14

1 defined in section 3121 of the Internal Revenue Code of 1954

2 for any month after December 31, 1974."

3 (b) Section 3202 (a) of such Code is amended by strik4 ing out, each place it appears, "September 30, 1973" and 5 inserting in lieu thereof "December 31, 1974".

6 (c) Section 3211 (a) of such Code (relating to the rate 7 of tax on employee representatives under the Railroad Re8 tirement Tax Act), as amended by section 102 (c) of this 9 Act, is further amended

10

11

12

13

14

156

(1) by striking out "9.5 percent” and inserting in lieu thereof "17.0 percent", and

(2) by striking out, each place it appears, "Sep

tember 30, 1973" and inserting in lieu thereof "December 31, 1974".

(d) Section 3221 (a) of such Code (relating to the rate 16 of tax on employers under the Railroad Retirement Tax 17 Act), as amended by section 102 (d) of this Act, is further 18 amended by

(1) striking out "9.5 percent" and inserting in lieu thereof "13.25 percent", and

(2) striking out, each place it appears, "September

30, 1973" and inserting in lieu thereof "December 31,

1974".

(e) The amendments made by the preceding provisions

15

1 shall apply only with respect to compensation paid for serv

2 ices rendered on or after that date.

PART C-MISCELLANEOUS

3

4

SEC. 130. This title may be cited as the "Railroad Re

5 tirement Amendments of 1973".

6

7

8

TITLE II-INTERSTATE COMMERCE ACT

AMENDMENTS

SEC. 201. Section 15a of the Interstate Commerce Act

9. (49 U.S.C. 15a) is amended by adding at the end thereof 10 the following new subsection:

11

15

"(4) (a) The Commission shall by rule establish within 12 ninety days after the date of enactment of this Act require13 ments for petitions for adjustment of interstate and intrastate 14 rates of common carrier by railroad based upon increases in expenses of such carriers pursuant to section 102 of the Rail16 road Retirement Amendments of 1973. Such requirements 17 established pursuant to section 553 of title 5, United States 18 Code, shall be designed to facilitate fair and expeditious ac19 tion on any such petition as required in paragraph (b) of 20 this subsection by disclosing such information as the amount 21 needed in rate increases to offset such increases in expenses 22 and the availability of means other than a rate increase by 23 which the carrier might absorb or offset such increases in

16

1

"(b) (1) The Commission shall, within sixty days of

2 the filing of a verified petition by any carrier or group of car3 riers in accordance with rules promulgated under paragraph 4 (a) of this subsection, act upon said petition.

5 "(2) Prior to action upon any provision in a verified 6 petition which relates to intrastate rates, the Commission 7 shall request from any State authority having jurisdiction 8 over any such rates within ten days from the filing of such 9 petition, a recommendation as to the action the Commission 10 should take. The Commission shall give due regard to any 11 such recommendation received within forty-five days from 12 the date of request."

13 SEC. 202. This title may be cited as the "Railroad 14 Rate Adjustment Act of 1973".

TITLE III-SEPARABILITY

SEC. 301. If any provision of this Act or the application thereof to any person or circumstances should be held invalid, the remainder of such Act or the application of

such provision to other persons or circumstances shall not

20 be affected thereby.

JAMES L. COWEN

CHAIRMAN

NEIL P. SPEIRS

WY THE D. QUARLES, JR.

1

UNITED STATES OF AMERICA
RAILROAD RETIREMENT BOARD

844 RUSH STREET

CHICAGO, ILLINOIS 60611

May 25, 1973

This is the report of the Railroad Retirement Board on the bill S. 1867, which was introduced by Mr. Hathaway on May 22, 1973.

The bill consists of three titles, the first of which is divided into
two parts entitled Temporary Provisions and Permanent Provisions,
respectively. The temporary provisions contained in part A of title I
would revise certain eligibility conditions for annuities under the
Railroad Retirement Act during the period July 1, 1974, through December 31,
1974; extend through December 31, 1974, certain benefit increases under
the Railroad Retirement Act which are now scheduled to expire on July 1,
1973; provide automatic railroad retirement benefit increases if social
security benefits are increased during the period July 1, 1973, through
December 31, 1974; and change the tax rates under the Railroad Retirement
Tax Act for the period October 1, 1973, through December 31, 1974. Part B
of title I, which contains the so-called permanent provisions amending the
Railroad Retirement Act, the Railroad Retirement Tax Act, and certain
Public Laws, would make the revisions in eligibility conditions for rail-
road retirement annuities and the temporary increases in such annuities
permanent and would increase the tax rates under the Railroad Retirement
Tax Act, effective January 1, 1975, to finance the benefit increases and
the change in eligibility conditions. The second title of the bill would
amend the Interstate Commerce Act to provide new procedures pertaining to
certain rate adjustments for carriers subject to Part I of that Act. The
third title of the bill would protect the remaining provisions of the
bill, if enacted, should any provision, or its application in a particular
case, be held invalid.

Section 101 of the bill would amend paragraphs (2) and (3) of section 2(a) of the Railroad Retirement Act to extend to male railroad employees the same eligibility conditions for unreduced age annuities as are now available for female employees, that is, eligibility for full retirement annuities at age 60 if they have completed 30 years of service. This provision for unreduced annuities for men would, in accordance with section 108(a) of the bill, be effective only with respect to annuities which first begin to accrue on or after July 1, 1974, and would cease to apply as of the close of December 31, 1974.

The purpose of section 102 of the bill is to reduce the railroad retirement tax rate on employees under the Railroad Retirement Tax Act (10.6 percent of taxable compensation) to the tax rate paid by nonrailroad employees for social security purposes (5.85 percent of taxable earnings) and to increase the tax rate on employers under the Tax Act (from 10.6 percent of taxable payroll to 15.35 percent of taxable payroll) to compensate for the reduction in the employee tax rate. This purpose would be accomplished by amending section 3201 of the Internal Revenue Code of 1954 (which levies taxes on employees for railroad retirement purposes) to provide that, effective with respect to compensation paid for service rendered after September 1973, the tax rate on employees thereunder will be equal to the rate of the tax imposed with respect to wages by sections 3101(a) and 3101(b) of the Code (which levy taxes on employees for social security benefit and medicare purposes, respectively). Section 3221 of the Internal Revenue Code (which levies taxes on employers for railroad retirement purposes) would also be amended so as, in effect, to increase the tax rate on employers, also effective with respect to compensation paid for services rendered after September 30, 1973, by the 4.75 percent by which th employees' railroad retirement tax rate would be reduced. Neither these amendments nor any of the other amendments made by section 102 -- these other amendments would make no substantive changes in the law; the amendment to section 3211 would merely conform the language of that section, which levies taxes on employee representatives, to the amended language of section 3201 and 3221 -- make any change in the current combined tax rates under the Railroad Retirement Tax Act. The reduction in employee tax rates and the concurrent increase in employer tax rates would, for most employers and employees, be effective with respect to compensation paid for service rendered on or after October 1, 1973. The changes in the tax rates would not, however, become applicable to a limited number of railroads owned by steel companies and to certain dock companies until