42 USC 608. 42 USC 602. 76 STAT. 207. RESPONSIBILITY FOR PLACEMENT AND FOSTER CARE OF DEPENDENT SEC. 155. (a) Clause (2) of section 408 (a) of the Social Security Act is amended to read: "(2) whose placement and care are the responsibility of (A) the State or local agency administering the State plan approved under section 402, or (B) any other public agency with whom the State agency administering or supervising the administration of such State plan has made an agreement which is still in effect and which includes provision for assuring development of a plan, satisfactory to such State agency, for such child as provided in paragraph (f) (1) and such other provisions as may be necessary to assure accomplishment of the objectives of the State plan approved under section 402,". (b) The amendment made by subsection (a) shall apply only for the period beginning October 1, 1962, and ending with the close of Report to Presi- June 30, 1963. The Secretary shall submit to the President, for transdent and Congress. mission to the Congress prior to March 1, 1963, a full report of the administration of the provisions of the amendment made by subsection (a), including the experiences of each of the States in arranging for foster care under the provisions of their respective State plans which are in accord with such amendment, together with his recommendations as to continuation of, and modifications in, such amendment. 42 USC 306. Ante, pp. 189, 190. 42 USC 1206. 42 USC 1355. 42 USC 301-306, 601-608, 12011206, 1351-1355. 42 USC 302. Ante, p. 188. STARTING DATE FOR PUBLIC ASSISTANCE IN FORM OF MEDICAL OR REMEDIAL CARE SEC. 156. (a) (1) So much of section 6(a) of the Social Security Act as precedes paragraph (1) thereof is amended by inserting "(if provided in or after the third month before the month in which the recipient makes application for assistance)" before "medical care". (2) So much of section 6(b) of such Act as precedes paragraph (1) thereof is amended by inserting "(if provided in or after the third month before the month in which the recipient makes application for assistance)" after "care and services". (b) So much of section 406(b) of such Act as precedes clause (1) thereof is amended by inserting "(if provided in or after the third month before the month in which the recipient makes application for aid)" before "medical care". (c) Section 1006 of such Act is amended by inserting "(if provided in or after the third month before the month in which the recipient makes application for aid)" before "medical care". (d) Section 1405 of such Act is amended by inserting "(if provided in or after the third month before the month in which the recipient makes application for aid)" before "medical care". (e) The amendments made by this section shall apply in the case of applications made after September 30, 1962, under a State plan approved under title I, IV, X, or XIV of the Social Security Act. CERTAIN EARNED INCOME MAY BE DISREGARDED IN DETERMINING NEED FOR SEC. 157. Section 2(a) (10) (A) of the Social Security Act (as amended by section 106 (a) (1) of this Act) is further amended by inserting before the semicolon at the end thereof "; except that, in making such determination, of the first $50 per month of earned income the State agency may disregard, after December 31, 1962, not more than the first $10 thereof plus one-half of the remainder". 76 STAT. 208. TITLE II-GENERAL MEANING OF TERM "SECRETARY" SEC. 201. As used in this Act and in the provisions of the Social Security Act amended by this Act, the term "Secretary", unless the context otherwise requires, means the Secretary of Health, Education, and Welfare. EFFECTIVE DATES SEC. 202. (a) The amendments made by sections 102(b) (1), 103, 106, and 134 shall become effective July 1, 1963. (b) The amendments made by sections 102 (c), 123, and 132(d) shall be applicable in the case of fiscal years beginning after June 30, 1962. (c) The amendments made by sections 102 (b) (2) and (d), and 152 shall be applicable in the case of expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act or 42 USC 301developed as provided in part 3 of title V of such Act, as the case 306, 601-608, may be, made after June 30, 1962. 1201-1206, (d) The amendments made by sections 109 and 132 (other than 1351-1355. subsections (d) and (e) thereof) shall be applicable in the case of 42 USC 721. expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act, as the case may be, made after September 1962. 30, (e) The amendments made by sections 105 (other than subsection (c)) and 108 shall be applicable in the case of expenditures under a State plan approved under title IV of the Social Security Act, made during the period beginning October 1, 1962, and ending with the close of June 30, 1967. (f) The amendments made by section 101 (a) shall be applicable in the case of expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act, as the case may be, made after August 31, 1962. The amendments made by section 101 (b) shall be applicable in the case of expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act, as the case may be, made after June 30, 1963. Approved July 25, 1962. 87th Congress, H. R. 10 An Act To encourage the establishment of voluntary pension plans by self-employed individuals. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may Self-Employed be cited as the "Self-Employed Individuals Tax Retirement Act of Individuals Tax 1962". SEC. 2. QUALIFICATION OF PLANS. Retirement Act of 1962. Section 401 of the Internal Revenue Code of 1954 (relating to qualified pension, profit-sharing, and stock bonus plans) is amended(1) by adding at the end of paragraph (5) of subsection (a) the following new sentence: "For purposes of this paragraph and 684 Stat. 135. paragraph (10), the total compensation of an individual who is an employee within the meaning of subsection (c) (1) means such Post, p. 811. individual's earned income (as defined in subsection (c) (2)), and Post, p. 811. the basic or regular rate of compensation of such an individual shall be determined, under regulations prescribed by the Secretary or his delegate, with respect to that portion of his earned income which bears the same ratio to his earned income as the basic or regular compensation of the employees under the plan bears to the total compensation of such employees."; (2) by adding at the end of subsection (a) the following new paragraphs: "(7) A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that, upon its termination or upon complete discontinuance of con tributions under the plan, the rights of all employees to benefits 76 STAT. 809. accrued to the date of such termination or discontinuance, to the 76 STAT. 810. extent then funded, or the amounts credited to the employees' accounts are nonforfeitable. This paragraph shall not apply to benefits or contributions which, under provisions of the plan adopted pursuant to regulations prescribed by the Secretary or his delegate to preclude the discrimination prohibited by para graph (4), may not be used for designated employees in the event 68A Stat. 135. of early termination of the plan. "(8) A trust forming part of a pension plan shall not constitute a qualified trust under this section unless the plan provides that forfeitures must not be applied to increase the benefits any employee would otherwise receive under the plan. (9) In the case of a plan which provides contributions or benefits for employees some or all of whom are employees within the meaning of subsection (c) (1), a trust forming part of such plan shall not constitute a qualified trust under this section unless, under the plan, the entire interest of each employee "(A) either will be distributed to him not later than his taxable year in which he attains the age of 701⁄2 years, or, in the case of an employee other than an owner-employee (as defined in subsection (c) (3)), in which he retires, whichever Post, p. 812. is the later, or "(B) will be distributed, commencing not later than such taxable year, (i) in accordance with regulations prescribed by the Secretary or his delegate, over the life of such employee or over the lives of such employee and his spouse, or (ii) in accordance with such regulations, over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and his spouse. Post, p. 812. 68A Stat. 135. Post, p. 818. 68A Stat. 138. Post, p. 820. 76 STAT. 810. 76 STAT. 811. Post, p. 812. 26 USC 1402. 26 USC 911. 26 USC 3121. A trust shall not be disqualified under this paragraph by reason of distributions under a designation, prior to the date of the enactment of this paragraph, by any employee under the plan of which such trust is a part, of a method of distribution which does not meet the terms of the preceding sentence. "(10) In the case of a plan which provides contributions or benefits for employees some or all of whom are owner-employees (as defined in subsection (c) (3))— "(A) paragraph (3) and the first and second sentences of paragraph (5) shall not apply, but 66 (i) such plan shall not be considered discriminatory within the meaning of paragraph (4) merely because the contributions or benefits of or on behalf of employees under the plan bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of such employees, and "(ii) such plan shall not be considered discriminatory within the meaning of paragraph (4) solely because under the plan contributions described in subsection (e) (3) (A) which are in excess of the amounts which may be deducted under section 404 (determined without regard to section 404 (a) (10)) for the taxable year may be made on behalf of any owner-employee; and "(B) a trust forming a part of such plan shall constitute a qualified trust under this section only if the requirements in subsection (d) are also met."; and (3) by redesignating subsection (c) as subsection (h) and inserting after subsection (b) the following new subsections: "(c) DEFINITIONS AND RULES RELATING TO SELF-EMPLOYED INDIVIDUALS AND OWNER-EMPLOYEES.-For purposes of this section "(1) EMPLOYEE. The term 'employee' includes, for any taxable year, an individual who has earned income (as defined in paragraph (2)) for the taxable year. To the extent provided in regulations prescribed by the Secretary or his delegate, such term also includes, for any taxable year— "(A) an individual who would be an employee within the meaning of the preceding sentence but for the fact that the trade or business carried on by such individual did not have net profits for the taxable year, and "(B) an individual who has been an employee within the meaning of the preceding sentence for any prior taxable year. "(2) EARNED INCOME.— "(A) IN GENERAL. -The term 'earned income' means the net earnings from self-employment (as defined in section 1402 (a)) to the extent that such net earnings constitute earned income (as defined in section 911 (b) but determined with the application of subparagraph (B)), but such net earnings shall be determined (i) without regard to paragraphs (4) and (5) of section 1402 (c), "(ii) in the case of any individual who is treated as an employee under sections 3121 (d) (3)(A), (C), or (D), without regard to paragraph (2) of section 1402 (c), and "(iii) without regard to items which are not included in gross income for purposes of this chapter, and the deductions properly allocable to or chargeable against such items. For purposes of this subparagraph, sections 911(b) and 1402, as in effect for a taxable year ending on December 31, 1962, and subparagraph (B), as in effect for a taxable year "(i) so much of his share of the net profits of such The preceding sentences shall not be construed to reduce the "(3) OWNER-EMPLOYEE.-The term 'owner-employee' means an employee who "(A) owns the entire interest in an unincorporated trade or business, or "(B) in the case of a partnership, is a partner who owns more than 10 percent of either the capital interest or the profits interest in such partnership. To the extent provided in regulations prescribed by the Secretary or his delegate, such term also means an individual who has been an owner-employee within the meaning of the preceding sentence. "(4) EMPLOYER.-An individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (1). "(5) CONTRIBUTIONS ON BEHALF OF OWNER-EMPLOYEES.-The term 'contribution on behalf of an owner-employee' includes, except as the context otherwise requires, a contribution under a plan "(A) by the employer for an owner-employee, and "(d) ADDITIONAL REQUIREMENTS FOR QUALIFICATION OF TRUSTS AND PLANS BENEFITING OWNER-EMPLOYEES.-A trust forming part of a pension or profit-sharing plan which provides contributions or benefits for employees some or all of whom are owner-employees shall constitute a qualified trust under this section only if, in addition to meeting the requirements of subsection (a), the following requirements of this 68A Stat. 134. subsection are met by the trust and by the plan of which such trust is a part: |