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PUBLIC LAW 89-97-JULY 30, 1965

373

(6) So much of subsection (f)(4) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection (s) " after "notwithstanding the provisions of p a r a ^ a p h (1)". (7) So much of the first sentence of subsection (g)(1) of such section 202 as follows subparagraph (F) is amended by inserting "(subject to subsection (s)) " after "shall". (8) So much of subsection (g)(3) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection (s) " after "notwithstanding the provisions of paragraph (1)". (9) So much of subsection (h)(4) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection (s) " after "notwithstanding the provisions of paragraph (1)". (10) The next to last sentence of subsection (c) of section 203 of such Act is amended by striking out "for any month in which" and inserting in lieu thereof "for any month in which paragraph (1) of section 202(s) applies or". (11) The last sentence of subsection (c) of such section 203 is amended by striking out "No" and inserting in lieu thereof "Subject to paragraph (3) of such section 202(s), no". (12) The last sentence of subsection (f)(1) of such section 203 is amended by inserting "but subject to section 202(s) " after "Notwithstanding the preceding provisions of this paragraph". (13) Subsections (b), (c), (f), and (g) of section 216 of such Act are each amended by inserting before the period at the end thereof "(subject, however, to section 202(s))". (14) Section 222(b) of such Act is amended by adding at the end thereof the following new paragraph: "(4) The provisions of paragraph (1) shall not apply to any child entitled to benefits under section 202(d), if he has attained the age of 18 but has not attained the age of 22, for any month during which he is a full-time student (as defined and determined under section 202(d))." (16) Section 225 of such Act is amended by adding at the end thereof the following new sentence: "The first sentence of this section shall not apply to any child entitled to benefits under section 202(d), if he has attained the age of 18 but has not attained the age of 22, for any month during which he is a full-time student (as defined and determined under section 2 0 2 (d)). " (d) The amendments made by this section shall apply with respect to monthly insurance benefits under section 202 of the Social Security Act for months after December 1964; except that— (1) m the case of an individual who was not entitled to a child's insurance benefit under subsection (d) of such section for the month in which this Act is enacted, such amendments shall apply only on the basis of an application filed in or after the month in which this Act is enacted, and (2) no monthly insurance benefit shall be payable for any month before the second month following the month in which this Act is enacted by reason of section 202(d)(1)(B) (ii) of the Social Security Act as amended by this section. REDUCED B E N E F I T S FOR W m O W S AT AGE

Postf^.^'arff' 42 USC 402.

^^ Stat. 1032. ^^ ^^^ ^''^•

^"'^' ^- ^'^^'

Js°^'' ""• ^°^' 42 USC 416. ^^ "^*^ ^22. 3^^"'^' ^^' ^^°' 42 USC 402. 42u*sc425'

S'* Stat. 482,

42 USC 402.

Ante, p. 370.

60

SEC. 307, (a)(1) Paragraph (1)(B) of section 202(e) of the Social Security Act (as amended by section 308(b) of this Act) is amended by striking out "age 62" and inserting in lieu thereof "age 60". (2) Paragraph (2) of such section (as so amended) is amended by striking out "Such" and inserting in lieu thereof "Except as provided in subsection (q), such".

Post,

p. 376.

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Page:United States Statutes at Large Volume 79.djvu/414

 374 42 USC ^^^'

Ante, p. 368.

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

(t>) (1) Paragraph (1) of section 202(q) of such Act is amended to read as follows: "(1) I f the first month for which an individual is entitled to an old-age, wife's, husband's, or widow's insurance benefit is a month before the month in which such individual attains retirement age, the amount of such benefit for each month shall, subject to the succeeding paragraphs of this subsection, be reduced by— " (a) 5/9 of 1 percent of such amount if such benefit is an oldage or widow's insurance benefit, or 25/36 of 1 percent of such amount if such benefit is a wife's or husband's insurance benefit, multiplied by " (B)(i) the number of months in the reduction period for such benefit (determined under paragraph (6)), if such benefit is for a month before the month in which such individual attains retirement age, or "(ii) the number of months in the adjusted reduction period for such benefit (determined under paragraph (7)), if such benefit is for the month in which such individual attains retirement age or for any month thereafter." (£) Paragraph (3)(A) (as renumbered by section 304(c) of this Act) of such section is amended— (A) by striking out "wife's or husband's insurance benefit'^* each place it appears and inserting in lieu thereof "wife's, husband's, or widow's insurance benefit"; and (B) by striking out "age 62" and inserting in lieu thereof "age 62 (in the case of a wife's or husband's insurance benefit) or age 60 (in the case of a widow's insurance benefit)". (3) Paragraph (3)(D) (as so renumbered) of such section is amended by striking out "wife's or husband's" and inserting in lieu thereof "wife's, husband's, or widow's". (4) Paragraph (3) (as so renumbered) of such section is amended by adding at the end thereof the following new subparagraph: " (E) if the first month for which an mdividual is entitled to an old-age insurance benefit (whether such first month occurs before, with^ or after the month in which such individual attains the age of 65) IS a month for which such individual is also (or would, but for subsection (e)(1), be) entitled to a widow's insurance benefit to Which such individual was first entitled for a month before she attained retirement age, then such old-age insurance benefit shall be reduced by whichever of the following is the larger: "(i) the amount by which (but for this subparagraph) such old-age insurance benefit would have been reduced under paragraph (1), or " (ii) the amount equal to the sum of the amount by which such widow's insurance benefit was reduced for the month in which such individual attained retirement age and the amount by which such old-age insurance benefit would be reduced under paragraph (1) if it were equal to the excess of such old-age insurance benefit (before reduction under this subsection) over such widow's insurance benefit (before reduction under this subsection)." (5) Paragraph (5) (as so renumbered) of such section is amended by adding at the end thereof the following new subparagraph: " (D) No widow's insurance benefit for a month in which she has in her care a child of her deceased husband (or deceased former husband) entitled to child's insurance benefits shall be reduced under this subsection below the amount to which she would have been

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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Page:United States Statutes at Large Volume 79.djvu/415

 79 STAT. ]

PUBLIC LAW 89-97-JULY 30, 1965

entitled had she been entitled for such month to mother's insurance benefits on the basis of her deceased husband's (or deceased former husband's) wages and self-employment income." (6) Paragraph (6) (as so renumbered) of such section is amended— (A) by striking out "wife's, or husband's" and inserting in lieu thereof "wife's, husband's, or widow's"; (B) by striking out "or husband's" in subparagraph (A)(i) and inserting in lieu thereof ", husband's, or widow's"; and (C) by striking out "age 65" in subparagraph (B) and insertingin lieu thereof "retirement age". (7) Paragraph (7) (as so renumbered) of such section is amended— (A) by striking out "wife's, or husband's" and inserting in lieu thereof "wife's, husband's, or widow's"; and (B) by striking out "and" at the end of subparagraph (B), by striking out the period at the end of subparagraph (C) and inserting in lieu thereof a comma, and by adding at the end thereof the following new subparagraphs: " (D) m the case of widow's insurance benefits, any month in which the reduction in the amount of such benefit was determined under paragraph (5)(D), " (E) in the case of widow's insurance benefits, any month before the month in which she attained retirement age for which she was not entitled to such benefit because of the occurrence of an event that terminated her entitlement to such benefits, and". (8) Section 202(q) of such Act (as amended by section 304(c) of this Act) is further amended by adding at the end thereof the following new paragraph: "(9) For purposes of this subsection, the term 'retirement age' means age 65 with respect to an old-age, wife's, or husband's insurance benefit and age 62 with respect to a widow's insurance benefit." (c) The amendments made by this section shall apply with respect to monthly insurance benefits under section 202 of the Social Security Act for and after the second month following the month in which this Act is enacted, but only on the basis of applications filed in or after the month in which this Act is enacted.

375

^"'®' P- ^^S-

^^ ^*|^- ^^j^^^-

WIFE'S AND WIDOW'S BENEFITS FOR DIVORCED WOMEN

SEC. 308. (a) Section 202(b) of the Social Security Act is amended to read as follows: "Wife's Insurance Benefits " (b)(1) The wife (as defined in section 216(b)) and every divorced wife (as defined in section 216(d)) of an individual entitled to old-age or disability insurance benefits, if such wife or such divorced wife— " (A) has filed application for wife's insurance benefits, " (B) has attained ag:e 62 or (in the case of a wife) has in her care (individually or jointly with such individual) at the time of filing such application a child entitled to a child's insurance benefit on the basis of the wages and self-employment income of such individual, "^C) in the case of a divorced wife, is not married, " (D) in the case of a divorced wife, was receiving at least onehalf of her support, as determined in accordance with regulations prescribed by the Secretary, from such individual, or was receiving substantial contributions from such individual (pursuant to a written agreement) or there was in effect a court order for substantial contributions to her support from such individual—

f°tTco'/i«^'

42 USC 416.

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Page:United States Statutes at Large Volume 79.djvu/416

 376

PUBLIC LAW 89-97~JULY 30, 1965

[79 STAT.

"(i) if he had a period of disability which did not end before the month in which he became entitled to old-age or disability insurance benefits, at the beginning of such period or at the time he became entitled to such benefits, or "(ii) if he did not have such a period of disability, at the time he became entitled to old-age insurance benefits, and "(E) is not entitled to old-age or disability insurance benefits, or is entitled to old-age or disability insurance benefits based on a primary insurance amount which is less than one-half of the primary insurance amount of such individual, shall (subject to subsection (s)) be entitled to a wife's insurance benefit for each month, beginning with the first month in which she becomes so entitled to such insurance benefits and ending with the month preceding the first month in which any of the following occurs— "(F) she dies, "^G) such individual dies, "(H) in the case of a wife, they are divorced and either (i) she has not attained age 62, or (ii) she has attained age 62 but has not been married to such individual for a period of 20 years immediately before the date the divorce became effective, "(I) in the case of a divorced wife, she marries a person other than such individual, " (J) in the case of a wife who has not attained age 62, no child of such individual is entitled to a child's insurance benefit, " (K) she becomes entitled to an old-age or disability insurance benefit based on a primary insurance amount which is equal to or exceeds one-half of the primary insurance amount of such individual, or "(L) such individual is not entitled to disability insurance benefits and is not entitled to old-age insurance benefits. "(2) Except as provided in subsection (q), such wife's insurance benefit for each month shall be equal to one-half of the primary insurance amount of her husband (or, in the case of a divorced wife, her former husband) for such month. "(3) In the case of any divorced wife who marries— "(A) an individual entitled to benefits under subsection (f) or (h) of this section, or "(B) an individual who has attained the age of 18 and is entitled to benefits under subsection (d), such divorced wife's entitlement to benefits under this subsection shall, notwithstanding the provisions of paragraph (1) (but subject to subsection (s)), not be terminated by reason of such marriage; except that, in the case of such a marriage to an individual entitled to benefits under subsection (d), the preceding provisions of this paragraph shall not apply with respect to oienefits for months after the last month for which such individual is entitled to such benefits under subsection (d) unless he ceases to be so entitled by reason of his death." 42 USC 402. (b)(1) Paragraphs (1) and (2) of section 202(e) of such Act are amended to read as follows: "(1) The widow (as defined in section 216(c)) and every surviving Post, p. 377. divorced wife (as defined in section 216(d)) of an individual who died a fully insured individual, if such widow or such surviving divorced wife— "(A) is not married, "(B) has attained age 62,

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text:
Page:United States Statutes at Large Volume 79.djvu/417

 79 STAT. ]

PUBLIC LAW 89-97-JULY 30, 1965

377

" (0)(i) has filed application for widow's insurance benefits, or was entitled, after attainment of age 62, to wife's insurance benefits, on the basis of the wages and self-employment income of such individual, for the month preceding the month in which he died, or "(ii) was entitled, on the basis of such wages and self-employment income, to mother's insurance benefits for the month preceding the month in which she attained age 62, "(D) in the case of a surviving divorced wife who was not entitled to wife's insurance benefits on the basis of the wages and self-employment iilcome of such individual for the month preceding the month in which he died, was receiving at least one-half of her support, as determined in accordance with regulations prescribed by the Secretary, from such individual, or was receiving substantial contributions from such individual (pursuant to a written agreement) or there was in effect a court order for substantial contributions to her support from such individual— "(i) at the time of his aeath (or, if such individual had a period of disability which did not end prior to the month in which he died, at the time such period began or at the time of his death), or "(ii) at the time he became entitled to old-age insurance benefite or disability insurance benefits (or, if such individual had a period of disability which did not end before the month in which he became entitled to such benefits, at the time such eriod began or at the time he became entitled to such benets),and "(E) is not entitled to old-age insurance benefits or is entitled to old-age insurance benefits each of which is less than 821/^ percent of the primary insurance amount of such deceased individual, shall be entitled to a widow's insurance benefit for each month, beginning with the first month in which she becomes so entitled to such insurance benefits and ending with the month preceding the first month in which any of the following occurs: she remarries, dies, or becomes entitled to an old-age insurance benefit equal to or exceeding 82i/^ percent of the primary insurance amount of such deceased individual. "(2) Such widow's insurance benefit for each month shall be equal to 8214 percent of the primary insurance amount of such deceased individual." (2) Paragraph (3) of section 202(e) of such Act is repealed. 42 USC 402. (3) Section 202(e) of such Act is amended by redesignating paragraph (4) as paragraph (3) and such paragraph is further amended by striking out "widow" and inserting in lieu thereof "widow or surviving divorced wife" and by striking out "widow's" and inserting in lieu thereof "widow's or surviving divorced wife's". (c) Section 216(d) of such Act is amended to read as follows: H ^^^ 4f6^^'

g

"Divorced Wives; Divorce "(d)(1) The term 'divorced wife' means a woman divorced from an individual, but only if she had been married to such individual for a period of 20 years immediately before the date the divorce became effective. "(2) The term 'surviving divorced wife' means a woman divorced from an individual who has died, but only if she had been married to the individual for a period of 20 years immediately before the date the divorce became effective. 49-850 0-66—27

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Page:United States Statutes at Large Volume 79.djvu/418

 378

64 Stat. 483. 42 USC 402. 72 Stat. 10 solo 3 2. 64 Stat. 510; 72 Stat. 10 27. 42 USC 416. Ante, p. 373. 42 USC 402.

Ante, p. 363.

PUBLIC LAW 89-97-JULY 30, 1965

{79 STAT.

" (3) The term 'surviving divorc;ed mother' means a woman divorced from an individual who has died, but only if (A) she is the mother of his son or daughter, (B^ she legally adopted his son or daughter while she was married to nim and while such son or daughter was under the age of 18, (C) he legally adopted her son or daughter while she was married to him and while such son or daughter was under the age of 18, or (D) she was married to him at the time both of them legiQly adopted a child under the age of 18. " (4) The terms 'divorce' and 'divorced' refer to a divorce a vinculo matrimonii." (d)(1) Section 202(c)(1) of such Act is amended by striking out "divorced a vinculo matrunonii," and inserting in lieu thereof "divorced,". (2)(A) Subsections (d)(6)(A), (f)(4)(A), and (h)(4)(A) of section 202 of such Act are each amended by inserting " (b)," before "(e),". (B) Subsections (b) and (c) of section 216 of such Act are each amended by striking out " (e) or" and inserting in lieu thereof " (b), (e), or". (3) Subparagraph (A) of section 202(g)(1) of such Act is amended by striking out "has not remarried" and inserting in lieu thereof "is not married". (4) Subparagraph (F) of section 202(g)(1) of such Act is amended to read as follows: "(F) in the case of a surviving divorced mother— "(i) at the time of such individual's death (or, if such individual had a period of disability which did not end before the month in which he died, at the time such period began or at the time of such death)— " (I) she was receiving at least one-half of her support, as determined in accordance with regulations prescribed by the Secretary, from such individual, or " (II) she was receiving substantial contributions from such individual (pursuant to a written agreement), or " ( III) there was a court order for substential contributions to her support from such individual, "(ii) the child referred to in subparagraph (E) is her son, daughter, or legally adopted child, and "(iii) the benefits referred to in such subparagraph are payable on the basis of such individual's wages and selfemployment income,". (5) Section 202(g) of such Act is further amended by striking out "former wife divorced" each place it appears and inserting in lieu thereof "surviving divorced mother". (6) Section 203(a) of such Act (as amended by section 301(c) of this Act) is amended b j striking out the period at the end of the first sentence and inserting m lieu thereof ", or" and by adding the following new paragraph: "(3) when any of such individuals is entitled to monthly benefits as a divorced wife under section 202(b) or as a surviving divorced wife under section 202(e) for any month, the benefit to which she is entitled on the basis of the wages and selfemployment income of such insured individual for such month shall oe determined without regard to this subsection, and the benefits of all other individuals who are entitled for such month to monthly benefits under section 202 on the wages and self-

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Page:United States Statutes at Large Volume 79.djvu/419

 79

STAT.

]

PUBLIC LAW 89-97-JULY 30, 1965

employment income of such insured individual shall be determined as if no such divorced wife or surviving divorced wife were entitled to benefits for such month." (7) Section 203(c) (4^ of such Act is amended by striking out "former wife divorced" and inserting in lieu thereof "surviving divorced mother". (8) Section 203(d)(1) of such Act is amended by striking out "wife," and inserting in lieu thereof "wife, divorced wife,". (9) The second sentence of section 205 (b^ of such Act is amended by striking out "wife, widow, former wife divorced," and inserting in lieu thereof "wife, divorced wife, widow, surviving divorced wife, surviving divorced mother,". (10) Section 205(c)(1)(C) of such Act is amended by striking out "former wife divorced," and inserting in lieu thereof "surviving divorced wife, surviving divorced mother,". (11) Section 222(b)(3) of such Act is amended by inserting "divorced wife," after "wife,". (12) Paragraph (3) of section 202(g) of such Act is repealed. (13) Section 202(g) of such Act is amended by redesignating paragraph (4) as paragraph (3). (e) The amendments made by this section shall be applicable with respect to monthly insurance benefits under title II of the Social Security Act beginning with the second month following the month in which this Act is enacted; but, in the case of an individual who was not entitled to a monthly insurance benefit under section 202 of such Act for the first month following the month in which this Act is enacted, only on the basis of an application filed in or after the month ill which this Act is enacted.

'

42 USC 403.

42 USC 405.

« u s e 422. ^ 42^^jsc 402.

^^ "^^ '*°^-

TRANSITIONAL INSURED STATUS

SEC. 309. (a) Title II of the Social Security Act is further amended by adding at the end thereof (after the new section 226 added by section 101 of this Act) the following new section: "*"'"' P- ^^°^'TRANSITIONAL INSURED STATUS

227. (a) In the case of any individual who attains the age of 72 before 1969 but who does not meet the requirements of section 214(a), the 6 (quarters of coverage referred to in so much of H upc iu.' aragraph (1) of section 214(a) as follows clause (C) shall, instead, e 3 Quarters of coverage for purposes of determining entitlement of such individual to benefits under section 202(a), and of his wife ^'^ ^^^ '*°^* to benefits under section 202(b), but, in the case of such wife, only ^"*®' P- 375. if she attains the age of 72 before 1969 and only with respect to wife's insurance benefits under section 202(b) for and after the month in which she attains such age. For each month before the month in which any such individual meets the requirements oi section 214(a), the amount of his old-age insurance benefit shall, notwithstanding the provisions of section 2C^(a), be $35 and the amount of the wife's insurance benefit of his wife shall, notwithstanding the provisions of section 202(b), be $17.50. "(b) In the case of any individual who has died, who does not meet the requirements of section 214(a), and whose widow attains age 72 before 1969, the 6 quarters of coverage referred to in paragraph (3) of section 214(a) and in so much of paragraph (1) thereof as follows clause (C) shall, for purposes of determining her entitle"SECL

P

379

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text:
Page:United States Statutes at Large Volume 79.djvu/420

 380 ^^Ante, pp. 376, 42 USC 402.

f,f4^<^r^' 42 USC 402.

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

meiit to wldow's insurance benefits under section 202(e), instead be— "(1) 3 quarters of coverage if such widow attains the age of 72 in or before 1966, " (2) 4 quarters of coverage if such widow attains the age of 72 in 1967, or "(3) 5 quarters of coverage if such widow attains the age of 72 in 1968. The amount of her widow's insurance benefit for each month shall, notwithstanding the provisions of section 202(e) (and section 202

(m)),be$35.

"(c) In the case of any individual who becjomes, or upon filing application therefor would become, entitled to benefits under section 202(a) by reason of the application of subsection (a) of this section, who dies, and whose w i d ^ attains the age of 72 before 1969, such deceased individual shall be deemed to meet the requirements of subSection (b) of this section for purposes of determining entitlement of such widow to widow's insurance benefits under section 202(e)." (b) The amendment made by subsection (a) shall apply in the case of monthly benefits under title II of the Social Security Act for and after the second month following the month in which this Act is enacted on the basis of applications filed in or after the month in which this Act is enacted. INCREASE IN AMOUNT AN INDIVIDUAL IS PERMITTED TO EARN WITHOUT SUFFERING FULL DEDUCTIONS FROM BENEFITS

42 USC 403.

SEC. 310. (a)(1) Paragraphs (1), (3), and (4)(B) of subsection (f) of section 203 of the Social Security Act are each amended by striking out "$100" wherever it appears therein and inserting in lieu thereof "$125". (2) The first sentence of paragraph (3) of such subsection (f) is amended by striking out " ^ 0 0 " each place it appears therein and inserting in lieu thereof "$1,200". (3) Paragraph (1)(A) of subsection (h) of section 203 of such Act IS amended by striking out "$100" and inserting in lieu thereof "$125". (b) The amendments made by subsection (a) shall apply with • respect to taxable years ending after December 31, 1965. COVERAGE FOR D0C1X>RS OF MEDICINE

42 USC 411.

Post, p. 381. 68 Stat. 1053 42 USC 410.

SEC. 3 U. (a)(1) Section 211(c)(5) of the Social Security Act is amended to read as follows: "(5) The performance of service by an individual in the exercise of his profession as a Christian Science practitioner." (2) Section 211(c) of such Act is further amended by striking out the last two sentences and inserting in lieu thereof the following: "The provisions of paragraph (4) or (5) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual during the period for which a certificate filed by jjjuj under section 1402(e) of the Internal Revenue Code of 1954 is in effect." (3) Section 210(a)(6)(C) (iv) of such Act is amended by inserting before the semicolon at the end thereof the following: ", other than as a medical or dental intern or a medical or dental resident in training".

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PUBLIC LAW 89-97-JULY 30, 1965

381

(4) Section 210(a) (13) of such Act is amended by striking out all Jt^H^^Q^^' that follows the first semicolon. 42 USC 4io. (b)(1) Section 1402(c)(5) of the Internal Revenue Code of 1954 ^o Stat. M^I. (relating to definition of trade or business) is amended to read as follows: "(5) the performance of service by an individual in the exercise of his profession as a Christian Science practitioner." (2) Section 1402(c) of such Code is further amended by striking ^^ ^*^** ^''^^• out the last.two sentences and inserting in lieu thereof the following: "The provisions of paragraph (4) or (5) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual during the period for which a certificate filed by him under subsection (e) is in effect." (3)(A) Section 1402(e)(1) of such Code (relating to filing of waiver certificate by ministers, members of religious orders, and Christian Science practitioners) is amended by striking out "extended to service" and all that follows and inserting in lieu thereof "extended to service described in subsection (c)(4) or (c)(5) performed by him." (B) Clause (A) of section 1402(e)(2) of such Code (relating to time for filing waiver certificate) is amended to read as follows: "(A) the due date of the return (including any extension thereof) for his second taxable year ending after 1954 for which he has net earnings from self-employment (computed without regard to subsections (c)(4) and (c)(5)) of $400 or more, any part of which was derived from the performance of service described in subsection (c) (4) or (c)(5); or". (4) Section 3121(b)(6)(C) (iv) of such Code (relating to defi- ^s st^a^ 1092. nition of employment) is amended by inserting before the semicolon ^'^^* at the end thereof the following: ", other than as a medical or dental intern or a medical or dental resident in training". (5) Section 3121(b) (13) of such Code is amended by striking out ^^^ttH-gf^^' all that follows the first semicolon. (c) The amendments made by paragraphs (1) and (2) of subsection (a), and by paragraphs (1), (2), and (3) of subsection (b), shall apply only with respect to taxable years ending on or after December 31, 1965, The amendments made by paragraphs (3) and (4) of subsection (a), and by paragraphs (4) and (5) of subsection (b), shall apply only with respect to services performed after 1965. GROSS INCOME OF FARMERS

SEC. 312. (a) The second sentence following paragraph (8) in section 211(a) of the Social Security Act is amended by striking out ^2 USC 411. "$1,800" each place it appears and inserting in lieu thereof "$2,400", and by striking out "$1,200" each place it appears and inserting in lieu thereof "$1,600". (b) The second sentence following paragraph (9) in section 1402(a) of the Internal Revenue Code of 1954 (relating to net earnings from self-employment) is amended by striking out "$1,800" each place it appears and inserting in lieu thereof "$2,400", and by striking out "$1,200" each place it appears and inserting in lieu thereof '^$1,600". (c) The amendments made by this section shall apply only with respect to taxable years beginning after December 31, 1965.

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Page:United States Statutes at Large Volume 79.djvu/422

 382

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

<X)VERAGE OF TIPS

yg64 Stat.^492; 42 USC 409.

Post, p. 384.

26ljs? 45\"'

26 USC 3102.

jgEo. 313, (ft)(1) SectioH 209 of the Social Security Act is amended by striking out "or" at the end of subsection (j), by striking out the period at the end of subsection (k) and inserting in lieu thereof "; or", and by adding immediately after subsection (k) the following new subsection: " Q)(1) Tips paid in any medium other than cash; "(2) Cash tips received by an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." (2) Section 209 of such Act is-further amended by adding at the end thereof the following new paragraph: "For purposes of this title, tips received by an employee in the course of his employment snail be considered remuneration for employment. Such remuneratic«i shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) of the Internal Revenue Code of 1954 or (if no statement including such tips is so furnished) at the time received." (b) Section 451 of the Internal Revenue Code of 1954 (relating to general rule for taxable year of inclusion) is amended by adding at the end thereof the following new subsection: "(c) S P ^ I A L RULE FOR EMPLOYEE T I P S. — For purposes of subsection (a), tips included in a written statement furnished an employer by an employee pursuant to section 6053(a) shall be deemed to be received at the time the written statement including such tips is furnished to the employer." (c)(1) Section 3102 of such Code (relating to deduction of tax from wages) is amended by adding at the end thereof the following new subsection: "(c)

Post, p. 39 5.

SPECIAL RULE FOR T I P S. —

"(1) I n the case of tips which constitute wages, subsection (a) shall be applicable only to such tips as are included in a written statement furnished to the employer pursuant to section 6053(a), and only to the extent that collection can be made by the employer, at or after the time such statement is so furnished and before the close of the 10th day following the calendar month (or, if paragraph (3) applies, the 30th day following the quarter) in which the tips were deemed paid, by deducting the amount of the tax from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) as are under control of the employer. «(2) If the tax imposed by section 3101, with respect to tips which are included in written statements furnished in any month to the employer pursuant to section 6053(a), exceeds the wages of the employee (excluding tips) from which the employer is required to collect the tax under paragraph (1), the employee may furnish to the employer on or before the 10th day of the following month (or, if paragraph (3) applies, on or before the 30th day of the following quarter) an amount of money equal to the amount of the excess. "(3) The Secretary or his delegate may, under regulations prescribed by him, authorize employers— " (A) to estimate the amount of tips that will be reported by the employee pursuant to section 6053(a) in any quarter of the calendar year,

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STAT.

]

PUBLIC LAW 89-97-JULY 30, 1965

"(B) to detennine the amount to be deducted trpon each payment of wages (exclusive of tips) during such quarter as if the tips so estimated constituted the actual tips so reported, and "(G) to deduct upon any payment of wages (other than tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) to such employee during such quarter (and within 30 days thereafter) such amount as may be necessary to adjust the amount actually deducted upon such wages of the employee during the quarter to the amount required to be deducted in respect of tips included in written statements furnished to the employer during the quarter. "(4) If the tax imposed by section 3101 with respect to tips which constitute wages exceeds the portion of such tax which can be collected by the employer from the wages of the employee pursuant to paragraph (1) or paragraph (3), such excess shall be paid by the employee." (2) The second sentence of section 3102(a) of such Code is amended by inserting before the period at the end thereof the following: "; and an emploj^er who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which paragraph (12)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax with respect to such tips from any wages of the employee (exclusive of tips) under his control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20". (3) Section 3121(a) of such Code (relating to definition of wages under the Federal Insurance Contributions Actj is amended by striking out "or" at the end of paragraph (10), by striking out the period at the end of paragraph (11) and inserting in lieu thereof "; or ", and by adding after paragraph (11) the following new paragraph: "(12)(A) tips paid in any medium other than cash; "(B) cash tips received by an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." (4) Section 3121 of such Code is further amended by adding at the end thereof the following new subsection: "(q) TIPS iNCiiliOED FOR EMPLOYEE TAXES.—For purposes of this chapter other than for purposes of the taxes imposed by section 3111, tips received by an employee in the course of his employment shall be considered remuneration for employment. Such remuneration shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including such tips is so furnished) at the time received." (d)(1) Section 3401 of such Code (relating to definitions for purposes of collecting income tax at source on wages) is amended by adding^at the end thereof the following new subsection: "(f) TIPS.—For purposes of subsection (a), the term 'wages' includes tips received by an employee in the course of his employment. Such wages shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including sudi tips is so furnished) at the time received."

383

^°^^' ^' '^^^•

68^l4t!*io93.^^' 26 USC 3102. Post, p. 384. 26 USC 3121.

^°^^' P- 396.

26^scr34(u^* "Wages."

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 384 69 Stat. 616; 7 5 Stat. 625; 78 Stat. 36, 52. 26 USC 3401.

68A Stat. 457; 69 Stat. 605. 26 USC 3402.

Intra.

Ante, p. 382. Ante, p. 383. 68A Stat. 747. 26 USC 6 0 5 1.

26 USC 3121, 3401.

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

(2) Section 3401(a) of such Code (relating to definition of wa^es for purposes of collecting income tax at source) is amended by striking out ", or" at the end of paragraph (6) and inserting in lieuihereof or'" by striking out the period at the end of paragraph (12) and inserting in lieu thereof "; or", by striking out the period at the end of paragraph (15) and inserting in lieu thereof "; or", and)by adding after paragraph (15) the followmgnew paragraph: "(16)(A) as tips in any medium other than cash; " (B) as cash tips to an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." (3) Subsection (a) of section 3402 of such Code (relating to income tax collected at source) is amended by striking out "subsection (j) " and inserting in lieu thereof "subsections {]) and (k) ". (4) Section 3402(h)(3) of such Code (relating to income tax withholding on basis of average wages) is amended by inserting after "quarter" the first place it appears the following: "(and, in the case of tips referred to in subsection (k), within 30 days thereafter)". (5) Section 3402 of such Code is further amended by adding at the end thereof the following new subsection: " (k) TIPS.—In the case of tips which constitute wages, subsection (a) shall be applicable only to such tips as are included in a written statement furnished to the employer pursuant to section 6053(a), and only to the extent that the tax can be deducted and withheld by the employer, at or after the time such statement is so furnished and before the close of the calendar year in which such statement is furnished, from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer for the purpose of such deduction and withholding) as are under the contr(M of the employer; and an employer who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which paragraph (16)(B) of section 3401(a) is applicable may deduct and withhold the tax with respect to such tips from any wages of the employee (excluding tips) under his control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20. Such tax shall not at any time be deducted and withheld in an amount which exceeds the aggregate of such wages and funds (including funds turned over under section 3102(c)(2)) minus any tax required by section 3102(a) to be collected from such wages and funds." (e)(1) Section 6051(a) of such Code (relating to receipts for employees) is amended by adding at the end thereof the following new sentence: " I n the case of tips received by an employee in the course of his employment, the amounts required to be shown by paragraphs (3) and (5) shall include only such tips as are included in statements furnished to the employer pursuant to section 6053(a)." (2)(A) Subpart C of part III of subchapter A of chapter 61 of such Code (relating to information regarding wages paid employees) is amended by adding at the end thereof the following new section: " (^) REPORTS BY EMPLOYEES.—Every employee who, in the course of his employment by an employer, receives in any calendar month tips which are wages (as defined in section 3121(a) or section 3401(a)) shall report all such tips in one or more written statements furnished to his employer on or before the 10th day following such month. Such
 * SEC. 6053. REPORTING OF TIPS.

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PUBLIC LAW 89-97-JULY 30, 1965

statements shall be furnished by the employee under such regulations, at such other times before such lOth day, and in such form and manner, as may be prescribed by the Secretary or his delegate. "(b) STATEMENTS FURNISHED BY EMPLOYERS.—If the tax imposed by section 3101 with respect to tips reported by an employee pursuant to subsection (a) exceeds the tax which can be collected by the employer pursuant to section 3102, the employer shall furnish to the employee a written statement showing the amount of such excess. The statement required to be furnished pursuant to this subsection shall be furnished at such time, shall contain such other information, and shall be in such form as the Secretary or his delegate may by regulations prescribe. When required by such regulations, a duplicate of any such statement shall be filed with the Secretary or his delegate." (B) Section 6652(b) of such Code (relating to failure to file information returns) is amended by inserting after "income tax withheld)," the following: "and in the case of each failure to furnish a statement required by section 6053(b) (relating to statements furnished by employers with respect to tips),". (C) Section 6674 of such Code (relating to fraudulent statement or failure to furnish statement to employee] is amended by striking out "6051" each place it appears and inserting in lieu thereof "6051 or 6053(b)". ^ ^^ ^ (D) The table of sections for such subpart G is amended by adding at the end thereof the following: "Sec. 6053. Reporting of tips." (3) Section 6652 of such Code (relating to failure to file certain information returns) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: "(c) FAILURE To EEPORT T I P S. — I n the case of failure by an employee to report to his employer on the date and in the manner prescribed therefor any amount of tips required to be so reported by section 6053(a) which are wages (as defined in section 3121(a)), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be paid by the employee, in addition to the tax imposed by section 3101 with respect to the amount of tips which he so failed to report, an amount fequal to 50 percent of such tax." (f) The amendments made by this section shall apply only with respect to tips received by employees after 1965.

385

Post, p. 39 5. 26 USC 3102.

H l"^^^ ^^l ^"^'^* 68A Stat. 8 28. 26 USC 6674.

o^'^il^^^^nlV 26 USC 6051.

^6 USC*3m' ^°^'' P- ^^S.

I N C L U S I O N OP ALASKA AMONG STATES PERMITTED TO DIVIDE THEIR RETIREMENT SYSTEMS

SEC. 314. The first sentence of section 218(d)(6)(C) of the Social Security Act is amended by inserting "Alaska," before "California". \l ^*|^- ^^^g^^ADDITIONAL PERIOD FOR ELECTING COVERAGE UNDER DIVIDED RETIREMENT SYSTEM

SEC. 315. The first sentence of section 218(d)(6)(F) of the Social Security Act is amended by striking out "1963" and inserting in lieu,Jof*f*'ii°^^' thereof "1967". 42 USC fis.

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 386

PUBLIC LAW 89-97-JULY 30, 1965 EMPLOYEES OF NONPROFIT

72 Stat. 1044. 26 USC 3121.

68A Stat. 821. 26 USC 6651.

It use I m '*°^*-

^2 USC*4\o!^*

[79 STAT.

ORGANIZATIONS

SEC. 316. (a)(1) Section 3121(k)(1)(B) (iii) of the Internal Revenue Code of 1954 (relating to effective date of exemption of religious, charitable, and certain other organizations) is amended to read as follows: "(iii) the first day of any calendar quarter preceding the calendar quarter in which the certificate is filed, except that such date may not be earlier than the first day of the twentieth calendar quarter preceding the quarter in which such certificate is filed." (2) The amendment made by paragraph (1) shall applv in the case of any certificate filed under section 3121(k)(1)(A) oi such Code after the date of the enactment of this Act. (b) Section 3121(k)(1) of such Code (relating to waiver of exemption by religious, charita;ble, and certain other organizations) is further amended by adding at the end thereof the following new subparagraph: "(H) An organization which files a certificate under subparagraph (A) before 1966 may amend such certificate during 1965 or 1966 to make the certificate effective with the first day of any calendar quarter preceding the quarter for which such certificate originally became effective, except that such date may not be earlier than the first day of the twentieth calendar quarter preceding the quarter in which such certificate is so amended. If an organization amends its certifixjate pursuant to the preceding sentence, such amendment shall be effective with respect to the service of individuals who concurred in the filing of such certificate (initially or through the filing of a supplemental list) and who concur in the filing of such amendment. An amendment to a certificate filed pursuant to this subparagraph shall be filed with such official and in such form and manner as may be prescribed by regulations made under this chapter. If an amendment is filed pursuant to this subparagraph— "(i) for purposes of computing interest and for purposes of section 6651 (relating to addition to tax for failure to file tax return), the due date for the return and payment of the tax for any calendar quarter resulting from the filing of such an amendment shall be the last day of the calendar month following the calendar quarter in which the amendment is filed; and "(ii) the statutory period for the assessment of such tax shall not expire before the expiration of three years (c)(1) Section 105(b) of the Social Security Amendments of 1960 is amended to read as follows: "(b)(1) I f ^ "(A) an individual performed service in the employ of an organization with respect to which remuneration was paid before the first day of the calendar quarter in which the organization filed a waiver certificate pursuant to section 3121 (k)(1) of the Internal Revenue Code of 1954, and such service is excepted from employment under section 210(a) (8)(B) of the Social Security Act, "(B) such service would have constituted employment as defined In section 210 of such Act if the requirements of section 3121(k)(1) of such Code were satisfied,

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387

" (C) such organization paid, on or before the due date of the tax return for the calendar quarter before the calendar quarter in which the organization filed a certificate pursuant to section 3121(k)(l) of such Code, any amount, as taxi^s oe u*sc 3121** imposed by sections 3101 and 3111 of such Code, with respect Post, pp. 395, to such remuneration paid by the organization to the individ- 396. ual for such service, " (D) such individual, or a fiduciary acting for such individual or his estate, or his survivor (within the meaning of section 205(c)(1)(C) of such Act), requests that such AnL^'p.^fgf' remuneration be deemed to constitute remuneration for employment for purposes of title II of such Act, and "^^ "^^ '*°^' " (E) the request is made in such form and manner, and with such official, as may be prescribed by regulations made by the Secretary of Health, Education, and Welfare, then, subject to the conditions stated in paragraphs (2), (3), (4), and (5), the remuneration with respect to which the amount has been paid as taxes shall be deemed to constitute remuneration for employment for purposes of title II of such Act. "(2) Paragraph (1) shall not apply with respect to an individual unless the organization referred to in paragraph (1)(A), on or before the date on which the request described in paragraph (1) is made, has filed a certificate pursuant to section 3121(k)(1) of such Code. "(3) Paragraph (1) shall not apply with respect to an individual who is employed by the organization referred to in paragraph (2) on the date the certificate is filed. "(4) If credit or refund of any portion of the amount referred to in paragraph (1)(C) (other than a credit or refund which would be allowed if the service constituted employment for purposes of chapter 21 of such Code) has been obtained, paragraph (1) shall oe^uscTsiVi-' not apply with respect to the individual unless the amount credited 3126. or refunded (including any interest under section 6611 of such Code) ^SA Stat. 819. is repaid before January 1, 1968, or, if later, the first day of the ^^^^^ ^*^^third year after the year in which the organization filed a certificate pursuant to section 3121(k)(1) of such Code. "(5) Paragraph (1) shall not apply to any service performed for the organization in a period for which a certificate filed pursuant to section 3121(k)(1) of such Code is not in effect." (2) The amendment made by paragraph (1) shall take effect on the date of the enactment of this Act. The provisions of section 105(b) of the Social Security Amendments of 1960 which were in Itfj^n^t^; 26 USC 3121 effect before the date of the enactment of this Act shall be applicable note. with respect to any request filed under section 105(b)(1) of such Amendments before such date. Nothing in the preceding sentence shall prevent the filing of a request under section 105(b)(1) of such Amendments as amended by this Act. (d) I f... (1) an individual performed service with respect to which remuneration was paid before the date of enactment of this Act by an organization which, before such date, filed a waiver certificate pursuant to section 3121(k)(1) of the Internal Revenue Code, (2) such service is excluded from employment under title II of the Social Security Act but would not be excluded therefrom if the requirements 01 such section 3121(k)(1) had been met with respect to such service, (3) such service was performed during the period such certificate was in effect, and

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 388 26 u*^c 3 °2f*

26 USC 3 m note,

42 USC 401.

PUBLIC LAW 89-97-JULY 30, 1965

[79

STAT.

(4) such individual was listed pursuant to such section 3121 (k)(1) ^t any time during such period and before the date of enactment of this Act as an employee who concurred in the filing of such certificate or such individual filed a request for coverage pursuant to section 105(b) of the Social Security Amendments of 1960, as in effect prior to the enactment of this Act (but such listing or request was not effective with respect to the service described above), then, subject to the conditions stated in subparagraphs (B), (C), (D), and (E) of paragraph (1), and paragraph (4), of section 105(b) of the Social Security Amendments of 1960, as amended by this section, the remuneration of such individual which was paid with respect to such excluded service shall be deemed to constitute remuneration for employment for purposes of such title II; except that, for purposes of this subsection, in applying subparagraph (C) of paragraph (1) of such section 105(b) the date of enactment of this Act shall be considered to be the date on which the organization filed its certificate under section 3121(k)(1) and any reference, in paragraph (4) of such section, to such paragraph (1) shall be considered a reference to the preceding provisions of this subsection. COVERAGE OF TEMPORARY EMPLOYEES OF THE DISTRICT OF COLUMBIA

74 Stat. 9 36.

61 Stat. 727; 63 Stat. 972.

74 Stat. 938.

8^0. 317. (a) Section 210(a)(7) of the Social Security Act is amended^— (1^ by striking out "or" at the end of subparagraph (B), (2) by striking out the semicolon at the end of subparagraph (C) (ii) and inserting in lieu thereof ", or", and (3) by adding after subparagraph (C) the following new subparagraph: " (D) service performed in the employ of the District of Columbia or any instrumentality which is wholly owned thereby, if such service is not covered by a retirement system established by a law of the United States; except that the provisions of this subparagraph shall not be applicable to service performed— " (i) in a hospital or penal institution by a patient or inmate thereof; "(ii) by any individual as an employee included under section 2 of the Act of August 4, 1947 (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government; 5 U.S.C. 1058), otheT thau as a medical or dental intern or as a medical or dental resident in training; "(iii) by any individual as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency; or "(iv) by a member of a board, committee, or council of the District of Columbia, paid on a per diem, meeting, or other fee basis;". (b) Section 3121(b)(7) of the Internal Revenue Code of 1954 (relating to certain services not included in definition of employment) is amended— (1^ by striking out "or" at the end of subparagraph (A), (2) by striking out the semicolon at the end of subparagraph (B) and inserting in lieu thereof ", or", and (3) by adding after subparagraph (B) the following new subparagraph:

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 79 STAT. ]

PUBLIC LAW 89-97-JULY 30, 1965

389

"(C) service performed in the employ of the District of Columbia or any instrumentality which is wholly owned thereby, if such service is not covered by a retirement system established by a law of the United States; except that the provisions of this subparagraph shall not be applicable to service performed— "(i) in a hospital or penal institution by a patient or inmate thereof; "(ii) by any individual as an employee included under section 2 of the Act of August 4, 1947 (relating to certain interns, student nurses, and other student employ^ of hospitals of the District of Columbia Government; 5 U.S.C. 1052), other than as a medical or dental intern or as a medical ga^stat^ 97^2^^' or dental resident in training; "(iii) by any individual as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or other similar emergency; or "(iv) by a member of a board, committee, or council of the District of Columbia, paid on a per diem, meeting, or other fee basis;". (c)(1) Section 3125 of such Code (relating to returns in the case ^'^ ^*^*' ^^^• of governmental employees in Guam and American Samoa) is amended ^^ ^^^ ^^^^• by adding at the end thereof the following new subsection: "(c) DISTRICT OF COLUMBIA.—In the case of the taxes imposed by this chapter with respect to service performed in the employ of the District of Columbia or in the employ of any instrumentality which is wholly owned thereby, the return and payment of the taxes may be made by the Commissioners of the District of Columbia or by such agents as they may designate. The person making such return may, for convenience of administration, make payments of the tax imposed by section 3111 with respect to such service without regard to the ^°s<'?• 396. $6,600 limitation in section 3121(a)(1)." ^°«'' P- ^sa(2) The heading of such section 3125 is amended by striking out "AND AMERICAN SAMOA" and inserting in lieu thereof ", AMERICAN SAMOA, AND THE DISTRICT OF COLUMBIA". (3) The table of sections for subchapter C of chapter 21 of such Code (relating to general provisions for Federal Insurance Contributions Act) IS amended by striking out "Sec. 3125. Returns in the case of governmental employees in Guam and American Samoa."

and inserting in lieu thereof

"Sec. 3125. Returns in the case of governmental employees in Guam, American Samoa, and the District of Columbia."

(d) Section 6205(a) of such Code (relating to adjustment of tax) 7/^^^*940^^^' is amended by adding at the end thereof the following new paragraph: 26 USC 6205. "(4) DISTRICT OF COLUMBIA AS EMPLOYER.—For purposes of this subsection, in the case of remuneration received during any calendar year from the District of Columbia or any instrumentality which is wholly owned thereby, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3126 shall be deemed a separate employer." (e) Seotion 6413(a) of such Code (relating to adjustment of certain y/litfgVo^^^' employment taxes) is amended by adding at the end thereof the fol- 26 USC 64i3. lowing paragraph: "(4) DISTRICT OF COLUMBIA AS EMPLOYER.—For purposes of this subsection, in the case of remuneration received during any calendar year from the District of Columbia or any instrumentality

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390

'74 Stat. 939. 26 USC 3125. 68A Stat. 797. 26 USC 6413.

which is wholly owned thereby, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3125 shall be deemed a separate employer." (f)(1) Section 6413(c)(2) of such Code (relating to applicability of special refunds to certain employment taxes) is amended by adding at the end thereof the following new subparagraph: "(F)

Ante, p. 389.

[79 STAT.

GOVERNMENTAL EMPLOYEES IN THE DISTRICT OF CJOLUM-

BiA.—In the case of remuneration received from the District of Columbia or any instrumentality wholly owned thereby, during any calendar year, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3125(c) shall, for purposes of this subsection, be deemed a separate employer." (2) The heading of such section 6413(c)(2) is amended by striking out "AND AMERICAN SAMOA" and inserting in lieu thereof ", A3IERICAN SAMOA, A N D THE DISTRICT OF COLUMBIA".

42 USC 401; Ante, p. 291.

(g) The amendments made by this section shall apply with respect to service performed after the calendar (quarter in which this section is enacted and after the calendar quarter m which the Secretary of the Treasury receives a certificaition from the Commissioners of the District of Columbia expressing their desire to have the insurance system established by title II (and part A of title XVIII) of the Social Security Act extended to the oflSicers and employees coming under the provisions of such amendments. COVERAGE FOR CERTAIN ADDITIONAL HOSPITAL EMPLOYEES I N CALIFORNIA

74 Stat. 935. 42 USC 418 note.

P o s t, pp. 39 5, 396. 68A Stat. 415. 26 USC 31013126.

SEC. 318. Section 102(k) of the Social Security Amendments of 1960 is amended by inserting "(1)" immediately after "(k)", and by adding at the end thereof the following new paragraph: "(2) Such agreement, as modified pursuant to paragraph (1), may at the option of such State be further modified, at any time prior to the seventh month after the month in which this paragraph is enacted, so as to apply to services performed for any hospital affected by such earlier modification by any individual who after December 31, 1959, is or was employed by such State (or any political subdivision thereof) in any position described in paragraph (1). Such modification shall be effective with respect to (A) all services performed by such individual in any such position on or after January 1, 1962, and (B) all such services, performed before such date, with respect to which amounts equivalent to the sum of the taxes which would have been imposed by sections 3101 and 3111 of the Internal Revenue Code of 1954 if such services had constituted employment for purposes of chapter 21 of such Code at the time they were performed have, prior to the date of the enactment of this paragraph, been paid." TAX EXEMPTION FOR RELIGIOUS GROUPS OPPOSED TO INSURANCE

68A Stat. 353. 26 USC 1402.

P o s t, p. 391.

SEC. 319. (a) Subsection (c) of section 1402 of the Internal Revenue Code of 1954 is amended by striking out "or" at the end of paragraph (4), by striking out the period at the end of paragraph (5) and inserting in lieu thereof "; or", and by adding after paragraph (5) the following new paragraph: "(6) the performance of service by an individual during the period for which an exemption under subsection (h) is effective with respect to him."

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 79 STAT. ]

PUBLIC LAW 89-97-JULY 30, 1965

(b) Subsection (c) of section 211 of the Social Security Act is amended by striking out "or" at the end of paragraph (4), by striking out the period at the end of paragraph (5) and inserting in lieu thereof •'; or", and by adding after paragraph (5) the following new paragraph: eriod for which an exemption under section 1402(h) of the nternal Revenue Code of 1954 is effective with respect to him." (c) Section 1402 of the Internal Revenue Code of 1954 is further amended by adding at the end thereof the following new subsection:
 * '(6) The performance of service by an individual during the

f

"(h)

391 42 ulc 411.'

aelisc MO"'

MEMBERS or CERTAIN RELIGIOUS FAITHS.—

"(1) EXEMPTION.—Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act). Such exemption may be granted only if the application 42 USC ilo's. ^ contains or is accompanied by— ^'(A) such evidence of such individual's membership in, and adherence to the tenets or teachings of, the sect or division thereof as the Secretary or his delegate may require for purposes of determining such individual's compliance with the preceding sentence, and "(B) his waiver of all benefits and other payments under titles II and XVIII of the Social Security Act on the basis J,l^l^^g\^' of his wages and self-employment income as well as all such benefits and other payments to him on the basis of the wages and self-employment income of any other person, and only if the Secretary of Health, Education, and Welfare finds that— "(C) such sect or division thereof has the established tenets or teachings referred to in the preceding sentence, "(D) it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his judgment is reasonable in view of their general level of living, and "(E) such sect or division thereof has been in existence at all times since December 31, 1950. An exemption may not be granted to any individual if any benefit or other payment referred to in subparagraph (B) became payable (or, but for section 203 or 222(b) of the Social Security Act, ya^tarioa^a"' would have become payable) at or before the time of the filing of 42 USC 403, such waiver. 422. " ^2) TIME FOR FILING APPLICATION.—For purposes of this subsection, an application must be filed— " (A) In the case of an individual who has self-employment income (determined without regard to this subsection and subsection (c)(6)) for any taxable year ending before "*"'*' ^' ^^°* December 31, 1965, on or before April 15, 1966, and

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 392

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

" ( B ^ I n any other case, on or before the time prescribed for fihng the return (including any extension thereof) for the first taxable year ending on or after December 31, 1965, for which he has self-employment income (as so determined). "(3)

64 Stat. 518. 42 USC 405. 64 Stat. 482; 70 Stat. 838. 42 USC 402.

PERIOD FOR WHICH EXEMPTION EFFECTIVE.—An exemption

granted to any individual pursuant to this subsection shall apply with respect to all taxable years beginning after December 31, 1950, except that such exemption shall not apply for any taxable year— " (A) beginning (i) before the taxable year in which such individual first met the requirements of the first sentence of paragraph (1), or (ii) before the time as of which the Secretary of Health, Education, and Welfare finds that the sect or division thereof of which such individual is a member met the requirements of subparagraphs (C) and (D), or " (B) ending (i) after the time such individual ceases to meet the requirements of the first sentence of paragraph (1), or (ii) after the time as of which the Secretary of Health, Education, and Welfare finds that the sect or division thereof of which he is a member ceases to meet the requirements of subparagraph (C) or (D). "(4) APPLICATION BY FIDUCIARIES OR suRvivoRS.-In any case where an individual who has self-employment income dies before the expiration of the time prescribed by paragraph (2) for filing an application for exemption pursuant to this subsection, such an application may be filed with respect to such individual within such time by a fiduciary acting for such individual's estate or by such individual's survivor (within the meaning of section 205 (c)(1)(C) of the Social Security Act). " (d) Section 202 of the Social Security Act is amended by adding at the end thereof the following new subsection: "Waiver of Benefits

Ante, p. 391.

Ante, p. 291.

68A Stat. 353. 26 USC 14011403.

"(v) Notwithstanding any other provisions of this title, in the case of any individual who files a waiver pursuant to section 1402(h) of the Internal Revenue Code of 1954 and is granted a tax exemption thereunder, no benefits or other payments shall be payable under tbis title to him, no payments shall be made on his behalf under part A of title X y i l l,?tnd no benefits or other payments under this title shall be payable on the basis of his wages and self-employment income to any other person, after the filing of such waiver; except that, if thereafter such individual's tax exemption under such section 1402(h) ceases to be effective, such waiver shall cease to be applicable in the case of benefits and other payments under this title and part A of title X VIII to the eittent based on his self-employment income for and after the first taxable year for which such tax exemption ceases to be effective and on his wages for and after the calendar year (if any) which begins in or with the beginning of such taxable year." (e) The amendments made by this section shall apply with respect to taxable years beginning after December 31, 1950. For such purpose, chapter 2 of the Internal Revenue Code of 1954 shall be treated as applying to all taxable years beginning after such date. (f) If refund or credit of any overpayment resulting from the enactment of this section is prevented on the date of the enactment of this Act or at any time on or before April 15, 1966, by the operation of any law or rule of law, refund or credit of such overpayment may,

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393

nevertheless, be made or allowed if claim therefor is filed on or before April 15, 1966. No interest shall be allowed or paid on any overpayment resulting from the enactment of this section. INCREASE OF E A R N I N G S COUNTED FOR B E N E F I T A N D TAX PURPOSES

SEC. 320. (a)(1)(A) Section 209(a)(3) of the Social Security Act H Stat. mg. is amended by inserting "and prior to 1966" after "1958". (B) Section 209(a) of such Act is further amended by adding at the end thereof the following new paragraph: "(4) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $6,600 with respect to employment has been paid to an individual during any calendar year after 1965, is paid to such individual during such calendar year;". (2)(A) Section 211(b)(1)(C) of such Act is amended by inserting ^^ use 4i i. "and prior to 1966" after "1958", and by striking out "; or" and inserting in lieu thereof "; and". (B) Section 211(b)(1) of such Act is further amended by adding at the end thereof the following new subparagraph: " (D) For any taxable year ending after 1965, (i) $6,600, minus (ii) the amount of the wages paid to such individual during the taxable year; or". (3)(A) Section 213(a)(2) (ii) of such Act is amended by striking ^/stfrsi"^^' out "after 1958" and inserting in lieu thereof "after 1958 and before 42 USC 413. 1966, or $6,600 in the case of a calendar year after 1965". (B) Section 213(a)(2) (iii) of such Act is amended by striking out "after 1958" and inserting in lieu thereof "after 1958 and before 1966, or $6,600 in the case of a taxable year ending after 1965". (4) Section 215(e)(1) of such Act is amended by striking out "and '^^ ^^^ '^^^^ the excess over $4,800 in the case of any calendar year after 1958" and inserting in lieu thereof "the excess over $4,800 in the case of any calendar year after 1958 and before 1966, and the excess over $6,600 in the case of any calendar year after 1965". (b)(1)(A) Section 1402(b)(1)(C) of the Internal Revenue Code of 1954 (relating to definition of self-employment income) is amended 26 USC 1402. by inserting "and before 1966" after "1958", and by striking out "; or" and inserting in lieu thereof "; and". (B) Section 1402(b)(1) of such Code is further amended by adding at the end thereof the following new subparagraph: " (D) for any taxable year ending after 1965, (i) $6,600, minus (ii) the amount of the wages paid to such individual during the taxable year; or". (2) Section 3121(a)(1) of such Code (relating to definition of esA Stat. 417; wages) is amended by striking out "$4,800" each place it appears and ^\TvscVv2i inserting in lieu thereof "$6,600". (3) The second sentence of section 3122 of such Code (relating to 26 USC 3122. Federal service) is amended by striking out "$4,800" and inserting in lieu thereof "$6,600". (4) Section 3125 of such Code (relating to returns in the case of 74 stat, 939. overnmental employees in Guam and American Samoa) is amended y striking out "$4,800" where it appears in subsections (a) and (b) and inserting in lieu thereof "$6,600. (5) Section 6413(c)(1) of such Code (relating to special refunds U f}^X' }?^^-

f

m

t

,.

\

.

I T

\

C

i

of employment taxes) is amended— (A) by inserting "and prior to the calendar year 1966" after "the calendar year 1958"; 49-850 0-66—28

^f) U o C 6 4 1 3.

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26? l c eJu.'

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

(B) by inserting after "exceed $4,800," the following: "or (C) during any calendar year after the calendar year 1965, the wages received by him during such year exceed $6,600". (C) by inserting before the period at the end thereof the following: "and before 1966, or which exceeds the tax with respect to the first $6,600 of such wages received in such calendar year after 1965". (^) Section 6413(c)(2)(A) of such Code (relating to refunds of employment taxes in the case of Federal employees) is amended by striking out "or $4,800 for any calendar year after 1958" and inserting in lieu thereof "$4,800 for the calendar year 1959, 1960, 1961, 1962, 1963, 1964, or 1965, or $6,600 for any calendar year after 1965". (c) The amendments made by subsections (a)(1) and (a)(3)(A), and the amendments made by subsection (b) (except paragraph (1) thereof), shall a p ^ y only with respect to remuneration paid after December 1965. The amendments made by subsections (a)(2), (a)(3)(B), and (b)(1) shall apply only with respect to taxable years ending after 1965. The amendment made by subsection (a)(4) shall apply only with respect to calendar years after 1965. CHANGES I N TAX SCHEDULES

26 USC uoi

S^^: ^^^- (^) Section 1401 of the Internal Revenue Code of 1954 (relating to rate of tax under the Self-Employment Contributions xVct) is amended to read as follows: "SEC. 1401. RATE OF TAX. " (a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows: "(1) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1967, the tax shall be equal to 5.8 percent of the amount of the self-employment income for such taxable year; "(2) in the case of any taxable year beginning after December 31, 1966, and before January 1, 1969, the tax shall be equal to 5.9 percent of the amount of the self-employment income for such taxable year; "(3) m the case of any taxable year beginning after December 31, 1968, and before January 1, 19T3, the tax shall be equal to 6.6 percent of the amount of the self-employment income for such taxable year; and "(4) in the case of any taxable year beginning after December 31, 19Y2, the tax shall be equal to 7.0 percent of the amount of the self-employment income for such taxable year. " (b) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows: "(1) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1967, the tax shall be equal to 0.35 percent of the amount of the self-employment income for such taxable year; "(2) m the case of any taxable year beginning after December 31, 1966, and before January 1, 1973, the tax shall be equal to 0.50 percent of the amount of the self-employment income for such taxable year;

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"(3) in the case of any taxable year beginning after December 31, 1972, and before January 1, 1976, the tax shall be equal to 0.55 percent of the amount of the self-employment income for such taxable year; "(4) in the case of any taxable year beginning after December 31, 1975, and before January 1, 1980, the tax shall be equal to 0.60 percent of the amount of the self-employment income for such taxable year; "(5) in the case of any taxable year begiiming after December 31, 1979, and before January 1, 1987, the tax shall be equal to 0.70 percent of the amount of the self-employment income for such taxable year; and "(6) in the case of any taxable year beginning after December 31, 1986, the tax shall be equal to 0.80 percent of the amount of the self-employment income for such taxable year. For purposes of the tax imposed by this subsection, the exclusion of employee representatives by section 1402(c)(3) shall not apply." (b) Section 3101 of the Internal Revenue Code of 1954 (relating to rate of tax on employees under the Federal Insurance Contributions Act) is amended to read as follows: '*SEC. 3101. RATE OF TAX. " (a)

395

^ 8 A Stat. 3 55. 26 USC 1402. 75 Stat. 141.

^^ "^^ ^^°^-

OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—In addition

to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)) — "(1) with respect to wages received during the calendar year 1966, the rate shall be 3.85 percent; "(2) with respect to wages received during the calendar years 1967 and 1968, the rate shall be 3.9 percent; " (3) with respect to wages received during the calendar years 1969, 1970, 1971, and 1972, the rate shall be 4.4 percent; and "(4) with respect to wages received after December 31, 1972, the rate shall be 4.85 percent. " (b) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b), but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees)— "(1) with respect to wages received during the calendar year 1966, the rate shall be 0.35 percent; "(2) with respect to wages received during the calendar years 1967, 1968^ 1969, 1970, 1971, and 1972, the rate shall be 0.50 percent; "(3) with respect to wages received during the calendar years 1973, 1974j and 1975, the rate shall be 0.55 percent; "(4) with respect to wages received during the calendar years 1976, 1977j 1978, and 1979, the rate shall be 0.60 percent; "(5) with respect to wages received during the calendar years 1980, 1981, 1982, 1983, 1984, 1985, and 1986, the rate shall be 0.70 percent; and "(6) with respect to wages received after December 31, 1986, the rate shall be 0.80 percent."

26^scf*3i2i'

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 396 75 Stat. 141. 26 USC 3111.

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

(c) Section 3111 of the Internal Revenue Code of 1954 (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3 l l l. RATE OF TAX.

68A Stat. 417. 26 USC 3121.

" (a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—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 following percentages of the wages (as denned in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))— "(1) with respect to wages paid during the calendar year 1966, the rate shall be 3.85 percent; "(2) with respect to wages paid during the calendar years 1967 and 1968, the rate shall be 3.9 percent; "(3) with respect to wages paid during the calendar years 1969, 1970, 1971, and 1972, the rate shall be 4.4 percent; and "(4) with respect to wages paid after December 31, 1972, the rate shall be 4.85 percent. " (b) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) aid by him with respect to employment (as defined in section 3121(b), ut without regard to the provisions of paragraph (9) thereof insofar as dt relates to employees)— "(1) with respect to wages paid during the calendar year 1966, the rate shall be 0.35 percent; "(2) with respect to wages paid during the calendar years 1967, 1968, 1969, 1970, 1971, and 1972, the rate shall be 0.50 percent; "(3) with respect to wages paid during the calendar years 1973, 1974, and 1975, the rate shall be 0.55 percent; " (4) with respect to wages paid during the calendar years 1976, 1977, 1978, and 1979, the rate shall be 0.60 percent; "(5) with respect to wages paid during the calendar years 1980, 1981, 1982, 1983, 1984, 1985, and 1986, the rate shall be 0.70 percent; "(6) with respect to wages paid after December 31, 1986, the rate shall be 0.80 percent." (d) The amendments made by subsection (a) shall apply only with respect to taxable years beginning after December 31, 1965. The amendments made by subsections (b) and (c) shall apply only with respect to remuneration paid after December 31, 1965.

E

REIMBURSEMENT OF T R U S T - F U N D S FOR COST OF NONCONTRIBUTOR:Y M I L I TARY SERVICE CREDITS

42 USC 4\7.*

^^^- ^22- Section 217(g) of the Social Security Act is amended to read as follows: " (g)(1) I n September 1965, and in every fifth September thereafter up to and including September 2010, the Secretary shall determine the amount which, if paid in equal installments at the beginning of each fiscal year in the period beginning— " (A) with July 1, 1965, in the case of the first such determination, and " (B) with the July 1 following the determination in the case of all other such determinations,

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and ending with the close of June 30, 2015, would accumulate, with interest compounded annually, to an amount equal to the amount needed to place each of the Trust Funds and the Federal Hospital Insurance Trust F u n d in the same position at the close of June 30, 2015, as he estimates they would otherwise be in at the close of that date if section 210 of this Act as in effect prior to the Social Security Act Amendments of 1950, and this section, had not been enacted. The rate of interest to be used in determining such amount shall be the rate determined under section 201(d) for public-debt obligations which were or could have been issued for purchase by the Trust Funds in the June preceding the September in which such determination is made. " (2) There are authorized to be appropriated to the Trust Funds and the Federal Hospital Insurance Trust Fund— " (A) for the fiscal year ending June 30, 1966, an amount equal to the amount determined under paragraph (1) in September 1965, and " (B) for each fiscal year in the period beginning with July 1, 1966, and ending with the close of June 30, 2015, an amount equal to the annual installment for such fiscal year under the most recent determination under paragraph (1) which precedes such fiscal year. "(3) For the fiscal year ending June 30, 2016, there is authorized to be approOTiated to the Trust Funds and the Federal Hospital Insurance Trust F u n d such sums as the Secretary determines would place the Trust Funds and the Federal Hospital Insurance Trust F u n d in the same position in which they would have been at the close of June 30, 2015, if section 210 of this Act as in effect prior to the Social Security Act Amendments of 1950, and this section, had not been enacted. " (4) There are authorized to be appropriated to the Trust Funds and the Federal Hospital Insurance Trust Fund annually, as benefits under this title and part A of title X VIII are paid after June 30, 2015, such sums as the Secretary determines to be necessary to meet the additional costs, resulting from subsections (a), (b), and (e), of such benefits (including lump-sum death payments)."

397

Ante,

p. 299.

42 USC 64 Stat. 42 USC note. 70 Stat. 42 USC

410. 477. 301 819. 401.

Ante, p. 291,

ADOPTION OF C H I L D BY RETIRED WORKER

SEC. 323. (a) Section 202(d) of the Social Security Act is amended— (1) by striking out the last sentence in paragraph (1), and (2) by adding at the end thereof (after the new paragraphs added by section 306 of this Act) the following new paragraphs: " (9) I n the case of— " (A) an individual entitled to disability insurance benefits, or " (B) an individual entitled to old-age insurance benefits who was entitled to disability insurance benefits for the month preceding the first month for which he was entitled to old-age insurance benefits, a child of such individual adopted after such individual became entitled to such disability insurance benefits shall be deemed not to meet the rec[uirements of clause (i) or (iii) of paragraph (1)(C) unless such child— " (C) is the natural child or stepchild of such individual (including such a child who was legally adopted by such individual), or (D) was legally adopted by such individual before the end of the 24-month period beginning with the month after the month in which such individual most recently became entitled to disability insurance benefits, but only if—

72 Stat. 1022. 42 USC 402.

Ante,

p. 370.

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42 u*sc 4o°2^^' supta. '

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

" (i) proceedings for such adoption of the child had been instituted by such individual in or before the month in which be^an the period of disability of such individual which still exists at the time of such adoption (or, if such child was adopted by such individual after such individual attained age 65, the period of disability of such individual which existed in the month preceding the month in which he attained age 65), or "(ii) such adopted child was living with such individual in such month. '*(10J If an individual entitled to old-age insurance benefits (but not an individual included under paragraph (9)) adopts a child after such individual becomes entitled to such oenefits, such child shall be deemed not to meet the requirements of clause (i) of paragraph (1)(C) unless such child— " (A) is the natural child or stepchild of such individual (including such a child who was legally adopted by such individual), or " (B) was legally adopted by such individual before the end of the 24-month period beginning with the month after the month in which such individual became entitled to old-age insurance benefits, but only if— " (i) such child had been receiving at least one-half of his support from such individual for the year before such individual filed his application for old-age insurance benefits or, if such individual had a period of disability which continued until he had become entitled to old-age insurance benefits, for the year before such period of disability began, and " (ii) either p r o c e e d m ^ for such adoption of the child had been instituted by such mdividual in or before the month in which the individual filed his application for old-age insurance benefits or such adopted child was living with such individual in such month." (b) The amendments made by subsection (a) of this section shall be applicable to persons who file applications, or on whose behalf applications are filed, for benefits under section 202(d) of the Social Security Act on or after the date this section is enacted. The time limit provided by section 202(d) (10)(B) of such Act as amended by this section for legally adopting a child shall not apply in the case of any child who is adopted before the end of the 12-month period following the month in which this section is enacted. EXTEXSION OF PERIOD FOR FILING PROOF OF SUPPORT AND APPLICATIONS FOR LUMP-SUM DEATH PAYMENT

42 us^c 40^2 *

^^^- ^^'*- ^^) Section 202(p) of the Social S e c u r i t y Act is amended to read as follows:

"Extension of Period for Filing Proof of Support and Applications for Lump-Sum Death Payment " (p) I n any case in which there is a failure— "(1) to file proof of support under subparagraph (C) of subsection (c) Q), clause (i) or (ii) of subparagraph (D) of subsection (f)(1), or subparagraph (B) of subsection (h)(1). or

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399

tinder clause (B) of subsection (f)(1) of this section as in effect prior to the Social Security Act Amendments of 1950, within the 64 Stat. 42 USC period prescribed by such subparagraph or clause, or note "(2) to file, in the case of a death after 1946, application for a lump-sum death payment under subsection (i), or under subsection (g) of this section as in effect prior to the Social Security 42 USC Act Amendments of 1950, within the period prescribed by such subsection, any such proof or application, as the case may be, which is filed after the expiration of such period shall be deemed to have been filed within such period if it is shown to the satisfaction of the Secretary that there was good cause for failure to file such proof or application within such period. The determination of what constitutes good cause for purposes of this subsection shall be made in accordance with regulations of the Secretary." (b) The amendments made by this section shall be effective with respect to (1) applications for lump-sum death payments filed in or after the month m which this Act is enacted, and (2) monthly benefits based on applications filed in or after such month.

477. 301

40 2.

TREATMENT OF CERTAIN ROYALTIES FOR RETIREMENT TE8T PURPOSES

SEC. 325. (a)(1) Subparagraph (B) of section 203(f)(5) of the Social Security Act is amended to read as follows: " (B) For purposes of this section— " (i) an individual's net earnings from self-employment for any taxable year shall be determined as provided in section 211, except that paragraphs (1), (4), and (5) of section 211(c) shall not apply and the gross income shall be computed by excluding the amounts provided by subparagraph (D),and "(ii) an individual's net loss from self-employment for any taxable year is the excess of the deductions (plus his distributive share of loss described in section 702(a)(9) of the Internal Revenue Code of 1954) taken into account under clause (i) over the gross income (plus his distributive share of income so descrited) taken into account under clause (i)." (2) Such section 203(f)(5) is further amended by adding at the end thereof the following new subparagraph: "(D) In the case of an individual— "(i) who has attained the age of 65 on or before the last day of the taxable year, and "(ii) who shows to the satisfaction of the Secretary that he is receiving royalties attributable to a copyright or patent obtained before the taxable year in which he attained the age of 65 and that the property to which the copyright or patent relates was created by his own personal efforts, there shall be excluded from gross mcome any such royalties." (b) The amendments made by subsection (a) shall apply with respect to the computation of net earnings from self-employment and the net loss from self-employment for taxable years beginning after 1964.

42 USC 40^3^."

42 USC 411.

68A Stat. 239. 26 USC 702.

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 400

PUBLIC LAW 89-97-JULY 30, 1965 AMENDMENTS PRESERVING MENT AND OLD-AGE, SYSTEMS

^/o^^tat.^307; 45 USC 228a. 73 Stat. 27. 45 USC 228e.

[79 STAT.

RELATIONSHIP B E T W E E N RAILROAD R E T I R E SURVIVORS, AND DISABILITY INSURANCE

SEC. 326. (a) Section l (q) of the Railroad Retirement Act of 1937 IS amended by striking out "1961" and inserting in lieu thereof "1965". (b) Section 5(1)(9) of such Act is amended by striking out "after jggg -^ j ^ ^ ^ ^^^^ $4,800" aud inserting in lieu thereof the following: "after 1958 and before 1966 is less than $4,800. or for any calendar year after 1965 is less than $6,600"; and by striking out "and $4,800 for years after 1958", and inserting in lieu thereof the following: "$4,800 for years after 1958 and before 1966, and $6,600 for years after 1965". T E C H N I C A L AMENDMENT R E L A T I N G TO M E E T I N G S OF BOARD OF TRU8TEIES OP THE OLD-AGE, SURVIVORS, A N D DISABILITY INSURANCE TRUST FUNDS

II us^c 4o\^"

^^'9' ^^'^- S^9<^ion 201(c) of the Social Security Act is amended by striking out "six months" in the fourth sentence and inserting in lieu thereof "calendar year". APPLICATION S FOR B E N E F I T S

«ulc4oJ.'

Ante, p. 367.

42 USC 423*

S ^ - ^28. (a) Section 202(j)(2) of the Social Security Act is amended to read as follows: "(2) An application for any monthly benefits under this section filed before the first month in which the applicant satisfies the requirements for such benefits shall be deemed a valid application only if the applicant satisfies the requirements for such benefits before the Secretary makes a final decision on the application. If upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such requirements, the application shall be deemed to have been filed in such first month." (b) Section 216(i)(2) of such Act (as amended by subsection (b)(1) of section 303) is amended by inserting after subparagraph (E) the following: " (F) A n application for a disability determination filed before the first day on which the applicant satisfies the requirements for a period of disability under this subsection shall be deemed a valid application only if the applicant satisfies the requirements for a period of disability before the Secretary makes a final decision on the application. I f upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such requirements, the application shall be deemed to have been filed on such first day." (^) "^^^ ^ ^ sentence of section 223(b) of such Act is amended to read as follows: "An application for disability insurance benefits filed before the first month in which the applicant satisfies the requirements for such benefits (as prescribed in subsection (a)(1)) shall be deemed a valid application only if the applicant satisfies the requirements for such benefits before the Secretary makes a final decision on the application. If, upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such requirements, the application shall be deemed to have been filed in such first month."

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(d) The amendments made by this section shall apply with respect to (1) applications filed on or after the date of enactment of this Act^ (2) applications as to which the Secretary has not made a final decision before the date of enactment of this Act, and (3) if a civil action with respect to final decision by the Secretary has been commenced under section 205 (g^ of the Social Security Act before the date of enactment of this Act, applications as to which there has been no final judicial decision before the date of enactment of this Act.

401

^^ u^c 4 ^ ° '

UNDERPAYMENTS

SEC. 329. Section 204 of the Social Security Act is amended by ^^ use 404. adding at the end thereof the following new subsection: " (d) Notwithstanding the provisions of subsection (a), if an individual dies before any payment due him under this title is completed, and the total amount due at the time of his death does not exceed the amount of the monthly insurance benefit to which he was entitled for the month preceding the month in which he died, payment of the amount due shall be made— "(1) to the person, if any, determined by the Secretary to be the surviving spouse of the deceased individual and to have been living in the same;household with the deceased at the time of his death, or "(2) if there is no such person, or if such person dies before receiving payment, to the legal representative of the estate of such deceased individual." PAYMENTS TO TWO OR MORE INDIVIDUALS OF THE SAME FAMILY

SEC. 330. Section 205(n) of the Social Security Act is amended to read as follows: " (n) The Secretary may, in his discretion, certify to the Managing Trustee any two or more individuals of the same family for joint payment of the total benefits payable to such individuals for any month, and if one of such individuals dies before a check representing such joint payment is negotiated, payment of the amount of such unnegotiated check to the surviving individual or individuals may be authorized in accordance with regulations of the Secretary of the Treasury; except that appropriate adjustment or recovery shall be made under section 204(a) with respect to so much of the amount of such check as exceeds the amount to which such surviving individual or individuals are entitled under this title for such month." VALIDATING CERTIFICATES FILED BY MINISTERS

SEC. 331. (a) Section 1402(e) of the Internal Revenue Code of 1954 (relating to certificates to waive tax exemption on self-employ- ^^ Stat. loss. ment income m the case of ministers, members of religious orders, and Christian Science practitioners) is amended by striking out paragraphs (5) and (6) and inserting in lieu thereof the following: "(5)

OPTIONAL PROVISION FOR CERTAIN CERTIFICATES FILED ON OR

BEFORE APRIL 15, 1967.—Notwithstanding any other provision of this section, in any case where an individual has derived earnings in any taxable year ending after 1954 from the performance of service described in subsection (c)(4), or in subsection (c)(5) insofar as it related to the performance of service by an individual

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