(b) RATE
OF TAX
ON EMPLOYEE REPRESENTA-
TIVES.—Section 3211, as amended by section 203, is
amended by striking subsection (a) and inserting the fol-
lowing new subsections:
‘‘(a) TIER 1 TAX.—In addition to other taxes, there
is hereby imposed on the income of each employee rep-
resentative a tax equal to the applicable percentage of the
compensation received during any calendar year by such
employee representative for services rendered by such em-
ployee representative. For purposes of the preceding sen-
tence, the term ‘applicable percentage’ means the percent-
age equal to the sum of the rates of tax in effect under
subsections (a) and (b) of section 3101 and subsections
(a) and (b) of section 3111 for the calendar year.
‘‘(b) TIER 2 TAX.—
‘‘(1) IN GENERAL.—In addition to other taxes,
there is hereby imposed on the income of each em-
ployee representative a tax equal to the applicable
percentage of the compensation received during any
calendar year by such employee representatives for
services rendered by such employee representative.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means—
‘‘(A) 14.75 percent in the case of com-
pensation received during 2001,
‘‘(B) 14.20 percent in the case of com-
pensation received during 2002, and
‘‘(C) in the case of compensation received
during any calendar year after 2002, the per-
centage determined under section 3241 for such
calendar year.
‘‘(c) CROSS REFERENCE.—
‘‘For application of different contribution bases
with respect to the taxes imposed by subsections (a)
and (b), see section 3231(e)(2).’’.
(c) RATE OF TAX ON EMPLOYEES.—Subsection (b)
of section 3201 is amended to read as follows:
‘‘(b) TIER 2 TAX.—
‘‘(1) IN GENERAL.—In addition to other taxes,
there is hereby imposed on the income of each em-
ployee a tax equal to the applicable percentage of
the compensation received during any calendar year
by such employee for services rendered by such em-
ployee.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means—
‘‘(A) 4.90 percent in the case of compensa-
tion received during 2001 or 2002, and
‘‘(B) in the case of compensation received
during any calendar year after 2002, the per-
centage determined under section 3241 for such
calendar year.’’.
(d) DETERMINATION
OF
RATE.—Chapter 22 is
amended by adding at the end thereof the following new
subchapter:
‘‘Subchapter E—Tier 2 Tax Rate
Determination
‘‘Sec. 3241. Determination of tier 2 tax rate based on average ac-
count benefits ratio.
‘‘SEC. 3241. DETERMINATION OF TIER 2 TAX RATE BASED
ON AVERAGE ACCOUNT BENEFITS RATIO.
‘‘(a) IN
GENERAL.—For purposes of sections
3201(b), 3211(b), and 3221(b), the applicable percentage
for any calendar year is the percentage determined in ac-
cordance with the table in subsection (b).
‘‘(b) TAX RATE SCHEDULE.—
Average account benefits ratio
Applicable per-
centage for sec-
tions 3211(b) and
3221(b)
Applicable per-
centage for section
3201(b)
At least
But less than
2.5
22.1
4.9
2.5
3.0
18.1
4.9
3.0
3.5
15.1
4.9
3.5
4.0
14.1
4.9
4.0
6.1
13.1
4.9
6.1
6.5
12.6
4.4
6.5
7.0
12.1
3.9
7.0
7.5
11.6
3.4
7.5
8.0
11.1
2.9
8.0
8.5
10.1
1.9
8.5
9.0
9.1
0.9
9.0
8.2
‘‘(c) DEFINITIONS RELATED TO DETERMINATION OF
RATES OF TAX.—
‘‘(1) AVERAGE
ACCOUNT
BENEFITS
RATIO.—
For purposes of this section, the term ‘average ac-
count benefits ratio’ means, with respect to any cal-
endar year, the average determined by the Secretary
of the account benefits ratios for the 10 most recent
fiscal years ending before such calendar year. If the
amount determined under the preceding sentence is
not a multiple of 0.1, such amount shall be in-
creased to the next highest multiple of 0.1.
‘‘(2) ACCOUNT
BENEFITS
RATIO.—For pur-
poses of this section, the term ‘account benefits
ratio’ means, with respect to any fiscal year, the
amount determined by the Railroad Retirement
Board by dividing the fair market value of the assets
in the Railroad Retirement Account and of the Rail-
road Retirement Investment Trust as of the close of
such fiscal year by the total benefits and administra-
tive expenses paid from the Railroad Retirement Ac-
count and administrative expenses of the Railroad
Retirement Investment Trust during such fiscal
year.
‘‘(d) NOTICE.—No later than December 1 of each
calendar year, the Secretary shall publish a notice in the
Federal Register of the rates of tax determined under this
section which are applicable for the following calendar
year.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 24(d)(3)(A)(iii) is amended by
striking ‘‘section 3211(a)(1)’’ and inserting ‘‘section
3211(a)’’.
(2) Section 72(r)(2)(B)(i) is amended by strik-
ing ‘‘section 3211(a)(2)’’ and inserting ‘‘section
3211(b)’’.
(3) Paragraphs (2)(A)(iii)(II) and (4)(A) of
section 3231(e) is amended by striking ‘‘3211(a)(1)’’
and inserting ‘‘3211(a)’’.
(4) Section 3231(e)(2)(B)(ii)(I) is amended by
striking ‘‘3211(a)(2)’’ and inserting ‘‘3211(b)’’.
(5) The table of subchapters for chapter 22 is
amended by adding at the end the following new
item:
‘‘Subchapter E. Tier 2 tax rate determination.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar years beginning after
December 31, 2000.
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