II

105TH CONGRESS

1ST SESSION S. 1470

To amend the Internal Revenue Code of 1986 to clarify that certain school

bus contractors and drivers are not employees.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 8, 1997

Ms. MIKULSKI introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to clarify

that certain school bus contractors and drivers are not

employees.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TREATMENT OF CERTAIN SCHOOL BUS CON4 TRACTORS AND DRIVERS.

5 (a) IN GENERAL.—Chapter 25 of the Internal Reve6 nue Code of 1986 is amended by adding at the end the

7 following new section:
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1 ‘‘SEC. 3511. TREATMENT OF CERTAIN SCHOOL BUS CON2 TRACTORS AND DRIVERS.

3 ‘‘(a) IN GENERAL.—For purposes of this title, in the

4 case of services performed as a qualified school bus con5 tractor or as a qualified driver—

6 ‘‘(1) the qualified school bus contractor shall

7 not be treated as an employee,

8 ‘‘(2) the person for whom services as a qualified

9 bus contractor are performed shall not be treated as

10 an employer, and

11 ‘‘(3) the qualified driver shall not be treated as

12 an employee of any person (except that this para13 graph shall not prevent such qualified driver from

14 being treated as an employee of the qualified school

15 bus contractor).

16 ‘‘(b) DEFINITIONS.—For purposes of this section—

17 ‘‘(1) QUALIFIED SCHOOL BUS CONTRACTOR.—

18 The term ‘qualified school bus contractor’ means

19 any individual who—

20 ‘‘(A) owns 1 or more school buses,

21 ‘‘(B) enters into a written agreement with

22 a public school board or district, or comparable

23 entity, to provide school bus transportation

24 services with respect to a public school using

25 the bus or buses owned by such contractor, and
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1 ‘‘(C) is not personally required to drive a

2 bus as part of such transportation service (but

3 is permitted to do so if qualified under applica4 ble State and local law to do so).

5 ‘‘(2) QUALIFIED DRIVER.—The term ‘qualified

6 driver’ means any individual who—

7 ‘‘(A) is qualified under applicable State

8 and local requirements to drive a public school

9 bus, and

10 ‘‘(B) is directly engaged by a qualified

11 school bus contractor to provide school bus

12 transportation services described in paragraph

13 (1)(B).

14 ‘‘(3) PUBLIC SCHOOL.—The term ‘public

15 school’ does not include any school above the second16 ary school level.

17 ‘‘(c) COORDINATION WITH RETIREMENT PLANS FOR

18 SELF-EMPLOYED.—This section shall not apply for pur19 poses of subtitle A to the extent that the individual is

20 treated as an employee under section 401(c)(1) (relating

21 to self-employed individuals).’’

22 (b) CLERICAL AMENDMENT.—The table of sections

23 for chapter 25 of such Code is amended by adding at the

24 end the following new item:

‘‘Sec. 3511. Treatment of certain school bus contractors and drivers.’’
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1 (c) EFFECTIVE DATE.—

2 (1) IN GENERAL.—The amendments made by

3 this section shall apply to services performed by in4 dividuals after December 31, 1991, as qualified

5 school bus contractors and qualified drivers (as de6 fined in section 3511 of such Code, as added by this

7 section).

8 (2) SPECIAL RULE.—If refund or credit of any

9 overpayment of tax resulting from the application of

10 subsection (a) is prevented at any time before the

11 close of the 1-year period beginning on the date of

12 the enactment of this Act by the operation of any

13 law or rule of law (including res judicata or any

14 closing agreement between the Internal Revenue

15 Service and any taxpayer), refund or credit of such

16 overpayment (to the extent attributable to the appli17 cation of subsection (a)) may, nevertheless, be made

18 or allowed if claim therefor is filed before the close

19 of such 1-year period.

Æ