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person's marriage is dissolved or if the person shall be granted an annuity under subdivision (3) of section 2 (a): Provided, however, That the person may, if his marriage is dissolved before the date his annuity begins to accrue, or if his annuity under subdivision (3) of section 2 (a) ceases because of failure to make the required proof of disability, make a new election under the conditions stated in the first sentence of this subsection. The annuity of a spouse under this subsection shall begin to accrue on the first day of the calendar month in which the death of the person occurs.

DEATH BENEFITS

Sec. 5. The following benefits shall be paid with respect to the death of persons who were employees after December 31, 1936:

(a) If the deceased should not be survived by a widow or widower who is entitled to an annuity under an election made pursuant to the provisions of section 4 of this Act, there shall be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments due the deceased but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the deceased, the death benefit shall be paid to the legal representative of the deceased.

(b) If the deceased should be survived by a widow or widower entitled to an annuity under an election made pursuant to the provisions of section 4, there shall, on the death of the widow or widower, be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments actually made to the widow or widower under an election made pursuant to the provisions of section 4 of this Act and under the provisions of section 3 (g) of this Act plus the total of the annuity payments due the widow or widower but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the widow or widower, the death benefit shall be paid to the legal representative of the deceased.

In computing the aggregate compensation for the purpose of this section, no part of any month's earnings in excess of $300 shall be recognized.

PENSIONS TO PERSONS ON PENSION OR GRATUITY ROLLS OF EMPLOYERS

SEC. 6. Beginning July 1, 1937, each person then on the pension or gratuity roll of an employer by reason of his employment, who was on such roll on March 1, 1937, and was not, prior to July 1, 1937, eligible for an annuity under this Act based in whole or in part on service rendered prior to January 1, 1937, shall be paid on July 1, 1937, and on the first day of each calendar month thereafter during his life in substitution for the pension or gratuity from his employer, a pension equal in amount to the pension or gratuity granted to him by the employer without diminution by reason of a general reduction or readjustment made subsequent to December 31, 1930, and applicable to pensioners of the employer: Provided, however, That no pension payable under this section shall exceed $120 monthly: And provided further, That no person on the pension or gratuity roll of an employer not conducting the principal part of its business in the United States shall be paid a pension under this section unless, in the judgment of the Board, he was, on March 1, 1937, carried on the pension or gratuity roll as a United States pensioner. No person shall be entitled to receive both a pension under this section and an annuity under section 2 of this Act.

SEC. 7. Nothing in this Act shall be taken as restricting or discouraging payment by employers to retired employees of pensions or gratuities in addition to the annuities or pensions paid to such employees under this Act, nor shall the Act be taken as terminating any trust heretofore created for the payment of such pensions or gratuities.

CONCLUSIVENESS OF RETURNS OF COMPENSATION AND OF FAILURE TO MAKE RETURNS

OF COMPENSATION

SEC. 8. (a) Returns of compensation required by the Board to be filed with it shall be under oath and shall be conclusive as to the amount of compensation earned by a person during a particular calendar month and the fact that no return was made of the compensation claimed to be earned by a person during a particular calendar month shall be taken as conclusive that no compensation was earned by that person during that month, unless the error in the amount of compensation returned in the one case, or in the failure to make return of the compensation in the other case, is called to the attention of the Board within four years after the last date on which return of the compensation was required to be made.

(b) The Board shall adopt such rules and regulations in connection with its requirement of returns of compensation as, in its judgment, may be necessary and proper to prevent the application of subsection (a) of this section from defeating the purpose of this Act.

RECOVERY OF ERRONEOUS PAYMENTS

SEC. 9. There shall be no recovery of payments of annuities, death benefits, or pensions from any person who, in the judgment of the Board, is without fault and where, in the judgment of the Board, such recovery would defeat the purpose of the benefits otherwise authorized or would be against equity and good conscience. No disbursing officer shall be held liable for any amount paid by him to any person where the recovery of such amount is waived under this section.

RETIREMENT BOARD

Personnel SEC. 10. (a) There is hereby established as an independent agency in the executive branch of the Government a Railroad Retirement Board, to be composed of three members appointed by the President, by and with the advice and consent of the Senate. Each member shall hold office for a term of five years, except that any member appointed to fill a vancancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of the term and the terms of office of the members first taking office after the date of enactment of this Act shall expire, as designated by the President, one at the end of two years, one at the end of three years, and one at the end of four years after the date of enactment of this Act. One member shall be appointed from recommendations made by representatives of the employees and one member shall be appointed from recommendations made by representatives of carriers by railroad subject to this Act, in both cases as the President shall direct, so as to provide representation on the Board satisfactory to the largest number, respectively, of employees and carriers concerned. One member, who shall be the chairman of the Board, shall be appointed initially for a term of two years without recommendation by either carriers or employees and shall not be in the employment of or be pecuniarily or otherwise interested in any employer or organization of employees. Vacancies in the Board shall not impair the powers nor affect the duties of the Board or of the remaining members of the Board, of whom a majority of those in office shall constitute a quorum, for the transaction of business. Each of said members shall receive a salary of $10,000 per year, together with necessary traveling expenses and subsistence expenses, or per-diem allowance in lieu thereof, while away from the principal office of the Board on duties required by this Act.

Duties (b) 1. The Board shall have and exercise all the duties and powers necessary to administer this Act. The Board shall take such steps as may be necessary to enforce this Act and make awards and certify payments. Decisions by the Board upon issues of law and fact relating to applications for annuities or death benefits shall not be subject to review by any other administrative or accounting officer, agent, or employee of the United States.

2. The Board shall from time to time certify to the Secretary of the Treasury the name and address of each person entitled to receive a payment under this Act, the amount of such payment, and the time at which it should be made, and the Secretary of the Treasury through the Division of Disbursements of the Treasury Department, and prior to audit by the General Accounting Office, shall make payment in accordance with the certification by the Board.

3. The Board shall establish and promulgate rules and regulations to provide for the adjustment of all controversial matters arising in the administration of this Act, with power as a Board or through any member or designated subordinate thereof to require and compel the attendance of witnesses, administer oaths, take testimony, and make all necessary investigations in any matter involving annuities or other payments; and shall maintain such offices, provide such equipment, furnishings, supplies, services, and facilities, and employ such persons and provide for their compensation and expenses as may be necessary for the proper discharge of its functions. The Board shall have power to employ, without regard to the provisions of the civil-service laws, such employees, attorneys, and special experts as may be necessary for the proper discharge of its duties, and, without regard to the provisions of the Classification Act of 1923, as amended, to provide for their compensation and expenses. Employees of the Board who shall not have been appointed in accordance with the provisions of the civil-service laws and the Classification Act of 1923, as amended, may acquire a competitive civil-service status if they shall have been in the employ of the Board for at least one year and shall have passed a noncompetitive examination given by the Board, the nature of which shall be determined by the Board, subject to the approval of the Civil Service Commission. All rules, regulations, or decisions of the Board shall require the approval of at least two members, except as provided in subdivision 4 of this subsection, and they shall be entered upon the records of the Board, which shall be a public record. Notice of a decision of the Board, or of an employee thereof, shall be communicated to the applicant in writing within thirty days after such decision shall have been made. The Board shall gather, keep, compile, and publish in convenient form such records and data as may be necessary to assure proper administration of the Act. The Board shall have power to require all employers and employees, and any officer, board, commission, or other agency of the United States, to furnish such information and records as shall be necessary for the administration of this Act. The several district courts of the United States and the District Court of the United States for the District of Columbia shall have jurisdiction upon suit by the Board to compel obedience to any order of the Board issued pursuant to this section. The orders, writs, and processes of the District Court of the United States for the District of Columbia in such suits may run and be served anywhere in the United States. The Board shall make an annual report to the President of the United States to be submitted to Congress. Witnesses summoned before the Board shall be paid the same fees and mileage that are paid witnesses in the courts of the United States.

4. The Board is authorized to delegate to any of its employees the power to make decisions on applications for annuities or death benefits in accordance with rules and regulations prescribed by the Board: Provided, however, That any person aggrieved by a decision so made shall have the right to appeal to the Board.

COURT JURISDICTION SEC. 11. The several district courts of the United States and the District Court of the United States for the District of Columbia, respectively, shall have jurisdiction to entertain an application and to grant appropriate relief on an application by an employee or other person aggrieved in or to the district court of any district wherein the Board may have established an office to compel the Board to set aside an action or decision claimed to be in violation of a legal right of the applicant, or to take action, or to make a decision necessary for the enforcement of a legal right of the applicant. The decision of the Board upon any application for annuity, pension, or death benefit shall not be subject to review by any court unless suit is commenced within one year after the decision shall have been entered upon the records of the Board and communicated to the applicant, and in any such suit the findings of the Board as to facts, unless contrary to the weight of the evidence, shall be binding upon the court. The jurisdiction herein specifically conferred upon the Federal courts shall not be held exclusive of any jurisdiction otherwise possessed by such courts to entertain actions at law or suits in equity in aid of the enforcement of rights or obligations arising under the provisions of this Act.

EXEMPTION Sec. 12. No annuity or pension payment shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated.

PENALTIES

SEC. 13. Any officer or agent of an employer, as the word "employer" is hereinbefore defined, or any employee acting in his own behalf, or any person whether or not of the character hereinbefore defined, who shall willfully fail or refuse to make any report or furnish any information required by the Board in the administration of this Act, or who shall knowingly make or cause to be made any false or fraudulent stateinent or report in response to any report or statement required to be made for the purpose of this Act or who shall knowingly make or aid in making any false or fraudulent statement or claim for the purpose of causing an award or payment under this Act, shall be punished by a fine of not less than $100 nor more than $10,000, or by imprisonment not exceeding one year.

SEPARABILITY SEC. 14. If any provision of this Act, or the application thereof to any person or circumstance, should be held invalid, the remainder of the Act, or application of such provision to other persons or circumstances, shall not be affected thereby.

RAILROAD RETIREMENT ACCOUNT SEC. 15. (a) There is hereby created an account in the Treasury of the United States to be known as the railroad retirement account. There is hereby appropriated to the account for each fiscal year, beginning with the fiscal year ending June 30, 1937, as an annual premium an amount sufficient, with a reasonable margin for contingencies, to provide for the payment of all annuities, pensions, and death benefits in accordance with the provisions of this Act. Such amount shall be based on such tables of mortality as the Railroad Retirement Board shall from time to time adopt, and on an interest rate of 3 per centum per annum, compounded semiannually. The Railroad Retirement Board shall submit annually to the Bureau of the Budget an estimate of the appropriation to be made to the account.

(b) At the request and direction of the Board, it shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the account as, in the judgment of the Board, is not immediately required for the payment of annuities, pensions, and death benefits in accordance with the provisions of this Act in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired on original issue at par or by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the account. Such special obligations shall bear interest at the rate of 3 per centum per annum. Obligations other than such special obligations may be acquired for the account only on such terms as to provide an investment yield of not less than 3 per centum per annum. It shall be the duty of the Secretary of the Treasury to sell and dispose of obligations in the account if it shall be in the interest of the amount so to do. Any obligations acquired by the account, except special obligations issued exclusively to the account, may be sold at the market price. Special obligations issued exclusively to the account shall, at the request of the Board, be redeemed at par plus accrued interest. The Board shall include in its annual report the status of the account. All amounts credited to the account shall be available for the payment of all annuities, pensions, and death benefits in accordance with the provisions of this Act.

(c) The Board is hereby authorized and directed to select two actuaries, one from recommendations made by representatives of employees and the other from recommendations made by representatives of carriers by railroad subject to this Act. These actuaries, along with a third who shall be designated by the

Secretary of the Treasury, shall be known as the actuarial advisory committee for the railroad retirement account. The committee shall examine the actuarial reports and valuations made by the Railroad Retirement Board and shall have authority to recommend to the Board such changes in actuarial methods as they may deem necessary. The compensation of the members of the committee of actuaries, exclusive of the member designated by the Secretary, shall be fixed by the Board on a per-diem basis.

(d) The Board shall include in its annual report a statement of the operations of the railroad retirement account. At intervals not longer than three years the Board shall make a valuation of the liabilities created by this Act having due regard for the recommendations of the actuarial advisory committee for the railroad retirement account and shall include such valuation in its annual report. Such valuation shall take into account the reduction in liabilities under title II of the Social Security Act arising out of the maintenance of this Act.

APPROPRIATION FOR ADMINISTRATIVE EXPENSES SEC. 16. There is hereby authorized to be appropriated from time to time such sums as may be necessary to provide for the expenses of the Board in administering the provisions of this Act.

SOCIAL SECURITY ACT SEC. 17. The term "employment”, as defined in subsection (b) of section 210 of title II of the Social Security Act, shall not include service performed by an employee of an employer as defined in section 1 (a) of this Act or service performed for an organization of employees by a representative who is an employee within the meaning of section 1 (b) of this Act.

SEC. 18. It shall not be unlawful for carriers by railroad subject to this Act to furnish free transportation to persons receiving annuities or pensions under this Act in the same manner as such transportation is furnished to employees in their service.

SHORT TITLE Sec. 19. This Act may be cited as the “Railroad Retirement Act of 1935.”

PART II

The claims of persons who, prior to the passage of this amendatory Act, shall have relinquished all rights to return to employer service and become eligible for annuities shall be adjudicated by the Board in the same manner and with the same effect as if this amendatory Act had not been passed : Provided, howerer, That no reduction shall be made in any annuity certified after the passage of this amendatory Act because of continuance in service after age seventy or after age sixty-five without filing with the Board an agreement to continue in employment : And provided further, That service rendered prior to the day on which the Railroal Retirement Act of 1935 was enacted to an employer which was subject to that Act on the day it was enacted shall be included in the service period in connection with any annuity certified in whole or in part by the Board after the passage of this amendatory Act, irrespective of whether, at the time such service was rendered, the employer was an employer as defined in section 1 (a) of that Act. Any person who, prior to the passage of this amendatory Act, shall have relinquished all rights to return to employer service and who was not eligible for an annuity under the Railroad Retirement Act of 1935 as originally enacted, but who would have been eligible therefor if this amendatory Act had been in force from and after August 29, 1935, shall have his right to an annuity adjudicated under this amendatory Act: Provided, however, That no such annuity shall begin prior to the date of the passage of this amendatory Act.

The Railroad Retirement Act of 1935 shall be deemed to continue in force and effect with respect to the terms of office of the present members of the Railroad Retirement Board and the rights of persons granted annuities prior to the passage of this Act. The CHAIRMAN. We will first hear from Mr. Harrison.

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