stance under this carrying out activitiesolunteers, while VII therchap. shallmoss Act (15 TITLE III-NATIONAL Administrator of the Small Business Code. There shall also be in such VOLUNTEER PROGRAMS TO Administration (hereinafter referred agency a Deputy Director who shall ASSIST SMALL BUSINESSES to in this title as the “Administrator”) be appointed by the President, by and AND PROMOTE VOLUNTEER pursuant to section 8(b)(1) of the with the advice and consent of the SERVICE BY PERSONS WITH Small Business Act (15 U.S.C. 637 Senate, and shall be compensated at BUSINESS EXPERIENCE (b)(1)). the rate provided for level IV of the (b) The assignment of volunteers Executive Schedule under section STATEMENT OF PURPOSE engaged in programs under this title 5315 of title 5, United States Code. Sec. 301. This title provides for shall be on such terms and conditions The Deputy Director shall perform programs in which persons with busi- as the Director may determine, except such functions as the Director shall ness experience volunteer to assist that he shall prescribe such terms and from time to time prescribe, and shall persons especially those who are eco- conditions in agreement with the Ad act as Director of the ACTION nomically disadvantaged engaged in, ministrator with respect to the service Agency during the absence or disor who seek to engage in, small busi- of volunteers described in the proviso ability of the Director. There shall ness enterprises, and to make avail- in subsection (a) of this section. also be in such agency two Associate able their expertise as volunteers in (c) (1) Such volunteers, while Directors who shall be appointed by programs authorized by, or of a char- carrying out activities under this title the President by and with the advice acter eligible for assistance under, this and section 8(b)(1) of the Small and consent of the Senate, and shall Act, the Economic Opportunity Act Business Act (15 U.S.C. 637(b)(1)), be compensated at the rate provided of 1964. as amended (42 U.S.C. chap. shall be deemed Federal employees for level V of the Executive Schedule 34) (particularly title VII thereof), for the purpose of the Federal tort under section 5316 of title 5, United or the Small Business Act (15 U.S.C. claims provisions in title 28, United States Code. One such Associate Dichap. 14A). The purpose of this title States Code. rector shall be designated "Associate is to utilize the skills and expertise of (2) The Director is authorized to Director for Domestic and Antipersons with business experience to reimburse such volunteers only for Poverty Operations” and shall carry assist persons in, or seeking to enter, such necessary out-of-pocket expenses out operational responsibility for all business enterprises, or to carry out incident to their provision of services programs authorized under this Act, management and financial counseling under this Act as he shall determine, and the other such Associate Director activities in furtherance of the pur in accordance with regulations which shall be designated “Associate Direcposes of this Act. he shall prescribe, and, while they are tor for International Operations" and carrying out such activities away from shall carry out operational responsiAUTHORITY TO ESTABLISH, their homes or regular places of busi- bility for all programs authorized unCOORDINATE, AND OPERATE PROGRAMS ness, for travel expenses (including der the Peace Corps Act (22 U.S.C. Sec. 302. (a) The Director is au per diem in lieu of subsistence) as au- 2501 et seq.). There shall also be in thorized to establish and conduct, and thorized by section 5703 of title 5, such agency no more than two Asto recruit, select, and train volunteers United States Code, for individualssistant Directors appointed by the for (and to make grants or enter into serving without pay. President by and with the advice and contracts therefor), volunteer pro consent of the Senate, who shall be grams, including a Service Corps of TITLE IV-ADMINISTRATION compensated at the rate provided for Retired Executives (SCORE) and an level V of the Executive Schedule AND COORDINATION Active Corps of Executives (ACE) under section 5316 of title 5, United and programs in which SCORE and ESTABLISHMENT OF AGENCY States Code. Each such Assistant DiACE volunteers expand the applica. Sec. 401. There is hereby estab rector shall perform such staff and tion of their expertise beyond Small lished in the executive branch of the support functions for such Associate Business Administration clients, to Government an agency to be known Directors as the Director shall. from carry out the purpose of this title: as the ACTION Agency. Such Agen time to time prescribe. There shall Provided, however, That the services cy shall be headed by a Director who also be in such agency one Deputy of volunteers who are assisting per. shall be appointed by the President, Associate Director, under the Associsons or enterprises seeking to obtain, obtain. by and with the advice and consent by and with the advice and consent ate Director for Domestic and Antior receiving, financial or management of the Senate, and shall be compen Poverty Operations, primarily responcounseling assistance from the Small sated at the rate provided for level sible for programs carried out under Business Administration shall be per- III of the Executive Schedule under parts A and B of title I of this Act formed under the direction of the section 5314 of title 5, United States and one Deputy Associate Director, by the Senate rate pre sched scode, an shall applica shall apply to persons of this Act shall be sted as . (bcomprehensive Services Law 93 under the Associate Director for Do- shall be deemed civil employees of the or organization which is, or is owned mestic and Anti-Poverty Operations, United States within the meaning of and operated by, one or more corpoprimarily responsible for programs the term "employee" as defined in rations or associations no part of the carried out under title II of this Act, section 8101 of title 5, United States net earnings of which inures, or may each of whom shall be appointed by Code, and the provisions of that sub- lawfully inure, to the benefit of any the Director. chapter shall apply except as follows: private shareholder or individual; and (A) in computing compensation bene- (4) the term “poor" or "low-in fits for disability or death, the month. come” persons, individuals, or volunDURATION OF PROGRAM ly pay of a volunteer shall be deemed teers means such individuals whose Sec. 413. The Director shall carry that received under the entrance sal incomes fall at or below the povertv out the programs provided for in this ary for a grade GS-7 employee, and line as set forth in section 625 of the Act during the fiscal year ending June subsections (a) and (b) of section Economic Opportunity Act of 1964, 30, 1974, and the three succeeding 8113 of title 5, United States Code, as amended by Public Law 92-424 fiscal years. For each such fiscal year, shall apply, and (B) compensation for (42 U.S.C. 2971d): Provided, That only such sums may be appropriated disability shall not begin to accrue disability shall not begin to accrue in determining who is in determining who is "poor" or "lowas the Congress may authorize by law. until the day following the date on income”, the Director shall take into which the injured volunteer is termi- consideration existing poverty guidenated. lines as appropriate to local situations. APPLICATION OF FEDERAL LAW Sec. 415. (a) Except as provided ELIGIBILITY FOR OTHER BENEFITS REPEAL OF TITLE VI OF THE OLDER in subsections (b), (c), (d), and (e) AMERICANS ACT of this section, volunteers under this Sec. 418. Notwithstanding any Act shall not be deemed Federal em- other provision of law, no payment Sec. 604. (a) Title VI of the Older ployees and shall not be subject to the for supportive services or reimburse. Americans Act of 1965, as amended provisions of laws relating to Federal ment of out-of-pocket expenses made (42 U.S.C. 3044-3044e) [Pub. L. 93officers and employees and Federal to persons serving pursuant to titles 29, page 437, this Bulletin), is hereby employment. II and III of this Act shall be subject repealed. (b) Individuals enrolled in proto any tax or charge or be treated as (b) Section 908 of the Older Amergrams under title I of this Act for wages or compensation for the purperiods of service of at least one year poses of unemployment, temporary ments Act of 1973 (Public Law 93shall, with respect to such service or disability, retirement, public assist 29) is amended by striking out training, (1) for the purposes of sub “1973," and "1974,” and inserting in ance, or similar benefit payments, or chapter III of chapter 73 of title 5, minim::m wage laws. This section lieu thereof "1974," and "1975,", re United States Code, be deemed per shall become effective with respect to spectively, sons employed in the executive branch all payments made after the effective Approved October 1, 1973. of the Federal Government. (2) for date of this Act. the purposes of the Internal Revenue Public Law 93-134 Code of 1954 (26 U.S.C. 1 et seq.) DEFINITIONS 93rd Congress, S. 1016 1 and title II of the Social Security Act October 19, 1973 (42 U.S.C. 401 et seq.), be deemed Sec. 421. For the purposes of this employees of the United States, and Act An Act To provide for the use or any service performed by an individ (1) the term "Director" means the distribution of funds appropriated in ual as a volunteer (including train. Director of the ACTION agency; satisfaction of certain judgments of ing) shall be deemed to be performed (2) the terms "United States” and the Indian Claims Commission and in the employ of the United States, “States” mean the several States, the the Court of Claims, and for other (3) for the purposes of the Federal District of Columbia, the Virgin Is purposes. Tort Claims provisions of title 28, lands, Puerto Rico, Guam, and Amer Be it enacted by the Senate and United States Code, be deemed em- ican Samoa and, for the purposes of f House of Representatives of the United ployees of the United States, and (4) title II of this Act, the Trust Terri States of America in Congress assemfor the purposes of subchapter I of tory of the Pacific Islands; bled, That, notwithstanding any other chapter 81 of title 5, United States (3) the term “nonprofit” as applied 1 This publication of the law is restricted to exerpts Code (relative to compensation to involving internal revenue matters; House Report No. to any agency, institution, or organi 93-377, and Senate Report No. 93.167 are not published Federal employees for work injuries), zation means an agency, institution, herein. sonshe Federal Government. Revenue chaptee purposes of ceStates, and (4) ican sa House of provisions to the billena Indian tribe aims in favor C. Income Tax Refund Bond for Individuals (Sec. 3 of the bill) In the Revenue Act of 1971, the Congress approved new withholding rates for withholding of individual income taxes on wages and salaries in order to eliminate serious underwithholding. The major source of this underwithholding was the way in which the low-income allowance had been incorporated into the withhold. ing structure. This resulted in a mar. ried couple, where both spouses work, nue aces law, all use or distribution of funds sions of the House bill without change. Provisions of House Bill the provisions of this Act. (2] Sec. 7. None of the funds distributed per capita or held in trust under the Refund check-bonds.—In the Reveprovisions of this Act shall be subject to Federal or State income taxes, and tables on wage and salary income were the per capita payments shall not be provided in order to reduce the seri. considered as income or resources ous amount of underwithholding that when determining the extent of eligi had been taking place. However, as a bility for assistance under the Social result of the change, there was a shift Security Act. in the opposite direction, and very Approved October 19, 1973. large amounts of overwithholding oc curred. In part, this appears to have Subpart C.-Committee Reports resulted from the fact that taxpayers did not file new withholding forms to Senate Report No. 93-249 correct the overwithholding and ap1st Session parently preferred to be overwithheld. In the present inflationary economic [Bracketed numerals indicate official situation, the Committee agrees with report page numbers.] the House that it is desirable to find CONTINUATION OF EXISTING a way to encourage taxpayers to save TEMPORARY INCREASE IN the funds that they will be paid in tax PUBLIC DEBT LIMIT refunds. The bill provides for a refund check-bond which automatically will June 25, 1973.-Ordered to be printed become the equivalent of a series E Mr. Long, from the Committee on bond, generally drawing interest from Finance, submitted the following January 1, if the taxpayer does not report together with supplemen- cash it before the time specified for tal views to accompany H.R. Series E bonds (presently this would 84101 be July 1, in the case of calendar year The Committee on Finance, to taxpayers). This provision is to be which was referred the bill (H.R. available to the Treasury Department 8410) to continue the existing tempo- for use in connection with returns rary increase in the public debt limit filed on or after January 1, 1974. through November 30, 1973, and for other purposes having considered the [6] BILL AS PASSED BY THE HOUSE [12] 1 Pub. L. 93-53, page 438. for withholding purposes while they were entitled to only one when they filed their tax return. Consequently, they had too little tax withheld; the same problem occurred for an individual who worked for more than one employer at the same time. A second source of underwithholding was that the top withholding rates were not high enough. [13] The Revenue Act of 1971 corrected this second source of underwithholding by increasing the top withholding rates. The act corrected the first source of underwithholding by adopting a “special withholding allowance” which a married taxpayer whose spouse was not employed (or a single person with only one employer) must claim on the withholding certificate (W-4) filed with his employer in order for the low-income allowance to be taken into account fully for withholding purposes. T hese actions corrected the serious underwithholding which previously existed but also had the effect of significantly increasing the overwithhold. ing in the case of other taxpayers. A major reason for the overwithholding apparently was the preference by many individuals to continue high overwithholding. Many employees did not file a new withholding certificate to claim this special withholding allowance and consequently were overwithheld. In addition, taxpayers did not take full advantage of the provision for reducing the overwithholding resulting from the higher withholding rates and large itemized deductions by claiming addi. tional allowances on the withholding certificate. The intent was to make withholding as accurate a reflection of individual income tax liability as possible. However, with the renewal of inflationary pressures the increased overwithholding became a helpful restraint by reducing the amount of funds available for spending in the private sector and also by reducing the budget deficit below what it otherwise would have been. Moreover, individuals appar. ently preferred to use overwithholding as a means of saving. In view of these factors, the committee concluded that it would be wise to encourage individual taxpayers who are overwithheld to invest these funds in Government bonds. In order to simplify this procedure, the committee in this bill gives the Treasury Depart. ment the authority to issue what are called “check-bonds” for tax refunds. If the individuals hold the check for 6 months or longer from its issue date, the check is to become a bond having the same general characteristics as a Series E bond. These refund bonds are to draw interest from January 1 of the year of issue in the case of cal. endar year taxpayers. The interest rate and the redemption procedures will be the same as on Series E United States Savings Bonds. Given the present in terest periods for Series E bonds, this means that in the case of a calendar year taxpayer no interest will be paid on any refund check-bond that is redeemed before July 1 of the year of issue. This provision is to be available to the Treasury Department for use in connection with returns filed on or after January 1, 1974. In order to avoid confusion and to account accurately for source and ownership of the refund bond, taxpayer identifying numbers are to appear on each check-bond. This step also will facilitate accurate reporting of the interest earned by the bond at Interstate and Foreign Commerce, the time it is redeemed. submitted the following report to The bill provides for check-bonds gether with minority views to to be issued with repect to refunds accompany H.R. 7200.1 made to individuals (other than trusts The Committee on Interstate and and estates) with respect to the income Foreign Commerce, to whom was retax and the social security tax on the ferred the bill (H.R. 7200) to amend self-employed (imposed under subtitle the Railroad Retirement Act of 1937 A of the Internal Revenue Code) in and the Railroad Retirement Tax Act cluding any amounts which may be to revise certain eligibility conditions claimed as credits against these taxes for annuities; to change the railroad (such as the refundable tax credits for retirement tax rates; and to amend gasoline taxes and those for taxes on the Interstate Commerce Act in order wages). to improve the procedures pertaining Taxpayers are to be eligible to re to certain rate adjustments for carriers ceive the bond for a refund only in subject to part I of this Act, and for [14) situations where the return is filed other purposes, having considered the within the time limit specified in the same, report favorably thereon with tax law without regard to extensions amendi amendments and recommend that the of time. For all taxpayers filing on a bill as amended do pass. [12] SECTION-BY-SECTION the refund can be paid as a bond only ANALYSIS OF THE BILL where the return is filed by April 15. Taxpayers who report on a fiscal year Title 1-Amendments to the Railroad basis must file their return within 3%. Retirement Act, the Railroad Remonths after the close of their fiscal tirement Tax Act, and Certain year to be eligible for the bond. Re Public Laws Section 102 The taxable payroll is the same un under the railroad retirement and For purposes of this limitation, it is social security systems (in 1973, a intend that in the case of these check maximum of $10,800 a year under bonds issued for refunds, the interest bonds issued for refunds the interest social security and a maximum of rate taken into account is to be the to be the $900 a month under railroad retirerate specified on the bond without ment). The tax rates (including 1 per regard to the fact that the bond was cent of taxable payroll for medicare) issued after the date from which the is 10.60 per cent on railroad employinterest began to run. ees and employers alike, [13] and only 5.85 per cent under the Social Secu rity Act. This section would amend House Report No. 93-204 section 3201 of the Internal Revenue 1st Session Code of 1954 to tax railroad employ ees at rates provided by sections [Bracketed numerals indicate official report 3101(a) and 3101(b) of the Internal page numbers.] Revenue Code of 1954 (relating to RAILROAD RETIREMENT TEM employee and medicare tax rates, PORARY BENEFIT INCREASE respectively, under the Social Security EXTENSION Act). The effect of this would be that May 11, 1973 employee railroad retirement tax rates Mr. Staggers, from the Committee on 2 Pub. L. 93-69, page 440. would be reduced (effective with respect to compensation paid for scrvices rendered after September 1973) by 4.75 per cent to 5.85 per cent. This section of the bill would also amend section 3221 of such Code to increase the current railroad retirement employer tax rate of 10.60 per cent by the 4.75 per cent by which the employees railroad retirement tax rate would be reduced, bringing the total employer railroad tax rate to 15.35 to 15.35 per cent (10.60 per cent + 4.75 per cent). This increase would carry out the intention of this section of the bill n of the bill to maintain the current combined rail. road retirement employee and employer tax rates (10.60 per cent + nt I 10.60 per cent = 21.20 per cent and 5.85 per cent + 15.35 per cent = 21.20 per cent). Thus, subsection (a) crion (a of section 3221 of such Code would be amended to tax railroad employers at 9.5 per cent of taxable payroll and subsection (b) of such section 3221 would increase the 9.5 per cent by an additional tax of 5.85 per cent to a o a total of 15.35 per cent. The reason for dividing the 15.35 per cent into 9.5 per cent plus the social security tax rate on emplovers (5.85 per cent) is to avoid the need for amending the Rail. road Retirement Tax Act anytime the social security tax rate is changed. The employee representative tax is fixed by section 3211 of such Code at the combined railroad employee and employer tax rate (10.60 per cent on each = 21.20 per cent). Under the amendments made by this section of the bill, the employee representative tax rate will continue to be 21.20 per cent (9.50 per cent + 5.85 per cent employer tax = 15.35 per cent, plus 5.85 per cent employee tax, totaling 21.20 per cent). The purpose of all the other amendments made by this section of the bill is to make the changes effective with respect to compensation paid for services rendered after September 30, 1973, to bring some provisions up to-date and to eliminate superfluous RAILROAD RETIREMENT TEMlanguage. PORARY BENEFIT INCREASE EXTENTION June 11, 1973 Mr. Hathaway, from the Committee [18] This section provides the effec on Labor and Public Welfare, for tive dates of the amendments made by the Committee on Labor and Public Title I of the bill. Welfare and the Committee on FiThe Committee added a proviso to nance, submitted the following joint section 108(b) of the bill providing report. that the shift in the incidence of tax The Committee on Labor and under the Railroad Retirement Tax Public Welfare and the Committee on Act would be delayed for certain de Finance, to which was referred the bill (H.R. 7200) ? to amend the Railroad scribed scribed railroads. Under this amendment the increased employer taxes ap Retirement Act of 1937 and the Railplicable to other railroads on October road Retirement Tax Act to revise 1, 1973 will not apply to a limited , certain eligibility conditions for annui. number of railroads owned by steelties; to change the railroad retirement companies and to certain dock compa tax rates; and to amend the Interstate com nies until such time as these current current Commerce Act in order to improve Com labor contracts expire, or at such ear- the procedures, pertaining to certain lier time as the parties may agree. rate adjustments for carriers subject to This delay for the so called “Steel part I of this Act, and for other purRoads” would be made because these poses, having considered the same, rerailroads currently have in effect, port favorably thereon jointly with an port favorably thereon jointly w amendment, and recommend that the agreements, supplemental pension plans bill as amended do pass. covering their employees. Shifting the COMMITTEE AMENDMENT burden of payment of tax under the Railroad Retirement Tax Act with re The Committee on Labor and spect to these employees at this time Public Welfare, in its action on H.R. 7200, approved an amendment in the would confer a windfall benefit on them, at the expense of the carriers in nature of a substitute for the provivolved. The Committee, therefore, sions of House-passed bill. Under the concluded that the shift in the burden committee bill, the provisions of title I of payment of tax in the case of these of the House-passed bill have been inemployees should be postponed until cluded with four exceptions. First, the such time as the collective bargaining provision of the House-passed bill agreements now in effect terminate or which would permit men to retire on are renegotiated, whichever is earlier. full annuities at age 60 would be a In this way, future agreements can permanent provision which would take into account the 4.75 percent de become effective on July 1, 1974. crease in employee taxes, which Under the committee amendment, the amount to an increase in take home provision would be temporary and expay for the employees, as well as the pire at the end of 1974 in the same comparable increase in employer manner as the temporary benefit in creases in the House-passed bill. taxes. Second, the provision of the House passed bill which would reduce emSenate Report No. 93-202 ployees railroad retirement taxes by 1st Session 4.75 percent to 5.85 percent of wages and increase employer taxes by an [Bracketed numerals indicate official report page numbers.) 1 Pub. L. 93-69, page 440. The Welfared an ame for the per the |