ANALYSIS OF THE PROPOSED OVERSEAS ALLOWANCES ACT OF 1955

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP59-00224A000100690002-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 9, 2016
• Document Release Date: August 25, 2000
• Sequence Number: 2
• Publication Date: June 14, 1955
• Content Type: REPORT

- 1 -
Analysis of the Proposed overseas
Allowances Act of 1955
Title I - Objectives, Definitions, and General Provisions
Sec. 101. This section states the objectives of the bill.
Sec. 111. This section defines terms used frequently in the bill. Two
of the definitions affect geographic coverage. "Continental
United States" is defined as the existing 48 States and the
District of Columbia. Thus, Statehood for Alaska or Hawaii
would not automatically terminate territorial allowances and
differentials in those areas. The Trust Territory of the
Pacific Islands is included under the foreign areas definition
rather than the Territories and possessions since conditions of
employment there are deemed to be more nearly comparable to
relatively undeveloped foreign areas.
The term "employee" is left for specific definition in
Presidential regulations. Varying bases of employment make it
impossible to devise a concise definition which would include
all qualified persons. It may be necessary to list specific
groups in the regulations in order to assure coverage. Coverage,
however, is limited to civilian personnel and would not include
any uniformed personnel as defined in the Career Compensation
Act of 1949, as amended.
Sec. 121. This section continues the provisions of existing legislation
authorizing the President to establish rules regulating the
payment of allowances and differentials for overseas service.
Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8
 -2-
Sec. 122. This section, as compared with existing statutes, extends
eligibility for foreign post differentials and for territorial
cost-of-living allowances, prevailing rate differentials and
post differentials to employees whose rates of basic compen-
sation,are fixed administratively. Present authorities for
these forms of compensation are limited to employees whose
salaries are set by statute, such as the Classification Act
and postal groups. Other existing overseas allowances are not
restricted to any particular pay group. The proposed language
permits payment of allowances and differentials to employees
whose pay rates are fixed administratively only if their rates
correspond with rates fixed for comparable work in the States
and do not include amounts for purposes considered in allowances
and differentials provided by this Act.
Sec. 123. This section provides authority for the President to designate
the Panama Canal Zone (which is not covered under either (5) or
(6) of Sec. 111) as either a Territory or possession or a foreign
area if he determines it would be in the best interests of the
United States to do so, for purposes of extending coverage of
this Act to employees of the U. S. Government in that area. It
is provided to assure continued payment of any allowances and
differentials presently authorized for employees in this area
under separate legislation, in the event such legislative
authority should be terminated. A restriction is included that
none of the allowances and differentials provided by this Act
(except transportation of dependents for college-education pur-
Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8
poses (Sec. 221(4)(ii) and payment of storage expenses (Sec.
 -3-
21a1(c) may be granted to any group of employees in the Panama
Canal Zone during any period that extra compensation is other-
wise provided for such group.
Sec. 124. This section amends Sec. 912 of the Internal Revenue Code of
1954 to continue existing exemptions from Federal income tax
Title II - Allowances and Differentials in Foreign Areas
Sec. 201. This section restricts payment of foreign allowances and differ-
entials to employees who are citizens or nationals of the United
States and stationed in foreign areas, with provision for ex-
ceptions in the Act. Such exception is made in connection with
storage expenses for non-citizen employees who are transported from
one location to another in the interests of the U.S. Government.
Use of the terra "stationed" rather than either ttpermanently
stationed" or "assigned" which appear in other acts (See Act of
June 26, 1930 - 5 U.S.C. 118a, and section 901 FS Act - 22 U.S.C.
1131) is deliberate. The word "permanently" is misleading since
few employees remain at any one overseas post for assignments suf-
ficiently long to be considered permanent. The average assignment
is from two to four years. The word "assigned" might prevent
payment of a differential to an employee during a long period of
detail at a hardship post. The present general provision of law
authorizing such payment (207 Ind. Off. Appro. Act of 1949 - 5
U.S.C. 118h) contains the word "stationed". However, an employee
granted allowances would not be entitled to per diem while at the
post at which such allowances are granted, although he could re-
ceive both per diem and allowances for periods when he is away
from the post temporarily under official orders.
Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8
 Sec. 211. This section consolidates the allowances provisions of the Act
of June 26, 1930 (P.L. 445, 71st Cong., 46 Stat. 818) and of
section 901(1) of the Foreign Service Act of 1946 (P.L. 724,
79th Cong., 60 Stat. 999) and makes certain revisions as in-
dicated below:
(1) The temporary lodging allowance, now available only to
officers and employees of the Foreign Service, is ex-
tended to officers and employees of other agencies
subject to the act.
A temporary lodging allowance of not in excess of
one month is also provided at the conclusion of a tour
of duty.
The provision in the Foreign Service Act of 1946
which restricts the amount that can be paid as a
temporary lodging allowance to the aggregate amount of
the per diem that would be allowed to the employee and
the members of his family if they were in travel status
is omitted.
(2) The quarters allowance, provided by section 901(1) of
the Foreign Service '.ct for the Foreign Service and by
the Act of June 26, 1930, for officers and employees
of all agencies whenever Government-owned or rented
quarters are not provided without charge, is continued.
Water is added to the utilities covered by the
 -5-
(3) Provision is made for payment or reimbursement to person-
nel for unusual expenses incurred to repair or improve
sub-standard dwellings in order to place them in habitable
condition (e.g., installation of plumbing, wiring, etc*
but not normal alterations or redecorating). Use of this
authority will be subject to strict administrative controls.
Exemption from RS-3648 (31 U.S.C. 529) permits the Govern-
ment to advance funds to employees to meet landlords' demands
for advance rental payments. Such requirements where housing is
acute may be for as much as one year's rent. Employees in the
lower and middle brackets seldom have money available to make
advance payments and present legislation, with few exceptions,
prohibits the Government's advancing rental allowances. Repay-
ments will be controlled by regulation with full protection of
the Government's interests.
Sec. 221. This section provides for the following cost-of-living allowances
for service in foreign areas:
(1) Post Allowance: The proposed legislation gives permanent
statutory authority to all agencies operating overseas to
pay post allowances. Although the proposed language dif-
fers from that of existing legislation, there is no actual
legal change.
(2) Transfer Allowance: There is no difference between the
scope of existing legislation and the proposed legis-
Approved For Release 2001103101:CIA-RD Fi5 01W0P110 1i0Wto transfers between foreign areas.
 The proposed legislation also provides for a home
service transfer allowance, to be payable only when the
home assignment is between assignments to foreign posts.
(3) Separate Maintenance Allowance: The proposed legislation
changes the phrase "country of assignment" to "post of
assignment" in order to make the administration of this
Education Allowance: The proposed legislation is virtually
identical to the language used in Sections 10(b) and 11
of P.L. 22 - 84th Congress, (amending the Foreign Service
Act) which authorized an education allowance and payment
of transportation costs for dependents for travel for
purposes of obtaining secondary and college education.
Section 10(b) added the education allowance to the
cost-of-living allowances under Section 901(2) of the
Foreign Service Act, and since all agencies are authorized
to pay cost-of-living allowances as authorized in that
section, the education allowance is therefore available
to all agencies as well as the Foreign Service.
The authority for transportation for education purposes
is contained elsewhere in the Foreign Service Act and is
not available to other agencies. The second part of this
Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8
section therefore adopts the language in the Foreign Service
 -7-
Act in order to provide the same transportation authority
for education proposed for all employees in foreign areas.
Existing legislation authorizing the Defense Depart-
ment to establish schools when needed is not affected.
Part C - Representation Ex e~ nses
Sec. 231. This section provides for amendment of the Administrative Expenses
Act of 1946 (60 Stat. 806), as amended, to include in that Act
authority for another normal and recurring operating expense in-
cident to certain types of activities in the field of foreign
relations and operations. This is the authority to use funds
for roopr_sontition purposes t.; I>ro::ota official policies
an:. pro r:s so t.: t th:; con.uct of )fficial cont.cts by U. S.
representatives will compare favorably with that of representa-
tives of other countries, and without personal cost to U. S.
representatives. For the first time it would make this authority
available to all agencies operating in foreign areas and to
resident missions to international or oonia:t onssuch as the
United States Dele,ation to the United Nations. However, it is
contemplated that only a very few agencies will need to make use
of the authority. Regulations will prescribe the conditions and
control the use of the authority.
Part D - Stora;e Expenses
This section would extend to all agencies authority for payment
of storm-e expenses similar to that now available to those
Approved For Release 2001/03/01 .qa-$QFi596o2wttw1ffdgwttt-to 1,2corcisc certain autiloritios of the Foreign
Service Act.
 - g -
Subsection (a) amends the language of sections 911(4) and
(5) of the Foreign Service Act to include certain provisions
heretofore carried in the Department of State's Appropriation
Acts. The "emergency" limitation of section 911(4) is eliminated,
and the present language is designed to provide authority to pay
storage and related costs in those instances (1) when an employee
either cannot take or cannot use his effects at the post of as-
signment, or (2) when it would be in the public interest or more
economical, as for example in lieu of quarters allowance payments
while an employee is away from his post under orders, or in lieu
of payment of transportation costs from one location to another.
An autoraobile may be included with effects for storage under
appropriate circunstances which Mill be defined in regulations.
Subsection (b) amends the language of sections 5(a)(1)(D)
and (E) of the CPI Act. These two sections are identical to
sections 911(4) and (5) of the Foreign Service Act and the pro-
posed amendment is to continue language identical with the
Foreign Service Act.
Subsection (c) amends the Administrative Expenses Act of
1046 by addin to section 1 thereof a new subsection to provide
authority for all agencies to pay storage expenses on the same
basis as provided for the Foreign Service and for CIA overseas
employees, under like conditions. It will apply both to foreign
areas and to the Territories and possessions.
Subsection (d) makes available the authority provided under
subsection (c) for any employees of the Government when it is in
Approved For Release 2001103101 CIA-RDP59-00224A000100690002-8
the public interest or more economical to store effects . Because
of exclusions elsewhere in this Act it specifies that the authority
 -9-
is available for U. S. citizen civilian employees in the Panama
Canal Zone, and for non-U. S. citizen civilian employees in either
#orein areas or in the Territories or possessions.
PART E - Official Residence Expenses
Sec. 251. This section provides for amendment of the Administrative Expenses
Act of 1946 (60 Stat. 806), as amended, to include in that Act
the authority covering another normal operating expense incident
to certain types of foreign activities. This is the authority to
use funds for unusual housekeeping expenses for top officials.
Heretofore authority for such expenses was restricted by section
902 of the Foreign Service Act to the principal officer at each
post. Experience has shown that certain ranking subordinates and
a limited number of top officials of other agencies are required
by their positions to maintain residences substantially larger
and more elaborate than their normal requirements because of
prestige and official representation requirements. This authority
will permit payment of the additional resultant costs as a regular
item of expense for doing business in that country. Regulations
will prescribe conditions and establish appropriate controls
governing the use of funds for this purpose. An amendment to
P.L. 341 (81st Congress), "An Act to amend the United Nations
Participation Act of 1945? is included to continue authority for
an official residence allotment to the U. S. delegate to the
United Nations.
Part F - Post Differential
Sec. 261. This section continues and extends existing authority for payment
Approved For Release 2001/03/01 :pCIA-q9 %00 N?81P8 ? A1s at foreign posts, based on undesirable
conditions of environment, at rates not in excess of 25 percent
 - 10 -
of rates of basic compensation. Two authorities exist at present;
section 1143 of the Foreign Service Act, as amended; and section
207 of the Independent Offices Appropriation Act, 191t9, as amended.
The language of the two differs somewhat, but in accordance with
standards set by Executive Order 10,000 the Department of State
has established a single schedule of post differentials equally
applicable under both authorities.
The proposed provision follows the language in section 207
of the Independent Offices Appropriation Act of 1949, as amended,
which prescribes the differential for posts where conditions of
environment are such that additional compensation is required as
a recruitment incentive. Rates of salary differential will con-
tinue to be determined by careful analysis of conditions at each
post or area. Resident Americans and certain other groups will
be excluded, as at present, through regulation.
Title III. Allowances and Differentials in Territorial Areas
Sec. 301. This section restricts payment of the allowances and differentials
provided under this title to employees who are citizens or nation-
als of the United States.
Sec. 302. This section defines for purposes of this title the circumstances
under which employees are considered as recruited outside a terri-
torial area and therefore entitled to the allowances and differ-
entials provided. Under certain specified conditions persons re-
cruited locally may be considered as recruited outside the
territorial area. The basis for eligibility is that the in-
dividual is only temporarily present in the territorial area and
Approved For Release 2001/03/01 t44?RP9?&09$s 0%9ATTC' 0ATi ed residence outside such territorial area
 - 11 -
during the period of presence in the territorial area. It is not
intended that dependents of persons employed by the U. S. Govern-
ment or by public or private firms or organizations would be
considered as recruited outside the territorial area.
Sec. 311. This section establishes a new differential called a prevailing
rate differential. It is designed to enable agencies of the
Government to meet competition from other employers in those areas
where locally prevailing wage rates are considerably higher than
the rates of basic compensation fixed by statute for certain types
of work. In sore localities it may be necessary to establish
schedules of rates based on rates prevailing in the immediate
employment area, or they may be based on rates prevailing in the
Territory as a whole, or, in isolated areas where it is impracti-
cable to establish a schedule of locally prevailing rates, it may
be necessary to construct a schedule of rates based on rates
prevailin elsewhere in the Territory for similar work under
similar conditions. The prevailing rate differential is intended
vided to pay this differential in lieu of the cost of living
allowance and the post differential to employees recruited outside
the area. This would he important should the prevailing rate
differential be hi;,,;her than the total of the allowable cost of
living allowance an:' any post differential, in order to avoid dis-
satisfaction and resentment on the part of employees recruited
from outside the area.
Sec. 321. This section continues existing authority for the territorial
cost differential, including the restriction to a maximum rate of
Approved For Release 200110310' : CIA-RDP59-00224A000100690002-8
 Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8 - 12 -
25%, provided by section 207 of the Independent Offices Appropria-
as amended. It will be payable only to persons
recruited outside the territorial area, excluding those who are
normally residents of the area.
Sec. 331. This section authorizes territorial cost of living allowances in
territorial areas to offset differences from the cost of living
in !Vashington, D. C. The new authority corresponds to the existing
territorial coxt of living provisions of section 207 of the In-
dependent Offices Appropriation Act, 1949, as amended. The prin-
cipal change is the elimination of a ceiling on the cost of living
allowance. Such allowance rates will be governed by measurable
differences between the cost of living in the territorial area and
in the District of Columbia. It will be payable only to employees
recruited outside the territorial area, except as authorized in
section 341.
Sec. 341. This section provides that until regulations are issued under this
title the status quo with regard to payment of allowances is main-
tained in territorial areas. As of the effective date of such
regulations employees recruited locally who are receiving a cost-of-
living allowance will, subject to certain modifications, continue
to be eligible for the allowances provided by such regulations for
employees recruited outside the territorial area, for a period of
one year, provided they are continuously employed in the same area.
However, such employees would not be entitled to any increase in
allowances prescribed by the regulations and, further, the amount
payable as allowances would be decreased by any amounts received
as increases in basic compensation rates. In territorial areas
Approved For Release 2001103/4th@1ffi@Dft59ft22+VIIOlFQf900 qe differential is payable, an employee
 Approved For Release 2001103101: CIA-RDP59-00224A000100690002-8
- 13 -
covered by this section would continue to receive the cost of
living allowance during the one year period in lieu of the prevail-
ing rate differential unless the differential to which he would be
entitled at least equals the amount of his cost of living allowance,
in which case he would be converted to the prevailing rate schedule.
TITLE IV - 'ISCELLANEOUS PROVISIONS
This title contains various technical provisions normally attaching to
enabling legislation of this type. Provisions are included for authorizing
appropriations, repealing specified statutes, maintaining rights and lia-
bilities under repealed statutes, and continuance in force of existing rules,
regulations, and executive orders until regulations ntder this Act rescind,
modify, or supersede them.