(III) by striking subparagraph
(F) and inserting the following:
‘‘(E) service which is included as employment
under section 210(a).’’
(b) AMENDMENTS
TO
THE INTERNAL REVENUE
CODE OF 1986.—
(1) IN
GENERAL.—Paragraph (7) of section
3121(b) of the Internal Revenue Code of 1986 (re-
lating to employment) is amended to read as follows:
‘‘(7) excluded State or local government em-
ployment (as defined in subsection (t));’’.
(2) EXCLUDED STATE OR LOCAL GOVERNMENT
EMPLOYMENT.—Section 3121 of such Code is
amended by inserting after subsection (s) the fol-
lowing new subsection:
‘‘(t) EXCLUDED STATE OR LOCAL GOVERNMENT EM-
PLOYMENT.—
‘‘(1) IN GENERAL.—For purposes of this chap-
ter, the term ‘excluded State or local government
employment’ means any service performed in the
employ of a State, of any political subdivision there-
of, or of any instrumentality of any one or more of
the foregoing which is wholly owned thereby, if—
‘‘(A)(i) such service would be excluded
from the term ‘employment’ for purposes of this
chapter if the provisions of subsection (b)(7) as
in effect in December 1999 had remained in ef-
fect, and (ii) the requirements of paragraph (2)
are met with respect to such service, or
‘‘(B) the requirements of paragraph (3)
are met with respect to such service.
‘‘(2) EXCEPTION FOR CURRENT EMPLOYMENT
WHICH CONTINUES.—
‘‘(A) IN GENERAL.—The requirements of
this paragraph are met with respect to service
for any employer if—
‘‘(i) such service is performed by an
individual—
‘‘(I) who was performing sub-
stantial and regular service for remu-
neration for that employer before Jan-
uary 1, 2000,
‘‘(II) who is a bona fide employee
of that employer on December 31,
1999, and
‘‘(III) whose employment rela-
tionship with that employer was not
entered into for purposes of meeting
the requirements of this subpara-
graph, and
‘‘(ii) the employment relationship with
that employer has not been terminated
after December 31, 1999.
‘‘(B) TREATMENT OF MULTIPLE AGENCIES
AND
INSTRUMENTALITIES.—For purposes of
subparagraph (A), 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, and
‘‘(ii) all agencies and instrumentalities
of a political subdivision of a State (as so
defined) shall be treated as a single em-
ployer and shall not be treated as de-
scribed in clause (i).
‘‘(3) EXCEPTION FOR CERTAIN SERVICES.—
‘‘(A) IN GENERAL.—The requirements of
this paragraph are met with respect to service
if such service is performed—
‘‘(i) by an individual who is employed
by a State or political subdivision thereof
to relieve such individual from unemploy-
ment,
‘‘(ii) in a hospital, home, or other in-
stitution by a patient or inmate thereof as
an employee of a State or political subdivi-
sion 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 in-
terns, 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 cal-
endar year for such service is less than
$1,000 with respect to service performed
during 2000, and the adjusted amount de-
termined under section 210(s)(3)(C) of the
Social Security Act for any subsequent
year with respect to service performed dur-
ing such subsequent year, except to the ex-
tent that service by such election official or
election worker is included in employment
under an agreement under section 218 of
the Social Security Act, or
‘‘(vi) 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 in-
clusion of such fees in net earnings from
self-employment.
‘‘(B) DEFINITIONS.—As used in this para-
graph, the terms ‘State’ and ‘political subdivi-
sion’ have the meanings given those terms in
section 218(b) of the Social Security Act.’’.
(3) CONFORMING AMENDMENTS.—
(A) Subsection (j) of such section 3121
(relating to covered transportation service) is
repealed.
(B) Paragraph (2) of section 3121(u) of
such Code (relating to application of hospital
insurance tax to Federal, State, and local em-
ployment) is amended—