To amend the Internal Revenue Code of 1986 to clarify that employees of a political subdivision of a State shall not lose their exemption from the hospital insurance tax by reason of the consolidation of the subdivision with the State.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to prohibit an employee of a political subdivision of a State from being treated as having terminated such employee's employment relationship with such subdivision by reason of the abolition of such subdivision if, as a result of such abolition (or other consolidation), such employee becomes an employee of the State and continues to hold the same or substantially the same position with the State.…