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Mr. GIBBONS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5651) to provide for the payment of retirement and survivor annuities to certain ex-spouses of employees of the Central Intelligence Agency and to provide for the tax treatment of certain disability benefits.
The Clerk read as follows:
TITLE I--ANNUITY BENEFITS FOR CERTAIN EX-SPOUSES OF CENTRAL INTELLIGENCE AGENCY EMPLOYEES
SEC. 101. SURVIVOR ANNUITY FOR CERTAIN EX-SPOUSES OF CIA EMPLOYEES.
(a) Survivor Annuity:
(1) Entitlement of former wife or husband: Any person who was divorced on or before December 4, 1991, from a participant or retired participant in the Central Intelligence Agency Retirement and Disability System (CIARDS) and who was married to such participant for not less than 10 years during such participant's creditable service, at least five years of which were spent by the participant during the participant's service as an employee of the Central Intelligence Agency outside the United States, or otherwise in a position the duties of which qualified the participant for designation by the Director of Central Intelligence as a participant under section 203 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees (50 U.S.C. 403 note), shall be entitled, except to the extent such person is disqualified under subsection (b), to a survivor annuity equal to 55 percent of the greater of--
(A) the unreduced amount of the participant's annuity, as computed under section 221(a) of such Act; or
(B) the unreduced amount of what such annuity as so computed would be if the participant had not elected payment of the lump-sum credit under section 294 of such Act.
(2) Reduction in survivor annuity: A survivor annuity payable under this section shall be reduced by an amount equal to any survivor annuity payments made to the former wife or husband under section 226 of such Act.
(b) Limitations: A former wife or husband is not entitled to a survivor annuity under this section if--
(1) the former wife or husband remarries before age 55, except that the entitlement of the former wife or husband to such a survivor annuity shall be restored on the date such remarriage is dissolved by death, annulment, or divorce;
(2) the former wife or husband is less than 50 years of age; or
(3) the former wife or husband meets the definition of `former spouse' that was in effect under section 204(b)(4) of such Act before December 4, 1991.
(c) Commencement and Termination of Annuity:
(1) Commencement of annuity.--The entitlement of a former wife or husband to a survivor annuity under this section shall commence--
(A) in the case of a former wife or husband of a participant or retired participant who is deceased as of October 1, 1992, beginning on the later of--
(i) the 60th day after such date; or
(ii) the date on which the former wife or husband reaches age 50; and
(B) in the case of any other former wife or husband, beginning on the latest of--
(i) the date on which the participant or retired participant to whom the former wife or husband was married dies;
(ii) the 60th day after October 1, 1992; or
(iii) the date on which the former wife or husband attains age 50.
(2) Termination of annuity.--The entitlement of a former wife or husband to a survivor annuity under this section terminates on the last day of the month before the former wife's or husband's death or remarriage before attaining age 55. The entitlement of a former wife or husband to such a survivor annuity shall be restored on the date such remarriage is dissolved by death, annulment, or divorce.
(d) Election of Benefits: A former wife or husband of a participant or retired participant shall not become entitled under this section to a survivor annuity or to the restoration of the survivor annuity unless the former wife or husband elects to receive it instead of any other survivor annuity to which the former wife or husband may be entitled under CIARDS or any other retirement system for Government employees on the basis of a marriage to someone other than the participant.
(e) Application:
(1) Time limit; waiver: A survivor annuity under this section shall not be payable unless appropriate written application is provided to the Director, complete with any supporting documentation which the Director may by regulation require. Any such application shall be submitted not later than October 1, 1993. The Director may waive the application deadline under the preceding sentence in any case in which the Director determines that the circumstances warrant such a waiver.
(2) Retroactive benefits: Upon approval of an application provided under paragraph (1), the appropriate survivor annuity shall be payable to the former wife or husband with respect to all periods before such approval during which the former wife or husband was entitled to such annuity under this section, but in no event shall a survivor annuity be payable under this section with respect to any period before October 1, 1992.
(f) Restoration of Annuity: Notwithstanding subsection (e)(1), the deadline by which an application for a survivor annuity must be submitted shall not apply in cases in which a former spouse's entitlement to such a survivor annuity is restored after October 1, 1992, under subsection (b)(1) or (c)(2).
(g) Applicability in Cases of Participants Transferred to FERS:
(1) Entitlement: Except as provided in paragraph (2), this section shall apply to a former wife or husband of a CIARDS participant who has elected to become subject to chapter 84 of title 5, United States Code.
(2) Amount of annuity: The survivor annuity of a person covered by paragraph (1) shall be equal to 50 percent of the unreduced amount of the participant's annuity computed in accordance with section 302(a) of the Federal Employees' Retirement System Act of 1986 and shall be reduced by an amount equal to any survivor annuity payments made to the former wife or husband under section 8445 of title 5, United States Code.
SEC. 102. RETIREMENT ANNUITY FOR CERTAIN EX-SPOUSES OF CIA EMPLOYEES.
(a) Retirement Annuity:
(1) Entitlement of former wife or husband: A person described in section 101(a)(1) shall be entitled, except to the extent such former spouse is disqualified under subsection (b), to an annuity--
(A) if married to the participant throughout the creditable service of the participant, equal to 50 percent of the annuity of the participant; or
(B) if not married to the participant throughout such creditable service, equal to that former wife's or husband's pro rata share of 50 percent of such annuity (determined in accordance with section 222(a)(1)(B) of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees).
(2) Reduction in retirement annuities:
(A) Amount of reduction: An annuity payable under this section shall be reduced by an amount equal to any apportionment payments payable to the former wife or husband pursuant to the terms of a court order incident to the dissolution of the marriage of such former spouse and the participant, former participant, or retired participant.
(B) Definition of terms: For purposes of subparagraph (A):
(i) Apportionment: The term `apportionment' means a portion of a retired participant's annuity payable to a former wife or husband either by the retired participant or the Government in accordance with the terms of a court order.
(ii) Court order: The term `court order' means any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.
(b) Limitations: A former wife or husband is not entitled to an annuity under this section if--
(1) the former wife or husband remarries before age 55, except that the entitlement of the former wife or husband to an annuity under this section shall be restored on the date such remarriage is dissolved by death, annulment, or divorce;
(2) the former wife or husband is less than 50 years of age; or
(3) the former wife or husband meets the definition of `former spouse' that was in effect under section 204(b)(4) of such Act before December 4, 1991.
(c) Commencement and Termination:
(1) Retirement annuities: The entitlement of a former wife or husband to an annuity under this section--
(A) shall commence on the later of--
(i) October 1, 1992;
(ii) the day the participant upon whose service the right to the annuity is based becomes entitled to an annuity under such Act; or
(iii) such former wife's or husband's 50th birthday; and
(B) shall terminate on the earlier of--
(i) the last day of the month before the former wife or husband dies or remarries before 55 years of age, except that the entitlement of the former wife or husband to an annuity under this section shall be restored on the date such remarriage is dissolved by death, annulment, or divorce; or
(ii) the date on which the annuity of the participant terminates.
(2) Disability annuities: Notwithstanding paragraph (1)(A)(ii), in the case of a former wife or husband of a disability annuitant--
(A) the annuity of the former wife or husband shall commence on the date on which the participant would qualify on the basis of the participant's creditable service for an annuity under the Central Intelligence Agency Retirement Act of 1964 for Certain Employees (other than a disability annuity) or the date the disability annuity begins, whichever is later; and
(B) the amount of the annuity of the former wife or husband shall be calculated on the basis of the annuity for which the participant would otherwise so qualify.
(3) Election of benefits: A former wife or husband of a participant or retired participant shall not become entitled under this section to an annuity or to the restoration of an annuity unless the former wife or husband elects to receive it instead of any other annuity to which the former wife or husband may be entitled under CIARDS or any other retirement system for Government employees on the basis of a marriage to someone other than the participant.
(4) Application:
(A) Time limit; waiver: An annuity under this section shall not be payable unless appropriate written application is provided to the Director of Central Intelligence, complete with any supporting documentation which the Director may by regulation require, not later than October 1, 1993. The Director may waive the application deadline under the preceding sentence in any case in which the Director determines that the circumstances warrant such a waiver.
(B) Retroactive benefits: Upon approval of an application under subparagraph (A), the appropriate annuity shall be payable to the former wife or husband with respect to all periods before such approval during which the former wife or husband was entitled to an annuity under this section, but in no event shall an annuity be payable under this section with respect to any period before October 1, 1992.
(d) Restoration of Annuities: Notwithstanding subsection (c)(4)(A), the deadline by which an application for a retirement annuity must be submitted shall not apply in cases in which a former spouse's entitlement to such annuity is restored after October 1, 1992, under subsection (b)(1) or (c)(1)(B).
(e) Applicability in Cases of Participants Transferred to FERS: The provisions of this section shall apply to a former wife or husband of a CIARDS participant who has elected to become subject to chapter 84 of title 5, United States Code. For purposes of this subsection, any reference in this section to a participant's CIARDS annuity shall be deemed to refer to the transferred participant's annuity computed in accordance with section 302(a) of the Federal Employees' Retirement System Act of 1986.
(f) Savings Provision: Nothing in this section shall be construed to impair, reduce, or otherwise affect the annuity or the entitlement to an annuity of a participant or former participant under title II or III of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees.
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SEC. 103. HEALTH BENEFITS.
(a) In General: Section 16 of the Central Intelligence Agency Act of 1949 (50 U.S.C. 403p) is amended--
(1) by redesignating subsections (c) through (e) as subsections (d) through (f), respectively;
(2) by inserting after subsection (b) the following new subsection (c):
`(c) Eligibility of Former Wives or Husbands: (1) Notwithstanding subsections (a) and (b) and except as provided in subsection (d), an individual--
`(A) who was divorced on or before December 4, 1991, from a participant or retired participant in the Central Intelligence Agency Retirement and Disability System or the Federal Employees Retirement System Special Category;
`(B) who was married to such participant for not less than ten years during the participant's creditable service, at least five years of which were spent by the participant during the participant's service as an employee of the Agency outside the United States, or otherwise in a position the duties of which qualified the participant for designation by the Director of Central Intelligence as a participant under section 203 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees (50 U.S.C. 403 note); and
`(C) who was enrolled in a health benefits plan as a family member at any time during the 18-month period before the date of dissolution of the marriage to such participant;
is eligible for coverage under a health benefits plan.
`(2) A former spouse eligible for coverage under paragraph (1) may enroll in a health benefits plan in accordance with subsection (b)(1), except that the election for such enrollment must be submitted within 60 days after the date on which the Director notifies the former spouse of such individual's eligibility for health insurance coverage under this subsection.'.
(b) Conforming Amendment: Subsection (a) of such section is amended by striking out `subsection (c)(1)' and inserting in lieu thereof `subsection (d)'.
SEC. 104. SOURCE OF PAYMENT FOR ANNUITIES.
Annuities provided under sections 101 and 102 shall be payable from the Central Intelligence Agency Retirement and Disability Fund established by section 202 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees (50 U.S.C. 403 note).
SEC. 105. EFFECTIVE DATE.
Sections 101 through 103 shall take effect as of October 1, 1992. No benefits provided pursuant to those sections shall be payable with respect to any period before that date.
TITLE II--TAX TREATMENT OF CERTAIN RETIREMENT BENEFITS
SEC. 201. TREATMENT OF CERTAIN DISABILITY BENEFITS RECEIVED BY FORMER POLICE OFFICERS OR FIREFIGHTERS.
(a) General Rule: For purposes of determining whether any amount to which this section applies is excludable from gross income under section 104(a)(1) of the Internal Revenue Code of 1986, the following conditions shall be treated as personal injuries or sickness in the course of employment:
(1) Heart disease.
(2) Hypertension.
(b) Amounts To Which Section Applies: This section shall apply to any amount--
(1) which is payable to an individual (or to the survivors of an individual) who was a full-time employee of any police department or fire department which is organized and operated by a State, by any political subdivision thereof, or by any agency or instrumentality of a State or political subdivision thereof; and
(2) which is received in calendar year 1989, 1990, or 1991.
For purposes of the preceding sentence, the term `State' includes the District of Columbia.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Florida [Mr. Gibbons] will be recognized for 20 minutes, and the gentleman from Iowa [Mr. Grandy] will be recognized for 20 minutes.
The Chair recognizes the gentleman from Florida [Mr. Gibbons].
Mr. GIBBONS. Mr. Speaker, I yield such time as she may consume to the gentlewoman from Connecticut [Mrs. Kennelly], the principal sponsor of this fine piece of legislation.
(Mrs. KENNELLY asked and was given permission to revise and extend her remarks.)
Mrs. KENNELLY. Mr. Speaker, I rise in support of H.R. 5651. First, let me thank the leadership of both the Ways and Means and Intelligence Committees, Congressmen Rostenkowski, Gibbons, Archer, McCurdy, Shuster, and Gekas, for their great assistance in bringing this bill to the floor today. H.R. 5651 addresses two complicated areas of pension and tax law, but it has important consequences for individuals who have served our country and our local communities.
In the main, H.R. 5651 recognizes the contributions made by certain former spouses of Central Intelligence Agency employees and provides them much needed retirement security.
Throughout the 1980's, Congress enacted legislation to provide greater retirement equity for the spouses of Federal Government employees. The CIA Spouses' Retirement Equity Act of 1982 provided that qualified former spouses of CIA officers would presumptively receive upon divorce a pro rata share of the officer's retirement benefits, up to 50 percent, based on the length of the marriage during the period of Agency services prior to divorce. The qualified former spouses would also be awarded a similar share of the officer's survivorship benefits. These presumptive amounts could be adjusted by court order or spousal agreement.
This right, which is substantially the same as that provided to similarly situated former spouses of foreign service officers, has been extremely important for the financial security of older women facing divorce from clandestine officers of the CIA. We are all now well aware of how difficult it has been for women to secure an equitable division of marital assets upon divorce, and the financial deprivation that usually results. These difficulties have been compounded for CIA spouses who have been unable to reveal in open court basic details of their personal circumstances.
Under the 1982 law, unfortunately, in order to qualify as a CIA former spouse, an individual not only had to have been married to a CIA employee during at least 10 years of creditable service, but 5 years had to have been spent outside the United States by both marriage partners.
The Subcommittee on Legislation of the Permanent Select Committee on Intelligence, which I chair, has become
aware that the 5-year overseas rule for the spouse has disqualified from retirement and survivorship benefits many former spouses whose sacrifices for family and country have been as great as those of the former spouses who met the requirement of the rule. These women also provided great support to their husbands and to the Agency by maintaining cover, accepting frequent transfers, and participating in service-related activities. They bore all family responsibilities stateside alone while the officer served overseas, and agreed to the extra demands on family income of maintaining two households. Like other CIA spouses, they found employment opportunities, when not precluded by the nature of the officer's work, to be very limited, and they too experienced the stress of living with secrecy and the fear for the physical safety of their partners. The subcommittee has found that these women were in some cases prevented from meeting the 5 years overseas rule by days because they were not allowed by the Agency to accompany the officers to war zone assignments or because they needed to bring a sick child back to the United States for medical care.
Congress last year repealed the 5-year overseas rule for former spouses divorced after December 4, 1991. H.R. 5651 addresses the plight of a relatively small number of individuals divorced before the repeal. It enables them to receive on a prospective basis retirement and survivor benefits equivalent to the amount they would have been presumptively been awarded, provided they meet the other former spouse requirements. In addition, these individuals will be allowed to purchase Federal health insurance benefits on the same terms available to other CIA former spouses.
Mr. Speaker, the tales of some of the women who will benefit from this legislation have been shared with the Subcommittee on Legislation, and they are heart rending. We are talking about people who were--and are--every bit as dedicated to the highest ideals of the Central Intelligence Agency as anyone employed there, but who have paid great costs financially and emotionally for their service.
I have had discussions about this bill with Mr. Shuster, the ranking minority member of the Intelligence Committee, and with Mr. Gekas, the ranking minority member of the Subcommittee on Legislation, either directly or through staff, and I share their concern that any potential fiscal year 1993 shortfall to the CIARDS fund as a result of this legislation be addressed. I have assured both of these fine gentlemen from Pennsylvania, and the officials of the Central Intelligence Agency, that I will not push for final enactment of this bill until the potential fiscal year 1993 shortfall is remedied.
Mr. Speaker, the Subcommittee on Legislation held a lengthy hearing on issues facing former spouses on May 22, 1992. At this hearing, witnesses from the Association of American Foreign Service Women and an association of CIA spouses made a forceful case for the need to extend former spouse legislation to spouses who had not met the 5-years overseas rule. This is not a concept objected to by the Central Intelligence Agency or by the leadership of the Intelligence Committee. In fact, since the enactment of the Central Intelligence Agency Former Spouses' Retirement Equity Act of 1982, the Congress on three occasions has enacted legislation to address the needs of qualified former spouses where divorce or retirement had taken place prior to the effective date of the act.
Unfortunately, despite the substantial savings that have been made in the Intelligence Authorization Act of fiscal year 1993, the Intelligence Committee does not have within its jurisdiction as a wide range of options
as would be desirable when it comes to the offsets required under the Budget Act to make improvements in the CIA retirement and disability system. Although the subcommittee undertook a massive rewrite and revision of the Central Intelligence Agency Retirement Act of 1964 for certain employees in the fiscal year 1993 intelligence authorization act, it limited the changes it made, in all but two minor matters, to technical adjustments.
Frankly, I was very frustrated by this situation, and made clear at each step in our legislative process that I would continue to work to extend former spouse legislation. We have today a solution to the roadblock--a bill which is under the joint jurisdiction of the Intelligence and Ways and Means Committees, and included in a package that includes Budget Act offsets. We thus have the opportunity to recognize today the unpaid and unsung contributions of CIA spouses and to ensure they enjoy basic retirement security.
The second section of H.R. 5651 simply excludes from gross income payments made to police and fire officials as a result of heart disease or hypertension incurred in the course of employment and misclassified for Federal tax purposes as a result of State errors.
This statutory change is necessary because a State law error in several States, including Connecticut, caused the IRS to rule that these benefits received by police and fire officials are taxable. These benefits were intended to be treated as workmen's compensation. For example, the error in the Connecticut State statute was the `irrebuttable presumption' that heart and hypertension conditions were the result of hazardous work conditions. This means that any policemen or firefighter who developed a heart condition or hypertension was automatically deemed to qualify for these benefits on the basis that the nature of the job caused the medical condition. The words `irrebuttable presumption' made the benefits taxable.
In Connecticut, at least, the State law has been corrected so that while there is a presumption that such conditions are the result of hazardous work, the State or municipality involved could require medical proof. Simply deleting the `irrebuttable presumption' made the benefits satisfy the IRS definition of workmen's compensation.
Therefore, all this section would do is to exempt from income those payments received by these individuals as a result of faulty State law but only for the past 3 years--1989, 1990, and 1991. From January 1, 1992 forward, those already receiving these benefits would have to meet the standard IRS test.
The importance of this amendment is that these individuals were led to believe that by following State law their benefits were exempt from Federal income tax. The cities and towns involved believed that they followed State law and therefore all parties involved believed that these benefits were not subject to tax.
However, the IRS currently has an audit project ongoing in Connecticut, and several other States, and has deemed these benefits taxable. All this section says is that all parties involved made a good faith effort to comply with what they thought the law was. The States were in error and where that error has been rectified these individuals on disability should not required to pay 3 years back taxes plus interest and penalties.
Again, I urge support of the House for this bill.
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[TIME: 1310]
Mr. GIBBONS. Mr. Speaker, I reserve the balance of my time.
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Mr. GRANDY. Mr. Speaker, I yield myself such time as I may consume.
(Mr. GRANDY asked and was given permission to revise and extend his remarks.)
Mr. GRANDY. Mr. Speaker, Republican members of the Committee on Ways and Means have heard no objection to this bill. It is my understanding it is supported by the Permanent Select Committee on Intelligence. We do not object to passage.
Mr. Speaker, I yield such time as he may consume to the gentleman from Pennsylvania [Mr. Gekas].
Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding time to me.
Mr. Speaker, the description given of the issue by the gentlewoman from Connecticut [Mrs. Kennelly] is very accurate, and requires no embellishment. The only consideration that was brought to our attention, and in particular to mine when we were prepared to come to the floor today, was the fiscal implications; whether or not what would occur here in the natural course of the fielding of this legislation would violate the pay-as-you-go concepts that have been embedded into our budget process. I was worried whether or not the Office of the Budget was in approval of the funding sources for this piece of legislation.
Because of colloquies that we were able to undertake among the minority and majority members in the Select Committee on Intelligence, we are assured, and we want to put it on the Record, that once this legislation moves reasonably and foreseeably to the conference committee, that we will make certain through our representatives on that committee that the funding source will not violate pay-as-you-go, and will reasonably fund the proposed legislation.
Mr. GIBBONS. Mr. Speaker, I yield such time as she may use to the gentlewoman from Connecticut [Mrs. Kennelly].
Mrs. KENNELLY. Mr. Speaker, I would like to thank the gentleman from Pennsylvania [Mr. Gekas] for those remarks. I do absolutely understand what he is saying and agree with what he is saying, and I make it very clear today that I understand, and unless it is pay-as-you-go, it cannot go.
Mr. GIBBONS. Mr. Speaker, I yield such time as she may consume to the gentlewoman from Connecticut [Ms. DeLauro].
(Ms. DeLAURO asked and was given permission to revise and extend her remarks.)
Ms. DeLAURO. Mr. Speaker, I want to thank the gentlewoman from Connecticut [Mrs. Kennelly] and the other Members for all their hard work on this important measure. I am pleased to be associated with this piece of legislation, H.R. 5651. The bill will help to right a wrong that has been done to some of the most dedicated public servants in this country, police officers and firefighters, people who serve in critically important, and stressful, and difficult jobs. As a result, they are often the victims of stress-related diseases that cause heart problems and hypertension.
The State of Connecticut long ago recognized that these health problems were related to the pressures that firefighters and police officers suffer on the job, and began to award nontaxable pensions to these retired men and women who could not work due to the heart and hypertension problems. The Connecticut law did not require evidence of a direct relationship between a person's service as a police officer and a firefighter and the development of these diseases.
In 1991 the IRS held that these pensions were taxable and came looking to these disabled workers for back taxes. Over the last year the IRS has proceeded to levy taxes on these benefits and has proceeded to demand that these disabled public servants pay back taxes on 1989, 1990, and 1991 benefits as well. These were people who were complying with the law as best they knew it and were receiving disability benefits after years of public service.
The IRS has also threatened to assess penalties and interest on these retirees if they did not pay the taxes promptly. Under H.R. 5651, as described by the gentlewoman from Connecticut [Mrs. Kennelly] and others, the IRS would be prohibited from collecting back taxes from those currently receiving heart and hypertension pensions for the years 1989, 1990, and 1992. This legislation would only impact those who are now, after many years of collecting these pensions, being asked for back taxes. It would not impact the tax status of future awards.
Today the disabled firefighters and police officers have been put on notice and are complying with their tax obligations. These disabled public servants deserve the relief granted by this bill, and I urge passage of H.R. 5651.
Mr. GRANDY. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. GIBBONS. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Montgomery). The question is on the motion offered by the gentleman from Florida [Mr. Gibbons] that the House suspend the rules and pass the bill, H.R. 5651.
The question was taken; and (two-thirds having voted in favor thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
END