Subsection (h) (2) of the bill also adds a new subsection (c) to section 222 of the Social Security Act. The new section provides that during a period of 12 months beginning with the first month in which the individual works pursuant to a program of rehabilitation under a State plan approved under the Vocational Rehabilitation Act the individual shall not, for the purpose of determining the existence or continuation of his disability under sections 216 (i) and 223, be regarded as being able to engage in substantial gainful activity solely by reason of such work.

Technical amendments relating to benefits based on disability

Section 103 (h) (3) of the bill would make a number of technical changes in the bill which would also have been made by the House bill. Section 101 (h) (3) (A) of the bill amends section 215 (g) of the Social Security Act to provide that benefits which would not be a multiple of $0.10 after reductions under section 224 of the act, as well as under section 203 (as at present), shall, in all cases, be raised to the next higher multiple of $0.10.

Subsection (h) (3) (B) of section 101 of the bill also revises section 216 (i) (1) of the Social Security Act to provide that the definition of disability for purposes of preserving insurance rights during periods of disability is not applicable for purposes of child's insurance benefits for a disabled child age 18 or over.

Section 101 (h) (3) (C) of the bill revises section 221 (a) of the Social Security Act (providing for determinations of disability by State agencies for purposes of the "disability freeze") to make it applicable to determinations of disability for child's benefits for disabled children age 18 or over.

Section 101 (h) (3) (D) of the bill amends section 221 (c) of the Social Security Act (providing for review of State agency determinations of disability under section 216 (i) (1) by the Secretary, for purposes of the "disability freeze") to make the section apply also to determinations of disability as defined in section 223.

Effective date

Section 101 (i) (1) of the bill provides that the amendments made by section 101 of the bill (except with respect to parent's benefits), will be effective with respect to monthly benefits payable for months after August 1956, but only, except as provided in paragraph (2), on the basis of applications for benefits filed after August 1956. An application filed by reason of paragraph (1) of the bill by an individual who was entitled to wife's, mother's, or child's benefits prior to, but not for, August 1956, and whose entitlement ended as a result of a child's attainment of age 18, would be treated as the application required under section 202 of the Social Security Act for entitlement to wife's, child's, or mother's benefits.

Section 101 (i) (2) makes an exception to the requirement of filing an application included in the provisions of section 101 (i) (1) to provide that where a child was entitled (without application of the provisions giving retroactive effect to applications filed after an individual first becomes eligible) to a child's insurance benefit for August 1956 no new application is required from the child, or from the mother who has him in her care and was also entitled to wife's or mother's benefits for that month, in order for them to receive benefits for months after August 1956.

Section 101 (i) (3) of the bill provides that the existence of a disabled dependent child age 18 or over shall preclude the payment of parent's benefits only if the worker (on whose earnings record the claim is based) dies after August 1956.

WIDOW'S INSURANCE BENEFITS AT AGE 62

Section 102 (a) of the bill amends section 202 (e) (1) of the act (relating to widow's insurance benefits) to strike out "retirement age" wherever it occurs and to insert in lieu thereof "age 62".

Subsection (b) of the section provides an effective date for the amendment made by subsection (a). In general, the amendment would be effective with respect to benefits for months after August 1956 on the basis of applications filed after that month. The amendment would apply automatically, however, in cases (1) where a widow who had attained age 62 before September 1956 was entitled to a wife's or a mother's insurance benefit for August 1956 and (2) where a widow who attains age 62 after August 1956 was entitled to a wife's or mother's insurance benefit for the month prior to the month in which she attained age 62.

EXTENSION OF COVERAGE

Foreign agricultural workers

Section 103 (a) of the bill amends section 210 (a) (1) (B) of the Social Security Act, which now excludes from coverage service performed by foreign agricultural workers (1) under contracts entered into in accordance with title V of the Agricultural Act of 1949, as amended, or (2) lawfully admitted to the United States from the Bahamas, Jamaica, and the other British West Indies on a temporary basis to perform agricultural labor. The amendment would make the exclusion applicable to service performed by foreign agricultural workers lawfully admitted from any foreign country or possession thereof on a temporary basis to perform agricultural labor. The amendment would be applicable in the case of service performed after 1956.

Share-farming arrangements

Section 103 (b) (1) of the bill, which is the same as section 104 (c) (1) of the House bill, amends section 210 (a) of the Social Security Act by inserting a new paragraph (16). The paragraph provides that service performed by an individual under an arrangement with the owner or tenant of land pursuant to which such individual undertakes to produce agricultural or horticultural commodities on such land shall be excepted from employment, provided that, pursuant to the arrangement, the agricultural or horticultural commodities produced by such individual, or the proceeds therefrom, are to be divided between him and the owner or tenant and the amount of such individual's share depends solely on the amount of the agricultural or horticultural commodities produced. This amendment would be effective with respect to service performed after 1954.

Section 103 (b) (2) of the bill, which is the same as section 104 (c) (2) of the House-approved bill, amends section 211 (a) (1) of the Social Security Act. Under this section of present law, rentals from real estate and from personal property leased with the real estate (including such rentals paid in crop shares) are excluded from "net

earnings from self-employment". Under the amendment, the present exclusion would not apply to income derived by an owner or tenant of land under an arrangement with another individual for the production by such other individual of agricultural or horticultural commodities on such land if such arrangement provides for material participation by the owner or tenant in the production of such agricultural or horticultural commodities and if there is participation by the owner or tenant in the production of any such commodity to a degree which is material with respect to that commodity.

Under this amendment it is contemplated that the owner or tenant of land which is used in connection with the production of agricultural or horticultural commodities must participate to a material degree in the management decisions or physical work relating to such production in order for the income derived therefrom to be classified as "net earnings from self-employment." The committee is of the opinion that in any case in which the owner or tenant establishes the fact that he periodically advises or consults with such other individual as to the production of the commodities and also establishes the fact that he periodically inspects the production activities on the land he will have presented strong evidence of the existence of the degree of participation contemplated by the amendment. If the owner or tenant also establishes the fact that he furnishes a substantial portion of the machinery, implements, and livestock used in the production of the commodities or that he furnishes, or advances, or assumes financial responsibility for, a substantial part of the expense (other than labor expense) involved in the production of the commodities, the committee feels that he will have established the existence of the degree of participation contemplated by the amendment.

This amendment would apply in the case of taxable years ending after 1955.

Section 103 (b) (3) of the bill, which is the same as section 104 (c) (3) of the House bill, amends section 211 (c) (2) of the Social Security Act so as to include within the term "trade or business" service described in the new paragraph (16), which is added to section 210 (a) of the act by section 103 (b) (1) of the bill.

This amendment gives statutory recognition to the conclusion being applied in administering present law that an individual who performs service under an arrangement of the type described in paragraph (16) of section 210 (a) of the act is not generally an employee with respect to the performance of such service, but is a self-employed person. It would be effective for taxable years ending after 1954.

Professional self-employed

Under section 211 (c) (5) of the Social Security Act, the performance of service by an individual (or a partnership) in the exercise of designated professions is excluded from the definition of the term "trade or business" for purposes of determining "net earnings from selfemployment" and "self-employment income." The professional service thus excluded under present law is service performed by any person as a physician, lawyer, dentist, osteopath, veterinarian, chiropractor, naturopath, optometrist, or Christian Science practitioner. Section 103 (c) of the bill would eliminate all of the exclusions, except service performed by a doctor of medicine, a doctor of osteopathy, or a Christian Science practitioner. The effect of the amendment is

that any income derived by an individual from the practice of the profession of lawyer, dentist, veterinarian, chiropractor, naturopath, or optometrist would be counted as "net earnings from self-employment" for old-age and survivors insurance purposes. This is the same as was done by section 104 (c) of the House bill, except for the continuation of the exclusion, by the committee bill, of osteopaths. The substitution of "doctor of medicine" and "doctor of osteopathy," for "physician" and "osteopath," respectively, is not intended to have any legal effect.

The new coverage effected by this amendment would apply in the case of taxable years ending after 1955.

Certain State and local employees

Section 103 (d) of the bill amends section 218 (d) (6) of the Social Security Act, which provides for treating a retirement system as two or more systems (each of which can hold a separate referendum and be covered as a separate group) in certain circumstances, to provide that the States of Georgia, Indiana, New York, North Dakota, Pennsylvania, Tennessee, Washington, Wisconsin, and the Territory of Hawaii, may, at their option, divide their retirement systems into 2 divisions or parts, 1 division consisting of the positions of members of the system who desire old-age and survivors insurance coverage and the other consisting of the positions of members who do not desire such coverage, and may treat each of the divisions as a separate retirement system. The positions of all persons who become members of the retirement system after old-age and survivors insurance coverage is extended to the division consisting of positions of employees who desire coverage must be included in that division. The positions of employees who are not personally eligible for membership in the system, even though the positions are under that system, must be included in the division consisting of positions of employees who do not desire old-age and survivors insurance coverage. These employees can be covered under present law without a referendum.

Section 103 (d) of the bill further amends section 218 (d) (6) of the Social Security Act to allow certain State employees who are in positions covered by a retirement system and who are compensated in whole or in part from Federal funds under title III of the Social Security Act (grants to States for unemployment compensation administration) to be treated as having a separate retirement system for purposes of old-age and survivors insurance coverage. The other employees of the State department in which the employees paid from title III funds are employed could also be deemed to be in a separate retirement system, or all of the employees of that department could be considered as having a separate system. This amendment applies to the States of Georgia, North Dakota, Pennsylvania, Washington, and the Territory of Hawaii.

Neither of these amendments was included in the House bill. Certain nonprofessional school district employees

Section 103 (e) of the bill provides that employees of school districts in the States of Nevada, New Mexico, Oklahoma, Pennsylvania, Texas, Washington, and the Territory of Hawaii who are not required to hold teachers' or administrators' certificates may be brought under old-age and survivors insurance coverage prior to July 1, 1957, without

regard to the provisions of section 218 (d) of the Social Security Act, which prescribes the conditions for covering employees in positions covered by State and local retirement systems (e. g., a favorable referendum among the members of the system). The new provision would not apply to employees already covered under old-age and survivors insurance. This amendment was not included in the House bill. Policemen and firemen in the States of North Carolina, South Carolina, and South Dakota

Section 103 (f) of the bill adds to section 218 of the Social Security Act a new subsection (p). The new subsection provides that the agreements with the States of North Carolina, South Carolina, and South Dakota may, notwithstanding the provisions of section 218 which preclude policemen and firemen who are under a State or local retirement system from being included under an agreement, be modified to include policemen and firemen in positions under a retirement system in effect on or after the date of enactment of the subsection, upon compliance with the requirements of subsection (d) (3) of section 218. This subsection prescribes the conditions, including a favorable referendum among the active members of the retirement system, for covering employees in positions under a State or local retirement system. Where a retirement system covers positions of policemen or firemen, or both and other positions, the State may, if it desires, treat the policemen or the firemen, or both, as the case may be, as having a separate retirement system.

This amendment was not included in the House bill.

Ministers

Section 103 (g) of the bill amends paragraph (7) of section 211 (a) of the Social Security Act to provide that a United States citizen performing ministerial services who elects to be covered as a self-employed person may include wages and salary from ministerial work, in computing his net income from self-employment for social-security purposes, if he is a minister in a foreign country and he has a congregation which is composed predominantly of citizens of the United States. Under present law wages and salary for ministerial work may be counted for social-security purposes only by a United States citizen employed by an American employer. This provision of the bill has the effect of making old-age and survivors insurance coverage available to additional ministers serving in foreign countries.

This amendment, which was not included in the House bill, would be effective in the case of the same taxable years to which the same amendment to the Internal Revenue Code of 1954 is applicable (made by sec. 201 (e) of the bill).

Effective dates

Section 103 (h) provides effective dates for the amendments made by section 103 of the bill. These have been described above in connection with discussion of the amendments.

Amendments with respect to agricultural labor

Section 104 (a) of the bill (for which there is no corresponding provision in the House bill) amends section 209 (h) of the Social Security Act by replacing paragraph (2) with a new paragraph. The existing provision excludes from the definition of wages, for purposes of old-age and survivors insurance, cash remuneration of less