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appropriation to be made to the account to provide for the payment of annuities, pensions and death benefits not based on military service. The estimate made in any year with respect to military service rendered prior to January 1, 1937, shall be based on the cost, as determined in accordance with the above provisions, of annuities awarded or increased on the basis of such military service up to the close of the preceding fiscal year and not previously appropriated for, and shall take into account interest from the date the annuity began to accrue or was increased to the date or dates on which the amount appropriated is to be credited to the Railroad Retirement Account. In making the estimate for the appropriation for military service rendered after December 31, 1936, the Board shall take into account any excess or deficiency in the appropriation or appropriations for such service in any preceding fiscal year or years, with interest thereon, resulting from an overestimate or underestimate of the number of individuals in creditable military service or the months of military service.”

SEC. 9. Immediately after the subsection of section 3A which, as amended, is subsection (n), insert the following new subsection :

“(0) Section 3A, as herein amended, shall be effective as of October 8, 1940. No rights shall be deemed to have accrued under section 3A which would not have accrued had this Act amending section 3A been enacted on October 8, 1940.”

SEC. 10. The third proviso of section 202 of said Act of June 24, 1937, is hereby amended to read as follows: “And provided further, That for the purposes of determining eligibility for an annuity and computing an annuity there shall also be included in an individual's service period, subject to and in accordance with the second proviso of subsection (a), subsections (b) to (e), inclusive, and subsections (g) to (1), inclusive, of section 3A of this Act, as amended, voluntary or involuntary military service of an individual within or without the United States during any war service period, including such military service prior to the date of enactment of this amendment, if, prior to the beginning of his military service in a war service period and in the same calendar year in which such military service began, or in the next preceding calendar year, the individual rendered service for compensation to a carrier, or to a person, service to which is otherwise creditable, or was serving as a representative; but such military service shall be included only subject to and in accordance with the provisions of the Railroad Retirement Act of 1935, in the same manner as though military service were service rendered as an employee. This proviso, as herein amended, shall be effective as of October 8, 1940. No right shall be deemed to have accrued under this proviso which would not have accrued had this amendment thereof been enacted on October 8, 1940."

SEC. 11. Immediately after section 18 of said Act of June 24, 1937, insert the following new section:

“INCOMPETENCB

"SEO. 19. (a) Every individual receiving or claiming benefits, or to whom any right or privilege is extended, under this or any other Act of Congress now or hereafter administered by the Board shall be conclusively presumed to have been competent until the date on which the Board receives written notice, in a form and manner acceptable to the Board, that he is an incompetent, or a minor, for whom a guardian or other person legally vested with the care of his person or estate has been appointed: Provided, however, That the Board may, in its discretion, validly, recognize actions by, and conduct transactions with, others acting, prior to receipt of, or in the absence of, such written notice, in behalf of an individual found by the Board to be an incompetent or a minor, if the Board finds such actions or transactions to be in the best interests of such individual.

“(b) Every guardian or other person legally vested with the care of the person or estate of an incompetent or minor who is receiving or claiming benefits, or to whom any right or privilege is extended, under this or any other Act of Congress now or hereafter administered by the Board shall have power everywhere, in the manner and to the extent prescribed by the Board, to take any action necessary or appropriate to perfect any right or exercise any privilege of the incompetent or minor and to conduct all transactions on his behalf under this or any other Act of Congress now or hereafter administered by the Board. Any payment made pursuant to the provisions of this or the preceding subsection shall be a complete settlement and satisfaction of any claim, right, or interest in and to such payment.

"(c) This section shall be effective as of August 29, 1935."

SEC. 12. Effective as of June 24, 1937, except as to death benefits certified prior to the date of the enactment of this section, section 5 of said Act of June 24, 1937, is hereby amended to read as follows:

"DEATH BENEFITS “SEC. 5. (a) The death benefit shall be an amount equal to 4 per centum of the aggregate compensation (determined in accordance with section 1 (h) of this Act but exclusive of the excess over $300 in any month's earnings) earned by an individual as an employee after December 31, 1936, less any annuity payments paid him, and less any annuity payments due him but not yet paid at his death, and, if he is survived by a spouse entitled to a joint and survivor annuity, less any annuity, payments paid such spouse under sections 3 (f) and 4 of this Act, and less any annuity payments due such spouse under said sections but not yet paid at death.

“(b) The amount of the death benefit computed under subsection (a) of this section shall be due upon the death of an individual who was an employee after December 31, 1936, or, if he is survived by a spouse entitled to a joint and survivor annuity, upon the death of such spouse and, upon application therefor, as provided in subsection (c) of this section, shall be paid in a lump sum to the person or persons designated by such individual in a writing filed, on or before the date of his death, with the Board, in such manner and form as provided by the Board : Provided, however, That if such designation has not been filed, or was improperly executed or improperly filed, or no designee is alive on the day the death benefit becomes due, the amount of the death benefit shall be paid to the person determined by the Board to have been such individual's spouse on the day of his death; if no such spouse is alive on the day the death benefit becomes due, such amount shall be paid to the person determined by the Board to be his child, by blood or by legal adoption, and alive on the day the death benefit becomes due, and if there be more than one such child they shall

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share equally; if there be no such child, such amount shall be paid to the person determined by the Board to be his parent and alive on the day the death benefit becomes due, and if both parents are so determined they shall share equally; if there be no such parent, such amount shall be paid to the person determined by the Board to be his brother or sister, by blood or through legal adoption, and alive on the day the death benefit becomes due, and if there be more than one such brother or sister they shall share equally; and if there be no such brother or sister such amount shall be paid to the person determined by the Board to be his grandchild, by blood or through legal adoption, and alive on the day the death benefit becomes due, and if there be more than one such grandchild they shall share equally. If there be no such persons enumerated above in this subsection the Board may compensate other persons to the extent and in the proportions that they have borne the expenses of the last illness or funeral or both of such individual in an amount or amounts, and upon such conditions, as the Board may fix as equitable, but the total of such amounts shall not exceed the amount of the death benefit.

"(c) No payment shall be made to any person under this section unless application therefor, in such manner and form as provided by the Board, shall have been filed, by or on behalf of any such person (whether or not legally competent), prior to the expiration of two years after the date the death benefit becomes due as provided in subsection (b) of this section. For the purpose of this subsection, if the death benefit became due as provided in subsection (b) of this section before the enactment of this amendment, such death benefit shall be considered to have become due on the date of the enactment hereof."

SEC. 13. The first proviso in subsection (c) of section 1 of said Act of June 24, 1937, is hereby amended to read as follows:"Provided, however, That an individual shall be deemed to be in the service of an employer, other than a local lodge or division or a general committee of a railway-labor-organization employer, not conducting the principal part of its business in the United States only when he is rendering service to it in the United States; and an individual shall be deemed to be in the service of such a local lodge or division only if (1) all, or substantially all, the individuals constituting its membership are employees of an employer conducting the principal part of its business in the United States; or (2) the headquarters of such local lodge or division is located in the United States; and an indi. vidual shall be deemed to be in the service of such a general committee only if (1) he is representing a local lodge or division described in clauses (1) or (2) immediately above; or (2) all, or substantially all, the individuals represented by it are employees of an employer conducting the principal part of its business in the United States; or (3) he acts in the capacity of a general chairman or an assistant general chairman of a general committee which represents individuals rendering service in the United States to an employer, but in such case if his office or headquarters is not located in the United States and the individuals represented by such general committee are employees of an employer not conducting the principal part of its business in the United States, only such proportion of the remuneration for such service shall be regarded as compensation as the propor. tion which the mileage in the United States under the jurisdiction of such general committee bears to the total mileage under its jurisdiction, unless such mileage formula is inapplicable, in which case the Board may prescribe such other formula as it finds to be equitable:".

The amendment in this section shall operate in the same manner and have the same effect as if it had been part of the Railroad Retirement Act of 1937 when that Act was enacted on June 24, 1937.

SEC. 14. The first proviso in subsection (d) of section 1532 of the Internal Revenue Code, approved February 10, 1939 (53 Stat. 1), is hereby amended to read as follows: "Provided, however, That an individual shall be deemed to be in the service of an employer, other than a local lodge or division or a general committee of a railwaylabor-organization employer, not conducting the principal part of its business in the United States only when he is rendering service to it in the United States; and an individual shall be deemed to be in the service of such a local lodge or division only if (1) all, or substantially all, the individuals constituting its membership are employees of an employer conducting the principal part of its business in the United States; or (2) the headquarters of such local lodge or division is located in the United States; and an individual shall be deemed to be in the service of such a general committee only if (1) he is representing a local lodge or division described in clauses (1) or (2) immediately above; or (2) all, or substantially all, the individuals represented by it are employees of an employer conducting the principal part of its business in the United States; or (3) he acts in the capacity of a general chairman or an assistant general chairman of a general committee which represents individuals rendering service in the United States to an employer, but in such case if his office or headquarters is not located in the United States and the individuals represented by such general committee are employees of an employer not conducting the principal part of its business in the United States, only such proportion of the remuneration for such service shall be regarded as compensation as the proportion which the mileage in the United States under the jurisdiction of such general committee bears to the total mileage under its jurisdiction, unless such mileage formula is inapplicable, in which case such other formula as the Railroad

Retirement Board may have prescribed pursuant to subsection (c) - of section 1 of the Railroad Retirement Act of 1937 shall be applicable:”.

The amendment in this section shall operate in the same manner and have the same effect as if it had been part of the Internal Revenue Code when that code was enacted on February 10, 1939, and as if it had been part of the Carriers Taxing Act of 1937 (50 Stat. 435) when that Act was enacted on June 29, 1937: Provided, however, That no interest or penalties shall accrue or be deemed to have accrued for the failure to make returns under, or pay taxes levied by, sections. 1500 and 1520, respectively, of said Internal Revenue Code and sections 2 and 3, respectively, of said Carriers Taxing Act of 1937 with respect to the compensation of employees of any local lodge or division or of any general committee of a railway-labor-organization employer earned prior to the enactment of this amendment, if (1) the headquarters of such a local lodge or division was not located in

the United States, or (2) all, or substantially all, the individuals constituting the membership of such a local lodge or division were employees of an employer not conducting the principal part of its business in the United States, or (3) the individuals represented by such a general committee were employees of an employer not conducting the principal part of its business in the United States, or (4) the service to such a general committee was rendered outside the United States, or (5) the office or headquarters of the individual rendering service to such a general committee was not located in the United States and if such returns are made and such taxes are paid within the time allowed for making returns and paying taxes with respect to the first calendar quarter beginning after the enactment of this amendment.

SEC. 15. The first proviso in subsection (e) of section 1 of the Railroad Unemployment Insurance Act, approved June 25, 1938, as amended, is hereby amended to read as follows: "Provided, however, That an individual shall be deemed to be in the service of an employer, other than a local lodge or division or a general committee of a railway-labor-organization employer, not conducting the principal part of its business in the United States only when he is rendering service to it in the United States; and an individual shall be deemed to be in the service of such a local lodge or division only if (1) all, or substantially all, the individuals constituting its membership are employees of an employer conducting the principal part of its business in the United States; or (2) the headquarters of such local lodge or division is located in the United States; and an individual shall be deemed to be in the service of such a general committee only if (1) he is representing a local lodge or division described in clauses (1) or (2) immediately above; or (2) all, or substantially all, the individuals represented by it are employees of an employer conducting the principal part of its business in the United States; or (3) he acts in the capacity of a general chairman or an assistant general chairman of a general committee which represents individuals rendering service in the United States to an employer, but in such case if his office or headquarters is not located in the United States and the individuals represented by such general committee are employees of an employer not conducting the principal part of its business in the United States, only such proportion of the remuneration for such service shall be regarded as compensation as the proportion which the mileage in the United States under the jurisdiction of such general committee bears to the total mileage under its jurisdiction, unless such mileage formula is inapplicable, in which case the Board may prescribe such other formula as it finds to be equitable:''.

The amendment in this section shall operate in the same manner and have the same effect as if it had been part of the Railroad Unemployment Insurance Act when that Act was enacted on June 25, 1938: Provided, however, That no interest or penalties shall accrue or be deemed to have accrued for the failure to make returns under, or pay contributions levied by, section 8 of said Railroad Unemployment Insurance Act with respect to the compensation of employees of any local lodge or division of a railway-labor-organization employer earned prior to July 1, 1940, and with respect to the compensation of employees of any general committee of a railway-labor-organization

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