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tion or treatment, physical evaluation, or retiring board proceedings for the purpose of determining their eligibility to receive disability retirement pay benefits under the provisions of the act of April 3, 1939. The Comptroller General's ruling of March 3, 1948, B-72707, held in effect that orders recalling an officer not on active duty to report to a hospital for further observation, treatment, and appearance before an Army retiring board do not operate to place such an officer on active duty within the meaning of pertinent laws and regulations cited in such decision so as to entitle such officer to active-duty pay and allowances. Administration of the act of April 3, 1939 (53 Stat. 557), providing retirement benefits to nonn-Regular Army officers for physical disability requires a determination of the permanency of the disability. During the peak of the demobilization period, the Army operated 99 retiring boards which processed over 80,000 cases of individual officers. In order to further reevaluate the permanency of their disability approximately 4,000 officers were recalled to active duty prior to the Comptroller General's ruling.

No accurate estimate of the fiscal effects of the proposed legislation can be made without incurring administrative costs which are not believed justified at this time. The pay and allowances resulting from subject orders have been paid and it is not predictable as to how much could be recovered.

This proposed legislation and report thereon have been coordinated among the departments and boards in the National Military Establishment in accordance with procedures prescribed by the Secretary of Defense.

The Bureau of the Budget has been consulted and advises that there is no objection to the submission of this proposed legislation for the consideration of the Congress.

Sincerely yours,

GORDON GRAY, Acting Secretary of the Army.

REPEALING THE PROVISIONS OF THE ALASKA RAILROAD RETIREMENT ACT AND SECTIONS 91 TO 107 OF THE CANAL ZONE CODE AND EXTENDING THE BENEFITS OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED, TO OFFICERS AND EMPLOYEES TO WHOM SUCH PROVISIONS ARE APPLICABLE

JUNE 8, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. MILLER of California, from the Committee on Post Office and Civil Service, submitted the following

REPORT

[To accompany H. R. 34451

The Committee on Post Office and Civil Service, to whom was referred the bill (H. R. 3445) to repeal the provisions of the Alaska Railroad Retirement Act of June 29, 1936, as amended, and sections 91 to 107 of the Canal Zone Code and to extend the benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to officers and employees to whom such provisions are applicable, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

The amendment is as follows: Strike out all after the enacting clause and insert the following:

That (a) the Alaska Railroad Retirement Act of June 29, 1936, as amended, is hereby repealed, and all officers and employees of The Alaska Railroad, Territory of Alaska, who are subject to the provisions of said Act are hereby included within the terms of the Civil Service Retirement Act of May 29, 1930, as amended. (b) Sections 91 to 107 (comprising article 2 of chapter 6) of title 2 of the Canal Zone Code, approved June 19, 1934 (48 Stat. 1122), as amended (known as the Canal Zone Retirement Act), are hereby repealed, and all officers and employees of the Panama Canal and the Panama Railroad Company, who are subject to the provisions of such sections, are hereby included within the terms of the Civil Service Retirement Act of May 29, 1930, as amended

SEC. 2. (a) The United States Civil Service Commission is hereby authorized and directed to ascertain the amount of the gross assets in the Alaska Railroad retirement and disability fund and the amount of the gross assets in the Canal Zone retirement and disability fund, and to certify such amounts to the Secretary of the Treasury, who is hereby authorized and directed to transfer such amounts on the books of the Treasury Department to the civil-service retirement and dis

ability fund

(b) In the case of each officer or employee described in section 1 of this Act, the United States Civil Service Commission shall credit to his individual account in the civil-service retirement and disability fund an amount equal to all deductions withheld from his salary and deposited or redeposited by him under the Alaska Railroad Retirement Act, as amended, or the Canal Zone Retirement Act, as amended, together with interest compounded on June 30 of each year at 4 per centum per annum to December 31, 1947, and at 3 per centum per annum thereafter to the effective date of this Act, and credit shall be allowed for the purposes of the Act of May 29, 1930, as amended, for the period of service covered by said contributions.

SEC. 3. Section 2 (a) of the Act of May 29, 1930, as amended, is further amended by adding at the end thereof the following: "In the case of an officer or an employee of the Alaska Railroad, Territory of Alaska, or an officer or employee who is a citizen of the United States employed on the Isthmus of Panama by the Panama Canal or the Panama Railroad Company, the provisions of this subsection shall apply upon his attaining the age of sixty-two years and completing fifteen years of service on the Isthmus of Panama or in the Territory of Alaska." SEC. 4. Section 4 of the Act of May 29, 1930, as amended, is further amended by adding at the end thereof the following new subsection (f):

"(f) In the case of an officer or employee retiring under the provisions of this Act, who is a citizen of the United States, the annuity otherwise computed under subsection (a) of this section shall be increased by an amount equal to $36 multiplied by the number of years of service rendered in the Territory of Alaska between March 12, 1914, and July 1, 1923, either in the employ of the Alaska Engineering Commission or the Alaska Railroad, or on the Isthmus of Panama between May 4, 1904, and April 1, 1914, either in the employ of the Isthmian Canal Commission or the Panama Railroad Company."

SEC. 5. Section 8 of the Act of May 29, 1930, as amended, is amended by adding at the end thereof a new paragraph as follows:

"In the case of any officer or employee who, prior to the effective date of this Act, shall have been retired on an annuity under the provisions of the Alaska Railroad Retirement Act, as amended, the Canal Zone Retirement Act, as amended or section 8 (b) of the Act of June 16, 1933, the annuity shall be increased effective April 1, 1948, by 25 per centum or $300 whichever is the lesser: Provided, That each such annuitant may, prior to the expiration of sixty days following the date of enactment of this paragraph, elect to retain his or her present annuity, in lieu of the increased annuity provided by this paragraph, name his wife or her husband to receive upon his or her death one-half of his or her present annuity but not to exceed $600 per annum during the remainder of the life of such survivor and upon the death of such survivor no further annuity shall be due or payable. Any such annuitant who shall have died between the effective date of this Act and the expiration of the said sixty-day period after the enactment of this paragraph leaving a surviving wife or husband shall be deemed to have named such wife or husband to receive an annuity as provided herein, but no such annuity shall become payable to such wife or husband prior to the date of enactment of this paragraph Except as provided in this paragraph the provisions of this Act shall not apply in the case of officers and employees of the Alaska Railroad. Territory of Aalska, or officers and employees of the Panama Canal or the Panama Railroad Company (1) retired prior to the effective date of this Act, or (2) separated prior to such date, in which case their refund or annuity rights shall be determined as though the Alaska Railroad Retirement Act and the Canal Zone Retirement Act had not been repealed: Provided, That there shall be deemed applicable as of July 29, 1942, to such officers and employees of the Panama Canal and the Panama Railroad Company, the provisions of the Act of July 30, 1947 (61 Stat 521), respecting the return of amounts deducted from compensation

SEC. 6 Section 9 of the Act o. May 29, 1930, as amended, is further amended by changing the period at the end thereof to a comma and adding the following "or for anv service rendered for the Panama Railroad Company prior to January 1. 1924.'

SEC. 7 (a) Except as otherwise provided herein, this Act shall take effect as of April 1, 1948

(b) Section 1 (c) of the Act of May 29, 1930, as amended, shall apply as of July 1, 1947, to any person separated from employment within the coverage of the Canal Zone Retirement Act, as amended

(c) The third paragraph of section 5 of the Act of May 29, 1930, as amended, shall apply as of September 8, 1939, to any person who left employment within the coverage of the Alaska Railroad Retirement Act, as amended, or the Canal Zone Retirement Act, as amended, to enter the armed forces of the United States.

(d) The provisions of section 12 (c) of the Act of May 29, 1930, as amended, shall apply as of February 28, 1948, in the case of any officer or employee within the coverage of the Alaska Railroad Retirement Act, as amended, or the Canal Zone Retirement Act, as amended, who shall have died subsequent to that date.

PURPOSE OF AMENDMENT

The purpose of the amendment is to retain in the bill certain retirement benefits to which employees of the Canal Zone and the Alaska Railroad are not now entitled under their retirement systems. Because of the nature of these amendments to the bill, the committee agreed to strike out all after the enacting clause and insert new language.

STATEMENT

The purpose of the bill is to consolidate the Alaska Railroad Retirement Act, as amended (49 Stat. 2017; 5 U. S. C. 745) and the retirement provisions of the Canal Zone Code (46 Stat. 1471; 48 U. S. C. 1371) under the Civil Service Retirement Act of May 29, 1930, as amended.

The bill will extend the benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to Federal employees now under the Alaska Railroad and Canal Zone retirement systems.

In addition, certain retirement benefits which now accrue to persons retiring under the Alaska Railroad Retirement Act or the retirement provisions of the Canal Zone Code would be retained. These are: (1) Provision for compulsory retirement at age 62 after 15 years' service on the Isthmus of Panama or in the Territory of Alaska, and (2) provision allowing employees of the Canal Zone and the Alaska Railroad a bonus in their annuities of $36 annually for each year of service in the construction of the Alaska Railroad and the Panama Canal.

Also, the bill provides for making the effective date retroactive to April 1, 1948. This will extend to employees of the Canal Zone and the Alaska Railroad the advantages of the recent revision of the civil service retirement law (Public Law 426, 80th Cong.).

Hearings were conducted at which time representatives of Federal employee organizations representing employees on the Panama Canal and in Alaska unanimously endorsed the provisions of the bill as introduced, and suggested the amendments which were accepted by the committee.

Representatives of the Department of the Army, which has jurisdiction over the Panama Canal, and the Department of the Interior which has jurisdiction over the Alaska Railroad supported the provisions of the bill, as introduced, and approved the amendments roposed by the Federal employee organizations.

Representatives of the Civil Service Commission stated that the Commission favored the bill as introduced but did not support the amendments proposed by the employee organizations, except the one relating to the annual bonus of $36 for retired employees of the Canal Zone and the Alaska Railroad for each year of service during the construction of the Alaska Railroad and the Panama Canal.

The committee believes that the consolidation of the Alaska Railroad and Canal Zone retirement systems under the Civil Service retirement system is desirable, and that in effecting such consolida

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