(d) Section 3221 of the Railroad Retirement Tax Act is amended (1) by striking out "64 percent" and inserting in lieu therof "64 percent"; (2) by striking out "after December 31, 1954" wherever it appears and inserting in lieu thereof "after June 30, 1959"; (3) by striking out "$350" wherever it appears and inserting in lieu thereof "$400"; (4) by striking out "after 1954" and inserting in lieu thereof "after June 1959."

SEC. 202. The Internal Revenue Code of 1954 is amended by adding the following new chapter after chapter 22:

"CHAPTER 22(a)-RAILROAD SICKNESS BENEFIT TAX ACT

"Subchapter A. Tax on employees.
"Subchapter B. General provisions.

"Subchapter A-Tax on Employees

"Sec. 3251. Rate of tax.

"Sec. 3252. Deduction of tax from compensation.

"SEC. 3251. RATE OF TAX

"In addition to other taxes, there is hereby imposed on the income of every employee a tax equal to 12 per cent of so much of the compensation paid to such employee after June 30, 1959, for services rendered by him after such date as is not in excess of $350 for any calendar month.

"SEC. 3252. DEDUCTION OF TAX FROM COMPENSATION

"(a) REQUIREMENT.-The tax imposed by section 3251 shall be collected by the employer of the taxpayer by deducting the amount of the tax from the compensation of the employee as and when paid. If an employee is paid compensation after June 30, 1959, by more than one employer for services rendered during any calendar month after June 30, 1959, and the aggregate of such compensation is in excess of $350, the tax to be deducted by each employer from the compensation paid by him to the employee with respect to such month shall be that proportion of the tax with respect to such compensation paid by all such employers which the compensation paid by him after June 30, 1959, to the employee for services rendered during such month bears to the total compensation paid by all such employers after June 30, 1959, to such employee for services rendered during such month.

"(b) INDEMNIFICATION OF EMPLOYER.-Every employer required under subsection (a) to deduct the tax shall be made liable for the payment of such tax and shall not be liable to any person for the amount of any such payment.

"Subchapter B-General Provisions

"SEC. 3272. For purposes of this chapter the provisions of subchapter D of chapter 22, other than section 3233, shall be applicable, except that the term 'employee' shall not include an employee of a local lodge or division of a railway labor organization, and the term 'employer' shall not include such local lodge or division.

"SHORT TITLE

"SEC. 3282. This chapter may be cited as the Railroad Sickness Benefit Tax Act."

TECHNICAL AMENDMENTS

SEC. 203. Sections 3231 (a), (b), (c), (d), (e), (f), and (g) of the Internal Revenue Code of 1954 are each amended by inserting "and chapter 22(a)" after "purposes of this chapter";

Section 323 2of the Internal Revenue Code of 1954 is amended by inserting "and chapter 22 (a)" after "provisions of this chapter";

Section 3502 of such Code is amended by inserting "and by section 3251 of chapter 22 (a)" after "chapter 22";

Section 3503 of such Code is amended by inserting "or 22(a)" after "22" Section 6305 of such Code is amended by inserting "3251," after "3221,' Sections 6413(a) and 6413(b) of such Code are amended by inserting "3251," after "3221,".

SEC. 204. The amendments made by sections 201 and 202 shall apply only with respect to compensation paid after June 30, 1959, for services rendered after such date.

PART III-AMENDMENTS TO THE RAILROAD UNEMPLOYMENT

INSURANCE ACT

DEFINITIONS OF BASE YEAR AND BENEFIT YEAR

SEC. 301. Section 1 (m) of the Railroad Unemployment Insurance Act is amended to read as follows:

"(m) The term 'benefit year' with respect to any individual means the period of three hundred and sixty-five consecutive days beginning with the first day of the first registration period after June 30, 1959, with respect to which the individual first files a valid claim for benefits, and thereafter the period of three hundred and sixty-five days beginning with the first day of the first registration period with respect to which the individual next files a valid claim for benefits after the termination of his last preceding benefit year. Any claim for benefits made in accordance with section 5(a) shall be deemed to be a 'valid claim' for the purposes of this subsection if the individual is with respect to his base period a ‘qualified employee' as defined in section 3 with respect to his base year."

Section 1(n) of such Act is amended to read as follows:

"(n) The term 'base year' means the twelve completed calendar months immediately preceding the first day of the individual's benefit year."

DEFINITION OF QUALIFIED EMPLOYEE

SEC. 302. Section 3 of the Railroad Unemployment Insurance Act is amended to read as follows:

"SEC. 3. An individual shall be a 'qualified employee' if the Board finds that his compensation with respect to his base year will have been not less than an amount equal to the product of eighty-seven and his daily wage computed pursuant to section 2(a), and that during his base year more than five calendar months will have been months of service used in computing his years of service for purposes of the Railroad Retirement Act of 1937, and more than one of such months of service shall have been in the last half of such base year. "No individual who, since earning substantial compensation has received one hundred and thirty daily unemployment benefits, or exhausted his unemployment benefit rights, shall be a 'qualified employee' with respect to further unemployment benefits until he has again earned substantial compensation, and no individual who, since earning substantial compensation has received one hundred and thirty daily sickness benefits or exhausted his sickness benefit rights, shall be a qualified employee with respect to further sickness benefits until he has again earned substantial compensation. As used in the preceding sentence, 'substantial compensation' means compensation in an amount not less than the product of twenty and the amount of the individual's last daily benefit."

WAITING PERIOD

SEC. 303. Clauses (i) and (ii) of section 2 (a) of the Railroad Unemployment Insurance Act are each amended by striking out "seven" and inserting "nine" in lieu thereof, and by inserting after the phrase "the same benefit year," the following: "if in such registration period or in the fourteen days immediately prior thereto he had not less than seven days of unemployment".

BENEFIT COMPUTATION AND LIMITATIONS

SEC. 304. Section 2 (a) of the Railroad Unemployment Insurance Act is amended by striking out the second sentence thereof, including the schedule, and inserting in lieu thereof the following: "The daily benefit rate of any qualified employee shall be an amount equal to 60 per centum of the daily rate of compensation after withholding taxes, for the employee's last employment in which he engaged for an employer in the base year, but not to exceed $8.50 and if such daily benefit rate so computed is less than $8.50 and is not an even multiple of 10 cents it shall be increased to the next highest multiple of 10 cents. For purposes of the preceding sentence, an employee's daily rate of compensation

after withholding taxes shall be, as determined by the Board, such employee's daily rate after reduction by the amount equal to the sum of—

"(1) the amount equal to the same percentage of such daily pay rate as shall be imposed by sections 3201 and 3251 of the Internal Revenue Code on compensation at the time of such last employment, and

"(2) the amount equal to one-fifth the amount which shall be required to be withheld at the time of such last employment by section 3402 (c) of such Code on a weekly pay period basis, on wages paid in a weekly pay period in an amount equal to the product of five and such daily rate."

DISQUALIFYING CONDITIONS

SEC. 305. Section 4 (a-1) (ii) of the Railroad Unemployment Insurance Act is amended by adding after "Social Security Act, or" the following: "except on days he is involuntarily unemployed due to lack of work, he meets the qualifying work and the age or disability requirements for full annuity payments, pensions, or benefits under one or both of such Acts and upon applying therefor could receive them, and any day in any period with respect to which the Board finds that he is receiving or will have received". Such section is further amended by striking out the colon preceding the words "Provided further" and striking out the remainder of this section after the colon and preceding the semicolon at the end thereof.

Sections 4 (a−2) (i) and 4 (a−2) (ii) are each amended by striking out "thirty" and by adding before the semicolon at the end thereof: "and ending with the fourth calendar week with respect to each of which the Board finds he shall have earned compensation of not less than $25."

Section 4 (a-2) (iii) of such Act is amended by striking out ", and the Board finds that such strike was commenced in violation of the provisions of the Railway Labor Act or in violation of the established rules and practices of a bona fide labor organization of which he was a member".

Section (a-2) (iv) of such Act is renumbered section 4 (a-2) (vi) and after section 4 (a-2) (iii) the following is inserted:

"(iv) any of the days beginning with the day with respect to which the Board finds that he was discharged or suspended for misconduct connected with his work and ending with the fourth calendar week with respect to each of which the Board finds he shall have earned compensation of not less than $25.

"(v) any of the days which the Board finds is in a maternity period of the employee."

After section 4 (a−2) of such Act the following is added:

"(a-3) There shall not be considered a day of sickness with respect to any employee

"(i) any day which is a Sunday or which the Board finds is generally observed as a holiday in the locality in which he registered for such day, unless such day was immediately preceded by a day of unemployment or sickness and immediately followed by a day of unemployment or sickness or was the last day in a registration period and was immediately preceded by a day of unemployment or sickness: Provided, That if two or more consecutive days are a Sunday and one or more holidays, then with respect to any employee neither shall be considered as days of sickness unless they were immediately preceded by a day of unemployment or sickness and immediately followed by a day of unemployment or sickness, or the last of such days was the last day of a registration period and such days were immediately preceded by a day of unemployment or sickness.

"(ii) any day which is disregarded as a day of unemployment of the employee as determined by the Board pursuant to sections 4 (a−2) (i) through (vi).

"(iii) any day which is in a maternity period unless the Board finds that sickness on such day is unrelated to the normal consequences of pregnancy or childbirth.

"(iv) any of the days which the Board finds to have occurred more than ninety days after the last day with respect to which the individual will have earned compensation, excluding from such ninety days any period beginning before the expiration thereof with respect to which the Board finds he was unemployed due to a stoppage of work described in section 4 (a-1) (iii) and excluding any registration period which begins, or any continuous registra

tion periods the first of which begins before the expiration of such ninety days. For purposes of the preceding sentence a 'registration period' shall be deemed continuous with the preceding registration period if established within ten days after the last day of such preceding period."

DEFINITION OF DAY OF SICKNESS

SEC. 306. Section 1(k) (2) of the Railroad Unemployment Insurance Act is amended by inserting "but would otherwise be available for work" after the phrase "he is not able to work."

DISCONTINUING MATERNITY BENEFITS

SEC. 307. Section 1(k) of the Railroad Unemployment Insurance Act is amended by deleting from the first sentence thereof "or which is included in a maternity period."

Section 1(1) (1) of such Act is amended by deleting ", and the term 'statement of maternity sickness' means a statement with respect to a maternity period of a female employee, in each case."

Section 2(a) of such Act is amended by striking out ", and (iii) for each day of sickness in a maternity period" in the first sentence thereof, and by striking out the fourth, fifth, and sixth sentences thereof.

Section (2) (c) of such Act is amended by deleting, both before the proviso and following the proviso, the identical phrases", other than days of sickness in a maternity period," and by deleting "; and the total amount of benefits which may be paid to an employee for days of sickness in a maternity period shall in no case exceed the employee's compensation in the base year on the basis of which the employee was determined to be qualified for benefits in such maternity period."

Section 12(i) of such Act is amended by deleting from the seventh sentence thereof "and, in the case of maternity sickness, the expected date of birth and the actual date of birth of the child."

Section 12 (n) of such Act is amended by deleting "or maternity" in each place such words occur and by deleting from the fourth sentence "or as to the expected date of birth of a female employee's child, or the birth of such child."

AMENDMENTS ESTABLISHING THE RAILROAD SICKNESS INSURANCE ACCOUNT

SEC. 308. The heading of section 10 of the Railroad Unemployment Insurance Act is amended by adding "and Railroad Sickness Insurance Account."

Section 10 (a) of such Act, effective July 1, 1959, is redesignated "Sec. 10 (a−1) and is amended (1) by inserting after "total compensation" in clause (i) "paid with respect to calendar months through June 1959, and is in excess of 0.7 per cent of such compensation thereafter"; (2) by inserting “unemployment" before "benefits" in clause (v); (3) by inserting with respect to unemployment benefits" before "pursuant" in clause (vii); (4) by inserting "unemployment before" "benefits", "all" before "refunds" and "and reimbursable transfers" after "refunds" in the last sentence thereof; and (5) by adding another section as follows:

"SEC. 10 (a-2) (1). The Secretary of the Treasury shall maintain in the unemployment trust fund established pursuant to section 904 of the Social Security Act an account to be known as the railroad sickness insurance account. This account shall consist of (i) such part of contributions collected pursuant to section 8 of this Act as is equal to 0.5 per centum of the total compensation with respect to months after June 1959 on which such contributions are based; (ii) all taxes collected pursuant to chapter 22 (a) of the Internal Revenue Code of 1954 together with all interest and penalties collected pursuant to such provisions; (iii) all amounts creditable with respect to sickness pursuant to section 2(f), section 12(g) or section 12 (o) of this Act; and (iv) all additional amounts appropriated to the railroad sickness insurance account in accordance with any provision of this Act or with any provision of law now or hereafter adopted. Notwithstanding any other provision of law, all moneys credited to this account shall be mingled and undivided, and are hereby permanently appropriated to the Board to be continuously available to the Board without further appropriation, for the payment of sickness benefits or reimbursements under this Act, and no part thereof shall lapse at any time, or be carried to the surplus fund or any other fund: Provided, That the Secretary of the Treasury is directed to pay from the account into the Treasury the amount estimated by him, with respect to col

lections under chapter 22 (a) of the Internal Revenue Code of 1954, as amended, as taxes which are subject to refund under section 6413 of such Code.

"(2) There is hereby appropriated to the railroad sickness insurance account, for the fiscal year ending June 30, 1960, and for each fiscal year thereafter, out of any moneys in the Treasury not otherwise appropriated, an amount equal to 100 per centum of the taxes collected under chapter 22 (a) of the Internal Revenue Code of 1954, as amended.

"(3) The Board shall, from time to time, certify to the Secretary of the Treasury amounts to be transferred between the railroad unemployment insurance account and the railroad sickness insurance account, and the Secretary shall transfer the amounts so certified. The Board shall certify for such transfer to the railroad sickness insurance account, from time to time, amounts equal to the part of contributions referred to in clause (i) of the second sentence of section 10 (a-2) (1), and shall likewise certify for transfer such additional amounts as may be needed to pay sickness benefits: Provided, That such additional amounts shall be on a reimbursable basis, and shall be repaid the railroad unemployment insurance account with interest determined equitable by the Board, by subsequent transfers from the railroad sickness insurance account certified by the Board when in its judgment funds of the railroad sickness insurance account make such transfer feasible."

Section 10(b) of such Act, effective July 1, 1959, is amended (1) by inserting before "account" in the first sentence thereof "railroad unemployment insurance account and the railroad sickness insurance," (2) by inserting in the first sentence thereof a comma after "benefits", by striking the word "and", and by adding after "refunds" the words "and reimbursable transfers", and (3) by inserting "appropriate" before "account" in the third sentence thereof.

Section 10 (c) of such Act, effective July 1, 1959, is amended by inserting "railroad unemployment insurance account and of the railroad sickness insurance" before "account".

Section 2(f) of such Act, effective July 1, 1959, is amended—

(1) by inserting after "special fund" in the next to the last sentence thereof "other than amounts payable hereunder into the railroad sickness insurance account,"

(2) by inserting in such sentence before "account" "railroad unemployment insurance" and

(3) by inserting in such sentence after "account," "and such other amounts shall be credited to the railroad sickness insurance account".

AMENDMENTS TO THE RAILROAD UNEMPLOYMENT ADMINISTRATION FUND PROVISIONS

SEC. 309. Effective July 1, 1959, the heading to section 11 of the Railroad Unemployment Insurance Act is amended to read: "Railroad Unemployment Insurance and Sickness Insurance Administration Fund" and subsection (a) of such section is amended by inserting "and sickness insurance" after "unemployment insurance" in each place where it appears.

Effective July 1, 1959, section 1 (q) of the Railroad Unemployment Insurance Act is amended by inserting "and sickness insurance" after "unemployment insurance".

MISCELLANEOUS PROVISIONS

SEC. 310. Effective July 1, 1959, section 1 (p) of the Railroad Unemployment Insurance Act is amended by adding after the word "means" the following: ", except when used in the phrase 'railroad sickness insurance account," ".

SEC. 311. Effective July 1, 1959, section 8(a) of the Railroad Unemployment Insurance Act is amended by adding at the end thereof "In determining such balance there shall be deemed to be a part thereof (1) all unrepaid balances of amounts transferred from the railroad unemployment insurance account to the railroad sickness insurance account, except that in no event shall the amount so deemed to be a part of such balance exceed the actual amount in the railroad sickness insurance account on September 30 of such year, and (2) that proportion of the balance to the credit of the railroad sickness insurance account as of September 30 of such year as consists of amounts contributed by employers under this section and placed in such account under section 10 (a−2) (1) of this Act."

SEC. 312. Effective July 1, 1959, section 8(f) of the Railroad Unemployment Insurance Act is amended (1) by inserting after the word "Act" the words