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"A payment made by an employer to an individual through the employer's pay roll shall be presumed, in the absence of evidence to the contrary, to be compensation for service rendered by such individual as an employee of the employer in the period with respect to which the payment is made. An employee shall be deemed to be paid, 'for time lost the amount he is paid by an employer with respect to an identifiable period of absence from the active service of the employer, including absence on account of personal injury, and the amount he is paid by the employer for loss of earnings resulting from his displacement to a less remunerative position or occupation. If a payment is made by an employer with respect to a personal injury and includes pay for time lost, the total payment shall be deemed to be paid for time lost unless, at the time of payment, a part of such payment is specifically apportioned to factors other than time lost, in which event only such part of the payment as is not so apportioned shall be deemed to be paid for time lost."
(g) Subchapter B of Chapter 9 of the Internal Revenue Code is amended by adding at the end thereof the following new section: “SEC. 1538. TITLE OF SUBCHAPTER.
“This subchapter may be cited as the 'Railroad Retirement Tax Act'."
DIVISION II Sec. 201. Section 1 (d) of the Railroad Retirement Act of 1937 is amended to read as follows:
“(d) An individual shall be deemed to have been in the employment relation to an employer on the enactment date if (i) he was on that date on leave of absence from his employment, expressly granted to him by the employer by whom he was employed, or by a duly authorized representative of such employer, and the grant of such leave of absence will have been established to the satisfaction of the Board before July 1947; or (ii) he was in the service of an employer after the enactment date and before January 1946 in each of six calendar months, whether or not consecutive; or (iii) before the enactment date he did not retire and was not retired or discharged from the service of the last employer by whom he was employed or its corporate or operating successor, but (A) solely by reason of his physical or mental disability he ceased before the enactment date to be in the service of such employer and thereafter remained continuously disabled until he attained age sixty-five or until August 1945 or (B) solely for such last stated reason an employer by whom he was employed before the enactment date or an employer who is its successor did not on or after the enactment date and before August 1945 call him to return to service, or (C) if he was so called he was solely for such reason unable to render service in six calendar months as provided in clause (ii); or (iv) he was on the enactment date absent from the service of an employer by reason of a discharge which, within one year after the effective date thereof, was protested, to an appropriate labor representative or to the employer, as wrongful, and which was followed within ten years of the effective date thereof by his reinstatement in good faith to his former service with all his seniority rights: Provided, That an individual shall not be deemed to have been on the enactment date in the employment relation to an employer if before that date he was granted a pension
or gratuity on the basis of which a pension was awarded to him pursuant to section 6, or if during the last pay-roll period before the enactment date in which he rendered service to an employer he was not in the service of an employer, in accordance with subsection (c), with respect to any service in such pay-roll period, or if he could have been in the employment relation to an employer only by reason of his having been, either before or after the enactment date in the service of a local lodge or division defined as an employer in section 1 (a).
SEC. 202. Section 1 (f) is amended by changing the period at the end of the proviso to a semicolon and adding “it may also be included as to service rendered to a person not an employer in the performance of operations involving the use of standard railroad equipment if such operations were performed by an employer on the enactment date.” Section 1 (f) is further amended by substituting for the word "An” in the next to the last sentence the following: Ultimate fractions shall be taken at their actual value, except that if the individual will have had not less than fifty-four months of service, an" and by striking out the last sentence. SEC. 203. A new subsection is added to section 1 as follows:
“(0) An individual shall be deemed to have 'a current connection with the railroad industry' at the time an annuity begins to accrue to him and at death if, in any thirty consecutive calendar months before the month in which an annuity under section 2 begins to accrue to him (or the month in which he dies if that first occurs), he will have been in service as an employee in not less than twelve calendar months and, if such thirty calendar months do not immediately precede such month, he will not have been engaged in any regular employment other than employment for an employer in the period before such month and after the end of such thirty months. For the purposes of section 5 only, an individual shall be deemed also to have à 'current connection with the railroad industry' if he is in all other respects completely insured but would not be fully insured under the Social Security Act, or if he is in all other respects partially insured but would be neither fully nor currently insured under the Social Security Act, or if he has no wage quarters of coverage."
SEC. 204. A new subsection is added to section 1 as follows: “(p) The terms 'quarter' and 'calendar quarter shall mean a period of three calendar months ending on March 31, June 30, September 30, or December 31."
SEC. 205. Section 2 (a) is amended by substituting for all that portion of the subsection after the first numbered paragraph the following:
“2. Women who will have attained the age of sixty and will have completed thirty years of service.
“3. Individuals who will have attained the age of sixty and will have completed thirty years of service, but the annuity of such an individual shall be reduced by one one-hundred-and-eightieth for each calendar month that he is under age sixty-five when his annuity begins to accrue.
“4. Individuals having a current connection with the railroad industry, and whose permanent physical or mental condition is such as to be disabling for work in their regular occupation, and who (i) will
have completed twenty years of service or (ii) will have attained the age of sixty. The Board, with the cooperation of employers and employees, shall secure the establishment of standards determining the physical and mental conditions which permanently disqualify employees for work in the several occupations in the railroad industry, and the Board, employers, and employees shall cooperate in the promotion of the greatest practicable degree of uniformity in the standards applied by the several employers. An individual's condition shall be deemed to be disabling for work in his regular occupation if he will have been disqualified by his employer because of disability for service in his regular occupation in accordance with the applicable standards so established; if the employee will not have been so disqualified by his employer, the Board shall determine whether his condition is disabling for work in his regular occupation in accordance with the standards generally established; and, if the employee's regular occupation is not one with respect to which standards will have been established, the standards relating to a reasonably comparable occupation shall be used. If there is no such comparable occupation, the Board shall determine whether the employee's condition is disabling for work in his regular occupation by determining whether under the practices generally prevailing in industries in which such occupation exists such condition is a permanent disqualification for work in such occupation. For the purposes of this section, an employee's “regular occupation shall be deemed to be the occupation in which he will have been engaged in more calendar months than the calendar months in which he will have been engaged in any other occupation during the last preceding five calendar years, whether or not consecutive, in each of which years he will have earned wages or salary, except that, if an employee establishes that during the last fifteen consecutive calendar years he will have been engaged in another occupation in one-half or more of all the months in which he will have earned wages or salary, he may claim such other occupation as his regular occupation; or
45. Individuals whose permanent physical or mental condition is such that they are unable to engage in any regular employment and who (i) have completed ten years of service, or (ii) have attained the age of sixty.
"Such satisfactory proof shall be made from time to time as prescribed by the Board, of the disability provided for in paragraph 4 or 5 and of the continuance of such disability (according to the standards applied in the establishment of such disability) until the employee attains the age of sixty-five. If the individual fails to comply with the requirements prescribed by the Board as to proof of the continuance of the disability until he attains the age of sixty-five years, his right to an annuity by reason of such disability shall, except for good cause shown to the Board, cease, but without prejudice to his rights to any subsequent annuity to which he may be entitled. If before attaining the age of sixty-five an employee in receipt of an annuity under paragraph 4 or 5 is found by the Board to be no longer disabled as provided in said paragraphs his annuity shall cease upon the last day of the month in which he ceases to be so disabled. An employee, in receipt of such annuity, who earns more than $75 in service for hire, or in self-employment, in each of any six consecutive
calendar months, shall be deemed to cease to be so disabled in the last of such six months; and such employee shall report to the Board immediately all such service for hire, or such self-employment. If after cessation of his disability annuity the employee will have acquired additional years of service, such additional years of service may be credited to him with the same effect as if no annuity had previously been awarded to him."
Sec. 206. Section 2 (b) is amended by substituting for “2 (b)” and uz” the numbers “4” and “5”, respectively.
SEC. 207. Section 3 (b) (4) is amended by substituting for the portion of the sentence following “June 30, 1937" the following: "and after the end of the calendar year in which the individual attains the age of sixty-five".
SEC. 208. Section 3 (c) is amended by substituting the phrase "paid to an employee with respect to” for the phrase "earned by an employee in".
Sec. 209. Section 3 (c) is further amended by substituting for that portion of the subsection following the phrase "and (2)” the following: "the amount of compensation paid or attributable as paid to him with respect to each month of service before September 1941 as a station employee whose duties consisted of or included the carrying of passengers' hand baggage and otherwise assisting passengers at passenger stations and whose remuneration for service to the employer was, in whole or in substantial part, in the forms of tips, shall be the monthly average of the compensation paid to him as a station employee in his months of service in the period September 1940-August 1941: Provided, however, That where service in the period 1924–1931 in the one case, or in the period September 1910-August 1941 in the other case, is, in the judgment of the Board, insufficient to constitute a fair and equitable basis for determining the amount of compensation paid or attributable as paid to him in each month of service before 1937, or September 1941, respectively, the Board shall determine the amount of such compensation for each such month in such manner as in its judgment shall be fair and equitable. In computing the monthly compensation, no part of any month's compensation in excess of $300 shall be recognized.'
Sec. 210. Section 3 (e) is amended to read as follows:
" (e) In the case of an individual having a current connection with the railroad industry and not less than five years of service, the minimum annuity payable shall, before any reduction pursuant to subsection 2 (a) (3), be whichever of the following is the least: (1) $3 multiplied by the number of his years of service; or (2) $50; or (3) his monthly compensation.”
Sec. 211. Section 3 (f) is amended to read as foilows: “Annuity payments which will have become due an individual but will not yet have been paid at death shall be paid to the same individual or individuals who, in the event that a lump sum will have become payable pursuant to section 5 hereof upon such death, would be entitled to receive such lump sum, in the same manner as, and subject to the same limitations under which, such lump sum would be paid, except that, as determined by the Board, first, brothers and sisters of the deceased, and if there are none such, then grandchildren of the deceased, if living on the date of the determination, shall be
entitled to receive payment prior to any payment being made for reimbursement of burial expenses. If there be no individual to wbom payment can thus be made, such annuity payments shall escheat to the credit of the Railroad Retirement Account."
Sec. 212. Section 4 is repealed, section 3A is renumbered as section 4, subsections (h) and (m) of said section are repealed, and all references to section "A" are changed to "4".
SEC. 213. The heading preceding section 5, and section 5 are amended to read as follows:
“ANNUITIES AND LUMP SUMS FOR SURVIVORS
“SEC. 5. (a) WIDOW'S INSURANCE ANNUITY.-A widow of a completely insured employee, who will have attained the age of sixty-five, shall be entitled during the remainder of her life or, if she remarries, then until remarriage to an annuity for each month equal to threefourths of such employee's basic amount.
“(b) WIDOW'S CURRENT INSURANCE ANNUITY.-A widow of a completely or partially insured employee, who is not entitled to an annuity under subsection (a) and who at the time of filing an application for an annuity under this subsection will have in her care a child of such employee entitled to receive an annuity under subsection (c) shall be entitled to an annuity for each month equal to three-fourths of the employee's basic amount. Such annuity shall cease upon her death, upon her remarriage, when she becomes entitled to an annuity under subsection (a), or when no child of the deceased employee is entitled to receive an annuity under subsection_(c), whichever occurs first.
"(c) CHILD'S INSURANCE ANNUITY.-Every child of an employee who will have died completely or partially insured shall be entitled, for so long as such child lives and meets the qualifications set forth in paragraph (1) of subsection (1), to an annuity for each month equal to one-half of the employee's basic amount.
“(d) PARENT'S INSURANCE ANNUITY.-Each parent, sixty-five years of age or over, of a completely insured employee, who will have died leaving no widow and no child, shall be entitled, for life, or, if such parent remarries after the employee's death, then until such remarriage, to an annuity for each month equal to one-half of the employee's basic amount.
"(e) When there is more than one employee with respect to whose death a parent or child is entitled to an annuity for a month, such annuity shall be one-half of whichever employee's basic amount is greatest.
“(f) LUMP-SUM PAYMENT.—Upon the death, on or after January 1, 1947, of a completely or partially insured employee who will have died leaving no widow, child, or parent who would on proper application therefor be entitled to receive an annuity under this section for the month in which such death occurred, there shall be paid a lump sum of eight times the employee's basic amount to the following person (or if more than one there shall be distributed among them) whose relationship to the deceased employee will have been determined by the Board, and who will have been living on the date of such determination: to the widow or widower of the deceased; or, if no such widow or widower be then living, to any