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105th Congress                                            Rept. 105-755
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
       DEPARTMENT OF STATE SPECIAL AGENTS RETIREMENT ACT OF 1998

                                _______
                                

 September 28, 1998.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Gilman, from the Committee on International Relations, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 633]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on International Relations, to whom was 
referred the bill (H.R. 633) to amend the Foreign Service Act 
of 1980 to provide that the annuities of certain special agents 
and security personnel of the Department of State be computed 
in the same way as applies generally with respect to Federal 
law enforcement officers, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Department of State Special Agents 
Retirement Act of 1998''.

SEC. 2. AMENDMENTS RELATING TO THE FOREIGN SERVICE RETIREMENT AND 
                    DISABILITY SYSTEM.

  (a) Definition of a Special Agent.--
          (1) In general.--Section 804 of the Foreign Service Act of 
        1980 (22 U.S.C. 4044) is amended--
                  (A) by striking ``and'' at the end of paragraph (13);
                  (B) by striking the period at the end of paragraph 
                (14) and inserting ``; and''; and
                  (C) by adding at the end the following:
          ``(15) `special agent' means an employee of the Department of 
        State with a primary skill code of 2501--
                  ``(A) the duties of whose position--
                          ``(i) are primarily--
                                  ``(I) the investigation, 
                                apprehension, or detention of 
                                individuals suspected or convicted of 
                                offenses against the criminal laws of 
                                the United States, or
                                  ``(II) the protection of persons 
                                pursuant to section 2709(a)(3) of title 
                                22, United States Code, against threats 
                                to personal safety; and
                          ``(ii) are sufficiently rigorous that 
                        employment opportunities should be limited to 
                        young and physically vigorous individuals, as 
                        determined by the Secretary of State pursuant 
                        to section 4823 of title 22, United States 
                        Code;
                  ``(B) performing duties described in subparagraph (A) 
                before, on, or after the date of the enactment of this 
                paragraph; or
                  ``(C) transferred directly to a position which is 
                supervisory or administrative in nature after 
                performing duties described in subparagraph (A) for at 
                least 3 years.''.
          (2) Conforming amendment.--Section 852 of such Act (22 U.S.C. 
        4071a) is amended--
                  (A) by striking ``and'' at the end of paragraph (7);
                  (B) by striking the period at the end of paragraph 
                (8) and inserting ``; and''; and
                  (C) by adding at the end the following:
          ``(9) the term `special agent' has the same meaning given in 
        section 804(15).''.
  (b) Contributions.--
          (1) In general.--Section 805(a) of such Act (22 U.S.C. 
        4045(a)) is amended by adding at the end the following:
  ``(3) For service as a special agent, paragraph (1) shall be applied 
by substituting for `7 percent' the percentage that applies to law 
enforcement officers under section 8334(a)(1) of title 5, United States 
Code.''.
          (2) Conforming amendment.--Section 805(a)(1) (22 U.S.C. 
        4045(a)(1)) of such Act is amended by striking ``Except as 
        provided in subsection (h),'' and inserting ``Except as 
        otherwise provided in this section,''.
  (c) Special Contribution for Prior Nondeposit Service.--Section 
805(d) of such Act (22 U.S.C. 4045(d)) is amended by adding at the end 
the following:
  ``(6) Subject to paragraph (4) and subsection (h), for purposes of 
applying this subsection with respect to prior service as a special 
agent, the percentages of basic pay set forth in section 8334(c) of 
title 5, United States Code, with respect to a law enforcement officer, 
shall apply instead of the percentages set forth in paragraph (1).''.
  (d) Computation of Annuities.--
          (1) In general.--Section 806(a) of such Act (22 U.S.C. 
        4046(a)) is amended--
                  (A) by redesignating paragraph (6) as paragraph (7); 
                and
                  (B) by inserting after paragraph (5) the following:
  ``(6)(A) The annuity of a special agent under this subchapter shall 
be computed under paragraph (1) except that, in the case of a special 
agent described in subparagraph (B), paragraph (1) shall be applied by 
substituting for `2 percent'--
          ``(i) the percentage under subparagraph (A) of section 
        8339(d)(1) of title 5, United States Code, for so much of the 
        participant's total service as is specified thereunder; and
          ``(ii) the percentage under subparagraph (B) of section 
        8339(d)(1) of title 5, United States Code, for so much of the 
        participant's total service as is specified thereunder.
  ``(B) A special agent described in this subparagraph is any such 
agent or former agent who--
          ``(i)(I) retires voluntarily or involuntarily under section 
        607, 608, 611, 811, 812, or 813, under conditions authorizing 
        an immediate annuity, other than for cause on charges of 
        misconduct or delinquency, or retires for disability under 
        section 808; and
          ``(II) at the time of retirement--
                  ``(aa) if voluntary, is at least 50 years of age and 
                has completed at least 20 years of service as a special 
                agent; or
                  ``(bb) if involuntary or disability, has completed at 
                least 20 years of service as a special agent; or
          ``(ii) dies in Service after completing at least 20 years of 
        service as a special agent, when an annuity is payable under 
        section 809.
  ``(C) For purposes of subparagraph (B), included with the years of 
service performed by an individual as a special agent shall be any 
service performed by such individual as a law enforcement officer 
(within the meaning of section 8331(20) or section 8401(17) of title 5, 
United States Code), or a member of the Capitol Police.''.
          (2) Special rule for those who exercised election rights 
        under section 860.--Section 806(a) of such Act (22 U.S.C. 
        4046(a)), as amended by paragraph (1), is further amended--
                  (A) by redesignating paragraph (7) (as so 
                redesignated by paragraph (1)(A)) as paragraph (8); and
                  (B) by inserting after paragraph (6) (as added by 
                paragraph (1)) the following:
  ``(7) In the case of a special agent who becomes or became subject to 
subchapter II pursuant to an election under section 860--
          ``(A) for purposes of paragraph (6)(B), any service performed 
        by the individual as a special agent (whether under this 
        subchapter or under subchapter II) shall be creditable; and
          ``(B) if the individual satisfies paragraph (6)(B), the 
        portion of such individual's annuity which is attributable to 
        service preceding the effective date of such election shall be 
        computed in conformance with paragraph (6).''.
          (3) Technical and conforming amendments.--
                  (A) Paragraph (8) of section 806(a) of such Act (22 
                U.S.C. 4046(a)), as so redesignated by paragraph 
                (2)(A), is amended by striking ``and (4)'' and 
                inserting ``(4), and (6)''.
                  (B) Paragraphs (1) and (3) of section 855(b) of such 
                Act (22 U.S.C. 4071d(b)) are each amended by inserting 
                ``611,'' after ``608,''.

SEC. 3. MANDATORY SEPARATION OF SPECIAL AGENTS.

  The first sentence of section 812(a)(2) of the Foreign Service Act of 
1980 (22 U.S.C. 4052(a)(2)) is amended to read as follows: 
``Notwithstanding paragraph (1)--
          ``(A) an individual described in section 4(a)(2)(B) of the 
        Department of State Special Agents Retirement Act of 1998 who 
        is otherwise eligible for immediate retirement under this 
        chapter, or
          ``(B) a Foreign Service criminal investigator/inspector of 
        the Office of Inspector General of the Agency for International 
        Development who would have been eligible for retirement 
        pursuant to either section 8336(c) or 8412(d) of title 5, 
        United States Code, as applicable, had the employee remained in 
        civil service,
shall be separated from the Service on the last day of the month in 
which such individual under subparagraph (A) or such Foreign Service 
criminal investigator/inspector under subparagraph (B) attains 57 years 
of age or completes 20 years of service if then over that age.''.

SEC. 4. EFFECTIVE DATE; APPLICABILITY.

  (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act--
          (1) shall take effect on the date of the enactment of this 
        Act; and
          (2) shall apply with respect to--
                  (A) any individual first appointed on or after that 
                date as a special agent; and
                  (B) any individual making an election under 
                subsection (b), subject to the provisions of such 
                subsection.
  (b) Election for Current Participants.--
          (1) Eligibility.--An election under this subsection may be 
        made by any currently employed participant under chapter 8 of 
        the Foreign Service Act of 1980 who is serving or has served as 
        a special agent, or by a survivor of a special agent who was 
        eligible to make an election under this section.
          (2) Effect of an election.--
                  (A) In general.--If an individual makes an election 
                under this subsection, the amendments made by this Act 
                shall become applicable with respect to such 
                individual, subject to subparagraph (B).
                  (B) Treatment of prior service.--
                          (i) Special contribution.--An individual may, 
                        after making the election under this 
                        subsection, make a special contribution up to 
                        the full amount of the difference between the 
                        contributions actually deducted from pay for 
                        prior service and the deductions that would 
                        have been required if the amendments made by 
                        this Act had then been in effect. Any special 
                        contributions under this clause shall be 
                        computed under regulations based on section 
                        805(d) of the Foreign Service Act of 1980 (as 
                        amended by section 2), including provisions 
                        relating to the computation of interest.
                          (ii) Actuarial reduction.--
                                  (I) Rule if the special contribution 
                                is paid.--If the full amount of the 
                                special contribution under clause (i) 
                                is paid, no reduction under this clause 
                                shall apply.
                                  (II) Rule if less than the entire 
                                amount is paid.--If no special 
                                contribution under clause (i) is paid, 
                                or if less than the entire amount of 
                                such special contribution is paid, the 
                                recomputed annuity shall be reduced by 
                                an amount sufficient to make up the 
                                actuarial present value of the 
                                shortfall.
  (c) Regulations and Notice.--Not later than 6 months after the date 
of the enactment of this Act, the Secretary of State--
          (1) shall promulgate such regulations as may be necessary to 
        carry out this Act; and
          (2) shall take measures reasonably designed to provide notice 
        to participants as to any rights they might have under this 
        Act.
  (d) Election Deadline.--An election under subsection (b) must be made 
not later than 90 days after the date on which the relevant notice 
under subsection (c)(2) is provided.
  (e) Definition.--For purposes of this section, the term ``special 
agent'' has the meaning given such term under section 804(15) of the 
Foreign Service Act of 1980 (22 U.S.C. 4044(15)), as amended by section 
2(a).

                         Background and Purpose

    H.R. 633 amends the Foreign Service Act of 1980 to provide 
that the annuities of Diplomatic Security (DS) special agents 
of the Department of State, who are participating in (or have 
participated in) the ``old'' Foreign Service Retirement and 
Disability System, ``be computed in the same way as applies 
generally to Federal law enforcement officers.'' 1 
In general, other Federal law enforcement officers who are 
covered under the Civil Service Retirement System (the ``old'' 
civil service system) contribute an additional one-half percent 
of their basic salary to their retirement fund and are eligible 
to receive an additional one-half percent per year served (for 
up to 20 years) or 25% increase in their annuity computation 
for the first 20 years as law enforcement officers, as compared 
to other employees.
---------------------------------------------------------------------------
    \1\ Under the ``new'' foreign service system (the Foreign Service 
Pension System), all foreign service employees, whether or not they are 
law enforcement officers, have their retirement benefits computed in 
general on the same basis as ``new system'' (or Federal Employee 
Retirement System) law enforcement officers in the civil service.
---------------------------------------------------------------------------
    Other law enforcement officers employed by the United 
States are, in general, provided with this special retirement 
benefit based upon a regulatory determination by their 
employing agency that they meet the definition of a ``law 
enforcement officer'' set out in 5 U.S.C. 8331 or 5 U.S.C. 
8401. Retroactive benefits are provided to employees working at 
the time of the determination in a manner similar to that 
provided for in this bill. Retroactive benefits date back to 
the time their duties began to fit the definition of a law 
enforcement officer.
    This legislation will affect a relatively small number of 
people--around 200 DS agents. The State Department believes it 
will resolve equity concerns in the Bureau of Diplomatic 
Security.
    An additional purpose of this bill is to ensure that DS 
special agents who have prior service in other federal law 
enforcement jobs receive ``law enforcement'' credit for that 
service. A number of DS special agents have transferred to the 
State Department from other Federal law enforcement agencies. 
When employed at these other agencies they contributed to the 
Civil Service retirement system at the higher ``law 
enforcement'' rate. This bill will permit them to be accorded 
benefits commensurate to their contributions for that service 
when they retire under the Foreign Service Retirement and 
Disability System.
    Finally, the bill applies to ``old system'' State 
Department special agents the mandatory retirement provisions 
applicable to ``old system'' civil service law enforcement 
officers. Specifically, it conforms to the precedent 
established in the case of AID Inspector General criminal 
investigators who became foreign service employees and had law 
enforcement benefits, and mandatory retirement, extended to 
them. This change occurred in 1990 (see section 587(b) of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 1991 (Public Law 101-513, 104 Stat. 2056)).

                            Committee Action

                           Markup of the Bill

    The bill was introduced on February 6, 1997 and referred to 
the Committee on International Relations, and in addition to 
the Committee on Government Reform and Oversight, for a period 
to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the 
jurisdiction of the committee concerned. On July 24, it was 
marked up by the Subcommittee on International Operations and 
Human Rights and forwarded, amended, to the full Committee. On 
August 6, 1998, the bill was considered and further amended. It 
was then ordered reported, as amended, by voice vote, with the 
recommendation that the bill, as amended, do pass.

                      Rollcall Votes on Amendments

    Clause (2)(l)(2)(B) of rule XI of the Rules of the House of 
Representatives requires the record of committee rollcall votes 
on final passage or amendments during the committee's 
consideration of H.R. 4283. No such rollcall votes were taken.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                   Constitutional Authority Statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee cites the 
following specific powers granted to the Congress in the 
Constitution as authority for enactment of H.R. 633 as reported 
by the Committee: Article I, section 8, clause 1 (relating to 
providing for the common defense and general welfare of the 
United States); Article I, section 8, clause 3 (relating to the 
regulation of commerce with foreign nations); and Article I, 
section 8, clause 18 (relating to making all laws necessary and 
proper for carrying into execution powers vested by the 
Constitution in the government of the United States).

New Budget Authority and Tax Expenditures, Congressional Budget Office 
             Cost Estimate, and Federal Mandates Statements

    The Committee adopts the cost estimate of the Congressional 
Budget Office as its submission of any new required information 
on new budget authority, new spending authority, new credit 
authority, or an increase or decrease in the national debt, 
which is set out below. It adopts the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act, also set out below.

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 2, 1998.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 633, the 
Department of State Special Agents Retirement Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Eric Rollins.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 633.--Department of State Special Agents Retirement Act of 1998

    Summary: H.R. 633 would provide higher retirement benefits 
for employees in the Foreign Service who are covered by the 
Foreign Service Retirement and Disability System (FSRDS) and 
perform duties of a law enforcement nature. Retirement 
annuities for these employees would be calculated in the same 
manner as benefits for law enforcement personnel who are 
covered by the Civil Service Retirement System (CSRS). The bill 
would also set a mandatory retirement age of 57 for these 
employees and criminal investigators working in the Agency for 
International Development (AID).
    CBO estimates that this bill would increase direct spending 
by $4 million over the 1999-2003 period due to higher FSRDS 
benefits. The bill would also increase discretionary spending 
and revenues by insignificant amounts. Because the bill would 
affect direct spending, pay-as-you-go procedures would apply.
    H.R. 633 does not contain any intergovernmental or private-
sector mandates as defined by the Unfunded Mandates Reform Act 
of 1995 (UMRA) and would impose no costs on state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 633 is shown in the following table.

                                 TABLE 1.--ESTIMATED BUDGET EFFECTS OF H.R. 633
----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal years, in millions of dollars--
                                                               -------------------------------------------------
                                                                  1999      2000      2001      2002      2003
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
Agency retirement contributions...............................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
Employer Social Security taxes................................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
                                                               -------------------------------------------------
      Total discretionary spending............................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
                                                               =================================================
                                           CHANGES IN DIRECT SPENDING
On-Budget:
    FSRDS retirement benefits.................................   ( \1\ )         1         1         1         1
    Agency retirement contributions (receipts)................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
                                                               -------------------------------------------------
      Subtotal................................................   ( \1\ )         1         1         1         1
Off-Budget:
    Employer Social Security taxes (receipts).................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
                                                               -------------------------------------------------
      Total direct spending...................................   ( \1\ )   ( \1\ )         1         1         1
                                                               =================================================
                                               CHANGES IN REVENUES
On-Budget:
    Employee retirement contributions.........................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
Off-Budget:
    Employee Social Security taxes............................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
                                                   TOTAL COST
Direct spending and revenues..................................   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )   ( \1\ )
All spending and revenues.....................................   ( \1\ )         1         1         1        1
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
 This estimate assumes that H.R. 633 is enacted on October 1, 1998.

    The mandatory costs of this legislation fall within budget 
function 600, Income Security
    Basis of estimate: Foreign Service employees who were hired 
before 1987 are generally covered by the Foreign Service 
Retirement and Disability System. Under FSRDS, employees 
contribute 7 percent of their basic pay towards retirement, 
with the employing agency contributing an equal amount. 
Employees may retire voluntarily once they reach the age of 50 
and have completed 20 years of service; they face mandatory 
retirement when they reach age 65 or spend too much time in 
their class without being promoted. Retirement benefits under 
FSRDS equal 2 percent of an employee's average pay for each 
year of service. Most employees hired after 1987 are covered by 
the Foreign Service Pension System (FSPS).
    The bill would allow certain employees (termed ``special 
agents'') who are covered by FSRDS and perform duties of a law 
enforcement nature to have their annuities calculated using a 
more generous formula. Special agents would be able to use a 
2.5 percent rate for their first 20 years of service instead of 
the current rate of 2 percent. This would match the formula 
used for law enforcement personnel who are covered by CSRS. In 
order to be eligible, employees would have to complete 20 years 
of service as a special agent and be at least 50 years old. 
Employees who worked as special agents while in FSRDS and have 
since elected to join FSPS would also be eligible for the 
higher rate, but the rate would apply only to service as an 
agent under FSRDS. The bill would also set a mandatory 
retirement age of 57 for special agents and criminal 
investigators in AID.

Discretionary spending

    Agency Retirement Contributions. The bill would increase 
the amount that the State Department contributes towards 
Foreign Service retirement for two reasons. First, the bill 
would increase the amount that special agents in FSRDS 
contribute towards their retirement from 7.0 percent to 7.5 
percent. This would match the rate paid by law enforcement 
personnel in the similar CSRS program. Under FSRDS, the State 
Department makes retirement contributions at the same rate paid 
by employees. As a result, contributions paid by the Department 
would also increase.
    Second, the bill would induce some special agents to retire 
earlier than they would otherwise (as discussed below). CBO 
assumed that the total number of special agents would remain 
constant, and that retiring agents would be replaced by new 
employees covered by FSPS, which requires agency contributions 
equal to 18 percent of pay. Overall, agency retirement 
contributions would rise by about $100,000 in 1999 and $120,000 
in 2003.
    Employer Social Security Taxes. Unlike employees in FSRDS, 
the new agents hired under FSPS would be covered by Social 
Security. As a result, agency payments for Social Security 
taxes would increase, but by less than $45,000 annually.

Direct spending

    FSRDS Retirement Benefits. H.R. 633's provisions would 
affect only special agents who are hired after the bill's 
enactment and current agents who elect to be covered by the 
bill. Current agents electing to be covered would be required 
to make a deposit into the Foreign Service retirement trust 
fund equal to the additional 0.5 percent in retirement 
contributions they would have paid under law enforcement rates 
during their career, plus interest. Agents who did not make 
this deposit would be required to take an actuarially 
equivalent reduction in their annuity.
    According to the State Department, about 200 current 
employees would qualify as special agents under the bill. CBO 
assumed that all of them would elect to be covered by the 
bill's provisions. The higher 2.5 percent accrual rate would 
boost annuities for many agents by 15 to 20 percent. This 
increase would be large enough that CBO assumed that half of 
the special agents would be induced to retire a year earlier 
than under current law. Finally, CBO assumed that all of the 
agents would take an actuarial reduction in their annuity 
(which would amount to 1 to 2 percent) rather than making the 
required deposit (which for many agents would be about 
$10,000). By taking the reduction, agents would be able to 
receive higher benefits without having to make a substantial 
deposit to get them. CBO estimates that spending on FSRDS 
retirement benefits would increase by about $270,000 in 1999, 
rising to $960,000 in 2003.
    The mandatory retirement age included in the bill would 
only affect a handful of employees. According to the State 
Department, almost all Foreign Service employees retire before 
age 57 either voluntarily or under the time-in-service 
requirements.
    Agency Retirement Contributions. The additional agency 
contributions discussed above would also increase receipts by 
the Foreign Service trust fund by about $70,000 in 1999 and 
$45,000 in 2003. CBO scores only the increase in receipts due 
to higher contributions for FSRDS employees. The additional 
receipts for new special agents hired under FSPS are associated 
with higher spending on FSPS benefits that lie outside the 5-
year budget window. CBO's longstanding practice in these 
situations is not to include these receipts under direct 
spending since they would present an inaccurate picture of the 
bill's overall impact on direct spending.
    Employer Social Security Taxes. The additional agency 
payments of Social Security taxes, discussed above, would 
increase receipts by the Social Security trust funds. These 
receipts, which are off-budget, would increase by less than 
$45,000 annually.

Revenues

    Receipts from employee retirement contributions, which are 
on-budget, would rise slightly since the bill would raise the 
rate paid by special agents a half percentage point to 7.5 
percent. The accelerated hiring of special agents covered by 
FSPS would also increase receipts from employee Social Security 
taxes, which are off-budget. In both cases, the amount of the 
annual increase would be less than $45,000.
    Pay-as-you-go considerations: Section 252 of the Balanced 
Budget and Emergency Deficit Control Act sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts. The net changes in outlays and governmental receipts 
that are subject to pay-as-you-go procedures are shown below. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects in the current year, the budget year, and the 
succeeding four years are counted.

                              TABLE 2.--ESTIMATED PAY-AS-YOU-GO EFFECTS OF H.R. 633
----------------------------------------------------------------------------------------------------------------
                                                      By fiscal years, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0      0      1      1      1      1      1      1      1      1      1
Changes in receipts................      0      0      0      0      0      0      0      0      0      0      0
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 633 does 
not contain any intergovernmental or private-sector mandates as 
defined by the Unfunded Mandates Reform Act of 1995 (UMRA) and 
would impose no costs on state, local, or tribal governments.
    Estimate prepared by: Federal Costs: Eric Rollins. Impact 
on State, Local and Tribal Governments: Pepper Santalucia. 
Impact on the Private Sector: Lesley Frymier.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                      Section-by-Section Analysis

    Section 1. Short Title. This section provides that this Act 
may be cited as the ``Department of State Special Agents 
Retirement Act of 1998''.
    Section 2. Amendments Relating to the Foreign Service 
Retirement and Disability System. Section 2 makes amendments to 
the Foreign Service Act relating to the Foreign Service 
Retirement and Disability System. It provides that certain 
special agents of the Department of State receive the same kind 
of law enforcement benefits that generally are available to 
other Federal law enforcement officers and must make increased 
contributions for such benefits.
    Section 2(a) amends the Foreign Service Act of 1980 to 
define ``special agent,'' for Foreign Service retirement and 
disability provisions, as an employee of the Department of 
State with a primary skill code of 2501 performing certain 
investigative or protective duties or having been transferred 
directly to a position which is supervisory or administrative 
in nature after performing such duties for at least three 
years.
    Section 2(b) sets forth the percentage rate applicable to 
special agents for both employee and agency contributions to 
the Foreign Service Retirement and Disability Fund. The 
percentage rate is thatwhich applies to law enforcement 
officers under the Civil Service Retirement and Disability System, 5 
U.S.C. 8334(a)(1).
    Section 2(c) provides that special agents, when making a 
special contribution for prior service as a special agent, 
shall be subject to the percentages for law enforcement 
officers under the Civil Service Retirement and Disability 
System, 5 U.S.C. 8334(c).
    Section 2(d) provides for the computation of annuities of 
eligible special agents participating in the Foreign Service 
Retirement and Disability System in the same manner as that for 
law enforcement officers under the Civil Service Retirement 
System. It also provides that a special agent, who elected to 
transfer from the Foreign Service Retirement and Disability 
System to the Foreign Service Pension System, have the portion 
of that agent's annuity attributable to service preceding such 
an election be computed in the same manner as for law 
enforcement officers under the Civil Service Retirement and 
Disability System.
    Section 3. Mandatory Separation of Special Agents. Section 
3 amends the Foreign Service Act of 1980 to subject special 
agents who make an election under this Act to the same 
mandatory retirement provisions that currently apply to law 
enforcement officers under the Civil Service Retirement System 
and certain Foreign Service criminal investigators/inspectors 
of the Office of Inspector General of the Agency for 
International Development who participate in the Foreign 
Service Retirement and Disability System.
    Section 4. Effective Date; Applicability. Section 4 sets 
forth the effective dates and applicability of the bill.
    Section 4(a) provides that the Act and its amendments take 
effect upon enactment. The Act only applies to: (1) individuals 
first appointed on or after the date of enactment as a special 
agent who will have any portion of their annuity computed under 
the Foreign Service Retirement and Disability System, and (2) 
eligible individuals who make an election to become subject to 
the Act.
    Section 4(b) specifies who is eligible to make an election 
to become subject to the Act. An election may be made by: (1) 
any current employee covered by one of the Foreign Service 
retirement systems who is serving or has served as a special 
agent, or (2) by a survivor of a special agent who was eligible 
to make an election. An election may not be made by any retired 
special agent. Special agents who elect to become subject to 
the Act may make a special contribution to make up the 
difference between their deducted contributions and the 
applicable law enforcement rate. If a special contribution is 
not made or fully made, the special agent's annuity will be 
subject to an actuarial reduction.
    Section 4(c) requires the Secretary of State to promulgate 
such regulations as may be necessary to carry out this 
legislation and to take measures reasonably designed to provide 
notice to individuals who may have rights under its provisions.
    Section 4(d) requires that an election under section (4)(b) 
of the bill must be made not later than 90 days after the date 
on which the relevant notice under section (4)(c) is provided.
    Section 4(e) defines the term ``special agent'' in the same 
manner as it is defined in section 2(a).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

FOREIGN SERVICE ACT OF 1980

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TITLE I--THE FOREIGN SERVICE OF THE UNITED STATES

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          Chapter 8--Foreign Service Retirement and Disability

subchapter i--foreign service retirement and disability system

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  Sec. 804. Definitions.--As used in this subchapter, unless 
otherwise specified, the term--
          (1) * * *

           *       *       *       *       *       *       *

          (13) ``surviving spouse'' means the surviving wife or 
        husband of a participant or annuitant who was married 
        to the participant or annuitant for at least 9 months 
        immediately preceding his or her death or is a parent 
        of a child born of the marriage, except that the 
        requirement for at least 9 months of marriage shall be 
        deemed satisfied in any case in which the participant 
        or annuitant dies within the applicable 9-month period, 
        if--
                  (A) the death of such participant or 
                annuitant was accidental; or
                  (B) the surviving spouse of such individual 
                had been previously married to the individual 
                and subsequently divorced and the aggregate 
                time married is at least 9 months; [and]
          (14) ``unfunded liability'' means the estimated 
        excess of the present value of all benefits payable 
        from the Fund over the sum of--
                  (A) the present value of deductions to be 
                withheld from the future basic salary of 
                participants and of future agency contributions 
                to be made on their behalf, plus
                  (B) the present value of Government payments 
                to the Fund under section 821, plus
                  (C) the Fund balance as of the date the 
                unfunded liability is determined[.]; and
          (15) ``special agent'' means an employee of the 
        Department of State with a primary skill code of 2501--
                  (A) the duties of whose position--
                          (i) are primarily--
                                  (I) the investigation, 
                                apprehension, or detention of 
                                individuals suspected or 
                                convicted of offenses against 
                                the criminal laws of the United 
                                States, or
                                  (II) the protection of 
                                persons pursuant to section 
                                2709(a)(3) of title 22, United 
                                States Code, against threats to 
                                personal safety; and
                          (ii) are sufficiently rigorous that 
                        employment opportunities should be 
                        limited to young and physically 
                        vigorous individuals, as determined by 
                        the Secretary of State pursuant to 
                        section 4823 of title 22, United States 
                        Code;
                  (B) performing duties described in 
                subparagraph (A) before, on, or after the date 
                of the enactment of this paragraph; or
                  (C) transferred directly to a position which 
                is supervisory or administrative in nature 
                after performing duties described in 
                subparagraph (A) for at least 3 years.
  Sec. 805. Contributions to the Fund.--(a)(1) [Except as 
provided in subsection (h),] Except as otherwise provided in 
this section, 7 percent of the basic salary received by each 
participant shall be deducted from the salary and contributed 
to the Fund for the payment of annuities, cash benefits, 
refunds, and allowances. An equal amount shall be contributed 
by the Department from the appropriations or fund used for 
payment of the salary of the participant. The Department shall 
deposit in the Fund the amounts deducted and withheld from 
basic salary and the amounts contributed by the Department.

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  (3) For service as a special agent, paragraph (1) shall be 
applied by substituting for ``7 percent'' the percentage that 
applies to law enforcement officers under section 8334(a)(1) of 
title 5, United States Code.

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (6) Subject to paragraph (4) and subsection (h), for purposes 
of applying this subsection with respect to prior service as a 
special agent, the percentages of basic pay set forth in 
section 8334(c) of title 5, United States Code, with respect to 
a law enforcement officer, shall apply instead of the 
percentages set forth in paragraph (1).

           *       *       *       *       *       *       *

  Sec. 806. Computation of Annuities.--(a)(1) * * *

           *       *       *       *       *       *       *

  (6)(A) The annuity of a special agent under this subchapter 
shall be computed under paragraph (1) except that, in the case 
of a special agent described in subparagraph (B), paragraph (1) 
shall be applied by substituting for ``2 percent''--
          (i) the percentage under subparagraph (A) of section 
        8339(d)(1) of title 5, United States Code, for so much 
        of the participant's total service as is specified 
        thereunder; and
          (ii) the percentage under subparagraph (B) of section 
        8339(d)(1) of title 5, United States Code, for so much 
        of the participant's total service as is specified 
        thereunder.
  (B) A special agent described in this subparagraph is any 
such agent or former agent who--
          (i)(I) retires voluntarily or involuntarily under 
        section 607, 608, 611, 811, 812, or 813, under 
        conditions authorizing an immediate annuity, other than 
        for cause on charges of misconduct or delinquency, or 
        retires for disability under section 808; and
          (II) at the time of retirement--
                  (aa) if voluntary, is at least 50 years of 
                age and has completed at least 20 years of 
                service as a special agent; or
                  (bb) if involuntary or disability, has 
                completed at least 20 years of service as a 
                special agent; or
          (ii) dies in Service after completing at least 20 
        years of service as a special agent, when an annuity is 
        payable under section 809.
  (C) For purposes of subparagraph (B), included with the years 
of service performed by an individual as a special agent shall 
be any service performed by such individual as a law 
enforcement officer (within the meaning of section 8331(20) or 
section 8401(17) of title 5, United States Code), or a member 
of the Capitol Police.
  (7) In the case of a special agent who becomes or became 
subject to subchapter II pursuant to an election under section 
860--
          (A) for purposes of paragraph (6)(B), any service 
        performed by the individual as a special agent (whether 
        under this subchapter or under subchapter II) shall be 
        creditable; and
          (B) if the individual satisfies paragraph (6)(B), the 
        portion of such individual's annuity which is 
        attributable to service preceding the effective date of 
        such election shall be computed in conformance with 
        paragraph (6).
  [(6)] (8) For purposes of paragraphs (2), (3), [and (4)] (4), 
and (6) of this subsection, the term ``basic pay'' includes pay 
as provided in accordance with section 412 of this Act or 
section 5545(c)(2) of title 5, United States Code.

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  Sec. 812. Mandatory Retirement.--(a)(1) Except as provided in 
subsection (b), any participant shall be retired from the 
Service at the end of the month in which the participant has 
reached age 65 and has at least 5 years of service credit 
toward retirement under the System (excluding military and 
naval service), and shall receive retirement benefits in 
accordance with section 806.
  (2) [Notwithstanding paragraph (1), a Foreign Service 
criminal investigator/inspector of the Office of Inspector 
General of the Agency for International Development who would 
have been eligible for retirement pursuant to either section 
8336(c) or 8412(d) of title 5, United States Code, as 
applicable, had the employee remained in civil service, shall 
be separated from the Service on the last day of the month in 
which that Foreign Service criminal investigator/inspector 
attains 57 years of age or completes 20 years of service if 
then over that age.] Notwithstanding paragraph (1)--
          (A) an individual described in section 4(a)(2)(B) of 
        the Department of State Special Agents Retirement Act 
        of 1998 who is otherwise eligible for immediate 
        retirement under this chapter, or
          (B) a Foreign Service criminal investigator/inspector 
        of the Office of Inspector General of the Agency for 
        International Development who would have been eligible 
        for retirement pursuant to either section 8336(c) or 
        8412(d) of title 5, United States Code, as applicable, 
        had the employee remained in civil service,
shall be separated from the Service on the last day of the 
month in which such individual under subparagraph (A) or such 
Foreign Service criminal investigator/inspector under 
subparagraph (B) attains 57 years of age or completes 20 years 
of service if then over that age. If the head of the agency 
judges that the public interest so requires, that agency head 
may exempt such an employee from automatic separation under 
this subsection until that employee attains 60 years of age. 
The employing office shall notify the employee in writing of 
the date of separation at least 60 days before that date. 
Action to separate the employee is not effective without the 
consent of the employee, until the last day of the month in 
which the 60-day notice expires.

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subchapter ii--foreign service pension system

           *       *       *       *       *       *       *


  Sec. 852. Definitions.--As used in this subchapter, unless 
otherwise specified--
          (1) * * *

           *       *       *       *       *       *       *

          (7) the term ``supplemental liability'' means the 
        estimated excess of--
                  (A) the actuarial present value of all future 
                benefits payable from the Fund under this 
                subchapter based on the service of participants 
                or former participants, over
                  (B) the sum of--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) any other appropriate amount, as 
                        determined by the Secretary of State in 
                        accordance with generally accepted 
                        actuarial practices and principles; 
                        [and]
          (8) the term ``System'' means the Foreign Service 
        Pension System[.]; and
          (9) the term ``special agent'' has the same meaning 
        given in section 804(15).

           *       *       *       *       *       *       *

  Sec. 855. Entitlement to Annuity.--(a) * * *
  (b)(1) Any participant who retires voluntarily or mandatorily 
under section 607, 608, 611, 811, 812, or 813 under conditions 
authorizing an immediate annuity for participants in the 
Foreign Service Retirement and Disability System and who has 
completed at least 5 years as a member of the Foreign Service 
shall be entitled to an immediate annuity computed under 
paragraph (2).

           *       *       *       *       *       *       *

  (3) any participant who is involuntarily retired or separated 
under section 607, 608, 611, or 610 and who would if a 
participant under subchapter I, become eligible for a refund of 
contributions or a deferred annuity under subchapter I, shall, 
in lieu thereof, receive benefits for an involuntary separation 
under this subchapter.

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