Title VI, SEC. 6123. PREMIUM DISCOUNT FOR CERTAIN EMPLOYERS. (a) Employer Discount. (1) In general. Subject to section 6124(c) (relating to phase in for certain large corporate alliance employers) and section 6125 (relating to the employer collection shortfall add-on), the amount of the employer premium payment required under this part for a regional alliance employer for any year shall not exceed the limiting percentage (as defined in subsection (b)) of the employer's wages for that year. (2) Exclusion of governmental employers and certain corporate alliance employers. Paragraph (1) shall not apply to (A) the Federal Government, a State government, or a unit of local government, or a unit or instrumentality of such government, before 2002; and (B) a corporate alliance employer which is treated as a regional alliance employer under section 6131(a)(2). (b) Limiting Percentage Defined. In subsection (a) (1) Any employer. For an employer that is not a small employer (as defined in subsection (c)), the limiting percentage is 7.9 percent. (2) Small employers. For an employer that is a small employer and that has an average number of full-time equivalent employees and average annual wages per full-time equivalent employee (as determined under subsection (d)), the limiting percentage is the applicable percentage determined based on following table: Limiting Percentage Average number of full-time equivalent employees Employer's average annual wages per full-time equivalent employee are: $0 $12,000 $12,001 $15,000 $15,001 $18,000 $18,001 $21,000 $21,001 $24,000 Fewer than 25 03.5% 04.4% 05.3% 06.2% 07.1% 25 but fewer than 50 04.4% 05.3% 06.2% 07.1% 07.9% 50 but fewer than 75 05.3% 06.2% 07.1% 07.9% 07.9% (c) Small Employer Defined. (1) In general. In this section (A) the term ``small employer'' means an employer that does not employ, on average, more than 75 full-time equivalent employees; and (B) subject to subsection (b)(3)(C)(i), the average number of full-time equivalent employees shall be determined by averaging the number of full-time equivalent employees employed by the employer in each countable month during the year. (2) Countable month. In paragraph (1), the term ``countable month'' means, for an employer, a month in which the employer employs any qualifying employee. (3) Determinations. The number of full-time equivalent employees shall be determined using the rules under section 1902(b)(2). (d) Average Annual Wages Defined. (1) In general. In this section, the term ``average annual wages'' means, for an employer for a year (A) the total wages paid in the year to individuals who, at the time of payment of the wages, are qualifying employees of the employer; divided by (B) the number of full-time equivalent employees of the employer in the year. (2) Determination. The Board may establish rules relating to the computation of the average annual wages for employers. (e) Determinations. For purposes of this section, the number of employees and average wages shall be determined on an annual basis. (f) Treatment of Certain Self-employed Individuals. In the case of an individual who is a partner in a partnership, is a 2-percent shareholder in an S corporation (within the meaning of section 1372 of the Internal Revenue Code of 1986), or is any other individual who carries on a trade or business as a sole proprietorship, for purposes of this section (1) the individual is deemed to be an employee of the partnership, S corporation, or proprietorship, and (2) the individual's net earnings from self employment attributable to the partnership, S corporation, or sole proprietorship are deemed to be wages from the partnership, S corporation, or proprietorship. (g) Application to Employers. An employer that claims that this section applies (1) shall provide notice to the regional alliance involved of the claim at the time of making payments under this part; and (2) shall make available such information (and provide access to such information) as the regional alliance may require (in accordance with regulations of the Secretary of Labor) to audit the determination of (A) whether the employer is a small employer, and, if so, the average number of full-time equivalent employees and average annual wages of the employer; and (B) the total wages paid by the employer for qualifying employees.