[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2105 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 2105

To amend the Internal Revenue Code of 1986 to clarify that employees of 
a political subdivision of a State shall not lose their exemption from 
   the hospital insurance tax by reason of the consolidation of the 
                      subdivision with the State.


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                    IN THE HOUSE OF REPRESENTATIVES

                              May 14, 2003

Mr. Neal of Massachusetts (for himself, Mr. Capuano, Mr. Delahunt, Mr. 
Frank of Massachusetts, and Mr. Markey) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to clarify that employees of 
a political subdivision of a State shall not lose their exemption from 
   the hospital insurance tax by reason of the consolidation of the 
                      subdivision with the State.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CLARIFICATION OF EMPLOYMENT RELATIONSHIP WHERE POLITICAL 
              SUBDIVISION OF STATE IS CONSOLIDATED WITH STATE.

    (a) In General.--Subparagraph (D) of section 3121(u)(2) of the 
Internal Revenue Code of 1986 (relating to application of hospital 
insurance tax to Federal, State, and local employment) is amended by 
adding at the end the following new clause:
                            ``(iii) An employee of a political 
                        subdivision of a State shall not be treated as 
                        having terminated such employee's employment 
                        relationship with such subdivision by reason of 
                        the abolition of such subdivision (or other 
                        consolidation of any agency or instrumentality 
                        of such subdivision with the State) if, as a 
                        result of such abolition (or other 
                        consolidation), such employee becomes an 
                        employee of the State and continues to hold the 
                        same or substantially the same position with 
                        the State.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to all abolitions and other consolidations, whether occurring 
before, on, or after the date of the enactment of this Act.
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