I
106TH CONGRESS
1ST SESSION
H. R. 1874
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
MAY 19, 1999
Mr. SCHAFFER (for himself, Mr. MCINNIS, Mr. SHOWS, Mr. WATTS of Okla-
homa, Mr. DICKEY, Mr. SESSIONS, Mrs. CHENOWETH, Mr. TERRY, Mr.
HANSEN, Mr. HASTINGS of Washington, Mr. NETHERCUTT, Mr. HILL of
Montana, Mr. HAYES, Mr. DOOLITTLE, Mr. WATKINS, Mr. ISTOOK, Mr.
LEWIS of Kentucky, Mr. RAHALL, Mr. HOSTETTLER, Mrs. CUBIN, Mr.
BURTON of Indiana, Mr. PICKERING, Mr. CHAMBLISS, Mr. EWING, Mr.
DAVIS of Illinois, Mr. GOODE, and Mr. GREEN of Wisconsin) 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 Fed-
eral 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 
1. 
INFLATION 
ADJUSTMENT 
FOR 
MAXIMUM
AMOUNT OF WAGES FARMERS CAN PAY FOR
AGRICULTURAL LABOR WITHOUT BEING SUB-
JECT TO FEDERAL UNEMPLOYMENT TAX ON
THAT LABOR.
(a) IN GENERAL.—Paragraph (2) of section 3306(a)
of the Internal Revenue Code of 1986 (defining agricul-
tural labor) is amended to read as follows:
‘‘(2) AGRICULTURAL LABOR.—
‘‘(A) IN GENERAL.—In the case of agricul-
tural labor, the term ‘employer’ means, with re-
spect to any calendar year, any person who—
‘‘(i)(I) during any calendar quarter in
the calendar year paid wages of the appli-
cable dollar amount (or more) for such cal-
endar year for agricultural labor, or
‘‘(II) during any calendar quarter in
the preceding calendar year paid wages of
the applicable dollar amount (or more) for
such preceding calendar year for agricul-
tural labor, or
‘‘(ii) on each of some 20 days during
the calendar year or during the preceding
calendar year, each day being in a dif-
ferent calendar week, employed at least 10
individuals in employment in agricultural
labor for some portion of the day.
‘‘(B) APPLICABLE DOLLAR AMOUNT.—For
purposes of subparagraph (A), the term ‘appli-
cable dollar amount’ means $50,000.
‘‘(C) INFLATION ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of a
calendar year beginning after 1999, the
dollar amount contained in subparagraph
(B) shall be increased by an amount equal
to—
‘‘(I) such dollar amount, multi-
plied by
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3)
for the calendar year, determined by
substituting ‘calendar year 1998’ for
‘calendar year 1992’ in subparagraph
(B) thereof.
‘‘(ii) ROUNDING.—If any amount as
adjusted under clause (i) is not a multiple
of $50, such amount shall be rounded to
the next lowest multiple of $50.’’.
(b) CONFORMING AMENDMENT.—Clause (i) of sec-
tion 3306(c)(1)(A) of such Code is amended to read as
follows:
‘‘(i)(I) during any calendar quarter in
the calendar year paid remuneration in
cash of the applicable dollar amount (as
defined in subsection (a)(2)(B)) or more
for such calendar year to individuals em-
ployed in agricultural labor (including
labor performed by an alien referred to in
subparagraph (B)), or
‘‘(II) during any calendar quarter in
the preceding calendar year paid remu-
neration in cash of the applicable dollar
amount 
(as 
defined 
in 
subsection
(a)(2)(B)) or more for such preceding cal-
endar year to individuals employed in agri-
cultural labor (including labor performed
by an alien referred to in subparagraph
(B)), or’’.
(c) EFFECTIVE DATE.—The amendments made by
this Act shall take effect on January 1, 2000.
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