
                transportation system acquired by the State or 
                political subdivision,
        the service of such employee in connection with the 
        operation of the transportation system shall constitute 
        covered transportation service, commencing with the 
        first day of the third calendar quarter following the 
        calendar quarter in which the acquisition of such part 
        took place, unless on such first day such service of 
        such employee is covered by a general retirement system 
        which does not, with respect to such employee, contain 
        special provisions applicable only to employees 
        described in subparagraph (C).
          (3) Transportation systems acquired after 1950.--All 
        service performed in the employ of a State or political 
        subdivision thereof in connection with its operation of 
        a public transportation system shall constitute covered 
        transportation service if the transportation system was 
        not operated by the State or political subdivision 
        prior to 1951 and, at the time of its first acquisition 
        (after 1950) from private ownership of any part of its 
        transportation system, the State or political 
        subdivision did not have a general retirement system 
        covering substantially all service performed in 
        connection with the operation of the transportation 
        system.
          (4) Definitions.--For purposes of this subsection--
                  (A) The term ``general retirement system'' 
                means any pension, annuity, retirement, or 
                similar fund or system established by a State 
                or by a political subdivision thereof for 
                employees of the State, political subdivision, 
                or both; but such term shall not include such a 
                fund or system which covers only service 
                performed in positions connected with the 
                operation of its public transportation system.
                  (B) A transportation system or a part thereof 
                shall be considered to have been acquired by a 
                State or political subdivision from private 
                ownership if prior to the acquisition service 
                performed by employees in connection with the 
                operation of the system or part thereof 
                acquired constituted employment under this 
                chapter or subchapter A of chapter 9 of the 
                Internal Revenue Code of 1939 or was covered by 
                an agreement made pursuant to section 218 of 
                the Social Security Act and some of such 
                employees became employees of the State or 
                political subdivision in connection with and at 
                the time of such acquisition.
                  (C) The term ``political subdivision'' 
                includes an instrumentality of--
                          (i) a State,
                          (ii) one or more political 
                        subdivisions of a State, or
                          (iii) a State and one or more of its 
                        political subdivisions.
  (l) Agreements Entered Into by American Employers With 
Respect to Foreign Affiliates.--
          (1) Agreement with respect to certain employees of 
        foreign affiliate.--The Secretary shall, at the 
        American employer's request, enter into an agreement 
        (in such manner and form as may be prescribed by the 
        Secretary) with any American employer (as defined in 
        subsection (h)) who desires to have the insurance 
        system established by title II of the Social Security 
        Act extended to service performed outside the United 
        States in the employ of any 1 or more of such 
        employer's foreign affiliates (as defined in paragraph 
        (6)) by all employees who are citizens or residents of 
        the United States, except that the agreement shall not 
        apply to any service performed by, or remuneration paid 
        to, an employee if such service or remuneration would 
        be excluded from the term ``employment'' or ``wages'', 
        as defined in this section, had the service been 
        performed in the United States. Such agreement may be 
        amended at any time so as to be made applicable, in the 
        same manner and under the same conditions, with respect 
        to any other foreign affiliate of such American 
        employer. Such agreement shall be applicable with 
        respect to citizens or residents of the United States 
        who, on or after the effective date of the agreement, 
        are employees of and perform services outside the 
        United States for any foreign affiliate specified in 
        the agreement. Such agreement shall provide--
                  (A) that the American employer shall pay to 
                the Secretary, at such time or times as the 
                Secretary may by regulations prescribe, amounts 
                equivalent to the sum of the taxes which would 
                be imposed by sections 3101 and 3111 (including 
                amounts equivalent to the interest, additions 
                to the taxes, additional amounts, and penalties 
                which would be applicable) with respect to the 
                remuneration which would be wages if the 
                services covered by the agreement constituted 
                employment as defined in this section; and
                  (B) that the American employer will comply 
                with such regulations relating to payments and 
                reports as the Secretary may prescribe to carry 
                out the purposes of this subsection.
          (2) Effective period of agreement.--An agreement 
        entered into pursuant to paragraph (1) shall be in 
        effect for the period beginning with the first day of 
        the calendar quarter in which such agreement is entered 
        into or the first day of the succeeding calendar 
        quarter, as may be specified in the agreement; except 
        that in case such agreement is amended to include the 
        services performed for any other affiliate and such 
        amendment is executed after the first month following 
        the first calendar quarter for which the agreement is 
        in effect, the agreement shall be in effect with 
        respect to service performed for such other affiliate 
        only after the calendar quarter in which such amendment 
        is executed. Notwithstanding any other provision of 
        this subsection, the period for which any such 
        agreement is effective with respect to any foreign 
        entity shall terminate at the end of any calendar 
        quarter in which the foreign entity, at any time in 
        such quarter, ceases to be a foreign affiliate as 
        defined in paragraph (6).
          (3) No termination of agreement.--No agreement under 
        this subsection may be terminated, either in its 
        entirety or with respect to any foreign affiliate, on 
        or after June 15, 1989.
          (4) Deposits in trust funds.--For purposes of section 
        201 of the Social Security Act, relating to 
        appropriations to the Federal Old-Age and Survivors 
        Insurance Trust Fund and the Federal Disability 
        Insurance Trust Fund, such remuneration--
                  (A) paid for services covered by an agreement 
                entered into pursuant to paragraph (1) as would 
                be wages if the services constituted 
                employment, and
                  (B) as is reported to the Secretary pursuant 
                to the provisions of such agreement or of the 
                regulations issued under this subsection,
        shall be considered wages subject to the taxes imposed 
        by this chapter.
          (5) Overpayments and underpayments.--
                  (A) If more or less than the correct amount 
                due under an agreement entered into pursuant to 
                this subsection is paid with respect to any 
                payment of remuneration, proper adjustments 
                with respect to the amounts due under such 
                agreement shall be made, without interest, in 
                such manner and at such times as may be 
                required by regulations prescribed by the 
                Secretary.
                  (B) If an overpayment cannot be adjusted 
                under subparagraph (A), the amount thereof 
                shall be paid by the Secretary, through the 
                Fiscal Service of the Treasury Department, but 
                only if a claim for such overpayment is filed 
                with the Secretary within two years from the 
                time such overpayment was made.
          (6) Foreign affiliate defined.--For purposes of this 
        subsection and section 210(a) of the Social Security 
        Act--
                  (A) In general.--A foreign affiliate of an 
                American employer is any foreign entity in 
                which such American employer has not less than 
                a 10-percent interest.
                  (B) Determination of 10-percent interest.--
                For purposes of subparagraph (A), an American 
                employer has a 10-percent interest in any 
                entity if such employer has such an interest 
                directly (or through one or more entities)--
                          (i) in the case of a corporation, in 
                        the voting stock thereof, and
                          (ii) in the case of any other entity, 
                        in the profits thereof.
          (7) American employer as separate entity.--Each 
        American employer which enters into an agreement 
        pursuant to paragraph (1) of this subsection shall, for 
        purposes of this subsection and section 6413(c)(2)(C), 
        relating to special refunds in the case of employees of 
        certain foreign entities, be considered an employer in 
        its capacity as a party to such agreement separate and 
        distinct from its identity as a person employing 
        individuals on its own account.
          (8) Regulations.--Regulations of the Secretary to 
        carry out the purposes of this subsection shall be 
        designed to make the requirements imposed on American 
        employers with respect to services covered by an 
        agreement entered into pursuant to this subsection the 
        same, so far as practicable, as those imposed upon 
        employers pursuant to this title with respect to the 
        taxes imposed by this chapter.
  (m) Service in the Uniformed Services.--For purposes of this 
chapter--
          (1) Inclusion of service.--The term ``employment'' 
        shall, notwithstanding the provisions of subsection (b) 
        of this section, include--
                  (A) service performed by an individual as a 
                member of a uniformed service on active duty, 
                but such term shall not include any such 
                service which is performed while on leave 
                without pay, and
                  (B) service performed by an individual as a 
                member of a uniformed service on inactive duty 
                training.
          (2) Active duty.--The term ``active duty'' means 
        ``active duty'' as described in paragraph (21) of 
        section 101 of title 38, United States Code, except 
        that it shall also include ``active duty for training'' 
        as described in paragraph (22) of such section.
          (3) Inactive duty training.--The term ``inactive duty 
        training'' means ``inactive duty training'' as 
        described in paragraph (23) of such section 101.
  (n) Member of a Uniformed Service.--For purposes of this 
chapter, the term ``member of a uniformed service'' means any 
person appointed, enlisted, or inducted in a component of the 
Army, Navy, Air Force, Marine Corps, or Coast Guard (including 
a reserve component as defined in section 101(27) of title 38, 
United States Code), or in one of those services without 
specification of component, or as a commissioned officer of the 
Coast and Geodetic Survey, the National Oceanic and Atmospheric 
Administration Corps, or the Regular or Reserve Corps of the 
Public Health Service, and any person serving in the Army or 
Air Force under call or conscription. The term includes--
          (1) a retired member of any of those services;
          (2) a member of the Fleet Reserve or Fleet Marine 
        Corps Reserve;
          (3) a cadet at the United States Military Academy, a 
        midshipman at the United States Naval Academy, and a 
        cadet at the United States Coast Guard Academy or 
        United States Air Force Academy;
          (4) a member of the Reserve Officers' Training Corps, 
        the Naval Reserve Officers' Training Corps, or the Air 
        Force Reserve Officers' Training Corps, when ordered to 
        annual training duty for fourteen days or more, and 
        while performing authorized travel to and from that 
        duty; and
          (5) any person while en route to or from, or at, a 
        place for final acceptance or for entry upon active 
        duty in the military, naval, or air service--
                  (A) who has been provisionally accepted for 
                such duty; or
                  (B) who, under the Military Selective Service 
                Act, has been selected for active military, 
                naval, or air service;
   and has been ordered or directed to proceed to such place.
The term does not include a temporary member of the Coast Guard 
Reserve.
  (o) Crew Leader.--For purposes of this chapter, the term 
``crew leader'' means an individual who furnishes individuals 
to perform agricultural labor for another person, if such 
individual pays (either on his own behalf or on behalf of such 
person) the individuals so furnished by him for the 
agricultural labor performed by them and if such individual has 
not entered into a written agreement with such person whereby 
such individual has been designated as an employee of such 
person; and such individuals furnished by the crew leader to 
perform agricultural labor for another person shall be deemed 
to be the employees of such crew leader. For purposes of this 
chapter and chapter 2, a crew leader shall, with respect to 
service performed in furnishing individuals to perform 
agricultural labor for another person and service performed as 
a member of the crew, be deemed not to be an employee of such 
other person.
  (p) Peace Corps Volunteer Service.--For purposes of this 
chapter, the term ``employment'' shall, notwithstanding the 
provisions of subsection (b) of this section, include service 
performed by an individual as a volunteer or volunteer leader 
within the meaning of the Peace Corps Act.
  (q) Tips Included for Both Employee and Employer Taxes.--For 
purposes of this chapter, tips received by an employee in the 
course of his employment shall be considered remuneration for 
such employment (and deemed to have been paid by the employer 
for purposes of subsections (a) and (b) of section 3111). Such 
remuneration shall be deemed to be paid at the time a written 
statement including such tips is furnished to the employer 
pursuant to section 6053(a) or (if no statement including such 
tips is so furnished) at the time received; except that, in 
determining the employer's liability in connection with the 
taxes imposed by section 3111 with respect to such tips in any 
case where no statement including such tips was so furnished 
(or to the extent that the statement so furnished was 
inaccurate or incomplete), such remuneration shall be deemed 
for purposes of subtitle F to be paid on the date on which 
notice and demand for such taxes is made to the employer by the 
Secretary.
  (r) Election of Coverage by Religious Orders.--
          (1) Certificate of election by order.--A religious 
        order whose members are required to take a vow of 
        poverty, or any autonomous subdivision of such order, 
        may file a certificate (in such form and manner, and 
        with such official, as may be prescribed by regulations 
        under this chapter) electing to have the insurance 
        system established by title II of the Social Security 
        Act extended to services performed by its members in 
        the exercise of duties required by such order or such 
        subdivision thereof. Such certificate of election shall 
        provide that--
                  (A) such election of coverage by such order 
                or subdivision shall be irrevocable;
                  (B) such election shall apply to all current 
                and future members of such order, or in the 
                case of a subdivision thereof to all current 
                and future members of such order who belong to 
                such subdivision;
                  (C) all services performed by a member of 
                such an order or subdivision in the exercise of 
                duties required by such order or subdivision 
                shall be deemed to have been performed by such 
                member as an employee of such order or 
                subdivision; and
                  (D) the wages of each member, upon which such 
                order or subdivision shall pay the taxes 
                imposed by sections 3101 and 3111, will be 
                determined as provided in subsection (i)(4).
          (2) Definition of member.--For purposes of this 
        subsection, a member of a religious order means any 
        individual who is subject to a vow of poverty as a 
        member of such order and who performs tasks usually 
        required (and to the extent usually required) of an 
        active member of such order and who is not considered 
        retired because of old age or total disability.
          (3) Effective date for election.--
                  (A) A certificate of election of coverage 
                shall be in effect, for purposes of subsection 
                (b)(8) and for purposes of section 210(a)(8) of 
                the Social Security Act, for the period 
                beginning with whichever of the following may 
                be designated by the order or subdivision 
                thereof:
                          (i) the first day of the calendar 
                        quarter in which the certificate is 
                        filed,
                          (ii) the first day of the calendar 
                        quarter succeeding such quarter, or
                          (iii) the first day of any calendar 
                        quarter preceding the calendar quarter 
                        in which the certificate is filed, 
                        except that such date may not be 
                        earlier than the first day of the 
                        twentieth calendar quarter preceding 
                        the quarter in which such certificate 
                        is filed.
                Whenever a date is designated under clause 
                (iii), the election shall apply to services 
                performed before the quarter in which the 
                certificate is filed only if the member 
                performing such services was a member at the 
                time such services were performed and is living 
                on the first day of the quarter in which such 
                certificate is filed.
                  (B) If a certificate of election filed 
                pursuant to this subsection is effective for 
                one or more calendar quarters prior to the 
                quarter in which such certificate is filed, 
                then--
                          (i) for purposes of computing 
                        interest and for purposes of section 
                        6651 (relating to addition to tax for 
                        failure to file tax return), the due 
                        date for the return and payment of the 
                        tax for such prior calendar quarters 
                        resulting from the filing of such 
                        certificate shall be the last day of 
                        the calendar month following the 
                        calendar quarter in which the 
                        certificate is filed; and
                          (ii) the statutory period for the 
                        assessment of such tax shall not expire 
                        before the expiration of 3 years from 
                        such due date.
  (s) Concurrent Employment by Two or More Employers.--For 
purposes of sections 3102, 3111, and 3121(a)(1), if two or more 
related corporations concurrently employ the same individual 
and compensate such individual through a common paymaster which 
is one of such corporations, each such corporation shall be 
considered to have paid as remuneration to such individual only 
the amounts actually disbursed by it to such individual and 
shall not be considered to have paid as remuneration to such 
individual amounts actually disbursed to such individual by 
another of such corporations.
  (u) Application of Hospital Insurance Tax to Federal, State, 
and Local Employment.--
          (1) Federal employment.--For purposes of the taxes 
        imposed by sections 3101(b) and 3111(b), subsection (b) 
        shall be applied without regard to paragraph (5) 
        thereof.
          (2) State and local employment.--For purposes of the 
        taxes imposed by sections 3101(b) and 3111(b)--
                  (A) In general.--Except as provided in 
                subparagraphs (B) and (C), subsection (b) shall 
                be applied without regard to paragraph (7) 
                thereof.
                  (B) Exception for certain services.--Service 
                shall not be treated as employment by reason of 
                subparagraph (A) if--
                          (i) the service is included under an 
                        agreement under section 218 of the 
                        Social Security Act, or
                          (ii) the service is performed--
                                  (I) by an individual who is 
                                employed by a State or 
                                political subdivision thereof 
                                to relieve him from 
                                unemployment,
                                  (II) in a hospital, home, or 
                                other institution by a patient 
                                or inmate thereof as an 
                                employee of a State or 
                                political subdivision thereof 
                                or of the District of Columbia,
                                  (III) by an individual, as an 
                                employee of a State or 
                                political subdivision thereof 
                                or of the District of Columbia, 
                                serving on a temporary basis in 
                                case of fire, storm, snow, 
                                earthquake, flood or other 
                                similar emergency,
                                  (IV) by any individual as an 
                                employee included under section 
                                5351(2) of title 5, United 
                                States Code (relating to 
                                certain interns, student 
                                nurses, and other student 
                                employees of hospitals of the 
                                District of Columbia 
                                Government), other than as a 
                                medical or dental intern or a 
                                medical or dental resident in 
                                training,
                                  (V) by an election official 
                                or election worker if the 
                                remuneration paid in a calendar 
                                year for such service is less 
                                than $1,000 with respect to 
                                service performed during any 
                                calendar year commencing on or 
                                after January 1, 1995, ending 
                                on or before December 31, 1999, 
                                and the adjusted amount 
                                determined under section 
                                218(c)(8)(B) of the Social 
                                Security Act for any calendar 
                                year commencing on or after 
                                January 1, 2000, with respect 
                                to service performed during 
                                such calendar year, or
                                  (VI) by an individual in a 
                                position described in section 
                                1402(c)(2)(E).
                As used in this subparagraph, the terms 
                ``State'' and ``political subdivision'' have 
                the meanings given those terms in section 
                218(b) of the Social Security Act.
                  (C) Exception for current employment which 
                continues.--Service performed for an employer 
                shall not be treated as employment by reason of 
                subparagraph (A) if--
                          (i) such service would be excluded 
                        from the term ``employment'' for 
                        purposes of this chapter if 
                        subparagraph (A) did not apply;
                          (ii) such service is performed by an 
                        individual--
                                  (I) who was performing 
                                substantial and regular service 
                                for remuneration for that 
                                employer before April 1, 1986,
                                  (II) who is a bona fide 
                                employee of that employer on 
                                March 31, 1986, and
                                  (III) whose employment 
                                relationship with that employer 
                                was not entered into for 
                                purposes of meeting the 
                                requirements of this 
                                subparagraph; and
                          (iii) the employment relationship 
                        with that employer has not been 
                        terminated after March 31, 1986.
                  (D) Treatment of agencies and 
                instrumentalities.--For purposes of 
                subparagraph (C), under regulations--
                          (i) All agencies and 
                        instrumentalities of a State (as 
                        defined in section 218(b) of the Social 
                        Security Act) or of the District of 
                        Columbia shall be treated as a single 
                        employer.
                          (ii) All agencies and 
                        instrumentalities of a political 
                        subdivision of a State (as so defined) 
                        shall be treated as a single employer 
                        and shall not be treated as described 
                        in clause (i).
          (3) Medicare qualified government employment.--For 
        purposes of this chapter, the term ``medicare qualified 
        government employment'' means service which--
                  (A) is employment (as defined in subsection 
                (b)) with the application of paragraphs (1) and 
                (2), but
                  (B) would not be employment (as so defined) 
                without the application of such paragraphs.
  (v) Treatment of Certain Deferred Compensation and Salary 
Reduction Arrangements.--
          (1) Certain employer contributions treated as 
        wages.--Nothing in any paragraph of subsection (a) 
        (other than paragraph (1)) shall exclude from the term 
        ``wages''--
                  (A) any employer contribution under a 
                qualified cash or deferred arrangement (as 
                defined in section 401(k)) to the extent not 
                included in gross income by reason of section 
                402(e)(3) or consisting of designated Roth 
                contributions (as defined in section 402A(c)), 
                or
                  (B) any amount treated as an employer 
                contribution under section 414(h)(2) where the 
                pickup referred to in such section is pursuant 
                to a salary reduction agreement (whether 
                evidenced by a written instrument or 
                otherwise).
          (2) Treatment of certain nonqualified deferred 
        compensation plans.--
                  (A) In general.--Any amount deferred under a 
                nonqualified deferred compensation plan shall 
                be taken into account for purposes of this 
                chapter as of the later of--
                          (i) when the services are performed, 
                        or
                          (ii) when there is no substantial 
                        risk of forfeiture of the rights to 
                        such amount.
                The preceding sentence shall not apply to any 
                excess parachute payment (as defined in section 
                280G(b)) or to any specified stock compensation 
                (as defined in section 4985) on which tax is 
                imposed by section 4985.
                  (B) Taxed only once.--Any amount taken into 
                account as wages by reason of subparagraph (A) 
                (and the income attributable thereto) shall not 
                thereafter be treated as wages for purposes of 
                this chapter.
                  (C) Nonqualified deferred compensation 
                plan.--For purposes of this paragraph, the term 
                ``nonqualified deferred compensation plan'' 
                means any plan or other arrangement for 
                deferral of compensation other than a plan 
                described in subsection (a)(5).
          (3) Exempt governmental deferred compensation plan.--
        For purposes of subsection (a)(5), the term ``exempt 
        governmental deferred compensation plan'' means any 
        plan providing for deferral of compensation established 
        and maintained for its employees by the United States, 
        by a State or political subdivision thereof, or by an 
        agency or instrumentality of any of the foregoing. Such 
        term shall not include--
                  (A) any plan to which section 83, 402(b), 
                403(c), 457(a), or 457(f)(1) applies,
                  (B) any annuity contract described in section 
                403(b), and
                  (C) the Thrift Savings Fund (within the 
                meaning of subchapter III of chapter 84 of 
                title 5, United States Code).
  (w) Exemption of Churches and Qualified Church-Controlled 
Organizations.--
          (1) General rule.--Any church or qualified church-
        controlled organization (as defined in paragraph (3)) 
        may make an election within the time period described 
        in paragraph (2), in accordance with such procedures as 
        the Secretary determines to be appropriate, that 
        services performed in the employ of such church or 
        organization shall be excluded from employment for 
        purposes of title II of the Social Security Act and 
        this chapter. An election may be made under this 
        subsection only if the church or qualified church-
        controlled organization states that such church or 
        organization is opposed for religious reasons to the 
        payment of the tax imposed under section 3111.
          (2) Timing and duration of election.--An election 
        under this subsection must be made prior to the first 
        date, more than 90 days after July 18, 1984, on which a 
        quarterly employment tax return for the tax imposed 
        under section 3111 is due, or would be due but for the 
        election, from such church or organization. An election 
        under this subsection shall apply to current and future 
        employees, and shall apply to service performed after 
        December 31, 1983. The election may be revoked by the 
        church or organization under regulations prescribed by 
        the Secretary. The election shall be revoked by the 
        Secretary if such church or organization fails to 
        furnish the information required under section 6051 to 
        the Secretary for a period of 2 years or more with 
        respect to remuneration paid for such services by such 
        church or organization, and, upon request by the 
        Secretary, fails to furnish all such previously 
        unfurnished information for the period covered by the 
        election. Any revocation under the preceding sentence 
        shall apply retroactively to the beginning of the 2-
        year period for which the information was not 
        furnished.
          (3) Definitions.--
                  (A) For purposes of this subsection, the term 
                ``church'' means a church, a convention or 
                association of churches, or an elementary or 
                secondary school which is controlled, operated, 
                or principally supported by a church or by a 
                convention or association of churches.
                  (B) For purposes of this subsection, the term 
                ``qualified church-controlled organization'' 
                means any church-controlled tax-exempt 
                organization described in section 501(c)(3), 
                other than an organization which--
                          (i) offers goods, services, or 
                        facilities for sale, other than on an 
                        incidental basis, to the general 
                        public, other than goods, services, or 
                        facilities which are sold at a nominal 
                        charge which is substantially less than 
                        the cost of providing such goods, 
                        services, or facilities; and
                          (ii) normally receives more than 25 
                        percent of its support from either (I) 
                        governmental sources, or (II) receipts 
                        from admissions, sales of merchandise, 
                        performance of services, or furnishing 
                        of facilities, in activities which are 
                        not unrelated trades or businesses, or 
                        both.
  (x) Applicable Dollar Threshold.--For purposes of subsection 
(a)(7)(B), the term ``applicable dollar threshold'' means 
$1,000. In the case of calendar years after 1995, the 
Commissioner of Social Security shall adjust such $1,000 amount 
at the same time and in the same manner as under section 
215(a)(1)(B)(ii) of the Social Security Act with respect to the 
amounts referred to in section 215(a)(1)(B)(i) of such Act, 
except that, for purposes of this paragraph, 1993 shall be 
substituted for the calendar year referred to in section 
215(a)(1)(B)(ii)(II) of such Act. If any amount as adjusted 
under the preceding sentence is not a multiple of $100, such 
amount shall be rounded to the next lowest multiple of $100.
  (y) Service in the Employ of International Organizations by 
Certain Transferred Federal Employees.--
          (1) In general.--For purposes of this chapter, 
        service performed in the employ of an international 
        organization by an individual pursuant to a transfer of 
        such individual to such international organization 
        pursuant to section 3582 of title 5, United States 
        Code, shall constitute ``employment'' if--
                  (A) immediately before such transfer, such 
                individual performed service with a Federal 
                agency which constituted ``employment'' under 
                subsection (b) for purposes of the taxes 
                imposed by sections 3101(a) and 3111(a), and
                  (B) such individual would be entitled, upon 
                separation from such international organization 
                and proper application, to reemployment with 
                such Federal agency under such section 3582.
          (2) Definitions.--For purposes of this subsection--
                  (A) Federal agency.--The term ``Federal 
                agency'' means an agency, as defined in section 
                3581(1) of title 5, United States Code.
                  (B) International organization.--The term 
                ``international organization'' has the meaning 
                provided such term by section 3581(3) of title 
                5, United States Code.
  (z) Treatment of Certain Foreign Persons as American 
Employers.--
          (1) In general.--If any employee of a foreign person 
        is performing services in connection with a contract 
        between the United States Government (or any 
        instrumentality thereof) and any member of any 
        domestically controlled group of entities which 
        includes such foreign person, such foreign person shall 
        be treated for purposes of this chapter as an American 
        employer with respect to such services performed by 
        such employee.
          (2) Domestically controlled group of entities.--For 
        purposes of this subsection--
                  (A) In general.--The term ``domestically 
                controlled group of entities'' means a 
                controlled group of entities the common parent 
                of which is a domestic corporation.
                  (B) Controlled group of entities.--The term 
                ``controlled group of entities'' means a 
                controlled group of corporations as defined in 
                section 1563(a)(1), except that--
                          (i) ``more than 50 percent'' shall be 
                        substituted for ``at least 80 percent'' 
                        each place it appears therein, and
                          (ii) the determination shall be made 
                        without regard to subsections (a)(4) 
                        and (b)(2) of section 1563.
                A partnership or any other entity (other than a 
                corporation) shall be treated as a member of a 
                controlled group of entities if such entity is 
                controlled (within the meaning of section 
                954(d)(3)) by members of such group (including 
                any entity treated as a member of such group by 
                reason of this sentence).
          (3) Liability of common parent.--In the case of a 
        foreign person who is a member of any domestically 
        controlled group of entities, the common parent of such 
        group shall be jointly and severally liable for any tax 
        under this chapter for which such foreign person is 
        liable by reason of this subsection, and for any 
        penalty imposed on such person by this title with 
        respect to any failure to pay such tax or to file any 
        return or statement with respect to such tax or wages 
        subject to such tax. No deduction shall be allowed 
        under this title for any liability imposed by the 
        preceding sentence.
          (4) Provisions preventing double taxation.--
                  (A) Agreements.--Paragraph (1) shall not 
                apply to any services which are covered by an 
                agreement under subsection (l).
                  (B) Equivalent foreign taxation.--Paragraph 
                (1) shall not apply to any services if the 
                employer establishes to the satisfaction of the 
                Secretary that the remuneration paid by such 
                employer for such services is subject to a tax 
                imposed by a foreign country which is 
                substantially equivalent to the taxes imposed 
                by this chapter.
          (5) Cross reference.--For relief from taxes in cases 
        covered by certain international agreements, see 
        sections 3101(c) and 3111(c).

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