‘‘(2) No funds may be transferred from the Social
Security Equivalent Benefit Account to the Railroad Re-
tirement Account or the Railroad Retirement Trust Fund,
and such funds may only be used for the purposes de-
scribed in subsection (c)(1).’’.
(b) CONFORMING AMENDMENT.—Section 15A(c)(1)
of the Railroad Retirement Act of 1974 (45 U.S.C. 231n–
1(c)(1)) is amended by striking ‘‘Except as otherwise pro-
vided in this section, amounts’’ and inserting ‘‘Amounts’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 2000.
SEC. 3. TRANSITION TO FULL SOCIAL SECURITY COVERAGE
OF RAILROAD EMPLOYMENT.
(a) RAILROAD WORKERS IN SOCIAL SECURITY SYS-
TEM.—
(1) IN GENERAL.—Section 210(a)(9) of the So-
cial Security Act (42 U.S.C. 410(a)(9)) is amended
by inserting ‘‘before January 1, 2002’’ after ‘‘per-
formed’’.
(2) PAYMENT OF FICA TAXES.—
(A) IN GENERAL.—Section 3121(b)(9) of
the Internal Revenue Code of 1986 (defining
employment) is amended by inserting ‘‘before
January 1, 2002’’ after ‘‘performed’’.
(B) NO IMPOSITION OF TIER 1 TAXES.—
(i) Section 3201(a) of such Code is
amended by adding at the end the fol-
lowing: ‘‘This subsection shall not apply to
service performed in calendar years after
2001.’’.
(ii) Section 3211(a)(1) of such Code
is amended by adding at the end the fol-
lowing: ‘‘This paragraph shall not apply to
service performed in calendar years after
2001.’’.
(iii) Section 3221(a) of such Code is
amended by adding at the end the fol-
lowing: ‘‘This subsection shall not apply to
service performed in calendar years after
2001.’’.
(b) RAILROAD RETIREES IN SOCIAL SECURITY SYS-
TEM.—
(1) RECEIPT OF SOCIAL SECURITY BENEFITS.—
Notwithstanding any other provision of law, with re-
spect to any individual who applies for a benefit
under the Railroad Retirement Act of 1974 after
December 31, 2002, based on such individual’s rail-
road employment or another individual’s railroad
employment, such individual shall receive a cor-
responding benefit (or an increased benefit) under
the Social Security Act determined by treating such
employment as included in the term ‘‘employment’’
as defined in the Social Security Act.
(2) CORRESPONDING REDUCTION IN RAILROAD
RETIREMENT BENEFIT.—With respect to any indi-
vidual described in paragraph (1), any benefit other-
wise receivable under the Railroad Retirement Act of
1974 shall be reduced by the benefit (or the increase
in the benefit) described in such paragraph.
(3) EFFECT ON FINANCIAL INTERCHANGE.—In
calculating any financial interchange between the so-
cial security system and the railroad retirement sys-
tem, the Commissioner of Social Security and the
Railroad Retirement Board shall take into account
the provisions of, and the amendments made by, this
section.
(4) OPTIONAL PAYMENT OF SOCIAL SECURITY
BENEFITS BY RAILROAD RETIREMENT BOARD.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), at the election of Railroad Retire-
ment Board, social security benefits described
in paragraph (1) for railroad retirees may be
paid by the Board on behalf of the Social Secu-
rity Administration.
(B) REQUIREMENTS FOR ANNUAL ELEC-
TIONS.—The Railroad Retirement Board may
elect annually to continue making benefit pay-
ments described in subparagraph (A), if the
Commissioner of Social Security certifies that
the Board is paying such benefits on-time and
is providing high quality customer service to all
new retirees.
(5) TECHNICAL AND CONFORMING CHANGES.—
The Commissioner of Social Security, the Railroad
Retirement Board, and the Secretary of the Treas-
ury, as soon as practicable but in any event not later
than 180 days after the date of enactment of this
Act, submit to the Committee on Ways and Means
of the House of Representatives and the Committee
on Finance of the Senate a draft of any technical
and conforming changes in the Social Security Act,
the Railroad Retirement Act of 1974, and the Inter-
nal Revenue Code of 1986 which are necessary to re-
flect throughout such Acts and Code the changes in
the substantive provisions of law made by this sec-
tion.
SEC. 4. REPEAL OF GENERAL FUND SUBSIDY TO RAILROAD
RETIREMENT ACCOUNT.
(a) REPEAL.—Subsection (c)(1)(A) of section 224 of
the Railroad Retirement Solvency Act of 1983 is repealed.
(b) EFFECTIVE DATE.—The repeal made by sub-
section (a) shall take effect on October 1, 2000.
SEC. 5. EMPLOYER, EMPLOYEE REPRESENTATIVE, AND EM-
PLOYEE TIER 2 TAX RATE ADJUSTMENTS.
(a) RATE OF TAX ON EMPLOYERS.—Subsection (b)
of section 3221 of the Internal Revenue Code of 1986 is
amended to read as follows:
‘‘(b) TIER 2 TAX.—
‘‘(1) IN GENERAL.—In addition to other taxes,
there is hereby imposed on every employer an excise
tax, with respect to having individuals in his employ,
equal to the applicable percentage of the compensa-
tion paid during any calendar year by such employer
for services rendered to such employer.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means the percentage determined under section
3241 for such calendar year.’’.
(b) RATE
OF TAX
ON EMPLOYEE REPRESENTA-
TIVES.—Paragraph (2) of section 3211(a) of the Internal
Revenue Code of 1986 is amended to read as follows:
‘‘(2) TIER 2 TAX.—