Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Independent Contractor
Simplification and Relief Act of 1999''.

SEC. 2. SAFE HARBOR FOR DETERMINING THAT CERTAIN INDIVIDUALS ARE NOT
EMPLOYEES.

(a) In General.--Chapter 25 (relating to general provisions
relating to employment taxes) is amended by adding after section 3510
the following new section:

''SEC. 3511. SAFE HARBOR FOR DETERMINING THAT CERTAIN INDIVIDUALS ARE
NOT EMPLOYEES.

''(a) Safe Harbor.--
''(1) In general.--For purposes of this title, if the
requirements of subsections (b), (c), and (d), or the
requirements of subsections (d) and (e), are met with respect
to any service performed by any individual, then with respect
to such service--
''(A) the service provider shall not be treated as
an employee,
''(B) the service recipient shall not be treated as
an employer,
''(C) the payor shall not be treated as an
employer, and
''(D) compensation paid or received for such
service shall not be treated as paid or received with
respect to employment.
''(2) Availability of safe harbor not to limit application
of other laws.--Nothing in this section shall be construed--
''(A) as limiting the ability of a service
provider, service recipient, or payor to apply other
provisions of this title, section 530 of the Revenue
Act of 1978, or the common law in determining whether
an individual is not an employee, or
''(B) as a prerequisite for the application of any
provision of law described in subparagraph (A).
''(b) Service Provider Requirements With Regard to the Service
Recipient.--For purposes of subsection (a), the requirements of this
subsection are met if the service provider, in connection with
performing the service--
''(1) has the ability to realize a profit or loss,
''(2) agrees to perform services for a particular amount of
time or to complete a specific result or task, and
''(3) either--
''(A) incurs unreimbursed expenses which are
ordinary and necessary to the service provider's
industry and which represent an amount equal to at
least 2 percent of the service provider's adjusted
gross income attributable to services performed
pursuant to 1 or more contracts described in subsection
(d), or
''(B) has a significant investment in assets.
''(c) Additional Service Provider Requirements With Regard to
Others.--For the purposes of subsection (a), the requirements of this
subsection are met if the service provider--
''(1) has a principal place of business,
''(2) does not primarily provide the service at a single
service recipient's facilities,
''(3) pays a fair market rent for use of the service
recipient's facilities, or
''(4) operates primarily from equipment not supplied by the
service recipient.
''(d) Written Document Requirements.--For purposes of subsection
(a), the requirements of this subsection are met if the services
performed by the service provider are performed pursuant to a written
contract between such service provider and the service recipient, or
the payor, and such contract provides that the service provider will
not be treated as an employee with respect to such services for Federal
tax purposes and that the service provider is responsible for the
provider's own Federal, State, and local income taxes, including self-
employment taxes and any other taxes.
''(e) Business Structure and Benefits Requirements.--For purposes
of subsection (a), the requirements of this subsection are met if the
service provider--
''(1) conducts business as a properly constituted
corporation or limited liability company under applicable State
laws, and
''(2) does not receive from the service recipient or payor
any benefits that are provided to employees of the service
recipient.
''(f) Special Rules.--For purposes of this section--
''(1) Failure to meet reporting requirements.--If for any
taxable year any service recipient or payor fails to meet the
applicable reporting requirements of section 6041(a) or
6041A(a) with respect to a service provider, then, unless the
failure is due to reasonable cause and not willful neglect, the
safe harbor provided by this section for determining whether
individuals are not employees shall not apply to such service
recipient or payor with respect to that service provider.
''(2) Corporation and limited liability company service
providers.--
''(A) Returns required.--If, for any taxable year,
any corporation or limited liability company fails to
file all Federal income and employment tax returns
required under this title, unless the failure is due to
reasonable cause and not willful neglect, subsection
(e) shall not apply to such corporation or limited
liability company.
''(B) Reliance by service recipient or payor.--If a
service recipient or a payor--
''(i) obtains a written statement from a
service provider which states that the service
provider is a properly constituted corporation
or limited liability company, provides the
State (or in the case of a foreign entity, the
country), and year of, incorporation or
formation, provides a mailing address, and
includes the service provider's employer
identification number, and
''(ii) makes all payments attributable to
services performed pursuant to 1 or more
contracts described in subsection (d) to such
corporation or limited liability company,
then the requirements of subsection (e)(1) shall be
deemed to have been satisfied.
''(C) Availability of safe harbor.--
''(i) In general.--For purposes of this
section, unless otherwise established to the
satisfaction of the Secretary, the number of
covered workers which are not treated as
employees by reason of subsection (e) for any
calendar year shall not exceed the threshold
number for the calendar year.
''(ii) Threshold number.--For purposes of
this paragraph, the term 'threshold number'
means, for any calendar year, the greater of
(I) 10 covered workers, or (II) a number equal
to 3 percent of covered workers.
''(iii) Covered worker.--For purposes of
this paragraph, the term 'covered worker' means
an individual for whom the service recipient or
payor paid employment taxes under subtitle C in
all 4 quarters of the preceding calendar year.
''(3) Burden of proof.--For purposes of subsection (a),
if--
''(A) a service provider, service recipient, or
payor establishes a prima facie case that it was
reasonable not to treat a service provider as an
employee for purposes of this section, and
''(B) the service provider, service recipient, or
payor has fully cooperated with reasonable requests
from the Secretary or his delegate,
then the burden of proof with respect to such treatment shall
be on the Secretary.
''(4) Related entities.--If the service provider is
performing services through an entity owned in whole or in part
by such service provider, the references to service provider in
subsections (b) through (e) shall include such entity if the
written contract referred to in subsection (d) is with such
entity.
''(g) Determinations by the Secretary.--For purposes of this
title--
''(1) In general.--
''(A) Determinations with respect to a service
recipient or a payor.--A determination by the Secretary
that a service recipient or a payor should have treated
a service provider as an employee shall be effective no
earlier than the notice date if--
''(i) the service recipient or the payor
entered into a written contract satisfying the
requirements of subsection (d),
''(ii) the service recipient or the payor
satisfied the applicable reporting requirements
of section 6041(a) or 6041A(a) for all taxable
years covered by the contract described in
clause (i), and
''(iii) the service recipient or the payor
demonstrates a reasonable basis for determining
that the service provider is not an employee
and that such determination was made in good
faith.
''(B) Determinations with respect to a service
provider.--A determination by the Secretary that a
service provider should have been treated as an
employee shall be effective no earlier than the notice
date if--
''(i) the service provider entered into a
contract satisfying the requirements of
subsection (d),
''(ii) the service provider satisfied the
applicable reporting requirements of sections
6012(a) and 6017 for all taxable years covered
by the contract described in clause (i), and
''(iii) the service provider demonstrates a
reasonable basis for determining that the
service provider is not an employee and that
such determination was made in good faith.
''(C) Reasonable cause exception.--The requirements
of subparagraph (A)(ii) or (B)(ii) shall be treated as
being met if the failure to satisfy the applicable
reporting requirements is due to reasonable cause and
not willful neglect.
''(2) Construction.--Nothing in this subsection shall be
construed as limiting any provision of law that provides an
opportunity for administrative or judicial review of a
determination by the Secretary.
''(3) Notice date.--For purposes of this subsection, the
notice date is the 30th day after the earlier of--
''(A) the date on which the first letter of
proposed deficiency that allows the service provider,
the service recipient, or the payor an opportunity for
administrative review in the Internal Revenue Service
Office of Appeals is sent, or
''(B) the date on which the deficiency notice under
section 6212 is sent.
''(h) Definitions.--For the purposes of this section--
''(1) Service provider.--The term 'service provider' means
any individual who performs a service for another person.
''(2) Service recipient.--Except as provided in paragraph
(4), the term 'service recipient' means the person for whom the
service provider performs such service.
''(3) Payor.--Except as provided in paragraph (4), the term
'payor' means the person who pays the service provider for the
performance of such service in the event that the service
recipient does not pay the service provider.
''(4) Exceptions.--The terms 'service recipient' and
'payor' do not include any entity in which the service provider
owns in excess of 5 percent of--
''(A) in the case of a corporation, the total
combined voting power of stock in the corporation, or
''(B) in the case of an entity other than a
corporation, the profits or beneficial interests in the
entity.
''(5) In connection with performing the service.--The term
'in connection with performing the service' means in connection
or related to the operation of the service provider's trade or
business.
''(6) Principal place of business.--For purposes of
subsection (c), the term 'principal place of business' has the
same meaning as under section 280A(c)(1) (as in effect for
taxable years beginning after December 31, 1998).
''(7) Fair market rent.--The term 'fair market rent' means
a periodic, fixed minimum rental fee which is based on the fair
rental value of the facilities and is established pursuant to a
written contract with terms similar to those offered to
unrelated persons for facilities of similar type and quality.''
(b) Repeal of Section 530(d) of the Revenue Act of 1978.--Section
530(d) of the Revenue Act of 1978 (as added by section 1706 of the Tax
Reform Act of 1986) is repealed.
(c) Clerical Amendment.--The table of sections for chapter 25 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new item:

''Sec. 3511. Safe harbor for determining
that certain individuals are
not employees.''
(d) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to services performed after the date of the enactment of
this Act.
(2) Determinations by the secretary.--Section 3511(g) of
the Internal Revenue Code of 1986 (as added by subsection (a))
shall apply to determinations after the date of the enactment
of this Act.
(3) Section 531(d).--The amendment made by subsection (b)
shall apply to periods ending after the date of the enactment
of this Act.
Output:
Amends the Revenue Act of 1978, as amended by the Tax Reform Act of 1986 to repeal the prohibition on treating certain technical service providers as independent contractors.