COVERAGE OF CERTAIN SERVICE PERFORMED FOR NON-PROFIT ORGANIZATIONS AND FOR STATE AND LOCAL GOVERNMENTS.

SEC. 115. COVERAGE OF CERTAIN SERVICE PERFORMED FOR NON-PROFIT ORGANIZATIONS AND FOR STATE AND LOCAL GOVERNMENTS. (a) General Rule.—Subparagraph (B) of section 3309(a)(1) of the Internal Revenue Code of 1954 (relating to State law requirements) is amended to read as follows: “(B) service excluded from the term ‘employment’ solely by reason of paragraph (7) of section 3300(c); and”. (b) Exclusion of Certain Government Employees.— (1) Certain employees.—Paragraph (3) of section 3309(b) of such Code (relating to certain services to which section 3309 does not apply) is amended to read as follows: “(3) intilie employ of a governmental entity referred to in paragraph (7) of section 3300(c), if such service is performed by an individual in the exercise of his duties— “(A) as an elected official; “(B) as a member of a legislative body or a member of the judiciary, of a State or political subdivision thereof; “(C) as a member of the State National Guard or Air National Guard; “(D) as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or similar emergency ; or “(E) in a position which, under or pursuant to the State law, is designated as (i) a major nontenured policymaking or advisory position, or (ii) a policymaking or advisory position the performance of the duties of which ordinarily does not require more than 8 hours per week;”. (2) Inmates.— Paragraph (6) of such section 3309(b) is amended to read as follows: “(6) by an inmate of a custodial or penal institution.” (c) Technical Adjustments.— (1) Subparagraph (A) of section 3304(a)(6) of such Code is amended by striking out “except that” and all that follows down through “, and” at the end thereof and inserting in lieu thereof the following: “except that— “(i) with respect to services in an instructional research, or principal administrative capacity for an educational insti-90 STAT. 2671tution to which section 3309(a)(1) applies, compensation shall not be payable based on such services for any week commencing during the period between two successive academic years (or, when an agreement provides instead for a similar period between two regular but not successive terms, during such period) to any individual if such individual performs such services in the first of such academic years (or terms) and if there is a contract or reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic years or terms, and “(ii) with respect to services in any other capacity for an educational institution (other than an institution of higher education) to which section 3309(a)(1) applies, compensation payable on the basis of such services may be denied to any individual for any week which commences during a period between two successive academic years or terms if such individual performs such services in the first of such academic years or terms and there is a reasonable assurance that such individual will perform such services in the second of such academic years or terms, and”. (2) Subsection (d) of section 3309 of such Code is hereby repealed. (3) The section heading of section 3309 of such Code is amended to read as follows: ‘SEC. 3309. STATE LAW COVERAGE OF SERVICES PERFORMED FOR NONPROFIT ORGANIZATIONS OR GOVERNMENTAL ENTITIES.”. (4) The table of sections for chapter 23 of such Code is amended by striking out the item relating to section 3309 and inserting in lieu thereof the following: “Sec. 3309. State law coverage of services performed for nonprofit organizations or governmental entities.”. (5) Section 3304 of such Code is amended by adding at the end thereof the following new subsection: “(f) Definition of Institution of Higher Education.—For purposes of subsection (a) (6), the term ‘institution of higher education’ means an educational institution in any State which— (1) admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate; (2) is legally authorized within such State to provide a program of education beyond high school; (3) provides an educational program for it which awards a bachelor’s or higher degree, or provides a program which is acceptable for full credit toward such a degree, or offers a program of training to prepare students for gainful employment in a recognized occupation; and (4) is a public or other nonprofit institution.” (d) Effective Date.—The amendments made by this section shall apply with respect to certifications of States for 1978 and subsequent years, but only with respect to services performed after December 31, 1977.