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Section 216 (f). This subsection provides for (1) conversion of existing administrative enrollees, both faculty and nonfaculty on a date mutually agreed upon by the Secretary of Commerce and the Civil Service Commission, in order to effect an orderly transition; (2) clear-cut legal recognition that after conversion, former administrative enrollees will be subject to laws of general applicability to civilian employees of the United States except as otherwise authorized by law; and (3) certain authority necessary to make possible the conversion of enrollees without undue personal hardship or inequity, and without any adverse effect upon the efficiency of the Merchant Marine Academy, with particular reference to compensation, leave, and creditability of prior service for various purposes.

Section 216(f) (1). This subsection defines how the basic compensation of administrative enrollees shall be determined upon conversion and provides for salary-saving and related safeguards in order to avoid reducing the compensation of enrollees as a result of conversion. For example, if an administrative enrollee's total basic pay, quarters, and subsistence allowances amount to $9,570.96 and his position is classified at grade GS-11, he would have his salary set at GS-11, $9,640, which is the next longevity rate over the total amount he is receiving for basic pay, quarters, and subsistence. An enrollee receiving a total of $8,105.76 for basic pay, subsistence, and quarters allowances whose position is classified at GS-9, for which the maximum longevity rate of the grade is $7,920, will have his salary set at $8,150, which is the first longevity step at GS-10, until he leaves such position, or otherwise is entitled to receive a higher rate by reason of operation of the Classification Act of 1949, as amended, or other applicable law, as indicated below.

This subsection applies only to persons serving as administrative enrollees on the date preceding the date of conversion. It does not provide retroactive benefits to any person.

Section 216(f) (2).

This paragraph makes provision to specifically ensure what is commonly referred to as "salary saving" by establishing the fact that the basic compensation as set up on conversion, as provided for in section 216(f) (1), will continue until the employee affected thereby is either separated from his position or receives a higher rate of basic compensation by operation of law or regulation as might occur in the case of promotion, Federal salary adjustments, etc.

Section 216(f) (3). This paragraph takes cognizance of the fact that administrative enrollees have earned, accumulated and used annual leave on a calendar day basis, and most enrollees have a much greater leave accumulation than the accumulation which would be authorized on conversion of such personnel under provisions of the Annual and Sick Leave Act. This paragraph would provide for the conversion of all unused annual leave without actual loss of leave for purposes of future use to the enrollee on the basis of 5 work days' leave for each 7 calendar days of leave.

Administrative enrollees are authorized to take sick leave, up to 4 months in emergencies, as may be necessary, but do not accumulate sick leave. If they had been permitted to accumulate sick leave, most administrative enrollees by reason of their length of service would now have a large accumulation of sick leave. To minimize the effect of losing the sick leave benefits to which administrative enrollees have been entitled, it is proposed that they be credited on the date of conversion with 13 days' sick leave. Thereafter, sick leave credits would accrue on the same basis as for other employees subject to the Annual and Sick Leave Act.

Section 216 (f) (4). This paragraph makes specific provisions to recognize active service as an administrative enrollee performed prior to the date fixed for conversion as civilian employment creditable for all purposes in the executive branch of the Federal Government, with the exception that in computing length of service as used under the Classification Act for the determination of one periodic step increase or one longevity step increase, all such prior service which occurred immediately preceding the date fixed for conversion, as provided in subsection (f) shall be counted toward the attainment of same. Thus, for such basic purposes as retirement, leave accruals, seniority, length-of-service awards, etc., all previous active service as an administrative enrollee would be creditable as civilian employment in the executive branch of the Federal Government for every purpose, except that in computation of length of service for salary step increases or longevity step increases, only such service as was continuous and uninterrupted immediately prior to the date fixed for conversion would be cred

itable in the determination of said step increases. Under these circumstances, an employee's salary thus established which is less than the maximum scheduled rate of the grade would be immediately considered against the requirements for one periodic step increase; and, as provided in subsection (f) (1), for purposes of determining eligibility for a periodic step increase, the basic compensation as an administrative enrollee would be considered as the total amount or value of basic pay, subsistence, and quarters allowances. Such prior service and basic compensation would also be considered in determining eligibility toward the 10-year aggregate period and 3-year waiting periods for one longevity step increase.

Section 216(f) (5). Administrative enrollees disenrolled from the Maritime Service are entitled to payment of travel and transportation expenses to their place of enrollment, etc., whether or not such transportation is actually furnished in kind. Administrative enrollees on active duty also receive free medical, dental, surgical, and hospital care under the provisions of paragraph (6) of section 322 of the Public Health Service Act of 1944 (58 Stat. 696, 42 U.S.C. 249).

This paragraph is for the purpose of making two practical provisions. First, it provides that administrative enrollees who accept conversion shall forfeit such rights to travel and transportation expenses. Those who elect to resign prior to conversion will be entitled to such benefits in keeping with the terms under which they were "enrolled” as administrative enrollees. Second, it provides that administrative enrollees after the effective date of conversion as authorized by this legislation shall not continue to receive free medical, dental, surgical, and hospital care pursuant to paragraph (6) of section 322 of the Public Health Service Act of 1944. After conversion, however, these employees and their immediate families will be eligible for health benefits on the same basis as other civilian employees of the Government under the Federal Employees' Health Benefits Act of September 28, 1959, 73 Stat. 709, 5 U.S.C. 3001.

Senator BARTLETT. There will be incorporated in the record at this point a report from the Comptroller General on S. 576, dated February 27.

I want to dwell upon that a bit after asking you some other questions, Admiral.

(Report from the Comptroller General follows:)

Hon. WARREN G. MAGNUSON,

COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, February 27, 1961.

Chairman, Committee on Interstate and Foreign Commerce,
U.S. Senate.

DEAR MR. CHAIRMAN: Your letter dated January 24, 1961, acknowledged January 26, requests our comments on S. 576, 87th Congress.

S. 576 would clarify the status of the faculty and administrative staff at the U.S. Merchant Marine Academy by authorizing the Secretary of Commerce to employ and compensate a faculty without regard to the Classification Act of 1949, as amended, and by providing for the conversion of nonfaculty administrative enrollees to positions subject to the civil service laws applicable to other civilian employees of the United States.

As pointed out in our report on the audit of the Federal Maritime Board and Maritime Administration for the fiscal years ended June 30, 1952, and 1953 (see pp. 29-30, H Doc. No. 383, 83d Cong.) the employment of administrative enrollees in civilian positions at the Merchant Marine Academy without regard to the civil service laws has resulted in advantages to such enrollees which are not afforded under the civil service system. Primarily, such advantages are attributable to the fact that enrollees received tax-free quarters and subsistence allowances in addition to their basic compensation, and that the total value of such compensation and allowances results in payments which are disproportionate to civil service rates for comparable duties.

We are therefore in agreement with the need for legislation in this area and, since the provisions of S. 576 appear to be adequate to effectuate the purposes intended, we recommend favorable consideration of the bill. We are enclosing 30 copies of this report, as requested.

.Sincerely yours,

JOSEPH CAMPBELL,

Comptroller General of the United States.

Senator BARTLETT. In your opinion, would enactment of this bill improve the Academy as an educational institution?

Mr. FORD. I certainly believe that it would. It will straighten out a situation with regard to status of the staff and will enable us to adopt procedures which we think are desirable in the hiring and firing of professors for an educational institution.

Senator BARTLETT. It would do what with respect to hiring and firing?

Mr. FORD. It would enable us to carry out procedures that are used at other educational institutions.

Senator BARTLETT. How is it done now-the hiring and firing? Mr. FORD. It is accomplished now, any hiring is done under civil service.

Senator BARTLETT. Of faculty members?

Mr. FORD. Of faculty members.

Mr. DAWSON. I am personnel officer of the Maritime Administration, and the complication we have is that the faculty is half civil service and half military. In other words, we have authority now and we use it to hire a faculty member to teach electrical engineering, foreign languages, or what have you, and he is enrolled in the maritime service and given a rank that is assimilated to that of the Coast Guard. His pay and leave is assimilated to that of the Coast Guard, but for all other purposes, he is under civil service, and the Civil Service Commission views him as a schedule A employee of the Civil Service Commission for disciplinary purposes or for all of his other fringe benefits, including retirement and unemployment compensation, et cetera. Now, this bill would enable us to adopt policies, pay, procedures, and tenure for schedule A employees, with pay rates set by the Secretary of Commerce, identical to the authority which the Secretary of the Navy has to administer the civilian faculty at the Naval Academy of some 215.

The other complication that makes this legislation or some similar form more urgent, if I may say so at this time, is that there was a decision in the Court of Claims, U.S. Court of Claims, December 1, 1960, as a result of 91 employees at the Academy, 6 of whom were faculty and the others staff, who had filed a claim on the adjustment of their ranks and ratings made in 1954. The court ruled that any rank or rating we set in interpretation of 216(a) of the Merchant Marine Act of 1936-and I will use the court's language-"must coincide with similar occupational categories at the Coast Guard."

Now, what that means is that if the dean and the Superintendent decide to hire an electrical engineer, and they want to make him a commander, we have to write to the Coast Guard, tell them what we are going to hire and for what purpose, and describe the job and say, "Now, would this be a commander if it was at the Coast Guard, and can we do this?" That complication, which is similar to many of these other complications in any system that is neither half fish or fowl, just makes it almost administratively impossible to administer officially.

Senator BARTLETT. Why do you have to ask the Coast Guard if you can do this?

Mr. DAWSON. When we adjusted the ranks and ratings of these 91 plaintiffs, who exhausted all their administrative remedies through

Civil Service and the General Accounting Office, and then went into the Court of Claims, the court said, re our interpretation of 216(a) of the Merchant Marine Act where we are authorized to enroll administrative employees, assimilated to the rank and pay of the Coast Guard that this section means that they must coincide with a double first cousin, as it were, at the Coast Guard.

Therefore we could not have a lieutenant (junior grade) performing a job that a lieutenant at the Coast Guard might.

Mr. FORD. To answer your question, we don't have to get their determination, but determine if there is a similar position at the Coast Guard Academy.

Senator BARTLETT. Is there any disposition ever on the part of the Coast Guard to say in respect to this electrical engineer, in response to your inquiry, that obviously he is not of a proficiency to be a commander-yet in your opinion he is. Is there any difficulty that way? Mr. DAWSON. Sir, we have excellent cooperation from the Coast Guard in their responses but one of the serious difficulties is they might say, "But we don't teach a subject of this nature here. We don't have anybody exactly like this, and we don't know what to tell you.” Now you see we have a different student body. We have a different academic program, and they don't teach any foreign languages at the Coast Guard. We teach three at the Merchant Marine Academy. We give some courses in ship management which they don't give, yet we are supposed to try to find a similar job at the Coast Guard in arriving at a rank or rating.

Senator BARTLETT. How do you resolve this difficulty when the Coast Guard is unable to help you?

Mr. DAWSON. When they say they don't have anything that is anywhere near like this, we say what is the nearest thing you have to it, or what do you think it would be if you had a course like this?

They say, well, it might be one thing or another, and so we take one of those choices.

Senator BARTLETT. What is the difference between schedule A and the remainder of civil service, so far as this particular situation is concerned?

Mr. DAWSON. Schedule A in the civil service is a term used to identify noncompetitive positions whereby you can recruit without the necessity of a competitive examination. And for all other purposes, it is the same throughout the civil service system.

In other words, you have the competitive system and the noncompetitive and you can only have the noncompetitive with the permission of the Civil Service Commission. We wanted schedule A for the faculty at the Academy because we don't want to go out and try to get a man to teach German and then tell him he has to take a civil service examination.

It is the same system they have for the civilians at the Naval Academy.

Senator BARTLETT. If this bill is enacted, you would not have to do that?

Mr. DAWSON. No, sir. If this bill was enacted, we would be able to recruit on the basis of faculty merit and qualifications without regard to a lot of redtape.

Senator BARTLETT. How many employeees would be affected?

Mr. DAWSON. 201 as of this date.

Senator BARTLETT. How many on the staff and how many on the faculty?

Mr. DAWSON. Seventy-seven on the faculty who are actually engaged in instructional duties and the remainder of the 201 are either staff or custodial work force or faculty support.

Senator BARTLETT. What do they think, they being employees, of this proposal?

Mr. DAWSON. Well, in any group of that sort I would say that there would be a divergence of opinion. This has been under discussion and they have had various meetings with the faculty up there, and initially the large majority of the faculty were opposed to this bill. In the last year or two the tenor of the attitude on the part of the staff and faculty is changing and I think the Superintendent, who is here, could probably speak more pertinently to that subject.

In other words, we have had members recently, like the librarian, that asked to be converted to the civil service without waiting for any bill. The executive officer is already in the civil service system, as is the assistant dean.

Mr. FORD. I think, generally speaking, that the faculty objected to conversion, when this started, on the basis that they had all of the military prerogatives without a number of the objectionable features of being in the military.

Senator BARTLETT. Would there be any financial sacrifices involved for employees?

Mr. FORD. The conversions would be at comparable salaries, and when I say that, one of the original objections was on the basis of military advantage-this is conversion of their military pay and allowances to a comparable pay grade in the civil service.

Now what this means is that they would lose the tax advantage of their military allowances. In other words, they would pay taxes on all of their salary and would not be exempt from that part which is considered in the military as allowance for cost of living-housing. Senator BARTLETT. There would be less than complete enthusiasm on the part of those affected?

Mr. FORD. I think that is probably accurate.

Senator BARTLETT. We won't ask you, because there is no reason why you ought to be in the position to know, but I think we will have to get into some of the details of this, too.

Mr. DAWSON. Could I give you one figure on that, Senator, just as an example?

Senator BARTLETT. Surely.

Mr. DAWSON. For instance, let's take an officer-and this is an actual case, and I won't identify him. We have worked this out. I will put it in the record, if you so desire. I will give one example on the case you just mentioned.

His annual base pay is $10,320, and that is what he pays taxes on. And his taxes, with two exemptions, his withholding taxes are $1,617.60. Now his allowances and subsistence add up to over $2,000. So his total gross pay is $12,536. Now when he is converted under our bill, and under salary saving, he will have to get a salary that is at least greater at the set salary step above his present gross, which would be $12,577. So he will get a raise of approximately $40. But

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