Dec. 21, 2001 (H.R. 10) Railroad Retirement and note. Public Law 107-90 An Act To modernize the financing of the railroad retirement system and to provide enhanced benefits to employees and beneficiaries. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.-This Act may be cited as the "Railroad Retirement and Survivors' Improvement Act of 2001". (b) TABLE OF CONTENTS.-The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE 11-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986 Sec. 201. Amendments to the Internal Revenue Code of 1986. Sec. 202. Exemption from tax for National Railroad Retirement Investment Trust. Sec. 204. Employer, employee representative. and employee tier 2 tax rate adjust ments. * 26 USC 501. TITLE II-AMENDMENTS TO THE SEC. 201. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986. Except as otherwise provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. SEC. 202. EXEMPTION FROM TAX FOR NATIONAL RAILROAD RETIRE. Subsection (c) of section 501 is amended by adding at the end the following new paragraph: "(28) The National Railroad Retirement Investment Trust established under section 15(j) of the Railroad Retirement Act of 1974.". SEC. 203. REPEAL OF SUPPLEMENTAL ANNUITY TAX. (a) REPEAL OF TAX ON EMPLOYEE REPRESENTATIVES.-Section 3211 is amended by striking subsection (b). (b) REPEAL OF TAX ON EMPLOYERS.-Section 3221 is amended by striking subsections (c) and (d) and by redesignating subsection (e) as subsection (c). (c) EFFECTIVE DATE.-The amendments made by this section shall apply to calendar years beginning after December 31, 2001. SEC. 204. EMPLOYER, EMPLOYEE REPRESENTATIVE, AND EMPLOYEE TIER 2 TAX RATE ADJUSTMENTS. (a) RATE OF TAX ON EMPLOYERS.-Subsection (b) of section 3221 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 compensation 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 "(A) 15.6 percent in the case of compensation paid during 2002, "(B) 14.2 percent in the case of compensation paid during 2003, and "(C) in the case of compensation paid during any calendar year after 2003, the percentage determined under section 3241 for such calendar year.". (b) RATE OF TAX ON EMPLOYEE REPRESENTATIVES.-Section 3211, as amended by section 203, is amended by striking subsection (a) and inserting the following new subsections: "(a) TIER 1 TAX.-In addition to other taxes, there is hereby imposed on the income of each employee representative a tax equal to the applicable percentage of the compensation received during any calendar year by such employee representative for services rendered by such employee representative. For purposes of the preceding sentence, the term applicable percentage' means the percentage 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 employee 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 compensation received during 2002, "(B) 14.20 percent in the case of compensation received during 2003, and "(C) in the case of compensation received during any calendar year after 2003, the percentage determined under section 3241 for such calendar year. 26 USC 3211. 26 USC 3221. Applicability. 26 USC 3211 note. 26 USC 3201. 26 USC 3241. "(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 employee a tax equal to the applicable percentage of the compensation received during any calendar year by such employee for services rendered by such employee. "(2) APPLICABLE PERCENTAGE.-For purposes of paragraph (1), the term 'applicable percentage' means "(A) 4.90 percent in the case of compensation received during 2002 or 2003, and “(B) in the case of compensation received during any calendar year after 2003, the percentage determined under section 3241 for such calendar year.". (d) DETERMINATION OF RATE.-Chapter 22 is amended by adding at the end the following new subchapter: "Subchapter E-Tier 2 Tax Rate Determination "Sec. 3241. Determination of tier 2 tax rate based on average account 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 accordance with the table in subsection (b). "(c) DEFINITIONS RELATED TO DETERMINATION OF RATES OF TAX. “(1) AVERAGE ACCOUNT BENEFITS RATIO.-For purposes of this section, the term 'average account benefits ratio' means, with respect to any calendar 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 increased to the next highest multiple of 0.1. "(2) ACCOUNT BENEFITS RATIO.-For purposes 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 National Railroad Retirement Investment Trust (and for years before 2002, the Social Security Equivalent Benefits Account) as of the close of such fiscal year by the total benefits and administrative expenses paid from the Railroad Retirement Account and the National 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.— Deadline. Federal Register, publication. (1) Section 24(d)(3)(A)(iii) is amended by striking "section 26 USC 24. 3211(a)(1)" and inserting "section 3211(a)”. (2) Section 72(r)(2)(B)(i) is amended by striking "3211(a)(2)" 26 USC 72. and inserting “3211(b)". (3) Paragraphs (2)(A)(iii)(II) and (4)(A) of section 3231(e) 26 USC 3231. are 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 Applicability. shall apply to calendar years beginning after December 31, 2001. 26 USC 24 note. Approved December 21, 2001. LEGISLATIVE HISTORY-H.R. 10: HOUSE REPORTS: No. 107-51, Pt. 1 (Comm. on Ways and Means) and Pt. 2 (Comm. on Education and the Workforce). CONGRESSIONAL RECORD, Vol. 147 (2001): May 2, considered and passed House. Nov. 29, Dec. 3-5, considered and passed Senate, amended. Dec. 11, House concurred in Senate amendments. 1st Session HOUSE OF REPRESENTATIVES Part 1, RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2001 MAY 24, 2001.-Ordered to be printed Mr. YOUNG of Alaska, from the Committee on Transportation and Infrastructure, submitted the following REPORT [To accompany H.R. 1140] [Including cost estimate of the Congressional Budget Office] The Committee on Transportation and Infrastructure, to whom was referred the bill (H.R. 1140) to modernize the financing of the railroad retirement system and to provide enhanced benefits to employees and beneficiaries, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.-This Act may be cited as the "Railroad Retirement and Survivors' Improvement Act of 2001". (b) TABLE OF CONTENTS.-The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I-AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974 * * * * * TITLE II-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986 Sec. 201. Amendments to the Internal Revenue Code of 1986. Sec. 202. Exemption from tax for Railroad Retirement Investment Trust. Sec. 203. Repeal of supplemental annuity tax. Sec. 204. Employer, employee representative, and employee tier 2 tax rate adjustments. 89-006 |