**United States Court of Appeals for the Federal Circuit**

04-3071

LINDA A. BUIE,

> Petitioner,

v\.

OFFICE OF PERSONNEL MANAGEMENT,

> Respondent.

[Linda A. Buie]{.underline}, pro se, of Kyle, Texas.

[Michael S. Dufault]{.underline}, Trial Attorney, Commercial Litigation
Branch, Civil Division, United States Department of Justice, of
Washington, DC, for respondent. With him on the brief were [Peter D.
Keisler]{.underline}, Assistant Attorney General; [David M.
Cohen]{.underline}, Director; and [Bryant G. Snee]{.underline},
Assistant Director.

Appealed from: United States Merit Systems Protection Board

**United States Court of Appeals for the Federal Circuit**

04-3071

LINDA A. BUIE,

> Petitioner,

v\.

OFFICE OF PERSONNEL MANAGEMENT,

> Respondent.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DECIDED: October 12, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before RADER, LINN, and DYK, [Circuit Judges]{.underline}.

LINN, [Circuit Judge]{.underline}.

Linda A. Buie ("Buie") appeals from a final decision of the Merit
Systems Protection Board ("Board"), affirming the decision of the Office
of Personnel Management ("OPM") calculating the amount of Buie's deposit
contributions to be made under the provisions of the Civil Service
Retirement System ("CSRS"). [Buie v. Office of Pers. Mgmt.]{.underline},
94 M.S.P.R. 595 (2003) (No. DA-0831-02-0096-I-1). Because Buie's service
was not "covered service" as defined by section 203(a)(3) of the Federal
Employees' Retirement Contribution Temporary Adjustment Act of 1983
("FERCTAA") and she is thus not eligible to claim the reduced deposit
rate contained in 5 U.S.C. § 8334(c), we affirm.

BACKGROUND

Buie was employed by the Internal Revenue Service ("IRS") from January
20, 1969 to September 14, 1984. [Buie]{.underline}, 94 M.S.P.R. at 596.
She later applied for, and received, a refund of her retirement
contributions of \$13,411.96 for that period of her service.
[Id.]{.underline} Buie was reemployed by the IRS from January 24, 1994
to July 19, 1994. [Id.]{.underline} From August 6, 1994 to December 24,
1994, Buie worked as a Rural Carrier Relief for the U.S. Postal Service
("USPS"). [Id.]{.underline} From December 24, 1994 to July 17, 1999,
Buie worked for the USPS as a Rural Carrier Associate. [Id.]{.underline}
Buie's service from January 24, 1994 to July 17, 1999 was considered
non-contributory service, and CSRS deductions were not taken from her
pay. [Id.]{.underline}

Buie later applied to OPM to redeposit her retirement contributions for
her periods of service between 1969 and 1984, and for a further deposit
for her non-deduction periods of service between 1994 and 1999.
[Id.]{.underline} OPM sent Buie a bill for redeposit of contributions
for \$46,341.00 (\$13,411.00 redeposit plus \$32,930.00 interest), and
deposit of contributions in the amount of \$8,498.00 (\$6,560.00 deposit
and \$1,938.00 interest). [Id.]{.underline} Buie disagreed, but OPM
determined that its calculations were correct. [Id.]{.underline} at
596-97.

Buie appealed OPM's decision. In an initial decision, the Board found
that OPM correctly calculated the amount of redeposit and interest for
Buie's service between 1969 and 1984. [Id.]{.underline} at 597. However,
the administrative judge found that OPM had improperly calculated the
amount of deposit and interest for Buie's service between 1994 and 1999,
holding that OPM had improperly relied on the basic pay rate in 5 U.S.C.
§ 8334(c) instead of the rate in 5 U.S.C. § 8334(k). [Id.]{.underline}

OPM filed a petition for review of the Board's initial decision.
[Id.]{.underline} In a final decision, the Board reversed the initial
decision's holding regarding the deposit for Buie's 1994 to 1999
service, holding that Buie did not fall within the reduced deposit
exception of 5 U.S.C. § 8334(c). [Id.]{.underline} at 602.

Buie appealed the Board's deposit determination to this court. We have
jurisdiction from an appeal of a final decision of the Board pursuant to
28 U.S.C. § 1295(a)(9).

ANALYSIS

A. [Standard of Review]{.underline}

"Our scope of review in an appeal from a decision of the Board is
limited. Specifically, we must affirm the Board's decision unless we
find it to be arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law; obtained without procedures
required by law, rule, or regulation having been followed; or
unsupported by substantial evidence." [Abell v. Dep't of the
Navy]{.underline}, 343 F.3d 1378, 1382-83 (Fed. Cir. 2003); 5 U.S.C.
§ 7703(c) (2000).

"The petitioner bears the burden of establishing error in the Board's
decision." [Harris v. Dep't of Veterans Affairs]{.underline}, 142 F.3d
1463, 1467 (Fed. Cir. 1998).

B. [The Parties' Arguments]{.underline}

The parties dispute what basic pay rate under 5 U.S.C. § 8334(c) applies
to Buie's deposit for her service between 1994 and 1999. Buie argues
that she should not be subject to the deposit rate set forth in section
8334(c) for her non-deduction service because her service was "covered
service" under the FERCTAA exception in section 8334(c). According to
Buie, to hold otherwise would render section 8334(c)'s exceptions a
nullity.

The Government, representing OPM, responds that Buie's service was not
"covered service" as defined by section 203(a)(3) of FERCTAA. The
Government argues that under the plain language of section 203, the
Board correctly concluded that "covered service" included only federal
employees that were made subject to Social Security coverage for the
first time by section 101 of the Social Security Amendments of 1983,
Pub. L. No. 98-21, 97 Stat. 65, 67-68 (codified at 42 U.S.C. § 410). The
Government argues that under [Taxera v. Office of Personnel
Management]{.underline}, 95 M.S.P.R. 97 (2003) ("[Taxera
II]{.underline}"), these employees include members of Congress,
congressional employees, the President and Vice-President, officers
serving under the Executive Schedule at 5 U.S.C. §§ 5312-5317,
non-career Senior Executive Service or Senior Foreign Service employees,
Article I and Article III judges, and all other federal employees not
subject to CSRS because they were subject to a different federal
employee retirement system. The Government contends that the specific
language in section 203(a)(3) referring to employees who were subject to
Social Security "by reason of" amendments enacted by Pub. L. No. 98-21
excludes federal employees that were not covered by CSRS, but were
covered by Social Security under provisions in effect prior to the
enactment of Pub. L. No. 98-21. The Government argues that the
legislative history is consistent with this interpretation.

C. [The Statute]{.underline}

Section 8334(c) provides:

> Each employee or Member credited with civilian service after July 31,
> 1920, for which retirement deductions or deposits have not been made,
> may deposit with interest an amount equal to the following percentages
> of his basic pay received for that service . . . .

5 U.S.C. § 8334(c) (2000). Section 8334(c) provides a table of
"percentage of basic pay rates" for various government positions. It
provides a 7% basic pay rate for "Employee" service from January 1, 1970
to December 31, 1998, and a 7.25% rate for service from January 1, 1999
to December 31, 1999. [Id.]{.underline}

However, section 8334(c) contains an exception that provides an
alternate contribution of the percentage of basic pay:

> [Notwithstanding the preceding provisions of this subsection and any
> provision of section 206(b)(3) of the Federal Employees' Retirement
> Contribution Temporary Adjustment Act of 1983 \[("FERCTAA")\], the
> percentage of basic pay required under this subsection in the case of
> an individual described in section 8402(b)(2) shall, with respect to
> any covered service (as defined by section 203(a)(3) of such
> Act)]{.underline} performed by such individual after December 31,
> 1983, and before January 1, 1987, be equal to 1.3 percent, and, with
> respect to any such service performed after December 31, 1986, [be
> equal to the amount that would have been deducted from the employee's
> basic pay under subsection (k) of this section]{.underline} if the
> employee's pay had been subject to that subsection during such period.

[Id.]{.underline} (emphases added). This exception allows employees
described under section 8402(b)(2) to contribute a different percentage
"with respect to any covered service" as defined by section 203(a)(3) of
FERCTAA. [Id.]{.underline}

Section 203(a)(3) of FERCTAA provides a definition of "covered service":

> the term "covered service" means service which is employment for the
> purposes of Title II of the Social Security Act and chapter 21 of the
> Internal Revenue Code of 1954 by reason of the amendments made by
> section 101 of the Social Security Amendments of 1983 (97 Stat.
> 67) . . . .

Federal Employees' Retirement Contribution Temporary Adjustment Act of
1983, Pub. L. No. 98-168, § 203(a)(3), 97 Stat. 1106, 1107 (codified at
5 U.S.C. § 8331, note).

Section 101(a) of the Social Security Amendments struck out the existing
paragraphs (5) and (6) defining types of federal service excluded from
the term "employment" and "insert\[ed\] in lieu thereof" new paragraphs
(5) and (6) defining different types of federal service excluded from
the term "employment." Social Security Amendments of 1983, Pub. L. No.
98-21, § 101(a), 97 Stat. 65, 67 (codified at 42 U.S.C.
§ 410(a)(5)-(6)); [see also]{.underline} [Knudtson v. Office of Pers.
Mgmt.]{.underline}, 59 M.S.P.R. 627, 631 (1993).

In what has been termed "an exception to the exception," [United States
v. Hatter]{.underline}, 532 U.S. 557, 563 (2001), new paragraph (5)
provided the following provisions:

> except that this paragraph shall not apply with respect to---
>
> > \(i\) service performed as the President or Vice President of the
> > United States,
>
> > \(ii\) service performed---
>
> > \(I\) in a position placed in the Executive Schedule under sections
> > 5312 through 5317 of title 5, United States Code,
>
> > \(II\) as a noncareer appointee in the Senior Executive Service or a
> > noncareer member of the Senior Foreign Service, or
>
> > \(III\) in a position to which the individual is appointed by the
> > President (or his designee) or the Vice President under section
> > 105(a)(1), 106(a)(1), or 107(a)(1) or (b)(1) of title 3, United
> > States Code, if the maximum rate of basic pay for such position is
> > at or above the rate for level V of the Executive Schedule,
>
> > \(iii\) service performed as the Chief Justice of the United States,
> > an Associate Justice of the Supreme Court, a judge of a United
> > States court of appeals, a judge of a United States district court
> > (including the district court of a territory), a judge of the United
> > States Claims Court, a judge of the United States Court of
> > International Trade, a judge of the United States Tax Court, a
> > United States magistrate, or a referee in bankruptcy or United
> > States bankruptcy judge,
>
> > \(iv\) service performed as a Member, Delegate, or Resident
> > Commissioner of or to the Congress, or
>
> > \(v\) any other service in the legislative branch of the Federal
> > Government . . . .

[See]{.underline} Social Security Amendments of 1983, Pub. L. No. 98-21,
§ 101(a)(1), 97 Stat. 65, 68 (codified at 42 U.S.C. § 410(a)(5)).

D. [Statutory Interpretation]{.underline}

Under section 8334(c), "\[a\]n employee's creditable civilian service
after July 31, 1920, for which retirement deductions have not been made,
will not be included in computing the amount of his CSRS annuity unless
he makes a deposit, with interest, for such service."
[Knudtson]{.underline}, 59 M.S.P.R. at 629 (citing 5 U.S.C. § 8334(c)
and 5 C.F.R. § 831.303). Federal employees "may deposit with interest"
an amount equal to a specified percentage of his or her basic pay
received for that service. 5 U.S.C. § 8334(c) (2000). Pertinent to this
case, that basic pay rate is 7% for any "Employee" service from January
1, 1970 to December 31, 1998, and 7.25% for service from January 1, 1999
to December 31, 1999. [Id.]{.underline}

Buie argues that her service falls under the exception to section
8334(c), thus entitling her deposit to be calculated under the lower
basic pay rate of 5 U.S.C. § 8334(k) enumerated in the exception. Under
the plain language of section 8334(c), Buie is eligible to claim the
lower basic pay rate under the exception if: (1) she is an employee
described under 5 U.S.C. § 8402(b)(2); and (2) the relevant period of
her employment was "covered service" as defined by section 203(a)(3) of
FERCTAA. 5 U.S.C. § 8334(c) (2000); [Buie]{.underline}, 94 M.S.P.R. at
599; [Knudtson]{.underline}, 59 M.S.P.R. at 630. Neither party disputes
that Buie is an employee described under 5 U.S.C. § 8402(b)(2), because
Buie had performed five years of civilian service before January 1, 1987
that was creditable under the CSRS. [See]{.underline} 5 U.S.C.
§ 8402(b)(2)(B) (2000).

The parties principally dispute whether Buie's service was "covered
service" within the meaning of section 203(a)(3) of FERCTAA. Under the
plain language of section 203(a)(3) of FERCTAA, "covered service"
includes only federal service that became "employment . . . by reason
of" the amendments to the Social Security Act made by section 101 of the
Social Security Amendments of 1983. The "by reason of" language includes
only categories of federal service that were brought within the meaning
of "employment" because of the amendments in section 101 of the Social
Security Amendments of 1983, and not because of other statutory or
regulatory provisions. [Knudtson]{.underline}, 59 M.S.P.R. at 630-31
("We interpret \[section 201(a)(3)\] as covering only service that
became 'employment' for the stated purposes 'by reason of,' i.e.,
because of, the 1983 Amendments and not covering service that was or
became 'employment' for these purposes because of other statutory or
regulatory provisions.").

In a thorough analysis, the Board in [Taxera II]{.underline} examined
the pre- and post-1983 amendment paragraphs of the Social Security Act,
the legislative history, and the Supreme Court precedent to determine
the effect of the statutory changes made by section 101 of the Social
Security Amendments of 1983. [See]{.underline} [Taxera II]{.underline},
95 M.S.P.R. at 102-03. In that analysis, the Board found that the new
paragraph (5) of section 210(a) of the Social Security Act exempted
certain specific categories of federal service from the definition of
"employment," including, [inter]{.underline} [alia]{.underline}, the
President, Vice-President, non-career Senior Executive Service,
non-career Senior Foreign Service, federal judges, and certain
legislative branch employees ("exempted high-level federal employees").
[Taxera II]{.underline}, 59 M.S.P.R. at 103 (quoting H.R. Rep. No.
98-25, at 39 (1983), [reprinted in]{.underline} 1983 U.S.C.C.A.N. 219,
257); [see also]{.underline} [Hatter]{.underline}, 532 U.S. at 563
(discussing the class of federal employees named in new paragraph (5)).

The Supreme Court recognized that the amendments seemed "to
[require]{.underline} this class of current federal employees to enter
into the Social Security program . . . ." [Hatter]{.underline}, 532 U.S.
at 563 (citing 42 U.S.C. § 410(a)(5)(C)-(G)). However, for these
exempted high-level federal employees, Congress guaranteed that
participation in the Social Security system would not result in an
increase in deductions from their basic pay. [See]{.underline}
[id.]{.underline}; [see also]{.underline} [Taxera II]{.underline}, 95
M.S.P.R. at 103.

Under this "exception to the exception," section 203(a)(2) said that any
exempted high-level federal employees who contributed to a "covered"
retirement program nonetheless could modify their participation such
that their payroll deduction for retirement and Social Security remained
unchanged---a 7% deduction, at the time, and no more.
[Hatter]{.underline}, 532 U.S. at 563. The exception defined a "covered"
program to include the CSRS as well as any other program to which an
employee must contribute. [Id.]{.underline}

The legislative history is in line with this statutory construction and
recognizes that section 101 of the Social Security Amendments of 1983
brought these exempted high-level federal employees under Social
Security for the first time. The House Report explained:

> Section 101(a) of the bill provides Social Security coverage for
> Federal employees hired on or after January 1, 1984 and for certain
> current Federal employees including the President, Vice President,
> appointed Federal officials, Federal judges, members of Congress and
> legislative employees who are not covered under a federal retirement
> system.
>
> Section 101(a)(1) of the bill replaces paragraphs (5) and (6) of
> section 210(a) of the Social Security Act with new paragraphs (5) and
> (6). (The present paragraphs (5) and (6) generally exclude from the
> definition of Social Security covered employment civilian service
> performed in the employ of the United States or an instrumentality of
> the United States.)
>
> \* \* \*
>
> The new paragraph (5) \[of section 210(a) of the Social Security Act\]
> does not apply to service: (1) as President or Vice President of the
> United States, (2) in a position established under sections 5312
> through 5317 of title 5, United States Code, as a noncareer appointee
> of the Senior Executive Service or a noncareer member of the Senior
> Foreign Service, or in a position to which the individual is appointed
> by the President or Vice President under sections 105(a)(1),
> 106(a)(1), or 107(a)(1) or (b)(1) of title 3, United States Code, if
> the position\'s basic pay is at or above the rate for level V of the
> Executive Schedule; (3) as a member of the Supreme Court, \[and other
> federal judges\]; (4) as a Member, Delegate, or Resident Commissioner
> of or to the Congress; or (5) as an employee of the legislative branch
> who is not covered under the Civil Service Retirement System as of
> January 1, 1984. [The effect of not applying paragraph (5) to such
> service is that such service is covered under Social Security
> beginning January 1, 1984.]{.underline}

H.R. Rep. No. 98-25, at 39 (1983) (emphasis added), [reprinted
in]{.underline} 1983 U.S.C.C.A.N. 219, 257-58.

Thus, the exception to new paragraph (5) added by the Social Security
Amendments of 1983 specifically required these exempted high-level
federal employees to participate in the Social Security program while
freeing them of any added financial obligation so long as they
previously had participated in other contributory retirement programs.
[See]{.underline} [Hatter]{.underline}, 532 U.S. at 564; Social Security
Amendments of 1983, § 101(a)(1), 97 Stat. 65, 67-68. As the House Report
recognized, the exception to new paragraph (5) brought such service
under Social Security coverage for the first time. H.R. Rep. No. 98-25,
at 39 (1983), [reprinted in]{.underline} 1983 U.S.C.C.A.N. 219, 258.
Thus, the service of only these exempted high-level federal employees
became "covered service" "by reason of" section 101 of the Social
Security Amendments of 1983.

Buie's service was not "covered service" within the meaning of the
exception to 5 U.S.C. § 8334(c). Buie's non-CSRS service between January
24, 1994 and July 17, 1999 would have been subject to Social Security
coverage under the provisions of the Social Security Act in effect
before the enactment of the Social Security Amendments of 1983, and
therefore did not [become]{.underline} "covered service" "by reason of"
those amendments. [See]{.underline} 5 U.S.C. § 8334(c) (2000); Federal
Employees' Retirement Contribution Temporary Adjustment Act of 1983,
Pub. L. No. 98-168, § 203(a)(3), 97 Stat. 1106, 1107;
[Buie]{.underline}, 94 M.S.P.R. at 602; [see also]{.underline} [Taxera
II]{.underline}, 95 M.S.P.R. at 101. Buie is therefore not eligible for
the reduced deposit rate exception in 5 U.S.C. § 8334(c).

CONCLUSION

Because Buie's service was not "covered service" as defined by section
203(a)(3) of FERCTAA, we affirm that Buie is not entitled to a reduced
deposit rate contained in the exception to 5 U.S.C. § 8334(c).

[AFFIRMED]{.underline}

COSTS

No costs.