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vry to the administration of the Medicare program are set forth in Tikusion (3) of subsection (d).
The Board from time to time is made the beneficiary of gifts and bespiests from annuitants or former annuitants. Although the Board ble les that it has authority to accept such gifts and bequests, the 1937 Act contains no express statutory provision conferring such authonty. Subsection (e) of section 7 provides such specific authority, which is similar to the comparable provision contained in section Olli) of the Social Security Act. Section 8
This section sets forth the provisions for court review of Board decisions. Review of all Board decisions will be by an appropriate United States court of appeals, as under the 1937 Act, with no review In any other court or by any governmental agency, officer, or employee.
Sition 9 contains the provisions regarding the requirement that emplovers covered under the Act furnish reports of compensation paid to their employees and regarding the finality of such reports. These provisions are identical to those contained in section 8 of the 1937 Art, intha the Board's records as to the amount of an employee's compensation, or as to whether any compensation was paid, for a particular real, Tull conclusive four years after the date on which the return of com: 1*11-2tion for that year was required to be made.
The provisions of section 9 of the 1937 Act relating to the recover" of wroneouis benefit payments are retained in section 10 of this di T! Board has the authority to recover any erroneous payments !! It makes by adjusting subsequent payments due the overpand and hal or any other individual on the basis of the same canny pory". Sulitjon ib) provides that such recovery can be made et!!! " decinctions from subsequent payments or by actuarial rotti : Sanquent payments. Recovery of erroneous payment to ". in (ases where the individual was without fault and people be contrary to the purpose of the Act or would be against equity and good conscience. Subsection (d) provides that certifying and dist ing officers are to be held personally liable for erroneous mamen
they made neous payments in good faith.
visions any claimant or recipient of benefits is presumed to be competent until the Board receives written notice to the contrary. If a claimant or beneficiary is incompetent the Board may make payments to, or conduct transactions with, any legally appointed guardian on behalf of the claimant or beneficiary. Furthermore, the proviso of subsection (a) expressly authorizes the Board to make payments, or conduct transactions, directly with the claimant or beneficiary, or with any other person on his behalf, even though he is an incompetent for whom a guardian is acting In such cases, the Board may conduct such transactions without regard to whether or not the incompetent is represented by legal counsel. The provisions of this section are applicable to benefits claimed or paid under any Act administered in whole or part by the Board, including any payment of social security benefits made by the Board pursuant to section 7 (b)(2) of this Act, Section 13
Section 13 of this Act sets forth the penalty provisions, consisting of a fine or imprisonment or both, for knowingly failing to furnish information required in the administration of the Art or for knowingly furnishing false information. The maximum fine under this section is $10,000, and the maximum prison term is one year. Any fines and penalties imposed by a court pursuant to the Act are to be credited to the Railroad Retirement Account. Section 14
Is under section 12 of the 1937 Act, section 14 of this Act exempts annuity payments from taxation, garnishment, attachment, or other legal process. As was also true under the 1937 Act. however, a supplemental annuity, while exempt from State taxation, is subject to taxation under the Federal income tax provisions of the Internal Revenue ('ode. Section 15
The Railroad Retirement Account and the Railroad Retirement Supplemental Account established by sections 15(a) and 15(b) of the 1937 Act are continued in effect, pursuant to subsections (a) and (c) of this section, and the funds contained therein will be available for the payment of all benefits administered by the Board and the expenses incurred in the administaration of all provisions of this Act. As was explained previously, a portion of these benefit costs and administrative expenses will be reimbursed in accordance with the financial interchange provisions of section 7(c) (2). The funds credited to the Accounts will be derived largely from the taxes levied by the Railroad Retirement Tax Act.
Under sections 15(a) and 15(b) of the 1937 Act, taxes levied under the Railroad Retirement Tax Act for supplemental annuity purposes are appropriated to the Railroad Retirement Supplemental Account, with the remaining taxes levied under the Tax Act being appropriated to the Railroad Retirement Account. For reasons which will be set forth in discussing the amendment to the Tax Act made by section 501 (a) (2) of this Act, the taxes imposed by the Tax Act for supplemental annuity purposes will continue to be levied at rates necessary to support supplemental annuities at the level provided under the 1937 Art (which provided supplemental annuities in amounts ranging from $15 to $70) even though the 1974 Act provides smaller supplemental alinuities (in amounts ranging from $23 to $13--persons receiving supplemental annuities under the 1937 Act on January 1, 1975, however, w!!. pursuant to the provisions of section 203 (a) of title II of this Act, continue to receive such annuities in the amounts provided by the 1937
Irt). Accordingly. pursuant to section 15(a) of the 1974 Act, the appropriation provisions of which are modeled after those contained 01: vrtion 1.5(b) of the 1937 Art (which provided appropriations to the Supplemental Arcot), only that portion of the supplemental annuity lases levied by the Tax Act which is necessary to provide sufficient funds to pay supplemental annuities at the level provided by the 1974 Art will be appropriated to the Railroad Retirement Supplemental Irroint. The remaining portion of such taxes will be appropriated to the Railroad Retirement Account.
It the same time as the Board establishes, pursuant to section 3221 fr) of the Tax Act, the rate of the supplemental annuity tax for a particular «alendar quarter, the Board will also, as is provided in wition 15(a) of the 1974 Act, determine what portion of that tax is to his appropriater to each of the Accounts pursuant to the provisions of sections 15(a) and 15(c) of the 1974 Act. The Secretary of the Treasury will then credit the amounts of the supplemental annuity taxes collected to the two Accounts in such proportions as the Board has determined.
Subsection (b) of section 15 provides for the reimbursement of the Railroad Retirement Account for the costs incurred by reason of crediting military service under this Act, as is provided by section 3(c) (2), for purposes of determining entitlement to, and the amounts of, ben(fits under section 2 of the Act. The amounts of such costs will be determined annually by the Board on the basis of the additional bencits paid under section 2 (but only to the extent that such benefit costs are not reimbursed under the financial interchange), the additional administrative expenses incurred, and the interest lost to the Railroad Retirement Account, by reason of the crediting of military service under the Act. I'nlike the 1937 Act, which provided in section 4(e) that the cost resulting from the creciting of military service would be determined on an actuarial basis at the time a particular annuity based, in part, on military service is awarded, the 1974 Act provides that such must will be determined on the basis of the additional amount of each annuity actually paid in a particular year because military service was included in computing the amount of the annuity.
In actual cost basis is now user to determine amounts which will be appropriate to the social serurity trust funds for the cost of crediting military service prior to 19.30 under the Social Security Act; military wrice par after 1950 is taxable as Wagns for employment under the Federal Insurance ('ontributious .let. In making the determination of the costs resulting from the crediting of military service for a partieular year, the Board will not consider any such costs for which the Railrond Retirement Account bats already received appropriations
der nection t(l) of the 1937 dot; the costs which will not be considered include all costs for military service rendered after Decemhver ::1, 19:36, and before July 1. 1963. The amount of such costs for a particular fiscal year will be determined by the Board as soon as practicable after the end of the fiscal year, and the amount so determined will be certified to the Secretary of the Treasury. Upon receipt of a certified report of the Board's determination under this subsection, and when authorized in an appropriation act, the Secretary of the Treasury is directed to transfer that amount from the general funds in the United Sates Treasury to the Railroad Retirement Account.
Subsection (1) of section 1; authorizes annual appropriations to the Railroad Retirement locount to reimburse the accoumt for the costs incuured because of the payment of dual benefits to employees under section 3 (h), to spouses under section (e), to survivors under section 4(h), and to beneficiaries on the rolls umder the transitional provisions in Title II. The amount authorized to be appropriated would be initially $28,5 million each vear, beginning with the fiscal year ending June 30, 1976, and ending with the fiscal year end June 30, 2000. Every 5 years the Board is to redetermine the amount to be appropriated under this subsection.
Subsection (e) of section 1.provides for the investment of the funds of the Railroad Retirement Jecount. The sixth sentence of section 15(«) of the 1937 Act provides that the Secretary of the Treasury may purchase interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States other than the special obligations issued exclusively to the Railroad Retirement Accounts if the Secretary determines that such purchases are in the public interest, provided that the interest yield of such obligations is not less than the interest rate determined in accordance with the fifth sentence of section 1.5(6). Section 15(c) of the 1974 det differs from the present section 15(c), after the fifth sentence, in several respects: (1) it confers upon the Railroad Retirement Board the authority to request the Secretary of the Treasury to purchase such other obligations; (2) it provides specific statutory authority permitting funds in the Railroad Retirement Account to be invested in obligations which are lawful investments for trust funds of the United States; and (3) it makes mandatory upon the Secretary all requests of the Board to the Secretary that are provided for in section 13(e). In addition, the bill places upon the Board the duty of determining what proportion of the Account shall be invested in other than special obligations of the Account and which of such obligations will provide the greatest rate of return on the funds invested. Section 15(e) also permits the Bowd to direct the redemption of special obligations for the purpose of investing the proceeds in other special obligations if the applicable interest as determined under the provisions of that section is higher than the rate in the special obligations to be redeemedl.
The remaining subsections of this section are virtually identical to provisions contained in section 107 of the 1937 let. Subsection (f) provides for the selection of an Actuarial Advisory ('ommittee to review the Board's actuarial reports and estimates, and subsection (g) directs the Board to include data concerning the status of the Railroad Retire. ment and Railroad Retirement Supplemental Accounts in its annual reports to the President and Congress. It should be noted that, unlike the comparable provisions of the 1937 let. section 13(f) of the 1974 Art requires that new members of the Actuarial Advisory ("ommittee holdi membership in the American Academy of Actuaries and be qualitind in the evaluation of pension plans. Section 10
This section, as did section 7 of the 1937 Act, assures that the proviSons of this Act will not be construed as restricting or discouraging the payment of private pensions by employers. Benefits paid under this Act, other than a supplemental annuity, will not be affected by the beneficiary's receipt of a private pension. Section 17
The provisions of section 17 of this Act, as did section 18 of the 1937 Act, permit employers to furnish free railroad transportation to annuitants. Sertion 18
Under subdivision (1) of this section, service covered under this Act is specifically excluded from the term employment as defined in the Sexial Security Act except under the circumstances described in subdivision (2).
Subdivision (2) contains provisions similar to those set forth in Sertion 3(k) (1) of the 1937 Act relating to the crediting of railroad service under the Social Security Act in certain cases. If an employee has not, at the time of his retirement or death, performed at least 10 years of creditable railroad service, and is thus not eligible for benefits under this Act, all of his railroad retirement credits will lop transferred to the social security system where they will be treated as, and combined with, social security credits to determine eligibility for, and the amount of, social security benefits payable to the emplover, his family, and his survivors. Railroad retirement credits are al transferred to the social security system for survivor benefit purposes where the employee did not have a current connection with the railroad industry at the time of his death. Nertion 19
Section 19 of the new Act is intended to provide automatic adjustidents in the cligibility requirements for certain benefits whenever amendments to the Social Security Act become effective after December 31, 1974, to liberalize the eligibility requirements for, or the nature of, monthly insurance benefits and health care benefits under that Act.
Any such adjustments under this Act will be provided in accordance with regulations prescribed by the Board.
Subsection (1) of section 19 provides that reductions in the social vipelrity eligibility requirements for old-age insurance benefits or disability insurance benefits will also be applicable to employees under this Act; that reductions in such requirements for a wife's or husband's insurance benefits will also be applicable to spouses under this Art: that reductions in such requirements for a widow's, widower's, or mother's insurance benefit will also be applicable to a widows or widowers, as the case may be, under this Act; that reductions in such requirements for a child's insurance benefit will also be applicable to children of deceased employees under this Act; and that reductions in such requirements for a parent's insurance benefit will also be