I

107TH CONGRESS

1ST SESSION H. R. 1003

To amend the Internal Revenue Code of 1986 to increase the maximum

amount of wages that a farmer can pay for agricultural labor without

being subject to the Federal unemployment tax on that labor to reflect

inflation since the unemployment tax was first established, and to provide

for an annual inflation adjustment in such maximum amount of wages.

IN THE HOUSE OF REPRESENTATIVES

MARCH 13, 2001

Mr. SCHAFFER (for himself, Mr. BISHOP, Mr. BLUNT, Mr. DOOLITTLE, Mr.

CHAMBLISS, Mr. FLETCHER, Mr. HAYES, Mr. GOODE, Mr. LEWIS of

Kentucky, Mr. MCHUGH, Mr. OTTER, Mr. PAUL, Mr. PICKERING, Mr.

ROSS, Mr. SESSIONS, Mr. SHOWS, Mr. SIMPSON, Mr. WATKINS, and Mr.

WATTS of Oklahoma) 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 increase

the maximum amount of wages that a farmer can pay

for agricultural labor without being subject to the Federal unemployment tax on that labor to reflect inflation

since the unemployment tax was first established, and

to provide for an annual inflation adjustment in such

maximum amount of wages.

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

2 This Act may be cited as the ‘‘Tax Fairness for Agri3 cultural Employers Act’’.

4 SEC. 2. INFLATION ADJUSTMENT FOR MAXIMUM AMOUNT

5 OF WAGES FARMERS CAN PAY FOR AGRICUL6 TURAL LABOR WITHOUT BEING SUBJECT TO

7 FEDERAL UNEMPLOYMENT TAX ON THAT

8 LABOR.

9 (a) IN GENERAL.—Paragraph (2) of section 3306(a)

10 of the Internal Revenue Code of 1986 (defining agricul11 tural labor) is amended to read as follows:

12 ‘‘(2) AGRICULTURAL LABOR.—

13 ‘‘(A) IN GENERAL.—In the case of agricul14 tural labor, the term ‘employer’ means, with re15 spect to any calendar year, any person who—

16 ‘‘(i)(I) during any calendar quarter in

17 the calendar year paid wages of the appli18 cable dollar amount (or more) for such cal19 endar year for agricultural labor, or

20 ‘‘(II) during any calendar quarter in

21 the preceding calendar year paid wages of

22 the applicable dollar amount (or more) for

23 such preceding calendar year for agricul24 tural labor, or

25 ‘‘(ii) on each of some 20 days during

26 the calendar year or during the preceding
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1 calendar year, each day being in a dif2 ferent calendar week, employed at least 10

3 individuals in employment in agricultural

4 labor for some portion of the day.

5 ‘‘(B) APPLICABLE DOLLAR AMOUNT.—For

6 purposes of subparagraph (A), the term ‘appli7 cable dollar amount’ means $50,000.

8 ‘‘(C) INFLATION ADJUSTMENT.—

9 ‘‘(i) IN GENERAL.—In the case of a

10 calendar year beginning after 2001, the

11 dollar amount contained in subparagraph

12 (B) shall be increased by an amount equal

13 to—

14 ‘‘(I) such dollar amount, multi15 plied by

16 ‘‘(II) the cost-of-living adjust17 ment determined under section 1(f)(3)

18 for the calendar year, determined by

19 substituting ‘calendar year 2000’ for

20 ‘calendar year 1992’ in subparagraph

21 (B) thereof.

22 ‘‘(ii) ROUNDING.—If any amount as

23 adjusted under clause (i) is not a multiple

24 of $50, such amount shall be rounded to

25 the next lowest multiple of $50.’’.
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1 (b) CONFORMING AMENDMENT.—Clause (i) of sec2 tion 3306(c)(1)(A) of such Code is amended to read as

3 follows:

4 ‘‘(i)(I) during any calendar quarter in

5 the calendar year paid remuneration in

6 cash of the applicable dollar amount (as

7 defined in subsection (a)(2)(B)) or more

8 for such calendar year to individuals em9 ployed in agricultural labor (including

10 labor performed by an alien referred to in

11 subparagraph (B)), or

12 ‘‘(II) during any calendar quarter in

13 the preceding calendar year paid remu14 neration in cash of the applicable dollar

15 amount (as defined in subsection

16 (a)(2)(B)) or more for such preceding cal17 endar year to individuals employed in agri18 cultural labor (including labor performed

19 by an alien referred to in subparagraph

20 (B)), or’’.

21 (c) EFFECTIVE DATE.—The amendments made by

22 this Act shall take effect on January 1, 2002.

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