Page:United States Statutes at Large Volume 100 Part 1.djvu/349

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 313

(c) EXISTING REDUCTION IN RATES FOR PERIOD AFTER TEMPORARY INCREASE RETAINED.—So much of subsection (e) of section 4121

26 USC 4i2i.

(relating to temporary increase in amount of tax) as precedes paragraph (2) is amended to read as follows: "(e) REDUCTION IN AMOUNT OF TAX.—

"(1) IN GENERAL.—Effective with respect to sales after the temporary increase termination date, subsection (b) shall be applied— "(A) by substituting '$.50' for '$1.10', "(B) by substituting '$.25' for '$.55', and "(C) by substituting '2 percent' for '4.4 percent'.". (d) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 4121 apply to sales after March 31, 1986. note. SEC. 13204. ONLY RAILROAD RETIREMENT BENEFITS EQUIVALENT TO SOCIAL SECURITY BENEFITS TREATED AS TIER 1 BENEFITS.

(a) IN GENERAL.—Paragraph (4) of section 86(d) (defining Social 26 USC 86. Security benefits) is amended to read as follows: ' (4) TIER i RAILROAD RETIREMENT BENEFIT.—For purposes of

paragraph (1), the term 'tier 1 railroad retirement benefit' means— "(A) the amount of the annuity under the Railroad Retirement Act of 1974 equal to the amount of the benefit 45 USC 231. to which the taxpayer would have been entitled under the Social Security Act if all of the service after December 31, 42 USC 1305 et 1936, of the employee (on whose employment record the *^9 annuity is being paid) had been included in the term 'employment' as defined in the Social Security Act, and "(B) a monthly annuity amount under section 3(f)(3) of the Railroad Retirement Act of 1974.". 45 USC 231b. Qa) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 86 note. shall apply to any monthly benefit for which the generally applicable payment date is after December 31, 1985. SEC. 13205. MEDICARE COVERAGE OF, AND APPLICATION OF HOSPITAL INSURANCE TAX TO, NEWLY HIRED STATE AND LOCAL GOVERNMENT EMPLOYEES. (a) APPLICATION OF HOSPITAL INSURANCE TAX TO NEWLY HIRED EMPLOYEES OF STATE AND LOCAL GOVERNMENTS.—

(1) IN GENERAL.—Subsection (u) of section 3121 (relating to 26 USC 3121. application of hospital insurance tax to Federal employment) is amended to read as follows: "(u) APPLICATION OF HOSPITAL INSURANCE TAX TO FEDERAL, STATE, AND LOCAL EMPLOYMENT.— "(1) FEDERAL EMPLOYMENT.—For purposes of the taxes im-

posed by sections 31010?) and 3111(b), subsection (b) shall be 26USe3ioi, applied without regard to paragraph (5) thereof. 3lii. "(2) STATE AND LOCAL EMPLOYMENT.—For purposes of the

taxes imposed by sections 3101(b) and 31110t))— "(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 42 USC 418.

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