93rd Congress, H. R. 7200 July 10, 1973 An Act To amend the Railroad Retirement Act of 1937 and the Railroad Retirement Tax Act to revise certain eligibility conditions for annuities; to change the railroad retirement tax rates; and to amend the Interstate Commerce Act in order to improve the procedures pertaining to certain rate adjustments for carriers subject to part I of the Act, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 87 STAT. 162 Railroads. Retirement annui TITLE I-RAILROAD RETIREMENT ACT AMENDMENTS ties and tax rates. SEC. 101. Section 2(a) of the Railroad Retirement Act of 1937 is Interstate and amended- intrastate rate (1) by striking out "Women" in paragraph 2 and inserting in adjustments. lieu thereof "Individuals"; (2) by striking out "Men who will have attained the age of sixty and will have completed thirty years of service, or individuals" in paragraph 3 and inserting in lieu thereof "Individuals”; and (3) by striking out "such men or" in paragraph 3 thereof. 60 Stat. 727; 75 Stat. 585. 45 USC 228b. SEC. 102. (a) Section 3201 of the Internal Revenue Code of 1954 Employee re(relating to the rate of tax on employees under the Railroad Retire- tirement tax ment Tax Act) is amended by striking out all that appears therein and rates, reducinserting in lieu thereof the following: tion. 80 Stat. 1078. "In addition to other taxes, there is hereby imposed on the income 73 Stat. 28; of every employee a tax equal to the rate of the tax imposed with 26 USC 3201. respect to wages by section 3101 (a) of the Internal Revenue Code of 1954 plus the rate imposed by section 3101 (b) of such Code of so 86 Stat. 1362, much of the compensation paid to such employee for services rendered 1363. by him after September 30, 1973, as is not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for 68A Stat. 417; any month after September 30, 1973." (b) Section 3202 (a) of such Code is amended 86 Stat. 419, 1365. (1) by striking out "1965" wherever it appears in the second 80 Stat. 1088. sentence thereof and inserting in lieu thereof 1973"; (2) by striking out "(i) $450, or (ii)" wherever it appears in the second sentence thereof; and (3) by striking out ", whichever is greater," wherever it appears in the second sentence thereof. (c) Section 3211(a) of such Code (relating to the rate of tax oll Employee repreemployee representatives under the Railroad Retirement Tax Act) is sentatives, tax. amended by striking out all that appears therein and inserting in lieu 73 Stat. 29; thereof the following: 80 Stat. 1078, "(a) In addition to other taxes, there is hereby imposed on the 1088. income of each employee representative a tax equal to 9.5 percent plus the sum of the rates of tax imposed with respect to wages by sections 3101 (a), 3101 (b), 3111(a), 3111(b) of the Internal Revenue Code of 1954 of so much of the compensation paid to such employee representative for services rendered by him after September 30, 1973, as is not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for any month after September 30, 1973." (d) Section 3221 (a) of such Code (relating to the rate of tax on Employers, employers under the Railroad Retirement Tax Act) is amended by excise tax. striking out "In addition to other taxes" and all that follows to "except that" and inserting in lieu thereof the following: 87 STAT. 163 68A Stat. 417; 86 Stat. 419, 1365. 26 USC 3121. 73 Stat. 29. 79 Stat. 396; 86 Stat. 1364. termination "In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 9.5 percent of so much of the compensation paid by such employer for services rendered to him after September 30, 1973, as is, with respect to any employee for any calendar month, not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for any month after September 30, 1973;”. (e) Section 3221 (a) of such Code, as amended by section 102 (d) of this Act, is further amended (1) by striking out "1965" wherever it appears in the first sentence thereof and inserting in lieu thereof "1973"; (2) by striking out “(1) $450, or (ii)" wherever it appears in the first sentence thereof; and (3) by striking out ", whichever is greater," wherever it appears in the first sentence thereof. (f) Section 3221(b) of such Code is amended by striking out all that appears therein and inserting in lieu thereof the following: "(b) The rate of tax imposed by subsection (a) shall be increased. with respect to compensation paid for services rendered after Septemher 30, 1973, by the rate of tax imposed with respect to wages by section 3111(a) of the Internal Revenue Code of 1954 plus the rate imposed by section 3111 (b) of such Code.” Annuity increase, SEC. 103. (a) Section 6 of Public Law 91-377, as amended by section 8(c) of Public Law 92-46, is further amended by striking out “June 30. 1973" cach time that date appcars and inserting in lieu thereof "December 31, 1974". date, exten sion. 84 Stat. 792; 85 Stat. 102. 45 USC 228c note. 86 Stat. 767. 45 USC 228c note. 82 Stat. 17; 86 Stat. 765. Annuity com- 42 USC 1305. (b) Section 8(b) of Public Law 92-46 is amended by striking out "June 30, 1973" each time that date appears and inserting in lieu thereof "December 31, 1974". (c) Section 5(b) of Public Law 92-460 is amended by striking out "June 30, 1973" each time that date appears and inserting in lieu thereof "December 31, 1974”. SEC. 104. (a) Section 3(a) of the Railroad Retirement Act of 1937 is amended by inserting at the end thereof the following new paragraph: "(6) If title II of the Social Security Act is amended to provide an increase in benefits payable thereunder at any time during the period July 1, 1973, through December 31, 1974, the individual's annuity computed under the preceding provisions of this subsection and that part of subsection (e) of this section which precedes the first proviso shall be increased in an amount equal to the difference between (i) the amount (before any reduction on account of age) which would be payable to such individual under the then current law if his or her annuity were computed under the first proviso of section 3 (e) of this Act, without regard to the words 'plus 10 per centum of such amount' contained therein; and (ii) the amount (before any reduction on account of age) which would have been payable to such individual under the law as in effect prior to July 1, 1973, if his or her annuity had been computed under such first proviso of section 3(e) of this Act, without regard to the words 'plus 10 per centum of such total amount' contained therein (assuming for this purpose that the eligibility conditions and the proportions of the primary insurance amounts payable under the then current Social Security Act had been in effect prior to July 1, 1973): Provided, however, That, in computing such amount, only the social security benefits which would have been payable to the individual whose annuity is being computed under this Act shall be taken into account: Provided further, That if an annuity accrues to an individual for a part of a month the added 87 STAT. 164 amount payable for such part of a month under this section shall be one-thirtieth of the added amount payable under this section for an entire month, multiplied by the number of days in such part of a month. If wages or compensation prior to 1951 are used in making any computation required by this paragraph, the Railroad Retirement Board shall have the authority to approximate the primary insurance amount to be utilized in making such computation. In making any computation required by this paragraph, any benefit to which an individual may be entitled under title II of the Social Security Act 42 USC 401. shall be disregarded. For purposes of this paragraph, individuals entitled to an annuity under section 2(a) (2) of this Act shall be deemed 45 USC 228b. to be age 65, and individuals entitled to an annuity under section 2(a) (3) of this Act who have not attained age 62 shall be deemed to be age 62. Individuals entitled to annuities under section 2(a)(4) or 2(a)(5) of this Act for whom no disability freeze has been granted shall be treated in the same manner for purposes of this paragraph as individuals entitled to annunities under section 2(a) (4) or 2(a) (5) for whom a disability freeze has been granted. In the case of an individual who is entitled to an annuity under this Act but whose annuity is based on insufficient quarters of coverage to have a benefit computed, either actually or potentially, under the first proviso of section 3(e) of this Act, the average monthly wage to be used in determining the amount to be added to the annuity of such individual shall be equal to the average monthly compensation or the average monthly earnings, whichever is applicable, used to enter the table in section 3(a) (2) of such Act for purposes of computing other portions of such individual's annuity." (b) Section 2(e) of the Railroad Retirement Act of 1937 is Spouse's amended annuity. (1) by striking out "section 3(a), (3), (4), or (5) of this Act" 86 Stat. 765. and inserting in lieu thereof "section 3(a), (3), (4), (5), or (6) 45 USC 228b. of this Act"; (2) by striking out the second sentence of the last paragraph; and (3) by adding at the end thereof the following new paragraph: "The spouse's annuity computed under the other provisions of this section shall (before any reduction on account of age) be increased in an amount determined by the method of computing increases set forth in subsection (a) (6) of section 3. The preceding sentence and the Ante, p.163. other provisions of this subsection shall not operate to increase the annuity of a spouse (before any reduction on account of age) to an amount in excess of the maximum amount of a spouse's annuity as provided in the first sentence of this subsection. This paragraph shall be disregarded in the application of the preceding three paragraphs." (c) Section 2(i) of the Railroad Retirement Act of 1937 is amended 45 USC 228b. by striking out "the last paragraph plus the two preceding paragraphs" and inserting in lieu thereof "the last paragraph plus the three preceding paragraphs". (d) Section 5 of the Railroad Retirement Act of 1937 is amended by Survivor's inserting at the end thereof the following new subsection: "(q) A survivor's annuity computed under the preceding provisions annuities. of this section shall be increased in an amount determined by the 86 Stat. 766. method of computing increases set forth in subsection (a)(6) of sec- 45 USC 228e. tion 3: Provided, however, That in computing such an amount for an individual entitled to an annuity under subsection 5(a) (2), the 90.75 82 Stat. 19. per centum figure appearing in the third paragraph of section 3 (e) 45 USC 228c. of this Act shall be deemed to be 82.5 per centum." SEC. 105. If title II of the Social Security Act is amended to provide Benefit inan increase in benefits payable thereunder at any time during the increases. period July 1, 1973, through December 31, 1974, the pension of each 87 STAT. 165 50 Stat. 312. 45 USC 228f. 49 Stat. 967. 45 USC 215 note. Ante, p. 163. Labor-management group, report; notice to congression al committees. Progress reports. Report to congressional committees. Effective dates. 50 Stat. 307. 45 USC 228a. individual under section 6 of the Railroad Retirement Act of 1937 and the annuity of each individual under the Railroad Retirement Act of 1935 shall be increased in an amount determined by the method of computing increases set forth in subsection (a) of section 104 of this Act, deeming for this purpose the average monthly earnings (in the case of a pension) or the average monthly compensation (in the case of an annuity under the Railroad Retirement Act of 1935) which would be used to compute the basic amount if the individual were to die to be the average monthly wage. SEC. 106. All recertifications required by reason of the amendments made by sections 104 and 105 of this Act shall be made by the Railroad Retirement Board without application therefor. SEC. 107. (a) For the purpose of preparing and submitting the report provided for in subsection (c), it shall be the duty and responsibility of representatives of employees to designate (within the thirtyday period commencing on the date of enactment of this Act) and notify the Senate Committee on Labor and Public Welfare and the House Committee on Interstate and Foreign Commerce of the identity (by name and position) of the labor members, and of representatives of carriers to designate (within such thirty-day period) and notify such committees of the identity (by name and position) of the management members, who shall compose the group authorized to prepare in their behalf, the report provided for in subsection (c). (b) The group so authorized to prepare the report provided for in subsection (c) shall (1) hold such meetings (which shall not be less often than once each month) as may be necessary to assure that such report will be submitted within the time provided, and contain the material prescribed, under subsection (c); and (2) submit to such committees on September 1, 1973, November 1, 1973, and January 1, 1974, interim reports as to the progress being made toward completion of the report provided for in subsection (c); except that no such interim report shall be submitted after the submission of the report provided for in subsection (c). (c) (1) Not later than April 1, 1974, representatives of employees and representatives of carriers, acting through the group designated by them pursuant to subsection (a), shall submit to such committees a report containing their joint recommendations for restructuring the railroad retirement system in a manner which will assure the longterm actuarial soundness of such system, which recommendations shall take into account the specific recommendations of the Commission on Railroad Retirement. (2) The joint recommendations contained in such report shall be specific and shall be presented in the form of a draft bill. SEC. 108. The Congress hereby declares its intent to enact legislation in 1974, effective not later than January 1, 1975, which will assure the long-term actuarial soundness of the railroad retirement system. SEC. 109. (a) The amendments made by section 101 of this Act shall become effective on July 1, 1974: Provided, however. That those amendments shall not apply to individuals whose annuities began to accrue prior to that date. (b) The amendments made by section 102 of this Act shall become effective on October 1, 1973, and shall apply only with respect to compensation paid for services rendered on or after that date: Provided, however, That such amendments shall not be applicable to any dock company, common carrier railroad, or railway labor organization described in section 1(a) of the Railroad Retirement Act of 1937, with respect to those of its employees covered as of October 1, 1973, by a private supplemental pension plan established through collective bargaining, where a moratorium in an agreement made on or before March 8, 1973, is applicable to changes in rates of pay contained in the current collective-bargaining agreement covering such employees, until the earlier of (1) the date as of which such moratorium expires, or (2) the date as of which such dock company, common carrier railroad, or railway labor organization agrees through collective bargaining to make the provisions of such amendments applicable. 87 STAT. 166 (c) The amendments made by sections 103 and 104 of this Act shall Effective date. be effective on the enactment date of this Act: Provided, however, Ante, p.163. That any increases in annuities or pensions resulting from the provisions of sections 104 and 105 of this Act shall be effective on the same date or dates as the benefit increases under title II of the Social Security Act which gave rise to such annuity or pension increases are 42 USC 401. effective. SEC. 110. This title may be cited as the "Railroad Retirement Amend- Citation of ments of 1973". TITLE II-INTERSTATE COMMERCE ACT AMENDMENTS title. SEC. 201. Section 15a of the Interstate Commerce Act (49 U.S.C. Rate increase 15a) is amended by adding at the end thereof the following new petitions. paragraph: 41 Stat. 488; 72 Stat. 572. "(4) (a) The Commission shall by rule, on or before August 1, 1973, establish requirements for petitions for adjustment of interstate rates of common carriers subject to this part based upon increases in expenses of such carriers resulting from any increases in taxes under the Railroad Retirement Tax Act, as amended, occurring on or before Ante, p. 162. January 1, 1975, or as a result of the enactment of the Railroad Retire- 26 USC 3201. ment Amendments of 1973. Such requirements, established pursuant Supra. to section 553 of title 5 of the United States Code (with time for 80 Stat. 383. comment limited so as to meet the required date for establishment and subject to future amendment or revocation), shall be designed to facilitate fair and expeditious action on any such petition as required in subparagraph (b) of this paragraph by disclosing such information as the amount needed in rate increases to offset such increases in expenses and the availability of means other than a rate increase by which the carrier might absorb or offset such increases in expenses. (b) Notwithstanding any other provision of law, the Commission Interim shall, within thirty days of the filing of a verified petition in accord- rates. ance with rules promulgated under subparagraph (a) of this paragraph, by any carrier or group of carriers subject to this part, permit the establishment of increases in the general level of the interstate rates of said carrier or carriers in an amount approximating that needed to offset increases in expenses theretofore experienced or demonstrably certain to occur commencing on or before the effective date of the increased rates, as a result of any increases in taxes under the Railroad Retirement Tax Act, as amended, occurring on or before January 1, 1975, or as a result of the enactment of the Railroad Retirement Amendments of 1973. Such increases in rates may be Public notice made effective on not more than thirty nor less than ten days' notice requirement. to the public, notwithstanding any outstanding orders of the Commission. To the extent necessary to effectuate their establishment, rates so increased shall be relieved from the provisions of section 4 of this part and may be published in tariff supplements of the kind ordinarily authorized in general increase proceedings. "(c) The Commission shall within sixty days from the date of Final rate establishment of interim rates under paragraph (4) (b) of this section determination, commence hearings for the purpose of making the final rate determina- hearings. tion. The Commission shall then proceed to make such final rate determination with the carrier having the burden of proof. In making such |