IB

Union Calendar No. 461

106TH CONGRESS

2D SESSION H. R. 4844

[Report No. 106–777, Parts I and II]

To modernize the financing of the railroad retirement system and to provide

enhanced benefits to employees and beneficiaries.

IN THE HOUSE OF REPRESENTATIVES

JULY 13, 2000

Mr. SHUSTER (for himself, Mr. OBERSTAR, Mr. ARCHER, Mr. RANGEL, Mr.

PETRI, Mr. RAHALL, Mr. SHAW, and Mr. MATSUI) introduced the following bill; which was referred to the Committee on Transportation and

Infrastructure, and in addition to the Committee on Ways and Means,

for a period to be subsequently determined by the Speaker, in each case

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

JULY 20, 2000

Reported from the Committee on Transportation and Infrastructure with an

amendment

[Strike out all after the enacting clause and insert the part printed in italic]

JULY 20, 2000

Referral to the Committee on Ways and Means extended for a period ending

not later than July 27, 2000

JULY 26, 2000

Additional sponsors: Mr. QUINN, Mr. LIPINSKI, Mr. BACHUS, Mr. WISE, Mrs.

JOHNSON of Connecticut, Mr. JEFFERSON, Mr. CAMP, Mrs.

NAPOLITANO, Mr. TERRY, Mr. BROWN of Ohio, Mr. DICKEY, Mr. UDALL

of New Mexico, Mr. REYNOLDS, Mr. MASCARA, Mr. COOKSEY, Mr.

WYNN, Mr. DUNCAN, Mr. BARCIA, Mr. NEY, Mr. MEEKS of New York,

Mr. KING, Mr. PETERSON of Minnesota, Mr. POMBO, Mr. CUMMINGS,

Mr. LATOURETTE, Mr. BRADY of Pennsylvania, Mr. FRANKS of New Jersey, Mr. COSTELLO, Mr. ISAKSON, Mr. KANJORSKI, Mr. WHITFIELD, Mr.

BOSWELL, Ms. PRYCE of Ohio, Ms. BROWN of Florida, Mr. HORN, Mr.

KUCINICH, Mr. WELLER, Mr. SKELTON, Mr. KUYKENDALL, Ms. KIL-
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PATRICK, Mr. CHAMBLISS, Mr. BERRY, Mr. SESSIONS, Mrs. TAUSCHER,

Mr. COOK, Mr. PRICE of North Carolina, Mr. DAVIS of Virginia, Mr.

ABERCROMBIE, Mr. LUCAS of Oklahoma, Mr. TURNER, Mrs. KELLY, Mr.

DOYLE, Mr. GILCHREST, Mr. CRAMER, Mr. SAXTON, Mr. SHOWS, Mr.

FOLEY, Mr. SNYDER, Mr. HULSHOF, Mr. KILDEE, Mr. COLLINS, Mr.

MURTHA, Mr. LAHOOD, Mr. FROST, Mr. SHERWOOD, Mr. ANDREWS,

Mrs. FOWLER, Mr. TANCREDO, Mr. RAMSTAD, Mr. HUTCHINSON, Mr.

PETERSON of Pennsylvania, Mr. SIMPSON, Mr. RUSH, Mr. BEREUTER,

Mrs. MALONEY of New York, Mr. BLILEY, Mrs. THURMAN, Mr.

STEARNS, Mr. STUPAK, Mr. SWEENEY, Mr. FRANK of Massachusetts,

Mr. EHRLICH, Ms. KAPTUR, Mr. THUNE, Mr. PHELPS, Mr. EHLERS, Mr.

HASTINGS of Florida, Mr. GOODLING, Mr. VENTO, Mr. MICA, Mr. LUTHER, Mr. BLUNT, Mr. KLINK, Mr. TIERNEY, Mr. BORSKI, Ms. NORTON,

Mr. MENENDEZ, Mr. KENNEDY of Rhode Island, Mr. CONYERS, Mr.

GREEN of Texas, Mr. GONZALEZ, Ms. STABENOW, Ms. SLAUGHTER, Ms.

BERKLEY, Mr. EVANS, Mr. BILBRAY, Mr. HINCHEY, Mr. LEWIS of Kentucky, Mr. SISISKY, Mr. BARTON of Texas, Mr. DINGELL, Mr. BAKER,

Mr. HOLT, Mr. BASS, Mr. HOEFFEL, Mr. GOODLATTE, Mr. SAWYER, Mr.

TIAHRT, Mr. BLUMENAUER, Mr. LATHAM, Mr. BONIOR, Mr. WATKINS,

Mr. BENTSEN, Mr. DAVIS of Illinois, Mr. LEWIS of Georgia, Ms. EDDIE

BERNICE JOHNSON of Texas, Mr. BONILLA, Mr. VISCLOSKY, Mr. DIAZBALART, Mr. GEPHARDT, Mr. ROMERO-BARCELO ́

, Mrs. MEEK of Florida,

Mr. BECERRA, Mr. PASTOR, Mr. SPRATT, Ms. HOOLEY of Oregon, Ms.

MILLENDER-MCDONALD, Ms. ROS-LEHTINEN, Ms. SCHAKOWSKY, Mr.

LOBIONDO, Mr. WEINER, Mr. SHIMKUS, Mr. SCOTT, Mrs. BIGGERT, Mr.

UDALL of Colorado, Mr. DOOLITTLE, Mr. CLYBURN, Mrs. EMERSON, Mr.

MOORE, Mrs. MCCARTHY of New York, Mr. JOHN, Mr. BACA, Mr. ROTHMAN, Mr. WAXMAN, Mr. WATTS of Oklahoma, Mr. ENGLISH, Mr.

NETHERCUTT, Mr. CASTLE, Mr. HILLIARD, Mr. FILNER, Mr. LUCAS of

Kentucky, Mr. GEKAS, Mr. JACKSON of Illinois, Mr. WALSH, Mr. BARRETT of Nebraska, Ms. DEGETTE, Mr. ETHERIDGE, Mr. GUTIERREZ,

Ms. RIVERS, Mr. LANTOS, Mr. PAYNE, Mr. ENGEL, Mrs. CLAYTON, Mr.

MCGOVERN, Mr. GEORGE MILLER of California, Mr. WEXLER, Mr. PICKERING, Mr. YOUNG of Alaska, Mr. CALLAHAN, Mr. THOMPSON of Mississippi, Mr. DEFAZIO, Mr. HALL of Texas, Mr. UPTON, Mr. CALVERT,

Mr. FALEOMAVAEGA, Mr. KLECZKA, Mr. LINDER, Mr. BALDACCI, Ms.

DUNN, Mr. RODRIGUEZ, Mr. GANSKE, Mr. GREENWOOD, Mr. BRADY of

Texas, Ms. GRANGER, Mr. SKEEN, Mr. HOBSON, Mr. GREEN of Wisconsin, Mr. MCHUGH, Mr. HASTINGS of Washington, Mr. WALDEN of

Oregon, Mr. JONES of North Carolina, Mrs. CHENOWETH-HAGE, Mr.

MOLLOHAN, Mr. LAZIO, Mr. TRAFICANT, Mr. CANADY of Florida, Mr.

DEUTSCH, Mr. EVERETT, Mr. HOLDEN, Mr. FLETCHER, Mr. BISHOP,

Mr. BRYANT, Mr. CROWLEY, Mr. ISTOOK, Ms. DELAURO, Mr. ROGAN,

Mr. SANDLIN, Ms. PELOSI, Ms. CARSON, Mr. GORDON, Mr. POMEROY,

Mr. LAMPSON, Mr. REYES, Mrs. MINK of Hawaii, Mr. DICKS, Mr. MCINTYRE, Mr. CANNON, Mr. FRELINGHUYSEN, Ms. JACKSON-LEE of Texas,

Mr. WELDON of Pennsylvania, Mr. PACKARD, Mr. GILLMOR, Mrs. ROUKEMA, Mr. ORTIZ, Mrs. MORELLA, Mr. SANDERS, Mrs. NORTHUP, Mr.

PALLONE, Mr. ADERHOLT, Mr. CLEMENT, Mr. BOYD, Mr. ROEMER, Mr.

HYDE, Mr. SMITH of New Jersey, Mr. BERMAN, Mr. LEACH, Mr. WU,

Ms. LEE, Mr. DAVIS of Florida, Mr. MARKEY, Ms. BALDWIN, Mr.
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STRICKLAND, Mr. BAIRD, Mr. WATT of North Carolina, Mr. SMITH of

Washington, Mr. OBEY, Mrs. MYRICK, Mr. MARTINEZ, Mr. BOEHNER,

Mr. OLVER, Mr. RYAN of Wisconsin, Mr. JENKINS, Mr. GALLEGLY, Mr.

MCDERMOTT, Ms. MCKINNEY, Mr. FORBES, Mr. BURR of North Carolina, Mr. FATTAH, Mr. HANSEN, Mr. KNOLLENBERG, Mr. MOAKLEY, Mr.

NEAL of Massachusetts, Mr. MEEHAN, Mr. TAUZIN, Mr. COYNE, Mr.

COMBEST, Mr. MCNULTY, Mr. GRAHAM, Mr. ROGERS, Mr. GUTKNECHT,

Mr. CAPUANO, Mr. BARR of Georgia, Mrs. CHRISTENSEN, Mr. WICKER,

Ms. ROYBAL-ALLARD, Mr. THOMPSON of California, Mr. SPENCE, Mr.

HILL of Montana, Mr. MORAN of Virginia, Mr. CONDIT, Mr. BOUCHER,

Mr. HAYES, Mr. TANNER, Mr. DELAHUNT, Mr. BARTLETT of Maryland,

Mr. OWENS, Mr. CLAY, and Mr. COBLE

JULY 26, 2000

Reported from the Committee on Ways and Means with an amendment, committed to the Committee of the Whole House on the State of the Union,

and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in boldface]

[For text of introduced bill, see copy of bill as introduced on July 13, 2000]

A BILL

To modernize the financing of the railroad retirement system

and to provide enhanced benefits to employees and beneficiaries.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Railroad Retirement and Survivors’ Improvement Act of

6 2000’’.

7 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

TITLE I—AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974

Sec. 101. Expansion of widow’s and widower’s benefits.

Sec. 102. Retirement age restoration.
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Sec. 103. Vesting requirement.

Sec. 104. Repeal of railroad retirement maximum.

Sec. 105. Investment of railroad retirement assets.

Sec. 106. Elimination of supplemental annuity account.

Sec. 107. Transfer authority revisions.

Sec. 108. Annual ratio projections and certifications by the Railroad Retirement

Board.

TITLE II—AMENDMENTS TO THE INTERNAL REVENUE CODE OF

1986

Sec. 201. Amendments to the Internal Revenue Code of 1986.

Sec. 202. Exemption from tax for Railroad Retirement Investment Trust.

Sec. 203. Repeal of supplemental annuity tax.

Sec. 204. Employer, employee representative, and employee tier 2 tax rate adjustments.

1 TITLE I—AMENDMENTS TO RAIL2 ROAD RETIREMENT ACT OF

3 1974

4 SEC. 101. EXPANSION OF WIDOW’S AND WIDOWER’S BENE5 FITS.

6 (a) IN GENERAL.—Section 4(g) of the Railroad Retire7 ment Act of 1974 is amended by adding at the end the fol8 lowing new subdivision:

9 ‘‘(10)(i) If for any month the unreduced annuity pro10 vided under this section for a widow or widower is less than

11 the widow’s or widower’s initial minimum amount com12 puted pursuant to paragraph (ii) of this subdivision, the

13 unreduced annuity shall be increased to that initial min14 imum amount. For the purposes of this subdivision, the un15 reduced annuity is the annuity without regard to any de16 duction on account of work, without regard to any reduc17 tion for entitlement to an annuity under section 2(a)(1)

18 of this Act, without regard to any reduction for entitlement
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1 to a benefit under title II of the Social Security Act, and

2 without regard to any reduction for entitlement to a public

3 service pension pursuant to sections 202(e)(7), 202(f)(2), or

4 section 202(g)(4) of the Social Security Act.

5 ‘‘(ii) For the purposes of this subdivision, the widow

6 or widower’s initial minimum amount is the amount of the

7 unreduced annuity computed at the time an annuity is

8 awarded to that widow or widower, except that—

9 ‘‘(A) in subsection (g)(1)(i) ‘100 per centum’

10 shall be substituted for ‘50 per centum’; and

11 ‘‘(B) in subsection (g)(2)(ii) ‘130 per centum’

12 shall be substituted for ‘80 per centum’ both places it

13 appears.

14 ‘‘(iii) If a widow or widower who was previously enti15 tled to a widow’s or widower’s annuity under section

16 2(d)(1)(ii) of this Act becomes entitled to a widow’s or wid17 ow’s annuity under section 2(d)(1)(i) of this Act, a new

18 initial minimum amount shall be computed at the time of

19 award of the widow’s or widower’s annuity under section

20 2(d)(1)(i) of this Act.’’.

21 (b) EFFECTIVE DATE.—

22 (1) GENERALLY.—The amendment made by this

23 section shall take effect January 1, 2001 and shall

24 apply to annuity amounts accruing for months after

25 December 2000 in the case of annuities awarded on
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1 or after that date and in the case of annuities award2 ed before that date if the annuity amount under sec3 tion 4(g) of the Railroad Retirement Act was com4 puted under section 4(g), as amended by Public Law

5 97–35.

6 (2) SPECIAL RULE FOR ANNUITIES AWARDED BE7 FORE JANUARY 1, 2001.—In applying the amendments

8 made by this section to annuities awarded before Jan9 uary 1, 2001, the calculation of the initial minimum

10 amount under new section 4(g)(10)(ii) of the Act shall

11 be made as of the date of award of the widow’s or

12 widower’s annuity.

13 SEC. 102. RETIREMENT AGE RESTORATION.

14 (a) EMPLOYEE ANNUITIES.—Section 3(a)(2) of the

15 Railroad Retirement Act of 1974 is amended by inserting

16 after ‘‘(2)’’ the following: ‘‘For purposes of this subsection,

17 individuals entitled to an annuity under section 2(a)(1)(ii)

18 of this Act shall, except for the purposes of recomputations

19 in accordance with section 215(f) of the Social Security Act,

20 be deemed to have attained retirement age (as defined by

21 section 216(l) of the Social Security Act).’’.

22 (b) SPOUSE AND SURVIVOR ANNUITIES.—Section

23 4(a)(2) of the Railroad Retirement Act of 1974 is amended

24 by striking ‘‘if an’’ and all that follows through ‘‘section
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1 2(c)(1) of this Act’’ and inserting ‘‘a spouse entitled to an

2 annuity under section 2(c)(1)(ii)(B) of this Act’’.

3 (c) CONFORMING REPEALS.—Sections 3(a)(3), 4(a)(3),

4 and 4(a)(4) of the Railroad Retirement Act are repealed.

5 (d) EFFECTIVE DATES.—

6 (1) GENERALLY.—Except as provided in para7 graph (2), the amendments made by this section shall

8 apply to annuities that begin to accrue on or after

9 January 1, 2001.

10 (2) EXCEPTION.—The amount of the annuity

11 provided for a spouse under section 4(a) shall be com12 puted under section 4(a)(3), as in effect before the

13 date of the enactment of this section, if the annuity

14 amount provided under section 3(a) for the indi15 vidual on whose employment record the spouse annu16 ity is based was computed under section 3(a)(3), as

17 in effect before the date of the enactment of this sec18 tion.

19 SEC. 103. VESTING REQUIREMENT.

20 (a) CERTAIN ANNUITIES FOR INDIVIDUALS.—Section

21 2(a) of the Railroad Retirement Act of 1974 is amended—

22 (1) by inserting in subdivision (1) ‘‘or, for pur23 poses of paragraphs (i), (iii), and (v), five years of

24 service, all of which accrues after December 31, 1995,’’

25 after ‘‘ten years of service’’, and
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1 (2) by adding at the end the following:

2 ‘‘(4) An individual who is entitled to an annuity

3 under paragraph (v) of subdivision (1), but who does not

4 have at least ten years of service, shall, prior to the month

5 in which the individual attains age 62, be entitled only to

6 an annuity amount computed under section 3(a) of this Act

7 (without regard to section 3(a)(2) of this Act) or section

8 3(f)(3) of this Act. Upon attainment of age 62, such an in9 dividual may also be entitled to an annuity amount com10 puted under section 3(b), but such annuity amount shall

11 be reduced for early retirement in the same manner as if

12 the individual were entitled to an annuity under section

13 2(a)(1)(iii).’’.

14 (b) COMPUTATION RULE FOR INDIVIDUALS’ ANNU15 ITIES.—Section 3(a) of the Railroad Retirement Act of

16 1974, as amended by section 102 of this Act, is further

17 amended by adding at the end the following new subdivi18 sion:

19 ‘‘(3) If an individual entitled to an annuity under sec20 tion 2(a)(1)(i) or (iii) of this Act on the basis of less than

21 ten years of service is entitled to a benefit under section

22 202(a), section 202(b), or section 202(c) of the Social Secu23 rity Act which began to accrue before the annuity under

24 section 2(a)(1)(i) or (iii) of this Act, the annuity amount

25 provided such individual under this subsection, shall be
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1 computed as though the annuity under this Act began to

2 accrue on the later of (A) the date on which the benefit

3 under section 202(a), section 202(b), or section 202(c) of

4 the Social Security Act began or (B) the date on which the

5 individual first met the conditions for entitlement to an age

6 reduced annuity under this Act other than the conditions

7 set forth in sections 2(e)(1) and 2(e)(2) of this Act and the

8 requirement that an application be filed.’’.

9 (c) SURVIVORS’ ANNUITIES.—Section 2(d)(1) of the

10 Railroad Retirement Act of 1974 is amended by inserting

11 ‘‘or five years of service, all of which accrues after December

12 31, 1995,’’ after ‘‘ten years of service’’.

13 (d) LIMITATION ON ANNUITY AMOUNTS.—Section 2 of

14 the Railroad Retirement Act of 1974 is amended by adding

15 at the end the following:

16 ‘‘(i) An individual entitled to an annuity under this

17 section who has completed five years of service, all of which

18 accrues after 1995, but who has not completed ten years

19 of service, and the spouse, divorced spouse, and survivors

20 of such individual, shall not be entitled to an annuity

21 amount provided under section 3(a), section 4(a), or section

22 4(f) of this Act unless the individual, or the individual’s

23 spouse, divorced spouse, or survivors, would be entitled to

24 a benefit under the Social Security Act on the basis of the
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1 individual’s employment record under both the Railroad

2 Retirement Act and the Social Security Act.’’.

3 (e) COMPUTATION RULE FOR SPOUSES’ ANNUITIES.—

4 Section 4(a) of the Railroad Retirement Act of 1974, as

5 amended by section 102 of this Act, is further amended by

6 adding at the end the following new subdivision:

7 ‘‘(3) If a spouse entitled to an annuity under section

8 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), or section 2(c)(2) of

9 this Act or a divorced spouse entitled to an annuity under

10 section 2(c)(4) of this Act on the basis of the employment

11 record of an employee who will have completed less than

12 10 years of service is entitled to a benefit under section

13 202(a), section 202(b), or section 202(c) of the Social Secu14 rity Act which began to accrue before the annuity under

15 section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), section 2(c)(2),

16 or section 2(c)(4) of this Act, the annuity amount provided

17 under this subsection shall be computed as though the annu18 ity under this Act began to accrue on the later of (A) the

19 date on which the benefit under section 202(a), section

20 202(b), or section 202(c) of the Social Security Act began

21 or (B) the first date on which the annuitant met the condi22 tions for entitlement to an age reduced annuity under this

23 Act other than the conditions set forth in sections 2(e)(1)

24 and 2(e)(2) of this Act and the requirement that an applica25 tion be filed.’’.
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1 (f) APPLICATION DEEMING PROVISION.—Section 5(b)

2 of the Railroad Retirement Act of 1974 is amended by strik3 ing the second sentence and inserting the following: ‘‘An

4 application filed with the Board for an employee annuity,

5 spouse annuity, or divorced spouse annuity on the basis of

6 the employment record of an employee who will have com7 pleted less than ten years of service shall be deemed to be

8 an application for any benefit to which such applicant may

9 be entitled under this Act or section 202(a), section 202(b),

10 or section 202(c) of the Social Security Act. An application

11 filed with the Board for an annuity on the basis of the em12 ployment record of an employee who will have completed

13 ten years of service shall, unless the applicant specified oth14 erwise, be deemed to be an application for any benefit to

15 which such applicant may be entitled under this Act or title

16 II of the Social Security Act.’’.

17 (g) CREDITING SERVICE UNDER THE SOCIAL SECU18 RITY ACT.—Section 18(2) of the Railroad Retirement Act

19 of 1974 is amended—

20 (1) by inserting ‘‘or less than five years of serv21 ice, all of which accrues after December 31, 1995,’’

22 after ‘‘ten years of service’’ every place it occurs; and

23 (2) by inserting ‘‘or five or more years of service,

24 all of which accrues after December 31, 1995,’’ after

25 ‘‘ten or more years of service’’.
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1 (h) AUTOMATIC BENEFIT ELIGIBILITY ADJUST2 MENTS.—Section 19 of Railroad Retirement Act of 1974 is

3 amended—

4 (1) by inserting ‘‘or five or more years of service,

5 all of which accrues after December 31, 1995,’’ after

6 ‘‘ten years of service’’ in subsection (c); and

7 (2) by inserting ‘‘or five or more years of service,

8 all of which accrues after December 31, 1995,’’ after

9 ‘‘ten years of service’’ in subsection (d)(2).

10 (i) CONFORMING AMENDMENTS.—

11 (1) Section 6(e)(1) of the Railroad Retirement

12 Act of 1974 is amended by inserting ‘‘or five or more

13 years of service, all of which accrues after December

14 31, 1995,’’ after ‘‘ten years of service’’.

15 (2) Section 7(b)(2) of the Railroad Retirement

16 Act of 1974 is amended by inserting ‘‘or five or more

17 years of service, all of which accrues after December

18 31, 1995,’’ after ‘‘ten years of service’’.

19 (3) Section 205(i) of the Social Security Act is

20 amended by inserting ‘‘or five or more years of serv21 ice, all of which accrues after December 31, 1995,’’

22 after ‘‘ten years of service’’.

23 (j) EFFECTIVE DATE.—The amendments made by this

24 section shall take effect January 1, 2001.
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1 SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.

2 (a) EMPLOYEE ANNUITIES.—Section 3(f) of the Rail3 road Retirement Act of 1974 is amended by striking para4 graph (1).

5 (b) SPOUSE AND SURVIVOR ANNUITIES.—Section 4 of

6 the Railroad Retirement Act of 1974 is amended by striking

7 subsection (c).

8 (c) EFFECTIVE DATE.—The amendments made by this

9 section shall be effective January 1, 2001, and shall apply

10 to annuity amounts accruing for months after December

11 2000.

12 SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.

13 (a) ESTABLISHMENT OF RAILROAD RETIREMENT IN14 VESTMENT TRUST.—Section 15 of the Railroad Retirement

15 Act of 1974 is amended by inserting after subsection (i)

16 the following:

17 ‘‘(j) RAILROAD RETIREMENT INVESTMENT TRUST.—

18 ‘‘(1) ESTABLISHMENT.—The Railroad Retire19 ment Investment Trust (hereinafter in this subsection

20 referred to as the ‘Trust’) is hereby established. The

21 Trust shall manage and invest the assets of the Rail22 road Retirement Trust Fund (hereinafter in this sec23 tion referred to as the ‘‘Fund’’, which is hereby estab24 lished as a trust organized in the District of Colum25 bia and shall, to the extent not inconsistent with this
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1 Act, be subject to the laws of the District of Columbia

2 applicable to such trusts.

3 ‘‘(2) NOT A FEDERAL AGENCY OR INSTRUMEN4 TALITY.—The Trust is not a department, agency, or

5 instrumentality of the Government of the United

6 States and shall not be subject to title 31, United

7 States Code.

8 ‘‘(3) BOARD OF TRUSTEES.—

9 ‘‘(A) GENERALLY.—The Trust shall have a

10 Board of Trustees, consisting of 7 members, each

11 appointed by a unanimous vote of the Railroad

12 Retirement Board. The Railroad Retirement

13 Board may remove any member so appointed by

14 unanimous vote. Of the 7 members, 3 shall rep15 resent the interests of labor, 3 shall represent the

16 interests of management, and 1 shall represent

17 the interests of the general public. The members

18 of the Board of Trustees shall not be considered

19 officers or employees of the Government of the

20 United States.

21 ‘‘(B) QUALIFICATIONS.—Members of the

22 Board of Trustees shall be appointed only from

23 among persons who have experience and exper24 tise in the management of financial investments

25 and pension plans. No member of the Railroad
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1 Retirement Board shall be eligible to be a mem2 ber of the Board of Trustees.

3 ‘‘(C) TERMS.—Except as provided in this

4 subparagraph, each member shall be appointed

5 for a 3-year term. The initial members ap6 pointed under this paragraph shall be divided

7 into 3 equal groups so nearly as may be, of

8 which one group will be appointed for a 1-year

9 term, one for a 2-year term, and one for a 3-year

10 term. A vacancy in the Board of Trustees shall

11 not affect the powers of the Board of Trustees

12 and shall be filled in the same manner as the se13 lection of the member whose departure caused the

14 vacancy. Upon the expiration of a term of a

15 member of the Board of Trustees, that member

16 shall continue to serve until a successor is ap17 pointed.

18 ‘‘(4) POWERS OF THE BOARD OF TRUSTEES.—

19 The Board of Trustees shall—

20 ‘‘(A) retain independent advisers to assist it

21 in the formulation and adoption of its invest22 ment guidelines;

23 ‘‘(B) retain independent investment man24 agers to invest the assets of the Fund in a man25 ner consistent with such investment guidelines;
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1 ‘‘(C) invest assets in the Fund, pursuant to

2 the policies adopted in subparagraph (A);

3 ‘‘(D) pay administrative expenses of the

4 Fund and the Trust from the money in the

5 Fund; and

6 ‘‘(E) transfer money to the disbursing agent

7 to pay benefits payable under this Act from

8 money in the Fund and administrative expenses

9 related to those benefits.

10 ‘‘(5) REPORTING REQUIREMENTS AND FIDUCIARY

11 STANDARDS.—The following reporting requirements

12 and fiduciary standards shall apply with respect to

13 the Railroad Retirement Trust and the Railroad Re14 tirement Trust Fund (and the assets held in such

15 Trust Fund):

16 ‘‘(A) DUTIES OF THE BOARD OF TRUST17 EES.—The Railroad Retirement Trust and each

18 member of the Board of Trustees shall discharge

19 their duties with respect to the assets of the Fund

20 solely in the interest of the Railroad Retirement

21 Board and through it, the participants and bene22 ficiaries of the programs funded under this

23 Act—

24 ‘‘(i) for the exclusive purpose of—
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1 ‘‘(I) providing benefits to partici2 pants and their beneficiaries; and

3 ‘‘(II) defraying reasonable ex4 penses of administering the functions

5 of the Trust;

6 ‘‘(ii) with the care, skill, prudence, and

7 diligence under the circumstances then pre8 vailing that a prudent person acting in a

9 like capacity and familiar with such mat10 ters would use in the conduct of an enter11 prise of a like character and with like aims;

12 ‘‘(iii) by diversifying investments so as

13 to minimize the risk of large losses, unless

14 under the circumstances it is clearly pru15 dent not to do so; and

16 ‘‘(iv) in accordance with Trust gov17 erning documents and instruments insofar

18 as such documents and instruments are con19 sistent with this Act.

20 ‘‘(B) PROHIBITIONS WITH RESPECT TO

21 MEMBERS OF THE BOARD OF TRUSTEES.—No

22 member of the Board of Trustees shall—

23 ‘‘(i) deal with the assets of the Fund in

24 the trustee’s own interest or for the trustee’s

25 own account;
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1 ‘‘(ii) in an individual or in any other

2 capacity act in any transaction involving

3 the assets of the Fund on behalf of a party

4 (or represent a party) whose interests are

5 adverse to the interests of the Trust, the

6 Fund, the Railroad Retirement Board, or

7 the interests of participants or beneficiaries;

8 or

9 ‘‘(iii) receive any consideration for the

10 trustee’s own personal account from any

11 party dealing with the assets of the Fund.

12 ‘‘(C) EXCULPATORY PROVISIONS AND INSUR13 ANCE.—Any provision in an agreement or in14 strument that purports to relieve a trustee from

15 responsibility or liability for any responsibility,

16 obligation or duty under this Act shall be void:

17 Provided, however, That nothing shall

18 preclude—

19 ‘‘(i) the Trust from purchasing insur20 ance for its trustees or for itself to cover li21 ability or losses occurring by reason of the

22 act or omission of a trustee, if such insur23 ance permits recourse by the insurer against

24 the trustee in the case of a breach of a fidu25 ciary obligation by such trustee;
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1 ‘‘(ii) a trustee from purchasing insur2 ance to cover liability under this section

3 from and for his own account; or

4 ‘‘(iii) an employer or an employee or5 ganization from purchasing insurance to

6 cover potential liability of one or more

7 trustees with respect to their fiduciary re8 sponsibilities, obligations, and duties under

9 this section.

10 ‘‘(D) BONDING.—Every trustee and every

11 person who handles funds or other property of

12 the Fund (hereafter in this subsection referred to

13 as ‘Trust official’) shall be bonded in accordance

14 with the following:

15 ‘‘(i) The amount of such bond shall be

16 fixed at the beginning of each fiscal year of

17 the Trust by the Railroad Retirement

18 Board. Such amount shall not be less than

19 10 percent of the amount of the funds han20 dled. In no case shall such bond be less than

21 $1,000 nor more than $500,000, except that

22 the Railroad Retirement Board, after con23 sideration of the record, may prescribe an

24 amount in excess of $500,000, subject to the
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1 10 per centum limitation of the preceding

2 sentence.

3 ‘‘(ii) It shall be unlawful for any Trust

4 official to receive, handle, disburse, or other5 wise exercise custody or control of any of

6 the funds or other property of the Fund

7 without being bonded as required by this

8 subsection and it shall be unlawful for any

9 Trust official, or any other person having

10 authority to direct the performance of such

11 functions, to permit such functions, or any

12 of them, to be performed by any Trust offi13 cial, with respect to whom the requirements

14 this subsection have not been met.

15 ‘‘(iii) It shall be unlawful for any per16 son to procure any bond required by this

17 subsection from any surety or other com18 pany or through any agent or broker in

19 whose business operations such person has

20 any control or significant financial interest,

21 direct or indirect.

22 ‘‘(E) AUDIT AND REPORT.—

23 ‘‘(i) The Trust shall annually engage

24 an independent qualified public accountant
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1 to audit the financial statements of the

2 Fund.

3 ‘‘(ii) The Trust shall submit an annual

4 management report to the Congress not

5 later than 180 days after the end of the

6 Trust’s fiscal year. A management report

7 under this subsection shall include—

8 ‘‘(I) a statement of financial posi9 tion;

10 ‘‘(II) a statement of operations;

11 ‘‘(III) a statement of cash flows;

12 ‘‘(IV) a statement on internal ac13 counting and administrative control

14 systems;

15 ‘‘(V) the report resulting from an

16 audit of the financial statements of the

17 Trust conducted under subparagraph

18 (E)(i); and

19 ‘‘(VI) any other comments and in20 formation necessary to inform the Con21 gress about the operations and finan22 cial condition of the Trust and the

23 Fund.

24 ‘‘(iii) The Trust shall provide the

25 President, the Railroad Retirement Board,
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1 and the Director of the Office of Manage2 ment and Budget a copy of the management

3 report when it is submitted to Congress.

4 ‘‘(F) ENFORCEMENT.—The Railroad Retire5 ment Board may bring a civil action—

6 ‘‘(i) to enjoin any act or practice by

7 the Railroad Retirement Investment Trust,

8 its Board of Trustees or its employees or

9 agents that violates any provision of this

10 Act; or

11 ‘‘(ii) to obtain other appropriate relief

12 to redress such violations, or to enforce any

13 provisions of this Act.

14 ‘‘(6) RULES AND ADMINISTRATIVE POWERS.—

15 The Board of Trustees shall have the authority to

16 make rules to govern its operations, employ profes17 sional staff, and contract with outside advisers to pro18 vide legal, accounting, investment advisory or other

19 services necessary for the proper administration of

20 this subsection. In the case of contracts with invest21 ment advisory services, compensation for such services

22 may be on a fixed contract fee basis or on such other

23 terms and conditions as are customary for such serv24 ices.
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1 ‘‘(7) QUORUM.—Five members of the Board of

2 Trustees constitute a quorum to do business. Invest3 ment guidelines must be adopted by a unanimous vote

4 of the entire Board of Trustees. All other decisions of

5 the Board of Trustees shall be decided by a majority

6 vote of the quorum present. All decisions of the Board

7 of Trustees shall be entered upon the records of the

8 Board of Trustees.’’.

9 (b) CONFORMING AND TECHNICAL AMENDMENTS GOV10 ERNING INVESTMENTS.—Subsection 15(e) of the Railroad

11 Retirement Act of 1974 is amended—

12 (1) beginning in the first sentence, by striking ‘‘,

13 the Dual Benefits Payments Account’’ and all that

14 follows through ‘‘may be made only’’ in the second

15 sentence and inserting ‘‘and the Dual Benefits Pay16 ments Account as are not transferred to the Railroad

17 Retirement Investment Trust as the Board may deter18 mine’’;

19 (2) by striking ‘‘the Second Liberty Bond Act, as

20 amended’’ and inserting ‘‘chapter 31 of title 31’’; and

21 (3) by striking ‘‘the foregoing requirements’’ and

22 inserting ‘‘the requirements of this subsection’’.

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall take effect on the date of the enactment of this

25 section.
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1 SEC. 106. ELIMINATION OF SUPPLEMENTAL ANNUITY AC2 COUNT.

3 (a) SOURCE OF PAYMENTS.—Section 7(c)(1) of the

4 Railroad Retirement Act of 1974 is amended by striking

5 ‘‘payments of supplemental annuities under section 2(b) of

6 this Act shall be made from the Railroad Retirement Sup7 plemental Account, and’’.

8 (b) ELIMINATION OF ACCOUNT.—Section 15(c) of the

9 Railroad Retirement Act of 1974 is repealed.

10 (c) IN GENERAL.—Section 15(a) of the Railroad Re11 tirement Act of 1974 is amended by striking ‘‘, except those

12 portions of the amounts covered into the Treasury under

13 sections 3211(b),’’ and all that follows through the end of

14 the subsection and inserting a period.

15 (d) EFFECTIVE DATE.—The amendments made by this

16 section shall take effect January 1, 2001, except that the

17 Railroad Retirement Supplemental Account shall continue

18 to exist until the transfer authorized by the following sen19 tence occurs. As soon as possible after December 31, 2000,

20 the Board shall determine the balance in the Railroad Re21 tirement Supplemental Account and shall direct the Sec22 retary of the Treasury to transfer such amount to the Rail23 road Retirement Trust Fund and the Secretary shall make

24 such transfer.
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1 SEC. 107. TRANSFER AUTHORITY REVISIONS.

2 (a) RAILROAD RETIREMENT ACCOUNT.—Section 15 of

3 the Railroad Retirement Act of 1974 is amended by adding

4 after subsection (j) the following:

5 ‘‘(k) TRANSFERS TO THE FUND.—The Board shall,

6 upon establishment of the Railroad Retirement Trust Fund

7 and from time to time thereafter, direct the Secretary of

8 the Treasury to transfer, in such manner as will maximize

9 the investment returns to the Railroad Retirement system,

10 that portion of the Railroad Retirement Account that is not

11 needed to pay current administrative expenses of the Board

12 to the Railroad Retirement Trust Fund. The Secretary shall

13 make that transfer.’’.

14 (b) RAILROAD RETIREMENT TRUST FUND.—Section

15 15 of the Railroad Retirement Act of 1974, as amended by

16 subsection (a), is further amended by adding after sub17 section (k) the following:

18 ‘‘(l) RAILROAD RETIREMENT TRUST FUND.—The

19 Railroad Retirement Trust shall from time to time transfer

20 to the disbursing agent described in section 7(b)(4) such

21 amounts as may be necessary to pay benefits under this

22 Act (other than benefits paid from the Social Security

23 Equivalent Benefit Account or the Dual Benefit Payments

24 Account).’’.
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1 (c) SOCIAL SECURITY EQUIVALENT BENEFIT AC2 COUNT.—Section 15A(d)(2) of the Railroad Retirement Act

3 of 1974 is amended to read as follows:

4 ‘‘(2) Upon establishment of the Railroad Retirement

5 Trust Fund and from time to time thereafter, the Board

6 shall direct the Secretary of the Treasury to transfer, in

7 such manner as will maximize the investment returns to

8 the Railroad Retirement system, the balance of the Social

9 Security Equivalent Benefit Account not needed to pay cur10 rent benefits required to be paid from that Account to the

11 Railroad Retirement Trust Fund, and the Secretary shall

12 make that transfer. Any balance transferred under this

13 paragraph shall be used by the Railroad Retirement Trust

14 only to pay benefits under this Act or to purchase obliga15 tions of the United States that are backed by the full faith

16 and credit of the United States pursuant to chapter 31 of

17 title 31, United States Code. The proceeds of sales of, and

18 the interest income from, such obligations shall be used by

19 the Trust only to pay benefits under this Act.’’.

20 (2) TRANSFERS TO DISBURSING AGENT.—Section

21 15A(c)(1) of the Railroad Retirement Act of 1974 is

22 amended by adding at the end the following: ‘‘The

23 Secretary shall from time to time transfer to the dis24 bursing agent under section 7(b)(4) amounts nec25 essary to pay those benefits.’’.
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1 (3) CONFORMING AMENDMENT.—Section

2 15A(d)(1) of the Railroad Retirement Act of 1974 is

3 amended by striking the second and third sentences.

4 (d) DUAL BENEFITS PAYMENTS ACCOUNT.—Section

5 15(d)(1) of the Railroad Retirement Act of 1974 is amended

6 by adding at the end the following: ‘‘The Secretary of the

7 Treasury shall from time to time transfer from the Dual

8 Benefits Payments Account to the disbursing agent under

9 section 7(b)(4) amounts necessary to pay benefits payable

10 from that Account.’’.

11 (e) CERTIFICATION BY THE BOARD AND PAYMENT.—

12 Paragraph (4) of section 7(b) of the Railroad Retirement

13 Act of 1974 is amended to read as follows:

14 ‘‘(4)(A) The Railroad Retirement Board, after con15 sultation with the Board of Trustees of the Railroad Retire16 ment Trust and the Secretary of the Treasury, shall enter

17 into an arrangement with a nongovernmental financial in18 stitution to serve as disbursing agent for benefits payable

19 under this Act who shall disburse consolidated benefits

20 under this Act to each recipient.

21 ‘‘(B) The Board shall from time to time certify—

22 ‘‘(i) to the Secretary of the Treasury the amounts

23 required to be transferred from the Social Security

24 Equivalent Benefit Account and the the Dual Benefits

25 Payments Account to the disbursing agent to make
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1 payments of benefits and the Secretary of the Treas2 ury shall transfer those amounts;

3 ‘‘(ii) to the Board of Trustees of the Railroad Re4 tirement Investment Trust the amounts required to be

5 transferred from the Railroad Retirement Investment

6 Trust to the disbursing agent to make payments of

7 benefits and the Board of Trustees shall transfer those

8 amounts; and

9 ‘‘(iii) to the disbursing agent the name and ad10 dress of each individual entitled to receive a payment,

11 the amount of such payment, and the time at which

12 the payment should be made.’’.

13 (f) BENEFIT PAYMENTS.—Section 7(c)(1) of the Rail14 road Retirement Act of 1974 is amended—

15 (1) by striking ‘‘from the Railroad Retirement

16 Account’’ and inserting ‘‘by the disbursing agent

17 under subsection (b)(4) from money transferred to it

18 from the Railroad Retirement Trust Fund or the So19 cial Security Equivalent Benefit Account, as the case

20 may be’’; and

21 (2) by inserting ‘‘by the disbursing agent under

22 subsection (b)(4) from money transferred to it’’ after

23 ‘‘Public Law 93–445 shall be made’’.

24 (g) TRANSITIONAL RULE FOR EXISTING OBLIGA25 TION.—In making transfers under subsections (a) and (c),
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1 the Board shall consult with the Secretary of the Treasury

2 to design an appropriate method to transfer obligations held

3 as of the date of enactment or to convert such obligations

4 to cash prior to transfer. The Railroad Retirement Trust

5 may hold to maturity any obligations so received or may

6 redeem them prior to maturity, as the Trust deems appro7 priate.

8 SEC. 108. ANNUAL RATIO PROJECTIONS AND CERTIFI9 CATIONS BY THE RAILROAD RETIREMENT

10 BOARD.

11 (a) PROJECTIONS.—Section 22(a)(1) of the Railroad

12 Retirement Act of 1974 is amended—

13 (1) by adding the following sentence after the

14 first sentence: ‘‘On or before May 1 of each year be15 ginning in 2002, the Railroad Retirement Board

16 shall compute its projection of the account benefits

17 ratio and the average account benefits ratio (as de18 fined by section 3241(c) of the Internal Revenue Code

19 of 1986) for each of the next succeeding five fiscal

20 years.’’; and

21 (2) by striking ‘‘the projection prepared pursu22 ant to the preceding sentence’’ and inserting ‘‘the pro23 jections prepared pursuant to the preceding two sen24 tences’’.
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1 (b) CERTIFICATIONS.—The Railroad Retirement Act of

2 1974 is amended by adding at the end the following:

3 ‘‘COMPUTATION AND CERTIFICATION OF ACCOUNT BENEFIT

4 RATIOS

5 ‘‘SEC. 23. (a) On or before November 1, 2002, the Rail6 road Retirement Board shall—

7 ‘‘(1) compute the account benefits ratios for each

8 of the most recent 10 preceding fiscal years, and

9 ‘‘(2) certify the account benefits ratios for each

10 such fiscal year to the Secretary.

11 ‘‘(b) On or before November 1 of each year after 2002,

12 the Railroad Retirement Board shall—

13 ‘‘(1) compute the account benefits ratio for the

14 fiscal year ending in such year, and

15 ‘‘(2) certify the account benefits ratio for such

16 fiscal year to the Secretary.

17 ‘‘(c) DEFINITION.—As used in this section, the term

18 ‘account benefit ratio’ has the meaning given that term in

19 section 3241(c) of the Internal Revenue Code of 1986.’’.

20 TITLE II—AMENDMENTS TO THE

21 INTERNAL REVENUE CODE OF

22 1986

23 SEC. 201. AMENDMENTS TO THE INTERNAL REVENUE CODE

24 OF 1986.

25 Except as otherwise provided, whenever in this title

26 an amendment or repeal is expressed in terms of an amend-
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1 ment to, or repeal of, a section or other provision, the ref2 erence shall be considered to be made to a section or other

3 provision of the Internal Revenue Code of 1986.

4 SEC. 202. EXEMPTION FROM TAX FOR RAILROAD RETIRE5 MENT INVESTMENT TRUST.

6 Subsection (c) of section 501 is amended by adding

7 at the end the following new paragraph:

8 ‘‘(28) The Railroad Retirement Investment Trust

9 established under section 15(j) of the Railroad Retire10 ment Act of 1974.’’

11 SEC. 203. REPEAL OF SUPPLEMENTAL ANNUITY TAX.

12 (a) REPEAL OF TAX ON EMPLOYEE REPRESENTA13 TIVES.—Section 3211 is amended by striking subsection (b).

14 (b) REPEAL OF TAX ON EMPLOYERS.—Section 3221

15 is amended by striking subsections (c) and (d).

16 (c) EFFECTIVE DATE.—The amendments made by this

17 section shall apply to calendar years beginning after De18 cember 31, 2000.

19 SEC. 204. EMPLOYER, EMPLOYEE REPRESENTATIVE, AND

20 EMPLOYEE TIER 2 TAX RATE ADJUSTMENTS.

21 (a) RATE OF TAX ON EMPLOYERS.—Subsection (b) of

22 section 3221 is amended to read as follows:

23 ‘‘(b) TIER 2 TAX.—

24 ‘‘(1) IN GENERAL.—In addition to other taxes,

25 there is hereby imposed on every employer an excise
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1 tax, with respect to having individuals in his employ,

2 equal to the applicable percentage of the compensation

3 paid during any calendar year by such employer for

4 services rendered to such employer.

5 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

6 of paragraph (1), the term ‘applicable percentage’

7 means—

8 ‘‘(A) 15.6 percent in the case of compensa9 tion paid during 2001,

10 ‘‘(B) 14.2 percent in the case of compensa11 tion paid during 2002, and

12 ‘‘(C) in the case of compensation paid dur13 ing any calendar year after 2002, the percentage

14 determined under section 3241 for such calendar

15 year.’’.

16 (b) RATE OF TAX ON EMPLOYEE REPRESENTA17 TIVES.—Section 3211, as amended by section 203, is

18 amended by striking subsection (a) and inserting the fol19 lowing new subsections:

20 ‘‘(a) TIER 1 TAX.—In addition to other taxes, there

21 is hereby imposed on the income of each employee represent22 ative a tax equal to the applicable percentage of the com23 pensation received during any calendar year by such em24 ployee representative for services rendered by such employee

25 representative. For purposes of the preceding sentence, the
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1 term ‘applicable percentage’ means the percentage equal to

2 the sum of the rates of tax in effect under subsections (a)

3 and (b) of section 3101 and subsections (a) and (b) of sec4 tion 3111 for the calendar year.

5 ‘‘(b) TIER 2 TAX.—

6 ‘‘(1) IN GENERAL.—In addition to other taxes,

7 there is hereby imposed on the income of each em8 ployee representative a tax equal to the applicable

9 percentage of the compensation received during any

10 calendar year by such employee representatives for

11 services rendered by such employee representative.

12 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

13 of paragraph (1), the term ‘applicable percentage’

14 means—

15 ‘‘(A) 14.75 percent in the case of compensa16 tion received during 2001,

17 ‘‘(B) 14.20 percent in the case of compensa18 tion received during 2002, and

19 ‘‘(C) in the case of compensation received

20 during any calendar year after 2002, the per21 centage determined under section 3241 for such

22 calendar year.
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1 ‘‘(c) CROSS REFERENCE.—

‘‘For application of different contribution bases

with respect to the taxes imposed by subsections (a)

and (b), see section 3231(e)(2).’’.

2 (c) RATE OF TAX ON EMPLOYEES.—Subsection (b) of

3 section 3201 is amended to read as follows:

4 ‘‘(b) TIER 2 TAX.—

5 ‘‘(1) IN GENERAL.—In addition to other taxes,

6 there is hereby imposed on the income of each em7 ployee a tax equal to the applicable percentage of the

8 compensation received during any calendar year by

9 such employee for services rendered by such employee.

10 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

11 of paragraph (1), the term ‘applicable percentage’

12 means—

13 ‘‘(A) 4.90 percent in the case of compensa14 tion received during 2001 or 2002, and

15 ‘‘(B) in the case of compensation received

16 during any calendar year after 2002, the per17 centage determined under section 3241 for such

18 calendar year.’’.

19 (d) DETERMINATION OF RATE.—Chapter 22 is amend20 ed by adding at the end thereof the following new sub21 chapter:
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1 ‘‘Subchapter E—Tier 2 Tax Rate

2 Determination

‘‘Sec. 3241. Determination of tier 2 tax rate based on average account benefits ratio.

3 ‘‘SEC. 3241. DETERMINATION OF TIER 2 TAX RATE BASED

4 ON AVERAGE ACCOUNT BENEFITS RATIO.

5 ‘‘(a) IN GENERAL.—For purposes of sections 3201(b),

6 3211(b), and 3221(b), the applicable percentage for any cal7 endar year is the percentage determined in accordance with

8 the table in subsection (b).

9 ‘‘(b) TAX RATE SCHEDULE.—

Average account benefits ratio Applicable percentage for sections 3211(b) and

3221(b)

Applicable percentage for section

At least But less than 3201(b)

2.5 22.1 4.9

2.5 3.0 18.1 4.9

3.0 3.5 15.1 4.9

3.5 4.0 14.1 4.9

4.0 6.1 13.1 4.9

6.1 6.5 12.6 4.4

6.5 7.0 12.1 3.9

7.0 7.5 11.6 3.4

7.5 8.0 11.1 2.9

8.0 8.5 10.1 1.9

8.5 9.0 9.1 0.9

9.0 8.2 0

10 ‘‘(c) DEFINITIONS RELATED TO DETERMINATION OF

11 RATES OF TAX.—

12 ‘‘(1) AVERAGE ACCOUNT BENEFITS RATIO.—For

13 purposes of this section, the term ‘average account

14 benefits ratio’ means, with respect to any calendar

15 year, the average determined by the Secretary of the
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1 account benefits ratios for the 10 most recent fiscal

2 years ending before such calendar year. If the amount

3 determined under the preceding sentence is not a mul4 tiple of 0.1, such amount shall be increased to the

5 next highest multiple of 0.1.

6 ‘‘(2) ACCOUNT BENEFITS RATIO.—For purposes

7 of this section, the term ‘account benefits ratio’

8 means, with respect to any fiscal year, the amount

9 determined by the Railroad Retirement Board by di10 viding the fair market value of the assets in the Rail11 road Retirement Account and of the Railroad Retire12 ment Investment Trust (and for years before 2001, the

13 Social Security Equivalent Benefits Account) as of

14 the close of such fiscal year by the total benefits and

15 administrative expenses paid from the Railroad Re16 tirement Account and the Railroad Retirement In17 vestment Trust during such fiscal year.

18 ‘‘(d) NOTICE.—No later than December 1 of each cal19 endar year, the Secretary shall publish a notice in the Fed20 eral Register of the rates of tax determined under this sec21 tion which are applicable for the following calendar year.’’.

22 (e) CONFORMING AMENDMENTS.—

23 (1) Section 24(d)(3)(A)(iii) is amended by strik24 ing ‘‘section 3211(a)(1)’’ and inserting ‘‘section

25 3211(a)’’.
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1 (2) Section 72(r)(2)(B)(i) is amended by striking

2 ‘‘section 3211(a)(2)’’ and inserting ‘‘section 3211(b)’’.

3 (3) Paragraphs (2)(A)(iii)(II) and (4)(A) of sec4 tion 3231(e) is amended by striking ‘‘3211(a)(1)’’ and

5 inserting ‘‘3211(a)’’.

6 (4) Section 3231(e)(2)(B)(ii)(I) is amended by

7 striking ‘‘3211(a)(2)’’ and inserting ‘‘3211(b)’’.

8 (5) The table of subchapters for chapter 22 is

9 amended by adding at the end the following new item:

‘‘Subchapter E. Tier 2 tax rate determination.’’.

10 (f) EFFECTIVE DATE.—The amendments made by this

11 section shall apply to calendar years beginning after De12 cember 31, 2000.

13 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

14 (a) SHORT TITLE.—This Act may be cited as

15 the ‘‘Railroad Retirement and Survivors’ Im16 provement Act of 2000’’.

17 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

TITLE I—AMENDMENTS TO RAILROAD RETIREMENT ACT

OF 1974

Sec. 101. Expansion of widow’s and widower’s benefits.

Sec. 102. Retirement age restoration.

Sec. 103. Vesting requirement.

Sec. 104. Repeal of railroad retirement maximum.

Sec. 105. Investment of railroad retirement assets.

Sec. 106. Elimination of supplemental annuity account.

Sec. 107. Transfer authority revisions.

Sec. 108. Annual ratio projections and certifications by the

Railroad Retirement Board.

TITLE II—AMENDMENTS TO THE INTERNAL REVENUE

CODE OF 1986
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Sec. 201. Amendments to the Internal Revenue Code of 1986.

Sec. 202. Exemption from tax for Railroad Retirement Investment Trust.

Sec. 203. Repeal of supplemental annuity tax.

Sec. 204. Employer, employee representative, and employee

tier 2 tax rate adjustments.

TITLE III—REPEAL OF 4.3-CENT MOTOR FUEL EXCISE

TAXES ON RAILROADS AND INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN GENERAL FUND

Sec. 301. Repeal of 4.3-cent motor fuel excise taxes on railroads

and inland waterway transportation which remain in general fund.

1 TITLE I—AMENDMENTS TO RAIL2 ROAD RETIREMENT ACT OF

3 1974

4 SEC. 101. EXPANSION OF WIDOW’S AND WIDOWER’S BENE5 FITS.

6 (a) IN GENERAL.—Section 4(g) of the Rail7 road Retirement Act of 1974 is amended by

8 adding at the end the following new subdivi9 sion:

10 ‘‘(10)(i) If for any month the unreduced

11 annuity provided under this section for a

12 widow or widower is less than the widow’s or

13 widower’s initial minimum amount computed

14 pursuant to paragraph (ii) of this subdivision,

15 the unreduced annuity shall be increased to

16 that initial minimum amount. For the pur17 poses of this subdivision, the unreduced an18 nuity is the annuity without regard to any de19 duction on account of work, without regard to
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1 any reduction for entitlement to an annuity

2 under section 2(a)(1) of this Act, without re3 gard to any reduction for entitlement to a

4 benefit under title II of the Social Security

5 Act, and without regard to any reduction for

6 entitlement to a public service pension pursu7 ant to sections 202(e)(7), 202(f)(2), or section

8 202(g)(4) of the Social Security Act.

9 ‘‘(ii) For the purposes of this subdivision,

10 the widow or widower’s initial minimum

11 amount is the amount of the unreduced annu12 ity computed at the time an annuity is award13 ed to that widow or widower, except that—

14 ‘‘(A) in subsection (g)(1)(i) ‘100 per

15 centum’ shall be substituted for ‘50 per

16 centum’; and

17 ‘‘(B) in subsection (g)(2)(ii) ‘130 per

18 centum’ shall be substituted for ‘80 per

19 centum’ both places it appears.

20 ‘‘(iii) If a widow or widower who was pre21 viously entitled to a widow’s or widower’s an22 nuity under section 2(d)(1)(ii) of this Act be23 comes entitled to a widow’s or widow’s annu24 ity under section 2(d)(1)(i) of this Act, a new

25 initial minimum amount shall be computed at
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1 the time of award of the widow’s or widower’s

2 annuity under section 2(d)(1)(i) of this Act.’’.

3 (b) EFFECTIVE DATE.—

4 (1) GENERALLY.—The amendment

5 made by this section shall take effect

6 January 1, 2001 and shall apply to annu7 ity amounts accruing for months after

8 December 2000 in the case of annuities

9 awarded on or after that date and in the

10 case of annuities awarded before that

11 date if the annuity amount under section

12 4(g) of the Railroad Retirement Act was

13 computed under section 4(g), as amended

14 by Public Law 97–35.

15 (2) SPECIAL RULE FOR ANNUITIES

16 AWARDED BEFORE JANUARY 1, 2001.—In ap17 plying the amendments made by this sec18 tion to annuities awarded before January

19 1, 2001, the calculation of the initial min20 imum amount under new section

21 4(g)(10)(ii) of the Act shall be made as of

22 the date of award of the widow’s or wid23 ower’s annuity.
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1 SEC. 102. RETIREMENT AGE RESTORATION.

2 (a) EMPLOYEE ANNUITIES.—Section 3(a)(2)

3 of the Railroad Retirement Act of 1974 is

4 amended by inserting after ‘‘(2)’’ the fol5 lowing: ‘‘For purposes of this subsection, indi6 viduals entitled to an annuity under section

7 2(a)(1)(ii) of this Act shall, except for the pur8 poses of recomputations in accordance with

9 section 215(f) of the Social Security Act, be

10 deemed to have attained retirement age (as

11 defined by section 216(l) of the Social Security

12 Act).’’.

13 (b) SPOUSE AND SURVIVOR ANNUITIES.—Sec14 tion 4(a)(2) of the Railroad Retirement Act of

15 1974 is amended by striking ‘‘if an’’ and all

16 that follows through ‘‘section 2(c)(1) of this

17 Act’’ and inserting ‘‘a spouse entitled to an an18 nuity under section 2(c)(1)(ii)(B) of this Act’’.

19 (c) CONFORMING REPEALS.—Sections

20 3(a)(3), 4(a)(3), and 4(a)(4) of the Railroad Re21 tirement Act are repealed.

22 (d) EFFECTIVE DATES.—

23 (1) GENERALLY.—Except as provided

24 in paragraph (2), the amendments made

25 by this section shall apply to annuities
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1 that begin to accrue on or after January

2 1, 2001.

3 (2) EXCEPTION.—The amount of the an4 nuity provided for a spouse under section

5 4(a) shall be computed under section

6 4(a)(3), as in effect before the date of the

7 enactment of this section, if the annuity

8 amount provided under section 3(a) for

9 the individual on whose employment

10 record the spouse annuity is based was

11 computed under section 3(a)(3), as in ef12 fect before the date of the enactment of

13 this section.

14 SEC. 103. VESTING REQUIREMENT.

15 (a) CERTAIN ANNUITIES FOR INDIVIDUALS.—

16 Section 2(a) of the Railroad Retirement Act of

17 1974 is amended—

18 (1) by inserting in subdivision (1) ‘‘or,

19 for purposes of paragraphs (i), (iii), and

20 (v), five years of service, all of which ac21 crues after December 31, 1995,’’ after ‘‘ten

22 years of service’’, and

23 (2) by adding at the end the fol24 lowing:
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1 ‘‘(4) An individual who is entitled to an an2 nuity under paragraph (v) of subdivision (1),

3 but who does not have at least ten years of

4 service, shall, prior to the month in which the

5 individual attains age 62, be entitled only to

6 an annuity amount computed under section

7 3(a) of this Act (without regard to section

8 3(a)(2) of this Act) or section 3(f)(3) of this Act.

9 Upon attainment of age 62, such an individual

10 may also be entitled to an annuity amount

11 computed under section 3(b), but such annu12 ity amount shall be reduced for early retire13 ment in the same manner as if the individual

14 were entitled to an annuity under section

15 2(a)(1)(iii).’’.

16 (b) COMPUTATION RULE FOR INDIVIDUALS’

17 ANNUITIES.—Section 3(a) of the Railroad Re18 tirement Act of 1974, as amended by section

19 102 of this Act, is further amended by adding

20 at the end the following new subdivision:

21 ‘‘(3) If an individual entitled to an annuity

22 under section 2(a)(1)(i) or (iii) of this Act on

23 the basis of less than ten years of service is

24 entitled to a benefit under section 202(a), sec25 tion 202(b), or section 202(c) of the Social Se-
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1 curity Act which began to accrue before the

2 annuity under section 2(a)(1)(i) or (iii) of this

3 Act, the annuity amount provided such indi4 vidual under this subsection, shall be com5 puted as though the annuity under this Act

6 began to accrue on the later of (A) the date

7 on which the benefit under section 202(a), sec8 tion 202(b), or section 202(c) of the Social Se9 curity Act began or (B) the date on which the

10 individual first met the conditions for entitle11 ment to an age reduced annuity under this

12 Act other than the conditions set forth in sec13 tions 2(e)(1) and 2(e)(2) of this Act and the re14 quirement that an application be filed.’’.

15 (c) SURVIVORS’ ANNUITIES.—Section 2(d)(1)

16 of the Railroad Retirement Act of 1974 is

17 amended by inserting ‘‘or five years of serv18 ice, all of which accrues after December 31,

19 1995,’’ after ‘‘ten years of service’’.

20 (d) LIMITATION ON ANNUITY AMOUNTS.—Sec21 tion 2 of the Railroad Retirement Act of 1974

22 is amended by adding at the end the fol23 lowing:

24 ‘‘(i) An individual entitled to an annuity

25 under this section who has completed five
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1 years of service, all of which accrues after

2 1995, but who has not completed ten years of

3 service, and the spouse, divorced spouse, and

4 survivors of such individual, shall not be enti5 tled to an annuity amount provided under

6 section 3(a), section 4(a), or section 4(f) of this

7 Act unless the individual, or the individual’s

8 spouse, divorced spouse, or survivors, would

9 be entitled to a benefit under the Social Secu10 rity Act on the basis of the individual’s em11 ployment record under both the Railroad Re12 tirement Act and the Social Security Act.’’.

13 (e) COMPUTATION RULE FOR SPOUSES’ ANNU14 ITIES.—Section 4(a) of the Railroad Retire15 ment Act of 1974, as amended by section 102

16 of this Act, is further amended by adding at

17 the end the following new subdivision:

18 ‘‘(3) If a spouse entitled to an annuity

19 under section 2(c)(1)(ii)(A), section

20 2(c)(1)(ii)(C), or section 2(c)(2) of this Act or

21 a divorced spouse entitled to an annuity

22 under section 2(c)(4) of this Act on the basis

23 of the employment record of an employee who

24 will have completed less than 10 years of serv25 ice is entitled to a benefit under section
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1 202(a), section 202(b), or section 202(c) of the

2 Social Security Act which began to accrue be3 fore the annuity under section 2(c)(1)(ii)(A),

4 section 2(c)(1)(ii)(C), section 2(c)(2), or section

5 2(c)(4) of this Act, the annuity amount pro6 vided under this subsection shall be com7 puted as though the annuity under this Act

8 began to accrue on the later of (A) the date

9 on which the benefit under section 202(a), sec10 tion 202(b), or section 202(c) of the Social Se11 curity Act began or (B) the first date on which

12 the annuitant met the conditions for entitle13 ment to an age reduced annuity under this

14 Act other than the conditions set forth in sec15 tions 2(e)(1) and 2(e)(2) of this Act and the re16 quirement that an application be filed.’’.

17 (f) APPLICATION DEEMING PROVISION.—Sec18 tion 5(b) of the Railroad Retirement Act of

19 1974 is amended by striking the second sen20 tence and inserting the following: ‘‘An appli21 cation filed with the Board for an employee

22 annuity, spouse annuity, or divorced spouse

23 annuity on the basis of the employment

24 record of an employee who will have com25 pleted less than ten years of service shall be
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1 deemed to be an application for any benefit

2 to which such applicant may be entitled

3 under this Act or section 202(a), section

4 202(b), or section 202(c) of the Social Security

5 Act. An application filed with the Board for an

6 annuity on the basis of the employment

7 record of an employee who will have com8 pleted ten years of service shall, unless the

9 applicant specified otherwise, be deemed to

10 be an application for any benefit to which

11 such applicant may be entitled under this Act

12 or title II of the Social Security Act.’’.

13 (g) CREDITING SERVICE UNDER THE SOCIAL

14 SECURITY ACT.—Section 18(2) of the Railroad

15 Retirement Act of 1974 is amended—

16 (1) by inserting ‘‘or less than five

17 years of service, all of which accrues

18 after December 31, 1995,’’ after ‘‘ten years

19 of service’’ every place it occurs; and

20 (2) by inserting ‘‘or five or more years

21 of service, all of which accrues after De22 cember 31, 1995,’’ after ‘‘ten or more years

23 of service’’.
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1 (h) AUTOMATIC BENEFIT ELIGIBILITY AD2 JUSTMENTS.—Section 19 of Railroad Retire3 ment Act of 1974 is amended—

4 (1) by inserting ‘‘or five or more years

5 of service, all of which accrues after De6 cember 31, 1995,’’ after ‘‘ten years of serv7 ice’’ in subsection (c); and

8 (2) by inserting ‘‘or five or more years

9 of service, all of which accrues after De10 cember 31, 1995,’’ after ‘‘ten years of serv11 ice’’ in subsection (d)(2).

12 (i) CONFORMING AMENDMENTS.—

13 (1) Section 6(e)(1) of the Railroad Re14 tirement Act of 1974 is amended by in15 serting ‘‘or five or more years of service,

16 all of which accrues after December 31,

17 1995,’’ after ‘‘ten years of service’’.

18 (2) Section 7(b)(2) of the Railroad Re19 tirement Act of 1974 is amended by in20 serting ‘‘or five or more years of service,

21 all of which accrues after December 31,

22 1995,’’ after ‘‘ten years of service’’.

23 (3) Section 205(i) of the Social Secu24 rity Act is amended by inserting ‘‘or five

25 or more years of service, all of which ac-
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1 crues after December 31, 1995,’’ after ‘‘ten

2 years of service’’.

3 (j) EFFECTIVE DATE.—The amendments

4 made by this section shall take effect January

5 1, 2001.

6 SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.

7 (a) EMPLOYEE ANNUITIES.—Section 3(f) of

8 the Railroad Retirement Act of 1974 is amend9 ed by striking paragraph (1).

10 (b) SPOUSE AND SURVIVOR ANNUITIES.—Sec11 tion 4 of the Railroad Retirement Act of 1974

12 is amended by striking subsection (c).

13 (c) EFFECTIVE DATE.—The amendments

14 made by this section shall be effective Janu15 ary 1, 2001, and shall apply to annuity

16 amounts accruing for months after December

17 2000.

18 SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.

19 (a) ESTABLISHMENT OF RAILROAD RETIRE20 MENT INVESTMENT TRUST.—Section 15 of the

21 Railroad Retirement Act of 1974 is amended

22 by inserting after subsection (i) the following:

23 ‘‘(j) RAILROAD RETIREMENT INVESTMENT

24 TRUST.—
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1 ‘‘(1) ESTABLISHMENT.—The Railroad

2 Retirement Investment Trust (hereinafter

3 in this subsection referred to as the

4 ‘Trust’) is hereby established. The Trust

5 shall manage and invest the assets of the

6 Railroad Retirement Trust Fund (herein7 after in this section referred to as the

8 ‘‘Fund’’, which is hereby established as a

9 trust organized in the District of Colum10 bia and shall, to the extent not incon11 sistent with this Act, be subject to the

12 laws of the District of Columbia applica13 ble to such trusts.

14 ‘‘(2) NOT A FEDERAL AGENCY OR INSTRU15 MENTALITY.—The Trust is not a depart16 ment, agency, or instrumentality of the

17 Government of the United States and

18 shall not be subject to title 31, United

19 States Code.

20 ‘‘(3) BOARD OF TRUSTEES.—

21 ‘‘(A) GENERALLY.—The Trust shall

22 have a Board of Trustees, consisting

23 of 7 members, each appointed by a

24 unanimous vote of the Railroad Re25 tirement Board. The Railroad Retire-
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1 ment Board may remove any member

2 so appointed by unanimous vote. Of

3 the 7 members, 3 shall represent the

4 interests of labor, 3 shall represent

5 the interests of management, and 1

6 shall represent the interests of the

7 general public. The members of the

8 Board of Trustees shall not be consid9 ered officers or employees of the Gov10 ernment of the United States.

11 ‘‘(B) QUALIFICATIONS.—Members of

12 the Board of Trustees shall be ap13 pointed only from among persons

14 who have experience and expertise in

15 the management of financial invest16 ments and pension plans. No member

17 of the Railroad Retirement Board

18 shall be eligible to be a member of

19 the Board of Trustees.

20 ‘‘(C) TERMS.—Except as provided

21 in this subparagraph, each member

22 shall be appointed for a 3-year term.

23 The initial members appointed under

24 this paragraph shall be divided into 3

25 equal groups so nearly as may be, of
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1 which one group will be appointed

2 for a 1-year term, one for a 2-year

3 term, and one for a 3-year term. A va4 cancy in the Board of Trustees shall

5 not affect the powers of the Board of

6 Trustees and shall be filled in the

7 same manner as the selection of the

8 member whose departure caused the

9 vacancy. Upon the expiration of a

10 term of a member of the Board of

11 Trustees, that member shall continue

12 to serve until a successor is ap13 pointed.

14 ‘‘(4) POWERS OF THE BOARD OF TRUST15 EES.—The Board of Trustees shall—

16 ‘‘(A) retain independent advisers

17 to assist it in the formulation and

18 adoption of its investment guidelines;

19 ‘‘(B) retain independent invest20 ment managers to invest the assets of

21 the Fund in a manner consistent with

22 such investment guidelines;

23 ‘‘(C) invest assets in the Fund,

24 pursuant to the policies adopted in

25 subparagraph (A);
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1 ‘‘(D) pay administrative expenses

2 of the Fund and the Trust from the

3 money in the Fund; and

4 ‘‘(E) transfer money to the dis5 bursing agent to pay benefits payable

6 under this Act from money in the

7 Fund and administrative expenses re8 lated to those benefits.

9 ‘‘(5) REPORTING REQUIREMENTS AND FI10 DUCIARY STANDARDS.—The following re11 porting requirements and fiduciary

12 standards shall apply with respect to the

13 Railroad Retirement Trust and the Rail14 road Retirement Trust Fund (and the as15 sets held in such Trust Fund):

16 ‘‘(A) DUTIES OF THE BOARD OF

17 TRUSTEES.—The Railroad Retirement

18 Trust and each member of the Board

19 of Trustees shall discharge their du20 ties with respect to the assets of the

21 Fund solely in the interest of the

22 Railroad Retirement Board and

23 through it, the participants and bene24 ficiaries of the programs funded

25 under this Act—
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1 ‘‘(i) for the exclusive purpose

2 of—

3 ‘‘(I) providing benefits to

4 participants and their bene5 ficiaries; and

6 ‘‘(II) defraying reasonable

7 expenses of administering the

8 functions of the Trust;

9 ‘‘(ii) with the care, skill, pru10 dence, and diligence under the

11 circumstances then prevailing

12 that a prudent person acting in a

13 like capacity and familiar with

14 such matters would use in the

15 conduct of an enterprise of a like

16 character and with like aims;

17 ‘‘(iii) by diversifying invest18 ments so as to minimize the risk

19 of large losses, unless under the

20 circumstances it is clearly pru21 dent not to do so; and

22 ‘‘(iv) in accordance with Trust

23 governing documents and instru24 ments insofar as such documents
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1 and instruments are consistent

2 with this Act.

3 ‘‘(B) PROHIBITIONS WITH RESPECT

4 TO MEMBERS OF THE BOARD OF TRUST5 EES.—No member of the Board of

6 Trustees shall—

7 ‘‘(i) deal with the assets of the

8 Fund in the trustee’s own interest

9 or for the trustee’s own account;

10 ‘‘(ii) in an individual or in any

11 other capacity act in any trans12 action involving the assets of the

13 Fund on behalf of a party (or rep14 resent a party) whose interests

15 are adverse to the interests of the

16 Trust, the Fund, the Railroad Re17 tirement Board, or the interests

18 of participants or beneficiaries;

19 or

20 ‘‘(iii) receive any consider21 ation for the trustee’s own per22 sonal account from any party

23 dealing with the assets of the

24 Fund.
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1 ‘‘(C) EXCULPATORY PROVISIONS AND

2 INSURANCE.—Any provision in an

3 agreement or instrument that pur4 ports to relieve a trustee from respon5 sibility or liability for any responsi6 bility, obligation or duty under this

7 Act shall be void: Provided, however,

8 That nothing shall preclude—

9 ‘‘(i) the Trust from purchasing

10 insurance for its trustees or for

11 itself to cover liability or losses

12 occurring by reason of the act or

13 omission of a trustee, if such in14 surance permits recourse by the

15 insurer against the trustee in the

16 case of a breach of a fiduciary ob17 ligation by such trustee;

18 ‘‘(ii) a trustee from pur19 chasing insurance to cover liabil20 ity under this section from and

21 for his own account; or

22 ‘‘(iii) an employer or an em23 ployee organization from pur24 chasing insurance to cover poten25 tial liability of one or more trust-
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1 ees with respect to their fiduciary

2 responsibilities, obligations, and

3 duties under this section.

4 ‘‘(D) BONDING.—Every trustee and

5 every person who handles funds or

6 other property of the Fund (hereafter

7 in this subsection referred to as

8 ‘Trust official’) shall be bonded. Such

9 bonds shall provide protection to the

10 Fund against loss by reason of acts of

11 fraud or dishonesty on the part of

12 any Trust official, directly or through

13 the connivance of others, and shall be

14 in accordance with the following:

15 ‘‘(i) The amount of such bond

16 shall be fixed at the beginning of

17 each fiscal year of the Trust by

18 the Railroad Retirement Board.

19 Such amount shall not be less

20 than 10 percent of the amount of

21 the funds handled. In no case

22 shall such bond be less than

23 $1,000 nor more than $500,000, ex24 cept that the Railroad Retirement

25 Board, after consideration of the
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1 record, may prescribe an amount

2 in excess of $500,000, subject to

3 the 10 per centum limitation of

4 the preceding sentence.

5 ‘‘(ii) It shall be unlawful for

6 any Trust official to receive, han7 dle, disburse, or otherwise exer8 cise custody or control of any of

9 the funds or other property of the

10 Fund without being bonded as re11 quired by this subsection and it

12 shall be unlawful for any Trust of13 ficial, or any other person having

14 authority to direct the perform15 ance of such functions, to permit

16 such functions, or any of them, to

17 be performed by any Trust offi18 cial, with respect to whom the re19 quirements this subsection have

20 not been met.

21 ‘‘(iii) It shall be unlawful for

22 any person to procure any bond

23 required by this subsection from

24 any surety or other company or

25 through any agent or broker in
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1 whose business operations such

2 person has any control or signifi3 cant financial interest, direct or

4 indirect.

5 ‘‘(E) AUDIT AND REPORT.—

6 ‘‘(i) The Trust shall annually

7 engage an independent qualified

8 public accountant to audit the fi9 nancial statements of the Fund.

10 ‘‘(ii) The Trust shall submit an

11 annual management report to the

12 Congress not later than 180 days

13 after the end of the Trust’s fiscal

14 year. A management report under

15 this subsection shall include—

16 ‘‘(I) a statement of finan17 cial position;

18 ‘‘(II) a statement of oper19 ations;

20 ‘‘(III) a statement of cash

21 flows;

22 ‘‘(IV) a statement on inter23 nal accounting and adminis24 trative control systems;
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1 ‘‘(V) the report resulting

2 from an audit of the financial

3 statements of the Trust con4 ducted under subparagraph

5 (E)(i); and

6 ‘‘(VI) any other comments

7 and information necessary to

8 inform the Congress about the

9 operations and financial con10 dition of the Trust and the

11 Fund.

12 ‘‘(iii) The Trust shall provide

13 the President, the Railroad Re14 tirement Board, and the Director

15 of the Office of Management and

16 Budget a copy of the management

17 report when it is submitted to

18 Congress.

19 ‘‘(F) ENFORCEMENT.—The Railroad

20 Retirement Board may bring a civil

21 action—

22 ‘‘(i) to enjoin any act or prac23 tice by the Railroad Retirement

24 Investment Trust, its Board of

25 Trustees or its employees or
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1 agents that violates any provision

2 of this Act; or

3 ‘‘(ii) to obtain other appro4 priate relief to redress such viola5 tions, or to enforce any provisions

6 of this Act.

7 ‘‘(6) RULES AND ADMINISTRATIVE POW8 ERS.—The Board of Trustees shall have

9 the authority to make rules to govern its

10 operations, employ professional staff, and

11 contract with outside advisers to provide

12 legal, accounting, investment advisory or

13 other services necessary for the proper

14 administration of this subsection. In the

15 case of contracts with investment advi16 sory services, compensation for such

17 services may be on a fixed contract fee

18 basis or on such other terms and condi19 tions as are customary for such services.

20 ‘‘(7) QUORUM.—Five members of the

21 Board of Trustees constitute a quorum to

22 do business. Investment guidelines must

23 be adopted by a unanimous vote of the

24 entire Board of Trustees. All other deci25 sions of the Board of Trustees shall be de-
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1 cided by a majority vote of the quorum

2 present. All decisions of the Board of

3 Trustees shall be entered upon the

4 records of the Board of Trustees.’’.

5 (b) CONFORMING AND TECHNICAL AMEND6 MENTS GOVERNING INVESTMENTS.—Subsection

7 15(e) of the Railroad Retirement Act of 1974

8 is amended—

9 (1) beginning in the first sentence, by

10 striking ‘‘, the Dual Benefits Payments

11 Account’’ and all that follows through

12 ‘‘may be made only’’ in the second sen13 tence and inserting ‘‘and the Dual Bene14 fits Payments Account as are not trans15 ferred to the Railroad Retirement Invest16 ment Trust as the Board may determine’’;

17 (2) by striking ‘‘the Second Liberty

18 Bond Act, as amended’’ and inserting

19 ‘‘chapter 31 of title 31’’; and

20 (3) by striking ‘‘the foregoing require21 ments’’ and inserting ‘‘the requirements

22 of this subsection’’.

23 (c) EFFECTIVE DATE.—The amendments

24 made by this section shall take effect on the

25 date of the enactment of this section.
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1 SEC. 106. ELIMINATION OF SUPPLEMENTAL ANNUITY AC2 COUNT.

3 (a) SOURCE OF PAYMENTS.—Section 7(c)(1)

4 of the Railroad Retirement Act of 1974 is

5 amended by striking ‘‘payments of supple6 mental annuities under section 2(b) of this

7 Act shall be made from the Railroad Retire8 ment Supplemental Account, and’’.

9 (b) ELIMINATION OF ACCOUNT.—Section

10 15(c) of the Railroad Retirement Act of 1974

11 is repealed.

12 (c) IN GENERAL.—Section 15(a) of the Rail13 road Retirement Act of 1974 is amended by

14 striking ‘‘, except those portions of the

15 amounts covered into the Treasury under sec16 tions 3211(b),’’ and all that follows through

17 the end of the subsection and inserting a pe18 riod.

19 (d) EFFECTIVE DATE.—The amendments

20 made by this section shall take effect January

21 1, 2001, except that the Railroad Retirement

22 Supplemental Account shall continue to exist

23 until the transfer authorized by the following

24 sentence occurs. As soon as possible after De25 cember 31, 2000, the Board shall determine

26 the balance in the Railroad Retirement Sup-
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1 plemental Account and shall direct the Sec2 retary of the Treasury to transfer such

3 amount to the Railroad Retirement Trust

4 Fund and the Secretary shall make such

5 transfer.

6 SEC. 107. TRANSFER AUTHORITY REVISIONS.

7 (a) RAILROAD RETIREMENT ACCOUNT.—Sec8 tion 15 of the Railroad Retirement Act of 1974

9 is amended by adding after subsection (j) the

10 following:

11 ‘‘(k) TRANSFERS TO THE FUND.—The Board

12 shall, upon establishment of the Railroad Re13 tirement Trust Fund and from time to time

14 thereafter, direct the Secretary of the Treas15 ury to transfer, in such manner as will maxi16 mize the investment returns to the Railroad

17 Retirement system, that portion of the Rail18 road Retirement Account that is not needed

19 to pay current administrative expenses of the

20 Board to the Railroad Retirement Trust Fund.

21 The Secretary shall make that transfer.’’.

22 (b) RAILROAD RETIREMENT TRUST FUND.—

23 Section 15 of the Railroad Retirement Act of

24 1974, as amended by subsection (a), is further
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1 amended by adding after subsection (k) the

2 following:

3 ‘‘(l) RAILROAD RETIREMENT TRUST FUND.—

4 The Railroad Retirement Trust shall from

5 time to time transfer to the disbursing agent

6 described in section 7(b)(4) such amounts as

7 may be necessary to pay benefits under this

8 Act (other than benefits paid from the Social

9 Security Equivalent Benefit Account or the

10 Dual Benefit Payments Account).’’.

11 (c) SOCIAL SECURITY EQUIVALENT BENEFIT

12 ACCOUNT.—Section 15A(d)(2) of the Railroad

13 Retirement Act of 1974 is amended to read as

14 follows:

15 ‘‘(2) Upon establishment of the Railroad

16 Retirement Trust Fund and from time to time

17 thereafter, the Board shall direct the Sec18 retary of the Treasury to transfer, in such

19 manner as will maximize the investment re20 turns to the Railroad Retirement system, the

21 balance of the Social Security Equivalent

22 Benefit Account not needed to pay current

23 benefits required to be paid from that Ac24 count to the Railroad Retirement Trust Fund,

25 and the Secretary shall make that transfer.
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1 Any balance transferred under this para2 graph shall be used by the Railroad Retire3 ment Trust only to pay benefits under this Act

4 or to purchase obligations of the United

5 States that are backed by the full faith and

6 credit of the United States pursuant to chap7 ter 31 of title 31, United States Code. The pro8 ceeds of sales of, and the interest income

9 from, such obligations shall be used by the

10 Trust only to pay benefits under this Act.’’.

11 (2) TRANSFERS TO DISBURSING AGENT.—

12 Section 15A(c)(1) of the Railroad Retire13 ment Act of 1974 is amended by adding at

14 the end the following: ‘‘The Secretary

15 shall from time to time transfer to the

16 disbursing agent under section 7(b)(4)

17 amounts necessary to pay those bene18 fits.’’.

19 (3) CONFORMING AMENDMENT.—Section

20 15A(d)(1) of the Railroad Retirement Act

21 of 1974 is amended by striking the second

22 and third sentences.

23 (d) DUAL BENEFITS PAYMENTS ACCOUNT.—

24 Section 15(d)(1) of the Railroad Retirement

25 Act of 1974 is amended by adding at the end
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1 the following: ‘‘The Secretary of the Treasury

2 shall from time to time transfer from the Dual

3 Benefits Payments Account to the disbursing

4 agent under section 7(b)(4) amounts nec5 essary to pay benefits payable from that Ac6 count.’’.

7 (e) CERTIFICATION BY THE BOARD AND PAY8 MENT.—Paragraph (4) of section 7(b) of the

9 Railroad Retirement Act of 1974 is amended

10 to read as follows:

11 ‘‘(4)(A) The Railroad Retirement Board,

12 after consultation with the Board of Trustees

13 of the Railroad Retirement Trust and the Sec14 retary of the Treasury, shall enter into an ar15 rangement with a nongovernmental financial

16 institution to serve as disbursing agent for

17 benefits payable under this Act who shall dis18 burse consolidated benefits under this Act to

19 each recipient.

20 ‘‘(B) The Board shall from time to time

21 certify—

22 ‘‘(i) to the Secretary of the Treasury

23 the amounts required to be transferred

24 from the Social Security Equivalent Ben25 efit Account and the the Dual Benefits
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1 Payments Account to the disbursing

2 agent to make payments of benefits and

3 the Secretary of the Treasury shall trans4 fer those amounts;

5 ‘‘(ii) to the Board of Trustees of the

6 Railroad Retirement Investment Trust

7 the amounts required to be transferred

8 from the Railroad Retirement Investment

9 Trust to the disbursing agent to make

10 payments of benefits and the Board of

11 Trustees shall transfer those amounts;

12 and

13 ‘‘(iii) to the disbursing agent the

14 name and address of each individual en15 titled to receive a payment, the amount

16 of such payment, and the time at which

17 the payment should be made.’’.

18 (f) BENEFIT PAYMENTS.—Section 7(c)(1) of

19 the Railroad Retirement Act of 1974 is

20 amended—

21 (1) by striking ‘‘from the Railroad Re22 tirement Account’’ and inserting ‘‘by the

23 disbursing agent under subsection (b)(4)

24 from money transferred to it from the

25 Railroad Retirement Trust Fund or the
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1 Social Security Equivalent Benefit Ac2 count, as the case may be’’; and

3 (2) by inserting ‘‘by the disbursing

4 agent under subsection (b)(4) from money

5 transferred to it’’ after ‘‘Public Law 93–

6 445 shall be made’’.

7 (g) TRANSITIONAL RULE FOR EXISTING OBLI8 GATION.—In making transfers under sub9 sections (a) and (c), the Board shall consult

10 with the Secretary of the Treasury to design

11 an appropriate method to transfer obligations

12 held as of the date of enactment or to convert

13 such obligations to cash prior to transfer. The

14 Railroad Retirement Trust may hold to matu15 rity any obligations so received or may re16 deem them prior to maturity, as the Trust

17 deems appropriate.

18 SEC. 108. ANNUAL RATIO PROJECTIONS AND CERTIFI19 CATIONS BY THE RAILROAD RETIREMENT

20 BOARD.

21 (a) PROJECTIONS.—Section 22(a)(1) of the

22 Railroad Retirement Act of 1974 is amended—

23 (1) by adding the following sentence

24 after the first sentence: ‘‘On or before

25 May 1 of each year beginning in 2002, the
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1 Railroad Retirement Board shall compute

2 its projection of the account benefits

3 ratio and the average account benefits

4 ratio (as defined by section 3241(c) of the

5 Internal Revenue Code of 1986) for each

6 of the next succeeding five fiscal years.’’;

7 and

8 (2) by striking ‘‘the projection pre9 pared pursuant to the preceding sen10 tence’’ and inserting ‘‘the projections pre11 pared pursuant to the preceding two sen12 tences’’.

13 (b) CERTIFICATIONS.—The Railroad Retire14 ment Act of 1974 is amended by adding at the

15 end the following:

16 ‘‘COMPUTATION AND CERTIFICATION OF ACCOUNT

17 BENEFIT RATIOS

18 ‘‘SEC. 23. (a) On or before November 1,

19 2002, the Railroad Retirement Board shall—

20 ‘‘(1) compute the account benefits ra21 tios for each of the most recent 10 pre22 ceding fiscal years, and

23 ‘‘(2) certify the account benefits ratios

24 for each such fiscal year to the Secretary.
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1 ‘‘(b) On or before November 1 of each year

2 after 2002, the Railroad Retirement Board

3 shall—

4 ‘‘(1) compute the account benefits

5 ratio for the fiscal year ending in such

6 year, and

7 ‘‘(2) certify the account benefits ratio

8 for such fiscal year to the Secretary.

9 ‘‘(c) DEFINITION.—As used in this section,

10 the term ‘account benefit ratio’ has the mean11 ing given that term in section 3241(c) of the

12 Internal Revenue Code of 1986.’’.

13 TITLE II—AMENDMENTS TO THE

14 INTERNAL REVENUE CODE

15 OF 1986

16 SEC. 201. AMENDMENTS TO THE INTERNAL REVENUE CODE

17 OF 1986.

18 Except as otherwise provided, whenever

19 in this title an amendment or repeal is ex20 pressed in terms of an amendment to, or re21 peal of, a section or other provision, the ref22 erence shall be considered to be made to a

23 section or other provision of the Internal Rev24 enue Code of 1986.
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1 SEC. 202. EXEMPTION FROM TAX FOR RAILROAD RETIRE2 MENT INVESTMENT TRUST.

3 Subsection (c) of section 501 is amended

4 by adding at the end the following new para5 graph:

6 ‘‘(28) The Railroad Retirement Invest7 ment Trust established under section

8 15(j) of the Railroad Retirement Act of

9 1974.’’

10 SEC. 203. REPEAL OF SUPPLEMENTAL ANNUITY TAX.

11 (a) REPEAL OF TAX ON EMPLOYEE REP12 RESENTATIVES.—Section 3211 is amended by

13 striking subsection (b).

14 (b) REPEAL OF TAX ON EMPLOYERS.—Sec15 tion 3221 is amended by striking subsections

16 (c) and (d).

17 (c) EFFECTIVE DATE.—The amendments

18 made by this section shall apply to calendar

19 years beginning after December 31, 2000.

20 SEC. 204. EMPLOYER, EMPLOYEE REPRESENTATIVE, AND

21 EMPLOYEE TIER 2 TAX RATE ADJUSTMENTS.

22 (a) RATE OF TAX ON EMPLOYERS.—Sub23 section (b) of section 3221 is amended to read

24 as follows:

25 ‘‘(b) TIER 2 TAX.—
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1 ‘‘(1) IN GENERAL.—In addition to other

2 taxes, there is hereby imposed on every

3 employer an excise tax, with respect to

4 having individuals in his employ, equal

5 to the applicable percentage of the com6 pensation paid during any calendar year

7 by such employer for services rendered

8 to such employer.

9 ‘‘(2) APPLICABLE PERCENTAGE.—For

10 purposes of paragraph (1), the term ‘ap11 plicable percentage’ means—

12 ‘‘(A) 15.6 percent in the case of

13 compensation paid during 2001,

14 ‘‘(B) 14.2 percent in the case of

15 compensation paid during 2002, and

16 ‘‘(C) in the case of compensation

17 paid during any calendar year after

18 2002, the percentage determined

19 under section 3241 for such calendar

20 year.’’.

21 (b) RATE OF TAX ON EMPLOYEE REPRESENTA22 TIVES.—Section 3211, as amended by section

23 203, is amended by striking subsection (a) and

24 inserting the following new subsections:
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1 ‘‘(a) TIER 1 TAX.—In addition to other

2 taxes, there is hereby imposed on the income

3 of each employee representative a tax equal

4 to the applicable percentage of the compensa5 tion received during any calendar year by

6 such employee representative for services

7 rendered by such employee representative.

8 For purposes of the preceding sentence, the

9 term ‘applicable percentage’ means the per10 centage equal to the sum of the rates of tax

11 in effect under subsections (a) and (b) of sec12 tion 3101 and subsections (a) and (b) of sec13 tion 3111 for the calendar year.

14 ‘‘(b) TIER 2 TAX.—

15 ‘‘(1) IN GENERAL.—In addition to other

16 taxes, there is hereby imposed on the in17 come of each employee representative a

18 tax equal to the applicable percentage of

19 the compensation received during any

20 calendar year by such employee rep21 resentatives for services rendered by

22 such employee representative.

23 ‘‘(2) APPLICABLE PERCENTAGE.—For

24 purposes of paragraph (1), the term ‘ap25 plicable percentage’ means—
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1 ‘‘(A) 14.75 percent in the case of

2 compensation received during 2001,

3 ‘‘(B) 14.20 percent in the case of

4 compensation received during 2002,

5 and

6 ‘‘(C) in the case of compensation

7 received during any calendar year

8 after 2002, the percentage determined

9 under section 3241 for such calendar

10 year.

11 ‘‘(c) CROSS REFERENCE.—

‘‘For application of different contribution bases

with respect to the taxes imposed by subsections (a)

and (b), see section 3231(e)(2).’’.

12 (c) RATE OF TAX ON EMPLOYEES.—Sub13 section (b) of section 3201 is amended to read

14 as follows:

15 ‘‘(b) TIER 2 TAX.—

16 ‘‘(1) IN GENERAL.—In addition to other

17 taxes, there is hereby imposed on the in18 come of each employee a tax equal to the

19 applicable percentage of the compensa20 tion received during any calendar year

21 by such employee for services rendered

22 by such employee.
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1 ‘‘(2) APPLICABLE PERCENTAGE.—For

2 purposes of paragraph (1), the term ‘ap3 plicable percentage’ means—

4 ‘‘(A) 4.90 percent in the case of

5 compensation received during 2001 or

6 2002, and

7 ‘‘(B) in the case of compensation

8 received during any calendar year

9 after 2002, the percentage determined

10 under section 3241 for such calendar

11 year.’’.

12 (d) DETERMINATION OF RATE.—Chapter 22

13 is amended by adding at the end thereof the

14 following new subchapter:

15 ‘‘Subchapter E—Tier 2 Tax Rate

16 Determination

‘‘Sec. 3241. Determination of tier 2 tax rate based on

average account benefits ratio.

17 ‘‘SEC. 3241. DETERMINATION OF TIER 2 TAX RATE BASED

18 ON AVERAGE ACCOUNT BENEFITS RATIO.

19 ‘‘(a) IN GENERAL.—For purposes of sections

20 3201(b), 3211(b), and 3221(b), the applicable

21 percentage for any calendar year is the per22 centage determined in accordance with the

23 table in subsection (b).

24 ‘‘(b) TAX RATE SCHEDULE.—
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Average account benefits ratio Applicable percentage for sections 3211(b) and

3221(b)

Applicable percentage for secAt least But less than tion 3201(b)

2.5 22.1 4.9

2.5 3.0 18.1 4.9

3.0 3.5 15.1 4.9

3.5 4.0 14.1 4.9

4.0 6.1 13.1 4.9

6.1 6.5 12.6 4.4

6.5 7.0 12.1 3.9

7.0 7.5 11.6 3.4

7.5 8.0 11.1 2.9

8.0 8.5 10.1 1.9

8.5 9.0 9.1 0.9

9.0 8.2 0

1 ‘‘(c) DEFINITIONS RELATED TO DETERMINA2 TION OF RATES OF TAX.—

3 ‘‘(1) AVERAGE ACCOUNT BENEFITS

4 RATIO.—For purposes of this section, the

5 term ‘average account benefits ratio’

6 means, with respect to any calendar year,

7 the average determined by the Secretary

8 of the account benefits ratios for the 10

9 most recent fiscal years ending before

10 such calendar year. If the amount deter11 mined under the preceding sentence is

12 not a multiple of 0.1, such amount shall

13 be increased to the next highest multiple

14 of 0.1.

15 ‘‘(2) ACCOUNT BENEFITS RATIO.—For

16 purposes of this section, the term ‘ac17 count benefits ratio’ means, with respect
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1 to any fiscal year, the amount determined

2 by the Railroad Retirement Board by di3 viding the fair market value of the assets

4 in the Railroad Retirement Account and

5 of the Railroad Retirement Investment

6 Trust (and for the years before 2001, the

7 Social Security Equivalent Benefits Ac8 count) as of the close of such fiscal year

9 by the total benefits and administrative

10 expenses paid from the Railroad Retire11 ment Account and the Railroad Retire12 ment Investment Trust during such fiscal

13 year.

14 ‘‘(d) NOTICE.—No later than December 1 of

15 each calendar year, the Secretary shall pub16 lish a notice in the Federal Register of the

17 rates of tax determined under this section

18 which are applicable for the following cal19 endar year.’’.

20 (e) CONFORMING AMENDMENTS.—

21 (1) Section 24(d)(3)(A)(iii) is amended

22 by striking ‘‘section 3211(a)(1)’’ and in23 serting ‘‘section 3211(a)’’.
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1 (2) Section 72(r)(2)(B)(i) is amended

2 by striking ‘‘section 3211(a)(2)’’ and in3 serting ‘‘section 3211(b)’’.

4 (3) Paragraphs (2)(A)(iii)(II) and

5 (4)(A) of section 3231(e) is amended by

6 striking ‘‘3211(a)(1)’’ and inserting

7 ‘‘3211(a)’’.

8 (4) Section 3231(e)(2)(B)(ii)(I) is

9 amended by striking ‘‘3211(a)(2)’’ and in10 serting ‘‘3211(b)’’.

11 (5) The table of subchapters for chap12 ter 22 is amended by adding at the end

13 the following new item:

‘‘Subchapter E. Tier 2 tax rate determination.’’.

14 (f) EFFECTIVE DATE.—The amendments

15 made by this section shall apply to calendar

16 years beginning after December 31, 2000.
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1 TITLE III—REPEAL OF 4.3-CENT

2 MOTOR FUEL EXCISE TAXES

3 ON RAILROADS AND INLAND

4 WATERWAY TRANSPOR5 TATION WHICH REMAIN IN

6 GENERAL FUND

7 SEC. 301. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES

8 ON RAILROADS AND INLAND WATERWAY

9 TRANSPORTATION WHICH REMAIN IN GEN10 ERAL FUND.

11 (a) TAXES ON TRAINS.—

12 (1) IN GENERAL.—Subparagraph (A) of

13 section 4041(a)(1) of the Internal Revenue

14 Code of 1986 is amended by striking ‘‘or

15 a diesel-powered train’’ each place it ap16 pears and by striking ‘‘or train’’.

17 (2) CONFORMING AMENDMENTS.—

18 (A) Subparagraph (C) of section

19 4041(a)(1) of such Code is amended by

20 striking clause (ii) and by redesig21 nating clause (iii) as clause (ii).

22 (B) Subparagraph (C) of section

23 4041(b)(1) of such Code is amended by

24 striking all that follows ‘‘section

25 6421(e)(2)’’ and inserting a period.
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1 (C) Subsection (d) of section 4041

2 of such Code is amended by redesig3 nating paragraph (3) as paragraph (4)

4 and by inserting after paragraph (2)

5 the following new paragraph:

6 ‘‘(3) DIESEL FUEL USED IN TRAINS.—

7 There is hereby imposed a tax of 0.1 cent

8 per gallon on any liquid other than gaso9 line (as defined in section 4083)—

10 ‘‘(A) sold by any person to an

11 owner, lessee, or other operator of a

12 diesel-powered train for use as a fuel

13 in such train, or

14 ‘‘(B) used by any person as a fuel

15 in a diesel-powered train unless there

16 was a taxable sale of such fuel under

17 subparagraph (A).

18 No tax shall be imposed by this para19 graph on the sale or use of any liquid if

20 tax was imposed on such liquid under

21 section 4081.’’

22 (D) Subsection (f) of section 4082

23 of such Code is amended by striking

24 ‘‘section 4041(a)(1)’’ and inserting
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1 ‘‘subsections (d)(3) and (a)(1) of sec2 tion 4041, respectively’’.

3 (E) Paragraph (3) of section

4 4083(a) of such Code is amended by

5 striking ‘‘or a diesel-powered train’’.

6 (F) Paragraph (3) of section

7 6421(f) of such Code is amended to

8 read as follows:

9 ‘‘(3) GASOLINE USED IN TRAINS.—In the

10 case of gasoline used as a fuel in a train,

11 this section shall not apply with respect

12 to the Leaking Underground Storage

13 Tank Trust Fund financing rate under

14 section 4081.’’

15 (G) Paragraph (3) of section

16 6427(l) of such Code is amended to

17 read as follows:

18 ‘‘(3) REFUND OF CERTAIN TAXES ON FUEL

19 USED IN DIESEL-POWERED TRAINS.—For pur20 poses of this subsection, the term ‘non21 taxable use’ includes fuel used in a diesel22 powered train. The preceding sentence

23 shall not apply to the tax imposed by sec24 tion 4041(d) and the Leaking Under25 ground Storage Tank Trust Fund financ-
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1 ing rate under section 4081 except with

2 respect to fuel sold for exclusive use by a

3 State or any political subdivision there4 of.’’

5 (b) FUEL USED ON INLAND WATERWAYS.—

6 (1) IN GENERAL.—Paragraph (1) of sec7 tion 4042(b) of such Code is amended by

8 adding ‘‘and’’ at the end of subparagraph

9 (A), by striking ‘‘, and’’ at the end of sub10 paragraph (B) and inserting a period, and

11 by striking subparagraph (C).

12 (2) CONFORMING AMENDMENT.—Para13 graph (2) of section 4042(b) of such Code

14 is amended by striking subparagraph (C).

15 (c) EFFECTIVE DATE.—The amendments

16 made by this section shall take effect on Octo17 ber 1, 2000.
Union Calendar No. 461

106TH CONGRESS

2D SESSION H. R. 4844

[Report No. 106–777, Parts I and II]

A BILL

To modernize the financing of the railroad retirement system and to provide enhanced benefits to

employees and beneficiaries.

JULY 26, 2000

Reported from the Committee on Ways and Means with

an amendment, committed to the Committee of theWhole House on the State of the Union, and orderedto be printed