An Act to provide additional civilian positions for the Department of Defense for purposes of scientific research and development relating to the national defense, to improve the management of the activities of such Department, and for other purposes
PL 86-377 (H.R.6059), enacted 09/23/1959

700 
PUBUC LAW 86-377-SEPT. 23, 1959 
[73 ST A T , 
eSAStat. 182. 
S m a l l business 
investment 
com-
pany. 
72 Stat. 689. 
15 u s e 661 note. 
68A Stat. 188. 
SEC. 3. (a) Section 542(c) of the Internal Revenue Code of 1954 
(relating to exceptions from definition of a personal holding com-
pany) is amended— 
(a) by inserting ";" in lieu of "." at the end thereof and 
(b) by adding at the end thereof the following new paragraph 
"(11) A small business investment company which is 
licensed by the Small Business Administration and operating 
under the Small Business Investment Act of 1958 and which 
is actively engaged in the business of providing funds to 
small business concerns under that Act. 
This paragraph 
shall not apply if any shareholder of the small business 
investment company owns at any time during the taxable year 
directly or indirectly (including, in the case of an individual, 
ownership by the members of his family as defined in section 
544(a) (2)) a 5 per centum or more proprietary interest in 
a small business concern to which funds are provided by the 
investment company or 5 per centum or more in value of the 
outstanding stock of such concern." 
(b) The amendment made by this section shall apply to taxable years 
beginning after December 31,1958. 
Approved September 23, 1959. 
September 23, 1959 
[H. R. 6059] 
Defense Depart-
ment. Civilian po-
sitions. 
63 Stat. 959. 
Public Law 86-377 
AN ACT 
To provide additional civilian positions for the Department of Defense for 
purposes of scientific research and development relating to the national 
defense, to improve the management of the activities of such Department, 
and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That (a) section 505 
of the Classification Act of 1949, as amended (5 U.S.C. 1105), is 
amended by adding the following new subsection at the end thereof: 
"(j) The Secretary of Defense is authorized, subject to the stand-
ards and procedures prescribed by this Act, to place a total of three 
hundred seventy-tw^o positions in the Department of Defense in grades 
16, 17, and 18 of the General Schedule." 
(b) The total number of positions authorized by section 505(b) of 
the Classification Act of 1949, as amended (5 U.S.C. 1105(b)), to be 
placed in grades 16,17, and 18 of the General Schedule of such Act at 
any time shall be deemed to have been reduced by the number of 
positions in such grades allocated to the Department of Defense 
immediately prior to the date of enactment of this Act. 
The respective 
numbers of positions authorized by such section 505(b) to be placed 
in grades 17 and 18 of such schedule at any one time shall be deemed 
to nave been reduced by the respective numbers of positions in such 
grades allocated to the Department of Defense immediately prior to 
the date of enactment of this Act. 
(c) Nothing contained in this section shall affect any position 
existing under authority of section 505(b) of the Classification Act 
of 1949, as in effect immediately prior to the date of enactment of 
this Act, the compensation attached to any such position, and any 
incumbent thereof, his appointment thereto, and his right to re-
ceive the compensation attached thereto, until appropriate action is 
78 S T A T . ] 
PUBLIC LAW 86-377-fiEPT. 23, 1969 
701 
70A Stat. 118. 
Report 
gress. 
to 
Con-
68 Stat. 737. 
5 u s e 2092. 
5 u s e 2094. 
5 u s e 2095. 
Life insurance. 
Termination. 
taken under authority of subsection (j) of section 505 of the Classi-
fication Act of 1949 as contained in the amendment made by sub-
section (a) of this section. 
SEC. 2. Section 1581(a) of title 10, United States Code, as modi-
fied by section 12(a) of the Federal Employees Salary Increase Act 
of 1958 (72 Stat. 213), and as amended by section 3 of the Act 
of May 29, 1959 (73 Stat. 63; Public Law 86-36), is amended to 
read as follows: 
"(a) The Secretary of Defense may establish not more than four development.'^ *
"
*
* 
hundred fifty civilian positions in the Department of Defense to 
carry out research and development relating to the national defense, 
military medicine, and other activities of the Department of De-
fense that require the services of specially qualified scientists or 
professional personnel." 
SEC. 3. The first sentence of section 1582 of title 10, United States 
Code, is amended to read as follows: 
"The Secretary of Defense 
shall report to Congress not later than February 1 of each year on 
the number of positions established under section 1581 of this title 
during the immediately preceding calendar year." 
SEC. 4. (a) Section 3(d) of the Federal Employees' Group Life 
Insurance Act of 1954 is repealed. 
(b) Section 5(a) of such Act is amended by striking out the words 
"under age sixty-five". 
(c) Section 6 of such Act is amended to read as follows: 
"SEC. 6. (a) Each policy purchased under this Act shall contain a 
provision, in terms approved by the Commission, to the <»ffect that any 
insurance thereunder on any employee shall cease upon his separation 
from the service or twelve months after discontinuance of his salary 
payments, whichever first occurs, subject to a provision which shall be 
contained in the policy for temporary extension of coverage and for 
conversion to an individual policy of life insurance under conditions 
approved by the Commission. 
"(b) If upon such date as the insurance would otherwise cease the 
employee retires on an immediate annuity and (1) his retirement is 
for disability or (2) he has completed twelve years of creditable serv-
ice, as determined by the Commission, his life insurance only may, 
under conditions determined by the Commission, be continued without 
cost to him, but the amount of such insurance shall be reduced by 2 
per centum thereof at the end of each full calendar month following 
the date the employee attains age sixty-five or retires, whichever is 
later, subject to minimum amounts prescribed by the Commission, but 
not less than 25 per centum of the insurance m force preceding the 
first such reduction. 
Periods of honorable active service in the Army, 
Navy, Air Force, Marine Corps, or Coast Guard of the United States 
shall be credited toward the required twelve years provided the em-
ployee has completed at least five years of civilian service. 
"(c) If upon such date as the insurance would otherwise cease the 
employee is receiving benefits under the Federal Employees' Com-
pensation Act because of disease or injury to himself, his life insurance 
may, as provided in subsection (b), be continued during the period he 
is in receipt of such benefits and held by the United States Department 
of Labor to be unable to return to duty." 
(e) The amendments made by subsections (a), (b), and (c) shall 
take effect as of August 17, 1954, except that (1) they shall not be 
applicable in any case in which the employee's death or retirement 
occurred prior to the date of enactment of this Act, and (2) nothing 
therein shall be construed to require salary withholdings for any 
period prior to the first day of the first pay period which begins after 
the date of enactment of this Act. 
Approved September 28, 1959. 
Effective date.