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 State political subdivision from being treated as having terminated the employment relationship with the subdivision due to the subdivision's abolition if, as a result of such abolition (or consolidation), the employee becomes a State employee with the same or substantially the same position.…