179 
of the second subsequent fiscal year, which provides for 
the liquidation of such liability over five years. 
‘‘(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accept-
ed actuarial practices and principles, with interest com-
puted at the rate used in the most recent valuation of the 
Civil Service Retirement and Disability System. 
‘‘(d) At the beginning of each fiscal year, beginning 
on October 1, 2008, the Director shall notify the Secretary 
of the Treasury of the amount of the first installment 
under the most recent amortization schedule established 
under subsection (c). The Secretary shall credit that 
amount to the Fund, as a Government contribution, out 
of any money in the Treasury of the United States not 
otherwise appropriated. For the purposes of Section 504 
of the National Security Act of 1947, this amount shall 
be considered authorized.’’. 
(e)(1) Title III of such Act (50 U.S.C. 2151 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 308. FULL FUNDING OF RETIREE COSTS FOR EM-
PLOYEES DESIGNATED UNDER SECTION 302. 
‘‘(a) In addition to other government contributions 
required by law, the Agency shall contribute to the Civil 
Service Retirement and Disability fund (hereinafter in this 
section referred to as the ‘Fund’) amounts calculated in 
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180 
accordance with section 8423 of title 5, United States 
Code, based on the projected number of employees to be 
designated pursuant to section 302 of this Act. In addi-
tion, the Agency, in a manner similar to that established 
for employee contributions to the Fund by section 8422 
of title 5, United States Code, will contribute an amount 
equal to the difference between that which would be con-
tributed by the number of employees projected to be des-
ignated under section 302 and the amounts that are actu-
ally being deducted and contributed from the basic pay 
of an equal number of employees pursuant to section 
8422. The amounts of the Agency’s contributions under 
this subsection shall be determined by the Director of the 
Office of Personnel Management, in consultation with the 
Director, and shall be paid by the Agency from funds 
available for salaries and expenses. Agency employees des-
ignated pursuant to section 302 of this Act shall, com-
mencing with such designation, have deducted from their 
basic pay the full amount required by section 8422 of title 
5, United States Code, and such deductions shall be con-
tributed to the Fund. 
‘‘(b)(1) The Director of the Office of Personnel Man-
agement, in consultation with the Director, shall deter-
mine the total amount of unpaid contributions (govern-
ment and employee contributions) and interest attrib-
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181 
utable to the number of individuals employed with the 
Agency on September 30, 2008, who are projected to be 
designated under section 302 of this Act, but are not yet 
designated under that section as of that date. The amount 
shall be referred to as the section 302 unfunded liability. 
‘‘(2) Not later than June 30, 2009, the Director of 
the Office of Personnel Management, in consultation with 
the Director, shall establish an amortization schedule, set-
ting forth a series of annual installments commencing 
September 30, 2009, which provides for the liquidation of 
the section 302 unfunded liability by September 30, 2016. 
‘‘(3) At the end of each fiscal year, beginning on Sep-
tember 30, 2009, the Director shall notify the Secretary 
of the Treasury of the amount of the annual installment 
under the amortization schedule established under para-
graph (2) of this subsection. Before closing the accounts 
for that fiscal year, the Secretary shall credit that amount 
to the Fund, out of any money in the Treasury of the 
United States not otherwise appropriated. 
‘‘(c) Amounts paid by the Agency pursuant to this 
section are deemed to be specifically authorized by the 
Congress for the purposes of section 504 of the National 
Security Act of 1947.’’. 
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182 
(2) The table of contents of such Act is amended by 
inserting after the item relating to section 307 the fol-
lowing new item: 
‘‘Sec. 308. Full funding of retiree costs for employees designated under section 
302.’’. 
SEC. 403. FOREIGN SERVICE RETIREMENT AND DISABILITY 
SYSTEM. 
(a) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
804 (22 U.S.C. 4044)— 
(1) by amending paragraph (5) to read as fol-
lows: 
‘‘(5) ‘normal cost percentage’ means the entry- 
age normal cost computed in accordance with gen-
erally accepted actuarial practice and standards 
(using dynamic assumptions) and expressed as a 
level percentage of aggregate basic pay.’’; 
(2) by amending paragraph (14) to read as fol-
lows: 
‘‘(14) ‘unfunded liability’ means the estimated 
excess of— 
‘‘(A) the actuarial present value of all fu-
ture benefits payable from the Fund under this 
part based on the service of current or former 
participants, over 
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183 
‘‘(B) the sum of— 
‘‘(i) the actuarial present value of de-
ductions to be withheld from the future 
basic pay of participants currently subject 
to this part pursuant to section 805; 
‘‘(ii) the actuarial present value of the 
future contributions to be made pursuant 
to section 805 with respect to participants 
currently subject to this part; 
‘‘(iii) the Fund balance, as defined in 
paragraph (7), as of the date the unfunded 
liability is determined, excluding any 
amount attributable to the Foreign Service 
Pension System, or contributions made 
under the Federal Employees’ Retirement 
Contribution Temporary Adjustment Act 
of 1983 by or on behalf of any individual 
who became subject to the Foreign Service 
Pension System; and 
‘‘(iv) any other appropriate amount, 
as determined by the Secretary of the 
Treasury in accordance with generally ac-
cepted actuarial practices and principles.’’; 
and 
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184 
(3)(A) by striking the period at the end of 
paragraph (15) and inserting ‘‘; and’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(16) ‘dynamic assumptions’ means economic 
assumptions that are used in determining actuarial 
costs and liabilities of a retirement system and in 
anticipating the effects of long-term future— 
‘‘(A) investment yields; 
‘‘(B) increases in rates of basic pay; and 
‘‘(C) rates of price inflation.’’. 
(b) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
852 (22 U.S.C. 4071a)— 
(1) in paragraph (4)— 
(A) by striking ‘‘normal cost’’ and insert-
ing ‘‘normal cost percentage’’; and 
(B) by striking ‘‘by the Secretary of 
State’’; 
(2) in paragraph (7)— 
(A) by striking ‘‘supplemental’’ and insert-
ing ‘‘unfunded’’; 
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185 
(B) in subparagraph (B)(i) by striking 
‘‘(I)’’ and ‘‘and (II) contributions for past civil-
ian and military service’’; and 
(C) in subparagraph (B)(ii) by inserting 
before the semicolon ‘‘with respect to partici-
pants currently subject to this part’’; and 
(3)(A) at the end of paragraph (8) by striking 
‘‘and’’; 
(B) at the end of paragraph (9) by striking the 
period and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(10) ‘dynamic assumptions’ means economic 
assumptions that are used in determining actuarial 
costs and liabilities of a retirement system and in 
anticipating the effects of long-term future— 
‘‘(A) investment yields; 
‘‘(B) increases in rates of basic pay; and 
‘‘(C) rates of price inflation.’’. 
(c) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
805(a)(1) (22 U.S.C. 4045(a)(i))— 
(1) by striking the second sentence; 
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186 
(2) (by redesignating that subsection, as so 
amended, as (a)(1)(A); 
(3) by redesignating the last sentence of that 
subsection, as so amended as (a)(1)(C); 
(4) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) Each employing agency having par-
ticipants shall contribute to the Fund the 
amount computed in a manner similar to that 
used under section 8334(a) of title 5, United 
States Code, pursuant to determinations of the 
normal cost percentage of the Foreign Service 
Retirement and Disability System. Contribu-
tions under this subparagraph shall be paid 
from the appropriations or fund used for pay-
ment of the salary of the participant.’’; 
(5) in subsection (a)(2)(A) by striking ‘‘An 
equal amount shall be contributed by the Depart-
ment’’ and inserting in its place ‘‘Each employing 
agency having participants shall contribute to the 
Fund the amount computed in a manner similar to 
that used under section 8334(a) of title 5, United 
States Code, pursuant to determinations of the nor-
mal cost percentage of the Foreign Service Retire-
ment and Disability System’’; and 
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187 
(6) in subsection (a)(2)(B) by striking ‘‘An 
equal amount shall be contributed by the Depart-
ment’’ and inserting in its place ‘‘Each employing 
agency having participants shall contribute to the 
Fund from amounts available for salaries and ex-
penses the amount computed in a manner similar to 
that used under section 8334(a) of title 5, United 
States Code, pursuant to determinations of the nor-
mal cost percentage of the Foreign Service Retire-
ment and Disability System’’. 
(d) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended by repeal-
ing sections 821 and 822 (22 U.S.C. 4061 and 4062) and 
by adding the following new section: 
‘‘§ 821 Unfunded liability 
‘‘(a)(1) Not later than June 30, 2008, the Secretary 
of State shall cause to be made actuarial valuations of the 
Fund that determine the unfunded liability of the Fund, 
as of September 30, 2007, attributable to benefits payable 
under this subchapter and make recommendations regard-
ing its liquidation. After considering such recommenda-
tions, the Secretary of State shall establish an amortiza-
tion schedule, including a series of annual installments 
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188 
commencing October 1, 2007, which provides for the liq-
uidation of such liability by October 1, 2046. 
‘‘(2) The Secretary of State shall redetermine the un-
funded liability of the Fund as of the close of the fiscal 
year, for each fiscal year beginning after September 30, 
2007, through the fiscal year ending September 30, 2041, 
and shall establish a new amortization schedule, including 
a series of annual installments commencing on October 1 
of the second subsequent fiscal year, which provides for 
the liquidation of such liability by October 1, 2046. 
‘‘(3) The Secretary of State shall redetermine the un-
funded liability of the Fund as of the close of the fiscal 
year for each fiscal year beginning after September 30, 
2041, and shall establish a new amortization schedule, in-
cluding a series of annual installments commencing on Oc-
tober 1 of the second subsequent fiscal year, which pro-
vides for the liquidation of such liability over five years. 
‘‘(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accept-
ed actuarial practices and principles, with interest com-
puted at the rate used in the most recent valuation of the 
Foreign Service Retirement and Disability System. 
‘‘(b) At the beginning of each fiscal year, beginning 
on October 1, 2008, the Secretary of State shall notify 
the Secretary of the Treasury of the amount of the first 
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189 
installment under the most recent amortization schedule 
established under paragraph (1). The Secretary of the 
Treasury shall credit that amount to the Fund, as a Gov-
ernment contribution, out of any money in the Treasury 
of the United States not otherwise appropriated.’’. 
(e) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
857(b)(1) (22 U.S.C. 4071f(b)(1)) by striking ‘‘equal an-
nual installments’’ and inserting ‘‘annual installments set 
in accordance with generally accepted actuarial practices 
and principles’’. 
(f) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
859 (22 U.S.C. 4071h) by adding ‘‘percentage’’ after 
‘‘normal cost’’. 
(g) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
94 Stat. 2071, as amended, is further amended in section 
802 (22 U.S.C. 4042) by adding at the end the following: 
‘‘The Fund is appropriated for the payment of benefits 
as provided by this subchapter.’’. 
(h) Chapter 8 of title I of the Foreign Service Act 
of 1980, Public Law 96–465, (22 U.S.C. 4041 et seq.) 
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190 
94 Stat. 2071, as amended, is further amended in section 
818 (22 U.S.C. 4058) by striking ‘‘System’’ and inserting 
‘‘Systems under this subchapter’’. 
SEC. 404. PUBLIC HEALTH SERVICE COMMISSIONED CORPS 
RETIREMENT SYSTEM. 
(a) IN GENERAL.—Title II of the Public Health Serv-
ice Act (42 U.S.C. 202 et seq.) is amended by adding at 
the end the following new part: 
‘‘PART C—PUBLIC HEALTH SERVICE COMMISSIONED 
CORPS RETIREMENT SYSTEM 
‘‘ESTABLISHMENT AND PURPOSE OF FUND 
‘‘SEC. 251. There is established on the books of the 
Treasury a fund to be known as the Public Health Service 
Commissioned Corps Retirement Fund (hereinafter in this 
part referred to as the ‘Fund’), which shall be adminis-
tered by the Secretary. The Fund shall be used for the 
accumulation of funds in order to finance on an actuarially 
sound basis liabilities of the Department of Health and 
Human Services for benefits payable on account of retire-
ment, disability, or death to commissioned officers of the 
Public Health Service and to their survivors pursuant to 
part A of this title. 
‘‘ASSETS OF THE FUND 
‘‘SEC. 252. There shall be deposited into the Fund 
the following, which shall constitute the assets of the 
Fund: 
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191 
‘‘(1) Amounts paid into the Fund under section 
255. 
‘‘(2) Any return on investment of the assets of 
the Fund. 
‘‘(3) Amounts transferred into the Fund pursu-
ant to section 404(c) of the Family Budget Protec-
tion Act of 2007. 
‘‘PAYMENT FROM THE FUND 
‘‘SEC. 253. There shall be paid from the Fund bene-
fits payable on account of retirement, disability, or death 
to commissioned officers of the Public Health Service and 
to their survivors pursuant to part A of this title. 
‘‘DETERMINATION OF CONTRIBUTIONS TO THE FUND 
‘‘SEC. 254. (a)(1) Not later than June 30, 2008, the 
Secretary shall determine the unfunded liability of the 
Fund attributable to service performed as of September 
30, 2007, which is ‘active service’ for the purpose of sec-
tion 212. The Secretary shall establish an amortization 
schedule, including a series of annual installments com-
mencing October 1, 2008, which provides for the liquida-
tion of such liability by October 1, 2046. 
‘‘(2) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for 
each fiscal year beginning after September 30, 2007, 
through the fiscal year ending September 30, 2041, and 
shall establish a new amortization schedule, including a 
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192 
series of annual installments commencing on October 1 
of the second subsequent fiscal year, which provides for 
the liquidation of such liability by October 1, 2046. 
‘‘(3) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for 
each fiscal year beginning after September 30, 2041, and 
shall establish a new amortization schedule, including a 
series of annual installments commencing on October 1 
of the second subsequent fiscal year, which provides for 
the liquidation of such liability over 5 years. 
‘‘(b) The Secretary shall determine each fiscal year, 
in sufficient time for inclusion in the budget request for 
the following fiscal year, the total amount of Department 
of Health and Human Services contributions to be made 
to the Fund during the fiscal year under section 255(a). 
That amount shall be the sum of— 
‘‘(1) the product of— 
‘‘(A) the current estimate of the value of 
the single level percentage of basic pay to be de-
termined under subsection (c)(1) at the time of 
the most recent actuarial valuation under sub-
section (c); and 
‘‘(B) the total amount of basic pay ex-
pected to be paid during that fiscal year to 
commissioned officers of the Public Health 
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193 
Service on active duty (other than active duty 
for training); and 
‘‘(2) the product of— 
‘‘(A) the current estimate of the value of 
the single level percentage of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37, United States Code) to be determined 
under subsection (c)(2) at the time of the most 
recent actuarial valuation under subsection (c); 
and 
‘‘(B) the total amount of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37, United States Code) expected to be 
paid during the fiscal year to commissioned of-
ficers of the Reserve Corps of the Public Health 
Service (other than officers on full-time duty 
other than for training) who are not otherwise 
described in subparagraph (A). 
‘‘(c) Not less often than every four years thereafter 
(or by the fiscal year end prior to the effective date of 
any statutory change affecting benefits payable on account 
of retirement, disability, or death to commissioned officers 
or their survivors), the Secretary shall carry out an actu-
arial valuation of benefits payable on account of retire-
ment, disability, or death to commissioned officers of the 
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194 
Public Health Service and to their survivors pursuant to 
part A of this title. Each such actuarial valuation shall 
be signed by an enrolled Actuary and shall include— 
‘‘(1) a determination (using the aggregate 
entry-age normal cost method) of a single level per-
centage of basic pay for commissioned officers of the 
Public Health Service on active duty (other than ac-
tive duty for training); and 
‘‘(2) a determination (using the aggregate 
entry-age normal cost method) of a single level per-
centage of basic pay and of compensation (paid pur-
suant to section 206 of title 37, United States Code) 
of commissioned officers of the Reserve Corps of the 
Public Health Service (other than officers on full 
time duty other than for training) who are not oth-
erwise described in paragraph (1). 
‘‘(d) All determinations under this section shall be in 
accordance with generally accepted actuarial principles 
and practices and, where appropriate, shall follow the gen-
eral pattern of methods and assumptions approved by the 
Department of Defense Retirement Board of Actuaries. 
‘‘(e) The Secretary shall provide for the keeping of 
such records as are necessary for determining the actu-
arial status of the Fund. 
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195 
‘‘PAYMENTS INTO THE FUND 
‘‘SEC. 255. (a) From amounts available to the De-
partment of Health and Human Services for salaries and 
expenses, the Secretary shall pay into the Fund at the end 
of each month the amount that is the sum of— 
‘‘(1) the product of— 
‘‘(A) the level percentage of basic pay de-
termined using all the methods and assump-
tions approved for the most recent (as of the 
first day of the current fiscal year) actuarial 
valuation under sections 254(c)(1) (except that 
any statutory change affecting benefits payable 
on account of retirement, disability, or death to 
commissioned officers or their survivors that is 
effective after the date of that valuation and on 
or before the first day of the current fiscal year 
shall be used in such determination); and 
‘‘(B) the total amount of basic pay accrued 
for that month by commissioned officers of the 
Public Health Service on active duty (other 
than active duty for training); and 
‘‘(2) the product of— 
‘‘(A) the level percentage of basic pay and 
of compensation (paid pursuant to section 206 
of title 37, United States Code) determined 
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196 
using all the methods and assumptions ap-
proved for the most recent (as of the first day 
of the current fiscal year) actuarial valuation 
under section 254(c)(2) (except that any statu-
tory change affecting benefits payable on ac-
count of retirement, disability, or death to com-
missioned officers or their survivors that is ef-
fective after the date of that valuation and on 
or before the first day of the current fiscal year 
shall be used in such determinations); and 
‘‘(B) the total amount of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37, United States Code) accrued for that 
month by commissioned officers of the Reserve 
Corps of the Public Health Service (other than 
officers on full-time duty other than for train-
ing). 
‘‘(b) At the beginning of each fiscal year, beginning 
on October 1, 2008, the Secretary shall certify to the Sec-
retary of the Treasury the amount of the first installment 
under the most recent amortization schedule established 
under section 254(a). The Secretary of the Treasury shall 
pay into the Fund from the General Fund of the Treasury 
the amount so certified. Such payment shall be the con-
tribution to the Fund for that fiscal year. 
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197 
‘‘INVESTMENTS OF ASSETS OF FUND 
‘‘SEC. 256. The Secretary may request the Secretary 
of the Treasury to invest such portion of the Fund as is 
not, in the judgment of the Secretary, required to meet 
the current needs of the Fund. Such investments shall be 
made by the Secretary of the Treasury in public debt secu-
rities with maturities suitable to the needs of the Fund, 
as determined by the Secretary, and bearing interest at 
rates determined by the Secretary of the Treasury, taking 
into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
maturities. The income on such investments shall be cred-
ited to and form a part of the Fund. 
‘‘IMPLEMENTATION YEAR EXCEPTIONS 
‘‘SEC. 257. (a) To avoid funding shortfalls in the first 
year should formal actuarial determinations not be avail-
able in time for budget preparation, the amounts used in 
the first year in sections 255(a)(1)(A) and 255(a)(2)(A) 
shall be set equal to those estimates in sections 
254(b)(1)(A) and 254(b)(2)(A) if final determinations are 
not available. The original unfunded liability as defined 
in section 254(a) shall include an adjustment to correct 
for this difference between the formal actuarial determina-
tions and the estimates in sections 254(b)(1)(A) and 
254(b)(2)(A).’’. 
(b) CONFORMING AMENDMENTS.— 
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198 
(1) CONDITION OF DETAIL.—Section 214 of the 
Public Health Service Act (42 U.S.C. 215) is 
amended by adding at the end the following new 
subsection: 
‘‘(e) The Secretary shall condition any detail under 
subsection (a), (b), or (c) upon the agreement of the exec-
utive department, State, subdivision, Committee of the 
Congress, or institution concerned to pay to the Depart-
ment of Health and Human Services, in advance or by 
way of reimbursement, for the full cost of the detail in-
cluding that portion of the contributions under section 
255(a) that is attributable to the detailed personnel.’’. 
(2) SEQUESTRATION RULE.—Section 256(f) of 
the Balanced Budget and Emergency Deficit Control 
Act of 1985 (2 U.S.C. 906(f)) is amended— 
(A) by inserting after the item relating to 
‘‘payment to the foreign service retirement and 
disability fund’’ the following item: ‘‘Payment 
to the Public Health Service Commissioned 
Corps Retirement Fund (75–0380–0–1–551);’’; 
and 
(B) by inserting after the item relating to 
the ‘‘Pensions for former Presidents’’ the fol-
lowing item: ‘‘Public Health Service Commis-
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199 
sioned Corps Retirement Fund (75–8274–0–7– 
602);’’. 
(c) TRANSFER OF APPROPRIATIONS.—There shall be 
transferred on October 1, 2009, into the fund established 
under section 251 of the Public Health Service Act, as 
added by subsection (a), any obligated or unobligated bal-
ances of appropriations made to the Department of Health 
and Human Services that are currently available for bene-
fits payable on account of retirement, disability, or death 
to commissioned officers of the Public Health Service and 
to their survivors pursuant to part A of title II of the Pub-
lic Health Service Act, and amounts so transferred shall 
be part of the assets of the Fund. 
SEC. 405. NATIONAL OCEANIC AND ATMOSPHERIC ADMIN-
ISTRATION COMMISSIONED OFFICER CORPS 
RETIREMENT SYSTEM. 
(a) IN GENERAL.—The National Oceanic and Atmos-
pheric Administration Commissioned Officer Corps Act of 
2002 (title II of Public Law 107–372) is amended by in-
serting after section 246 (33 U.S.C. 3046) the following 
new section: 
‘‘SEC. 246A. 
‘‘(a) ESTABLISHMENT
AND PURPOSE
OF NOAA 
COMMISSIONED OFFICER CORPS RETIREMENT FUND.— 
(1) There is established on the books of the Treasury a 
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fund to be known as the National Oceanic and Atmos-
pheric Administration Commissioned Officer Corps Retire-
ment Fund (hereinafter in this section referred to as the 
‘Fund’), which shall be administered by the Secretary. The 
Fund shall be used for the accumulation of funds in order 
to finance on an actuarially sound basis liabilities of the 
Department of Commerce under military retirement and 
survivor benefit programs for the commissioned officers 
corps. 
‘‘(2) The term ‘military retirement and survivor ben-
efit program’ means— 
‘‘(A) the provisions of this title and title 10, 
United States Code, creating entitlement to, or de-
termining, the amount of retired pay; 
‘‘(B) the programs under the jurisdiction of the 
Department of Defense providing annuities for sur-
vivors and members and former members of the 
Armed Forces, including chapter 73 of title 10, sec-
tion 4 of Public Law 92–425, and section 5 of Pub-
lic Law 96–202, as made applicable to the commis-
sioned officer corps by section 261. 
‘‘(b) ASSETS OF THE FUND.—There shall be depos-
ited into the Fund the following, which shall constitute 
the assets of the Fund: 
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‘‘(1) Amounts paid into the Fund under sub-
section (e). 
‘‘(2) Any return on investment of the assets of 
the Fund. 
‘‘(3) Amounts transferred into the Fund pursu-
ant to section 405(c) of the Family Budget Protec-
tion Act of 2007. 
‘‘(c) PAYMENTS FROM THE FUND.—There shall be 
paid from the Fund benefits payable on account of mili-
tary retirement and survivor benefit programs to commis-
sioned officers of the commissioned officer corps and their 
survivors. 
‘‘(d) DETERMINATION OF CONTRIBUTIONS TO THE 
FUND.—(1)(A) Not later than June 30, 2007, the Sec-
retary shall determine the unfunded liability of the Fund 
attributable to service performed as of September 30, 
2007, which is ‘active service’ for the purpose of this title. 
The Secretary shall establish an amortization schedule, in-
cluding a series of annual installments commencing Octo-
ber 1, 2008, which provides for the liquidation of such 
liability by October 1, 2046. 
‘‘(B) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for 
each fiscal year beginning after September 30, 2007, 
through the fiscal year ending September 30, 2041, and 
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shall establish a new amortization schedule, including a 
series of annual installments commencing on September 
30 of the subsequent fiscal year, which provides for the 
liquidation of such liability by October 1, 2046. 
‘‘(C) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for 
each fiscal year beginning after September 30, 2041, and 
shall establish a new authorization schedule, including se-
ries of annual installments commencing on October 1 of 
the second subsequent fiscal year, which provides for the 
liquidation of such liability over 5 years. 
‘‘(2) The Secretary shall determine each fiscal year, 
in sufficient time for inclusion in the budget request for 
the following fiscal year, the total amount of Department 
of Commerce contributions to be made to the Fund during 
that fiscal year under (e). The amount shall be the product 
of— 
‘‘(A) the current estimate of the value of the 
single level percentage of basic pay to be determined 
under subsection (e) at the time of the most recent 
actuarial valuation under paragraph (3); and 
‘‘(B) the total amount of basic pay expected to 
be paid during that fiscal year to commissioned offi-
cers of NOAA on active duty. 
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203 
‘‘(3) Not less often then every four years (or by the 
fiscal year end before the effective date of any statutory 
change affecting benefits payable on account of retire-
ment, disability, or death to commissioned officers or their 
survivors), the Secretary shall carry out an actuarial valu-
ation of benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of 
the Administration and to their survivors. Each such actu-
arial valuation shall be signed by an enrolled Actuary and 
shall include a determination (using the aggregate entry- 
age normal cost method) of a single level percentage of 
basic pay for commissioned officers on active duty. 
‘‘(4) All determinations under this section shall be in 
accordance with generally accepted actuarial principles 
and practices, and, where appropriate, shall follow the 
general pattern of methods and assumptions approved by 
the Department of Defense Retirement Board of Actu-
aries. 
‘‘(5) The Secretary shall provide for the keeping of 
such records as are necessary for determining the actu-
arial status of the Fund. 
‘‘(e) PAYMENTS
INTO
THE
FUND.—(1) From 
amounts appropriated to the National Oceanic Atmos-
pheric Administration for salaries and expenses, the Sec-
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204 
retary shall pay into the Fund at the end of each month 
the amount that is the product of— 
‘‘(A) the level percentage of basic pay deter-
mined using all the methods and assumptions ap-
proved for the most recent (as of the first day of the 
current fiscal year) actuarial valuation under sub-
section (d) (except that any statutory change affect-
ing benefits payable on account of military retire-
ment and survivor benefit programs to commissioned 
officers of the Administration and to their survivors 
that is effective date after the date of that valuation 
and on or before the first day of the current fiscal 
year shall be used in such determination); and 
‘‘(B) the total amount of basic pay accrued for 
that month by commissioned officers on active duty. 
‘‘(2)(A) At the beginning of each fiscal year, the Sec-
retary shall determine the sum of— 
‘‘(i) the amount of the payment for that year 
under the amortization of the original unfunded li-
ability of the Fund; 
‘‘(ii) the amount (including any negative 
amount) for that year under the most recent amorti-
zation schedule determined by the Secretary for the 
amortization of any cumulative actuarial gain or loss 
to the Fund, resulting from changes in benefits; and 
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205 
‘‘(iii) the amount (including any negative 
amount) for that year under the most recent amorti-
zation schedule determined by the Secretary for the 
amortization or any cumulative actuarial gain or loss 
to the Fund resulting from changes in actuarial as-
sumptions and from experience different from the 
assumed since the last valuation. 
The Secretary shall promptly certify the amount of the 
sum to the Secretary of the Treasury. 
‘‘(B) Upon receiving the certification pursuant to 
paragraph (1), the Secretary of the Treasury shall 
promptly pay into the Fund from the General Fund of 
the Treasury the amount so certified. Such payment shall 
be the contribution to the Fund for that fiscal year. 
‘‘(f) INVESTMENT OF ASSETS OF THE FUND.—The 
Secretary may request the Secretary of the Treasury to 
invest such portion of the Fund as is not, in the judgment 
of the Secretary, required to meet the current needs of 
the Fund. Such investments shall be made by the Sec-
retary of the Treasury in public debt securities with matu-
rities suitable to the needs of the Fund, as determined 
by the Secretary, and bearing interest at rates determined 
by the Secretary of the Treasury, taking into consideration 
current market yields on outstanding marketable obliga-
tions of the United States of comparable maturities. The 
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206 
income of such investments shall be credited to and form 
a part of the Fund. 
‘‘(g) IMPLEMENTATION YEAR EXCEPTIONS.—(1) To 
avoid funding shortfalls in the first year should formal ac-
tuarial determinations not be available in time for budget 
preparation, the amounts used in the first year in sub-
section (e)(1)(A) shall be set equal to the estimate in sub-
section (d)(2)(A) if final determinations are not available. 
The original unfunded liability as determined in sub-
section (d)(1) shall include an adjustment to correct for 
this difference between the formal actuarial determina-
tions and the estimates in subsection (d)(2)(A).’’. 
(b) SEQUESTRATION RULE.—Section 256(f) of the 
Balanced Budget and Emergency Deficit Control Act of 
1985 (2 U.S.C. 906(f)) is amended by striking ‘‘National 
Oceanic and Atmospheric Administration retirement (13– 
1450–0–1–306);’’ and inserting ‘‘National Oceanic and 
Atmospheric Administration Commissioned Officer Corps 
Retirement Fund;’’. 
(c) TRANSFER OF APPROPRIATIONS.—There shall be 
transferred on October 1, 2009, into the fund established 
under section 246A(a) of the National Oceanic and At-
mospheric Administration Commissioned Officer Corps 
Act of 2002 (title II of Public Law 107–372, as added 
by subsection (a)), any obligated and unobligated balance 
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207 
of appropriations made to the Department of Commerce 
that are available as of the date of the enactment of this 
Act for benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of 
the NOAA Commissioned Officer Corps and to their sur-
vivors, and amounts so transferred shall be part of the 
assets of the Fund, effective October 1, 2009. 
(d) EFFECTIVE DATE.—Subsection (c) (relating to 
payments from the Fund) and (e) (relating to payments 
into the Fund) of section 246A of the National Oceanic 
and Atmospheric Administration Commissioned Officer 
Corps Act of 2002 (title II of Public Law 107–372, as 
added by subsection (a)), shall take effect on October 1, 
2007. 
SEC. 406. COAST GUARD MILITARY RETIREMENT SYSTEM. 
(a) ACCRUAL FUNDING FOR COAST GUARD RETIRE-
MENT.— 
(1) IN
GENERAL.—Chapter 11 of title 14, 
United States Code, is amended by adding at the 
end the following new subchapter: 
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208 
‘‘SUBCHAPTER V—COAST GUARD MILITARY 
RETIREMENT FUND 
‘‘§ 441. Establishment and purpose of Fund; defini-
tions 
‘‘(a) ESTABLISHMENT OF FUND; PURPOSE.—There 
is established on the books of the Treasury a fund to be 
known as the Coast Guard Military Retirement Fund 
(hereinafter in this subchapter referred to as the ‘Fund’), 
which shall be administered by the Secretary. The Fund 
shall be used for the accumulations of funds in order to 
finance on an actuarially sound basis liabilities of the 
Coast Guard under military retirement and survivor ben-
efit programs. 
‘‘(b) MILITARY RETIREMENT AND SURVIVOR BEN-
EFIT PROGRAMS DEFINED.—In this subchapter, the term 
‘military retirement and survivor benefit programs’ 
means— 
‘‘(1) the provisions of this title and title 10 cre-
ating entitlement to, or determining the amount of, 
retired pay; 
‘‘(2) the programs providing annuities for sur-
vivors of members and former members of the 
armed forces, including chapter 73 of title 10, sec-
tion 4 of Public Law 92–425, and section 5 of Pub-
lic Law 96–402; and 
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209 
‘‘(3) the authority provided in section 1048(h) 
of title 10. 
‘‘(c) SECRETARY DEFINED.—In this subchapter, the 
term ‘Secretary’ means the Secretary of Homeland Secu-
rity when the Coast Guard is not operating as a service 
in the Navy and the Secretary of Defense when the Coast 
Guard is operating as a service in the Navy. 
‘‘§ 442. Assets of the Fund 
‘‘There shall be deposited into the Fund the fol-
lowing, which shall constitute the assets of the Fund: 
‘‘(1) Amounts paid into the Fund under section 
445 of this title. 
‘‘(2) Any return on investment of the assets of 
the Fund. 
‘‘(3) Amounts transferred into the Fund pursu-
ant to section 406(d) of the Family Budget Protec-
tion Act of 2007. 
‘‘§ 443. Payments from the Fund 
‘‘(a) IN GENERAL.—There shall be paid from the 
Fund the following: 
‘‘(1) Retired pay payable to persons on the re-
tired list of the Coast Guard. 
‘‘(2) Retired pay payable under chapter 1223 of 
title 10 to former members of the Coast Guard and 
the former United States Lighthouse Service. 
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210 
‘‘(3) Benefits payable under programs that pro-
vide annuities for survivors of members and former 
members of the armed forces, including chapter 73 
of title 10, section 4 of Public Law 92–425, and sec-
tion 5 of Public Law 96–402. 
‘‘(4) Amounts payable under section 1048(h) of 
title 10. 
‘‘(b) AVAILABILITY OF ASSETS OF THE FUND.—The 
assets of the Fund are hereby made available for payments 
under subsection (a). 
‘‘§ 444. Determination of contributions to the Fund 
‘‘(a) INITIAL UNFUNDED LIABILITY.—(1) Not later 
than June 30, 2008, the Secretary shall determine the un-
funded liability of the Fund attributable to service per-
formed as of September 30, 2007, which is ‘active service’ 
for the purposes of section 212. The Secretary shall estab-
lish an amortization schedule, including a series of annual 
installments commencing October 1, 2008, which provides 
for the liquidation of such liability by October 1, 2046. 
‘‘(2) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for 
each beginning after September 30, 2007, through the fis-
cal year ending September 30, 2041, and shall establish 
a new amortization schedule, including a series of annual 
installments commencing on October 1 of the second sub-
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211 
sequent fiscal year, which provides for the liquidation of 
such liability by October 1, 2046. 
‘‘(3) The Secretary shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for 
each fiscal year beginning after September 30, 2041, and 
shall establish a new amortization schedule, including a 
series of annual installments commencing on October 1 
of the second subsequent fiscal year, which provides for 
the liquidation of such liability over five years. 
‘‘(b) ANNUAL CONTRIBUTIONS FOR CURRENT SERV-
ICES.—(1) The Secretary shall determine each fiscal year, 
in sufficient time for inclusion in the budget request for 
the following fiscal year, the total amount of Department 
of Homeland Security, or Department of Defense, con-
tributions to be made to the Fund during that fiscal year 
under section 445(a) of this title. That amount shall be 
the sum of the following: 
‘‘(A) The product of— 
‘‘(i) the current estimate of the value of 
the single level percentage of basic pay to be de-
termined under subsection (c)(1)(A) at the time 
of the most recent actuarial valuation under 
subsection (c); and 
‘‘(ii) the total amount of basic pay ex-
pected to be paid during that fiscal year to 
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212 
members of the Coast Guard on active duty 
(other than active duty for training). 
‘‘(B) The product of— 
‘‘(i) the current estimate of the value of 
the single level percentage of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37) to be determined under subsection 
(c)(1)(B) at the time of the most recent actu-
arial valuation under subsection (c); and 
‘‘(ii) the total amount of basic pay and 
compensation (paid pursuant to section 206 of 
title 37) expected to be paid during that fiscal 
year to members of the Coast Guard Ready Re-
serve (other than members on full-time Reserve 
duty other than for training) who are not other-
wise described in subparagraph (A)(ii). 
‘‘(2) The amount determined under paragraph (1) for 
any fiscal year is the amount needed to be appropriated 
to the Department of Homeland Security for that fiscal 
year for payments to be made to the Fund during that 
year under section 445(a) of this title. The President shall 
include not less than the full amount so determined in the 
budget transmitted to Congress for that fiscal year under 
section 1105 of title 31. The President may comment and 
make recommendations concerning any such amount. 
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213 
‘‘(c) PERIODIC ACTUARIAL VALUATIONS.—(1) Not 
less often than every four years (or before the effective 
date of any statutory change affecting benefits payable on 
account of retirement, disability, or death to members of 
the Coast Guard or their survivors), the Secretary shall 
carry out an actuarial valuation of the Coast Guard mili-
tary retirement and survivor benefit programs. Each actu-
arial valuation of such programs shall be signed by an en-
rolled actuary and shall include— 
‘‘(A) a determination (using the aggregate 
entry-age normal cost method) of a single level per-
centage of basic pay for members of the Coast 
Guard on active duty (other than active duty for 
training); and 
‘‘(B) a determination (using the aggregate 
entry-age normal cost method) of single level per-
centage of basic pay and of compensation (paid pur-
suant to section 206 of title 37) for members of the 
Ready Reserve of the Coast Guard (other than mem-
bers on full-time Reserve duty other than for train-
ing) who are not otherwise described in subpara-
graph (A). 
‘‘(2) Such single level percentages shall be used for 
the purposes of subsection (b) and section 445(a) of this 
title. 
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214 
‘‘(d) USE
OF GENERALLY ACCEPTED ACTUARIAL 
PRINCIPLES AND PRACTICES.—All determinations under 
this section shall be in accordance with generally accepted 
actuarial principles and practices and, where appropriate, 
shall follow the general pattern of methods and assump-
tions approved by the Department of Defense Retirement 
Board of Actuaries. 
‘‘(e) RECORDS.—The Secretary shall provide for the 
keeping of such records as are necessary for determining 
the actuarial status of the Fund. 
‘‘§ 445. Payments into the Fund 
‘‘(a) MONTHLY ACCRUAL CHARGE FOR CURRENT 
SERVICES.—From amounts appropriated to the Coast 
Guard for salaries and expenses, the Secretary shall pay 
into the Fund at the end of each month as the Department 
of Homeland Security, or Department of Defense, con-
tribution to the Fund for that month the amount that is 
the sum of the following: 
‘‘(1) The product of— 
‘‘(A) the level percentage of basic pay de-
termined using all the methods and assump-
tions approved for the most recent (as of the 
first day of the current fiscal year) actuarial 
valuation under section 444(c)(1)(A) of this 
title (except that any statutory change in the 
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215 
military retirement and survivor benefit systems 
that is effective after the date of that valuation 
and on or before the first day of the current fis-
cal year shall be used in such determination); 
and 
‘‘(B) the total amount of basic pay accrued 
for that month by members of the Coast Guard 
on active duty (other than active duty for train-
ing). 
‘‘(2) The product of— 
‘‘(A) the level percentage of basic pay and 
compensation (accrued pursuant to section 206 
of title 37) determined using all the methods 
and assumptions approved for the most recent 
(as of the first day of the current fiscal year) 
actuarial valuation under section 444(c)(1)(B) 
of this title (except that any statutory change 
in the military retirement and survivor benefit 
systems that is effective after the date of that 
valuation and on or before the first day of the 
current fiscal year shall be used in such deter-
mination); and 
‘‘(B) the total amount of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37) accrued for that month by members of 
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216 
the Ready Reserve (other than members of full- 
time Reserve duty other than for training) who 
are not otherwise described in paragraph 
(1)(B). 
‘‘(b) ANNUAL PAYMENT FOR UNFUNDED LIABIL-
ITIES.—(1) At the beginning of each fiscal year, beginning 
on October 1, 2008, the Secretary shall certify to the Sec-
retary of the Treasury the amount of the first installment 
under the most recent amortization schedule established 
under section 254(a). The Secretary of the Treasury shall 
promptly pay into the Fund from the General Fund of 
the Treasury the amount so certified. Such payment shall 
be the contribution to the Fund for that fiscal year. 
‘‘§ 446. Investment of assets of the Fund 
‘‘The Secretary may request the Secretary of the 
Treasury to invest such portion of the Fund as is not, 
in the judgment of the Secretary, required to meet the 
current needs of the Fund. Such investments shall be 
made by the Secretary of the Treasury in public debt secu-
rities with maturities suitable to the needs of the Fund, 
as determined by the Secretary, and bearing interest at 
rates determined by the Secretary of the Treasury, taking 
into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
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217 
maturities. The income on such investments shall be cred-
ited to and form a part of the Fund.’’. 
(2) TECHNICAL AMENDMENTS.—Such chapter 
is further amended— 
(A) by amending the center heading after 
the table of sections to read as follows: 
‘‘SUBCHAPTER I—OFFICERS’’; 
(B) by amending the center heading after 
section 336 to read as follows: 
‘‘SUBCHAPTER II—ENLISTED MEMBERS’’; 
(C) by amending the center heading after 
section 373 to read as follows: 
‘‘SUBCHAPTER III—GENERAL PROVISIONS’’; 
and 
(D) by amending the center heading after 
section 425 to read as follows: 
‘‘SUBCHAPTER IV—SPECIAL PROVISIONS’’. 
(3) CLERICAL AMENDMENTS.—The table of sec-
tions at the beginning of such chapter is amended— 
(A) by striking ‘‘OFFICERS’’ at the be-
ginning of the table and inserting ‘‘SUB-
CHAPTER I—OFFICERS’’; 
(B) by striking ‘‘ENLISTED MEM-
BERS’’ after the item relating to section 336 
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218 
and 
inserting 
‘‘SUBCHAPTER 
II—EN-
LISTED MEMBERS’’; 
(C) by striking ‘‘GENERAL PROVI-
SIONS’’ after the item relating to section 373 
and inserting ‘‘SUBCHAPTER III—GEN-
ERAL PROVISIONS’’ ; 
(D) 
by 
striking 
‘‘SPECIAL 
PROVI-
SIONS’’ after the item relating to section 425 
and inserting ‘‘SUBCHAPTER IV—SPECIAL 
PROVISIONS’’ ; and 
(E) by adding at the end the following: 
‘‘SUBCHAPTER V—COAST GUARD MILITARY RETIREMENT FUND 
‘‘441. Establishment and purpose of Fund; definitions. 
‘‘442. Assets of the Fund. 
‘‘443. Payments from the Fund. 
‘‘444. Determination of contributions to the Fund. 
‘‘445. Payments into the Fund. 
‘‘446. Investment of assets of the Fund.’’. 
(b) IMPLEMENTATION YEAR EXCEPTIONS.—To avoid 
funding shortfalls in the first year of implementation of 
subchapter V of chapter 11 of title 14, United States 
Code, as added by subsection (a), if formal actuarial deter-
minations are not available in time for budget preparation, 
the amounts used in the first year under sections 
445(a)(1)(A) and 445(a)(2)(A) of such title shall be set 
equal to those estimates in sections 444(b)(1)(A)(i) and 
444(b)(1)(B)(i), respectively, of such title if final deter-
minations are not available. The original unfunded liabil-
ity, as defined in section 444(a) of such title, shall include 
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219 
an adjustment to correct for this difference between the 
formal actuarial determinations and the estimates in sec-
tions 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title. 
(c) CONFORMING AMENDMENT.—Section 256(f) of 
the Balanced Budget and Emergency Deficit Control Act 
of 1985 (2 U.S.C. 906(f)) is amended by striking ‘‘Retired 
Pay, Coast Guard (69–0241–0–1–403)’’ and inserting 
‘‘Coast Guard Military Retirement Fund (69–0241–01– 
403)’’. 
(d) TRANSFER OF EXISTING BALANCES.— 
(1) TRANSFER.—There shall be transferred into 
the Fund on October 1, 2008, any obligated and un-
obligated balances of appropriations made to the De-
partment of Homeland Security that are currently 
available for retired pay, and amounts so transferred 
shall be part of the assets of the Fund. 
(2) FUND
DEFINED.—For purposes of para-
graph (1), the term ‘‘Fund’’ means the Coast Guard 
Military Retirement Fund established under section 
441 of title 14, United States Code, as added by 
subsection (a). 
(e) EFFECTIVE DATE.—Sections 443 (relating to 
payments from the Fund) and 445 (relating to payments 
into the Fund) of title 14, United States Code, as added 
by subsection (a), shall take effect on October 1, 2008. 
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Subtitle 
B—Accrual 
Funding 
of 
Post-Retirement Health Benefits 
Costs for Federal Employees 
SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND. 
(a) Section 8906 of title 5, United States Code, is 
amended— 
(1) by redesignating subsection (c) as sub-
section (c)(1) and by adding at the end the following 
new paragraphs: 
‘‘(2) In addition to Government contributions re-
quired by subsection (b) and paragraph (1), each employ-
ing agency shall contribute amounts as determined by the 
Office to be necessary to prefund the accruing actuarial 
cost of post-retirement health benefits for each of the 
agency’s current employees who are eligible for Govern-
ment contributions under this section. Amounts under this 
paragraph shall be paid by the employing agency separate 
from other contributions under this section, from the ap-
propriations or fund used for payment of the salary of the 
employee, on a schedule to be determined by the Office. 
‘‘(3) Paragraph (2) shall not apply to the United 
States Postal Service or the government of the District 
of Columbia.’’; and 
(2) by amending subsection (g)(1) to read as 
follows: 
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221 
‘‘(g)(1) Except as provided in paragraphs (2) and 
(3), all Government contributions authorized by this sec-
tion for health benefits for an annuitant shall be paid from 
the Employees Health Benefits Fund to the extent that 
funds are available in accordance with section 8909(h)(6) 
and, if necessary, from annual appropriations which are 
authorized to be made for that purpose and which may 
be made available until expended.’’. 
(b) Section 8909 of title 5, United States Code, is 
amended by adding at the end the following new sub-
section: 
‘‘(h)(1) Not later than June 30, 2009, the Office 
shall determine the existing liability of the Fund for post- 
retirement health benefits, excluding the liability of the 
United States Postal Service for service under section 
8906(g)(2), under this chapter as of September 30, 2009. 
The Office shall establish an amortization schedule, in-
cluding a series of annual installments commencing Sep-
tember 30, 2009, which provides for the liquidation of 
such liability by September 30, 2045. 
‘‘(2) At the close of each fiscal year, for fiscal years 
beginning after September 30, 2008, the Office shall de-
termine the supplemental liability of the Fund for post- 
retirement health benefits, excluding the liability attrib-
utable to the United States Postal Service for service sub-
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222 
ject to section 8906(g)(2), and shall establish an amortiza-
tion schedule, including a series of annual installments 
commencing on September 30 of the subsequent fiscal 
year, which provides for liquidation of such supplemental 
liability over 30 years. 
‘‘(3) Amortization schedules established under this 
paragraph shall be set in accordance with generally accept-
ed actuarial practices and principles. 
‘‘(4) At the end of each fiscal year on and after Sep-
tember 30, 2009, the Office shall notify the Secretary of 
the Treasury of the amounts of the next installments 
under the most recent amortization schedules established 
under paragraphs (1) and (2). Before closing the accounts 
for the fiscal year, the Secretary shall credit the sum of 
these amounts (including in that sum any negative 
amount for the amortization of the supplemental liability) 
to the Fund, as a Government contribution, out of any 
money in the Treasury of the United States not otherwise 
appropriated. 
‘‘(5) For the purpose of carrying out paragraphs (1) 
and (2), the Office shall perform or arrange for actuarial 
determinations and valuations and shall prescribe reten-
tion of such records as it considers necessary for making 
periodic actuarial valuations of the Fund. 
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223 
‘‘(6) Notwithstanding subsection (b), the amounts de-
posited into the Fund pursuant to this subsection and sec-
tion 8906(c)(2) to prefund post-retirement health benefits 
costs shall be segregated within the Fund so that such 
amounts, as well as earnings and proceeds under sub-
section (c) attributable to them, may be used exclusively 
for the purpose of paying Government contributions for 
post-retirement health benefits costs. When such amounts 
are used in combination with amounts withheld from an-
nuitants to pay for health benefits, a portion of the con-
tributions shall then be set aside in the Fund as described 
in subsection (b). 
‘‘(7) Under this subsection, ‘supplemental liability’ 
means— 
‘‘(A) the actuarial present value for future post- 
retirement health benefits that are the liability of 
the Fund, less 
‘‘(B) the sum of— 
‘‘(i) the actuarial present value of all fu-
ture contributions by agencies and annuitants 
to the Fund toward those benefits pursuant to 
section 8906; 
‘‘(ii) the present value of all scheduled am-
ortization payments to the Fund pursuant to 
paragraphs (1) and (2); 
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‘‘(iii) the Fund balance as of the date the 
supplemental liability is determined, to the ex-
tent that such balance is attributable to post-re-
tirement benefits; and 
‘‘(iv) any other appropriate amount, as de-
termined by the Office in accordance with gen-
erally accepted actuarial practices and prin-
ciples.’’. 
SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENE-
FITS FOR ALL RETIREES. 
Title 10, United States Code, is amended— 
(1) in the title of chapter 56, by striking ‘‘DE-
PARTMENT OF DEFENSE MEDICARE- 
ELIGIBLE’’ 
and 
inserting 
‘‘UNIFORMED 
SERVICES’’; 
(2) in section 1111— 
(A) in subsection (a)— 
(i) by striking ‘‘Department of De-
fense Medicare-Eligible’’ and inserting 
‘‘Uniformed Services’’; 
(ii) by striking ‘‘Department of De-
fense under’’; and 
(iii) by striking ‘‘for medicare-eligible 
beneficiaries’’; 
(B) in subsection (c)— 
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225 
(i) by striking ‘‘The Secretary of De-
fense may’’ and inserting ‘‘The Secretary 
of Defense shall’’; 
(ii) by striking ‘‘with any other’’ and 
inserting ‘‘with each’’; 
(iii) by striking ‘‘Any such agree-
ment’’ and inserting ‘‘Such agreements’’; 
and 
(iv) by striking ‘‘administering Sec-
retary may’’ and inserting ‘‘administrative 
Secretary shall’’; 
(3) in section 1113— 
(A) in subsection (a)— 
(i) by striking ‘‘and are medicare eli-
gible’’; 
(ii) by striking ‘‘who are medicare eli-
gible’’; and 
(iii) by adding at the end the fol-
lowing new sentence: ‘‘For the fiscal year 
starting October 1, 2007, only, the pay-
ments will be solely for the costs of mem-
bers or former members of a uniformed 
service who are entitled to retired or re-
tainer pay and are medicare-eligible, and 
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226 
eligible dependents or survivors who are 
medicare-eligible.’’; 
(B) in subsection (c)(1), by striking ‘‘who 
are medicare-eligible’’; 
(C) in subsection (d), by striking ‘‘who are 
medicare-eligible’’; and 
(D) in subsection (f), by striking ‘‘If’’ and 
inserting ‘‘When’’; 
(4) in section 1114, in subsection (a)(1), by 
striking ‘‘Department of Defense Medicare-Eligible’’ 
and inserting ‘‘Uniformed Services’’; 
(5) in section 1115— 
(A) in subsection (b)(2), by striking ‘‘The 
amount determined under paragraph (1) for 
any fiscal year is the amount needed to be ap-
propriated to the Department of Defense (or to 
the other executive department having jurisdic-
tion over the participating uniformed service)’’ 
and inserting ‘‘The amount determined under 
paragraph (1), or the amount determined under 
section 1111(c) for a participating uniformed 
service, for any fiscal year, is the amount need-
ed to be appropriated to the Department of De-
fense (or to any other executive department 
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227 
having jurisdiction over a participating uni-
formed service)’’; 
(B) in subsection (c)(2), by striking ‘‘for 
medicare eligible beneficiaries’’; and 
(C) by adding at the end the following new 
subsection: 
‘‘(f) For the fiscal year starting October 1, 2007, 
only, the amounts in this section shall be based solely on 
the costs of medicare-eligible benefits of beneficiaries and 
the costs for their eligible dependents or survivors who are 
medicare-eligible, and shall be recalculated thereafter to 
reflect the cost of beneficiaries defined in section 1111.’’; 
and 
(6) in section 1116— 
(A) in subsection (a)(1)(A), by striking 
‘‘for medicare-eligible beneficiaries’’; 
(B) in subsection (a)(2)(A), by striking 
‘‘for medicare-eligible beneficiaries’’; and 
(C) in subsection (c), by striking ‘‘sub-
section (a) shall be paid from funds available 
for the health care programs’’ and inserting 
‘‘subsection (a) and section 1111(c) shall be 
paid from funds available for the pay of mem-
bers of the participating uniformed services 
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228 
under the jurisdiction of the respective admin-
istering secretaries’’. 
SEC. 413. EFFECTIVE DATE. 
Except as otherwise provided, this title shall take ef-
fect upon enactment with respect to fiscal years beginning 
after 2008. 
Subtitle C—Earmark Transparency 
SEC. 421. PROHIBITION ON OBLIGATION OF FUNDS FOR 
EARMARKS INCLUDED ONLY IN CONGRES-
SIONAL REPORTS. 
(a) REQUIREMENT THAT EARMARKS MUST BE IN 
LEGISLATIVE TEXT.—Notwithstanding any other rule of 
the House, in addition to the requirements set forth in 
clause 9 of rule XXI of the Rules of the House of Rep-
resentatives, it shall not be in order to consider any bill, 
joint resolution, amendment thereto, or conference report 
thereon, unless the list of congressional earmarks, limited 
tax benefits, and limited tariff benefits, required by clause 
9(a)of rule XXI are also set forth in the text of such meas-
ure. 
(b) AVAILABILITY
ON
THE INTERNET.—Notwith-
standing any other rule of the House, in addition to the 
requirements set forth in clause 9 of rule XXI of the Rules 
of the House of Representatives, it shall not be in order 
to consider any bill, joint resolution, or conference report 
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229 
thereon, unless the lists required by paragraphs (1), (2), 
and (4) of clause 9 of rule XXI are made available on 
the Internet in a searchable format to the general public 
for at least 48 hours before consideration. 
SEC. 422. DEFINITIONS. 
(a) CONGRESSIONAL EARMARK.—For purposes of 
this subtitle, the term ‘‘congressional earmark’’ means a 
provision or report language included primarily at the re-
quest of a Member, Delegate, Resident Commissioner, or 
Senator providing, authorizing or recommending a specific 
amount of discretionary budget authority, credit author-
ity, or other spending authority for a contract, loan, loan 
guarantee, grant, loan authority, or other expenditure 
with or to an entity, or targeted to a specific State, locality 
or Congressional district, other than through a statutory 
or administrative formula-driven or competitive award 
process. 
(b) LIMITED BENEFITS.— 
(1) LIMITED
TARIFF
BENEFIT.—The term 
‘‘limited tariff benefit’’ means any provision of law 
that modifies the Harmonized Tariff Schedule of the 
United States in a manner that benefits 10 or fewer 
entities (as defined in paragraph (12)(B)). 
(2) LIMITED
TAX
BENEFIT.—(A) The term 
‘‘limited tax benefit’’ means any revenue-losing pro-
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230 
vision that provides a Federal tax deduction, credit, 
exclusion, or preference to ten or fewer beneficiaries 
(determined with respect to either present law or 
any provision of which the provision is a part) under 
the Internal Revenue Code of 1986 in any year for 
which the provision is in effect; 
(B) For purposes of subparagraph (A)— 
(i) all businesses and associations that are 
members of the same controlled group of cor-
porations (as defined in section 1563(a) of the 
Internal Revenue Code of 1986) shall be treat-
ed as a single beneficiary; 
(ii) all shareholders, partners, members, or 
beneficiaries of a corporation, partnership, asso-
ciation, or trust or estate, respectively, shall be 
treated as a single beneficiary; 
(iii) all employees of an employer shall be 
treated as a single beneficiary; 
(iv) all qualified plans of an employer shall 
be treated as a single beneficiary; 
(v) all beneficiaries of a qualified plan shall 
be treated as a single beneficiary; 
(vi) all contributors to a charitable organi-
zation shall be treated as a single beneficiary; 
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(vii) all holders of the same bond issue 
shall be treated as a single beneficiary; and 
(viii) if a corporation, partnership, associa-
tion, trust or estate is the beneficiary of a pro-
vision, the shareholders of the corporation, the 
partners of the partnership, the members of the 
association, or the beneficiaries of the trust or 
estate shall not also be treated as beneficiaries 
of such provision; 
(C) For the purpose of this paragraph, the 
term ‘‘revenue-losing provision’’ means any provision 
that is estimated to result in a reduction in Federal 
tax revenues (determined with respect to either 
present law or any provision of which the provision 
is a part) for any one of the two following periods— 
(i) the first fiscal year for which the provi-
sion is effective; or 
(ii) the period of the 5 fiscal years begin-
ning with the first fiscal year for which the pro-
vision is effective; 
(D) the term ‘‘limited tax benefit’’ does not in-
clude any provision which applies uniformly to an 
entire industry; and 
(E) the terms used in this paragraph shall have 
the same meaning as those terms have generally in 
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