HOSTAGE RELIEF ACT OF 1980

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000300030007-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 20
• Document Creation Date: December 20, 2016
• Document Release Date: May 21, 2007
• Sequence Number: 7
• Publication Date: September 19, 1980
• Content Type: OPEN SOURCE

Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
96TH CONGRESS HOUSE OF REPRESENTATIVES 5 REPT. 96-
2d Session j 1349 Part 1
LEGISLATIK. tiS
FILECOPY
Mr. HANLEY, from the Committee on Post Office and Civil Service,
submitted the following
REPORT
[To accompany H.R. 7085 which on April 17, 1980, was referred jointly to the
Committee on Foreign Affairs, the Committee on Post Office and Civil
Service, and the Committee on Ways and Means]
[Including cost estimate of the Congressional Budget Office]
The Committee on Post Office and Civil Service, to whom was re-
ferred the bill (H.R. 7085) to amend title 5 of the United States Code
and the Internal Revenue Code of 1954 to provide certain benefits to
individuals held hostage in Iran and to similarly situated individuals,
having considered the same, report favorably thereon with amend-
ments and recommend that the bill as amended do pass.
The amendments (stated in terms of the page and line numbers of
the introduced bill) are as follows :
Strike out title I (beginning on line 1 of page 2 and ending on
line 12 of page 6) and insert in lieu thereof the following :
TITLE I-SPECIAL PERSONNEL BENEFITS
SEC. 101. For purposes of this title-
(1) The term "American hostage" means any individ-
ual who, while-
(A) in the civil service or the uniformed services
of the United States, or
(B) a citizen or resident alien of the United
States rendering personal service to the United
states abroad similar to the service of a civil of-
ficer or employee of the United States (as de-
termined by the Secretary of State).
is placed in a captive status during the hostage period.
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
(2) The term "hostage period" means the period be-
ginning on November 4, 1979, and ending on the date
the President specifies, by Executive order, as the date
on which all citizens and resident aliens of the United
States who were placed in a captive status due to the
seizure of the United States Embassy in Iran have been
returned to the United States or otherwise accounted
for.
(3) The term "family member", when used with re-
spect to any American hostage, means-
(A) any dependent (as defined in section 5561 of
title 5, United States Code) of such hostage; and
(B) any member of the hostage's family or house-
hold (as determined under regulations which the
Secretary of State shall prescribe).
(4) The term "captive status" means a missing status
arising. because of a hostile action abroad-
(A) which is directed against the United States
during the hostage period ; and
(B) which is identified by the Secretary of State
in the Federal Register.
(5) The term "missing status"-
(A) in the case of employees, has the meaning
given it in section 5561(5) of title 5, United States
Code;
(B) in the case of members of the uniformed serv-
ices, has the. meaning given it in section 551(2) of
title 37, United States Code; and
(C) in the case of other individuals, has a similar
meaning as that provided under such section, as
determined by the Secretary of State.
(6) The terms "pay and allowances", "employee", and
"agency" have the meanings given to such terms in sec-
tion 5561 of title 5, United States Code, and the term
"civil service", "uniformed services", and "armed forces"
have the meanings given to such terms in section 2101 of
such title 5.
PAY AND ALLOWANCES MAY BE ALLOWED TO SPECIAL SAVINGS
FUND
SEC. 102. (a) The Secretary of the Treasury shall establish
a savings fund to which the head of an agency may allot all
or any portion of the pay and allowances of any American
hostages which are for pay periods during which the Ameri-
can hostage is in a captive status and which are not subject
to an allotment under section 5563 of title 5, United States
Code, under section 553 of title 37, United States Code, or
under any other provision of law.
(5) Amounts so allotted to the savings fund shall bear
interest at a rate which, for any calendar quarter, shall be
equal to the average rate paid on United States Treasury bills
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
3
with three-month maturities issued during the preceding cal-
endar quarter. Such interest shall be compounded quarterly.
(c) Amounts may be allotted to the savings fund from pay
and allowances for any pay period ending after November 4,
1979, and before the establishment of the savings fund. Inter-
est on amounts allotted from the pay and allowances for any
such pay period shall be calculated as if the allotment had
occurred at the end of the pay period.
(d) Amounts in the savings fund credited to any American
hostage shall be considered as pay and allowances for pur-
poses of section 5563 of title 5, United States Code, (or in the
case of a member of the uniformed services, for purposes of
section 553 of title 37, United States Code) and shall other-
wise be subject to withdrawal under procedures which the
Secretary of the Treasury shall establish.
SEC. 103. Under regulations prescribed by the President, the
head of an agency may pay (by advancement or reimburse-
ment) any individual who is an American hostage, or any
family member of such an individual, for medical and health
care, and other expenses related to such care, to the extent
such care-
(1) is incident to that individual being an American
hostage; and
(2) is not covered by insurance.
SEC. 104. (a) Under regulations prescribed by the Presi-
dent, the head of an agency shall pay (by advancement or
reimbursement) a spouse or child of an American hostage for
expenses incurred for subsistence, tuition, fees, supplies,
books, and equipment, and other educational expenses, while
attending an educational or training institution. Payment
shall not exceed the maximum amount authorized to be paid
with respect to missing members of the armed forces under
section 1732 of title 38, United States Code.
(b) (1) Except as provided in paragraph (2), payments
shall be available under this section for a spouse or child of
an individual who is an American hostage for education or
training which occurs-
(A) after the ninetieth day after the date the individ-
ual is placed in a captive status, and
(B) on or before-
(i) the end of the semester or quarter (as appro-
priate during which the individual ceases to be in
a captive status, or
(ii) if the educational or training institution is
not operated on a semester or quarter system, the
earlier of the end of the course during which the
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
individual ceases to be in such captive status or the
end of the 12-week period following the date the in-
dividual ceases to be in such status.
In order to respond to special circumstances, the President
may specify a date for purposes of cessation of assistance un-
der subparagraph (B) which is later than the date which
would otherwise apply under subparagraph (B).
(2) In the event an American hostage dies and the death
is, incident to that individual being an American hostage, pay-
ents shall be available under this section for a spouse or
child of an individual who is an American hostage for educa-
tion or training which occurs after the date of death.
(3) In no event may assistance be provided under this sec-
tion for any spouse or child of an American hostage for a
period in excess of 45 months (or the equivalent thereof in
part-time education or training).
(c) Assistance under this section shall be discontinued for
any spouse or child if such individual's conduct or progress
is unsatisfactory under standards consistent with those estab-
lished pursuant to section 1724 of title 38, United States Code.
(d) The preceding provisions of this section shall not apply
with respect to any spouse or child who is eligible for assist-
ance under chapter 35 of title 38, -United States Code.
(e) Regulations issued by the President under this section
shall provide that the program under this section be consist-
ent with the assistance program under chapters 35 and 36 of
title 38, United States Code.
EXTENSION OF APPLICABILITY OF CERTAIN BENEFITS OF THE
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940
SEC. 105. (a) Under regulations prescribed by the Presi-
dent, an American hostage is entitled to the benefits provided
by the Soldiers' and Sailors' Civil Relief Act of 1940 (50
U.S.C. App. 501 et seq.), including the benefits provided by
section 701 (50 U.S.C. App. 591) but excluding the benefits
provided by sections 104, 105, 106, 400 through 408, 501
through 512, and 514 (50 U.S.C. App. 514, 515, 516, 540
through 548,561 through 572, and 574).
(b) In applying such Act for purposes of this section-
(1) the term "person in the military service" is deemed
to include any such American hostage ;
(2) the term "period of military service" is deemed to
include the period during which such American hostage
is in a captive status; and
(3) references to the Secretary of the Army, the Sec-
retary of the Navy, the Adjutant General of the Army,
The Chief of Naval Personnel, and the Commandant,
United States Marine Corps, are deemed to be references
to the Secretary of State.
(c) The preceding provisions of this section shall not apply
with respect to any American hostage covered by such pro-
visions of the Soldiers' and Sailors' Civil Relief Act of 1940
by reason of being in the armed forces.
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
5
SEC. 106. Notwithstanding. the requirements of section
101(1) , for purposes of this title, Richard Starr of Edmonds,
Washington, who, as a Peace Corps volunteer, was held cap-
tive in Colombia and released on or about February 10, 1980,
shall be held,and considered to be an American hostage placed
in a captive status on November 4,1979.
SEC. 107. The preceding provisions of this title shall take
effect as of November 4, 1979.
Amend the title so as to read :
A bill to provide certain benefits to individuals held hostage in Iran and to
similarly situated individuals.
The committee amendment substitutes an entirely new text for the
text of title I of the introduced bill. The explanation of the provisions
of the committee amendment is contained in the explanation of the bill
as set forth below in this report. The title of the bill is amended to re-
flect the action of the committee.
PURPOSE
The purpose of H.R. 7085 is to provide certain benefits to individuals
held hostage in Iran and to similarly situated individuals.
H.R. 7085 was introduced on April 17, 1980, by Representative
Dante B. Fascell and was subsequently cosponsored by 58 Members.
On August 27, 1980, the Committee on Post Office and Civil Service,
by voice vote, ordered H.R. 7085, as amended, favorably reported.
H.R. 7085 was jointly referred to the Committees on Post Office
and Civil Service, Ways and Means, and Foreign Affairs. Under
clause (1) (o) of House rule X the Committee on Post Office and Civil
Service has jurisdiction over all "Federal Civil Service". By law, the
"civil service" consists of all appointive positions in the executive,
legislative, and judicial branches of the Government, except posi-
tions in the uniformed services (5 U.S.C. 2101), and thus includes the
competitive service and employment excepted from the competitive
service such as the foreign service. In the course of its consideration
and after consultation with the Chairman of the Committee on Armed
Services which has jurisdiction over the uniformed services, the com-
mittee expanded the coverage of certain provisions of the bill to in-
clude members of the military. This was done to ensure that civilian
and military hostages would be entitled to the same benefits and with
full recognition that jurisdiction with respect to the military rests with
the other committee.
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
With respect to title IT, the subject matter of which is within the
jurisdiction of the Committee on Ways and Means, the committee took
no action.
While recognizing that the safe return of the Americans held
hostage in Iran is uppermost in the hearts and minds of their families
and the Nation, the committee believes that the Hostage Relief Act of
1980 will alleviate, to the extent possible, the financial burdens borne
by the families. The committee also believes that enactment of this
legislation will demonstrate to the hostages and to their families that
the Government shares their concerns and is interested in their welfare.
The major provisions of title I of the introduced bill :
-established an interest-bearing salary savings fund for civilian
employees;
-authorized up to $25,000 per year for reimbursement for medical
expenses of a civilian employee and the employee's dependents;
-authorized reimbursement for spouses who incur educational and
training related expenses; and
-authorized State and Federal courts to stay certain civil actions
affecting property rights.
H.R. 7085, as reported, reflects the general intent of the introduced
bill but enlarges its scope in line with recommendations of the Admin-
istration. In this regard, the reported bill :
-eliminates the $25,000 limit on reimbursement for medical
expenses;
-authorizes medical expense reimbursements for "family members"
as well as for dependents;
-extends education reimbursement benefits to children as well as to
spouses;
-includes military personnel in provisions relating to the savings
program and medical reimbursements ; and
-limits application of the bill's provisions to the current hostage
situation.
In addition to the Administration's' recommendations, other changes
made by the committee :
(1) permit funds to be withdrawn from the savings fund to
meet unexpected needs of the hostages or the families;
(2) provide that interest be paid retroactively on the salaries
held in personnel offices prior to the establishment of the savings
fund;
(3) permit extensions of eligibility for educational and train-
ing benefits under special circumstances; and
(4) permit payment of allowable expenses by either advance-
ment or reimbursement.
The reported bill alters the scope and coverage of the introduced
bill in three significant ways. First, it is a temporary measure, not
permanent legislation, and expires at the end of the current Iranian
hostage situation. Second. it covers the military as well as the civilian
hostages. Third, it extends certain benefits not only to the hostages'
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
7
spouses and children, but also to other family or household members.
For the most part, these changes are reflected in the reported bill's
controlling definitions which differ substantially from those in the
introduced bill. Eligibility for the intended benefits of the reported
bill hinges on the definitions of "American hostage" and "family
member". These terms replace and expand upon the introduced bill's
reference to employees, spouses, and dependents.
American hostage who is in a captive status
As defined in the reported bill, the terms "American hostage" and
"captive status" do two things : one, they expressly include the military
personnel who are among the Americans held hostage in Iran; and
two, they limit the legislation's application to the current Iranian
situation.
The committee made these changes in the introduced bill because
it agrees with the Administration that permanent legislation should
await completion of a thorough and independent study of appropriate
measures to be taken when American citizens are taken hostage in a
hostile action abroad. It also agrees with the Administration that
similarly situated military personnel should receive the same benefits
extended to the civilian hostages. H.R. 7085, as reported, is a tempo-
rary measure designed to meet the immediate needs of the hostages and
their family members.
Family member
By reference to an existing definition of "dependent" (5 U.S.C.
5561(3) ), the reported bill includes wives, unmarried children under
21 (including step .children or adopted children), dependent parents,
and other qualifying individuals under the definition of "family
member." Subject to regulations to be prescribed by the Secretary of
State, it also includes members of the hostages' families or house-
holds who are not technically "dependent."
The committee's use of the term "family member" is a deliberate
expansion of the coverage of the introduced bill, which was limited to
spouses and dependents. It reflects an Administration suggestion that
certain benefits should be available to individuals who might not be de-
pendent on a hostage for financial support, but who have nevertheless
suffered physical, mental, or emotion distress because of their close
relationship, to the hostage. The committee agrees with the Adminis-
tration and believes that the term "family member" allows the greatest
flexibility in identifying those individuals entitled to the legislation's
intended benefits.
Interest-bearing savings fund
Under existing law, there is no authority to pay interest on the por-.
tion of 'a missing employee's salary which is not otherwise allotted for
a specific purpose. H.R. 7085, as introduced, would authorize the Sec-
retary of the Treasury to establish an interest-bearing savings fund
to which agency heads could deposit all or part of the salaries due
employees in a missing status.
The committee believes that an interest-bearing savings fund pro-
vides a safe and appropriate place to hold salaries due the American
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
8
hostages. Consequently, the reported bill includes a provision estab-
lishing an interest-bearing salary savings fund, but makes two changes
the committee believes significantly improve the original savings fund
provisions. First, it authorizes retroactive interest payments on
amounts attributable to pay and allowances for pay periods ending
after November 4, 1979, and before the actual establishment of the sav-
ings fund. The committee believes this provision maximizes the eco-
nomic benefit of the savings fund for the hostages. Second, the reported
bill allows an agency head to make allotments from the savings fund
under appropriate circumstances. The committee believes this author-
ity allows an agency head, acting in the best interests of a hostage,
to reach funds that otherwise would have been "locked in" under the
provisions of the introduced bill.
Education and training benefits
The introduced bill entitled the spouse of a civilian hostage who is
held more than 90 days to the same reimbursement for education and
training-related expenses as is currently authorized for spouses of mili-
tary personnel who are in a missing status. The Administration sug-
gested that education and training benefits also be provided to the chil-
dren of the civilian hostages, as is currently done for children of the
military.
The reported bill incorporates the Administration's suggestion and
thus equalizes civilian and military education and training benefits.
The reported bill further provides that payments for allowable ex-
penses may be made by advancement or reimbursement and specifies
that the President, under special circumstances, may authorize benefits
beyond the end of the semester or quarter during which the hostages
are released.
Medical and other related expenses
The introduced bill authorized agency heads to reimburse employees
in a captive status or their dependents for necessary travel, rest and
recuperation, private medical care, or other expenses related to the
hostage ordeal. The total amount available to the employee, including
his or her dependents, was limited to $25,000 in any calendar year.
At the suggestion of the Administration, the committee made three
major changes in this provision. First, it removed the annual $25,000
ceiling on reimbursement of allowable expenses. Second, it restricted
allowable expenses to those related to medical and health care. Third,
it expanded eligibility from the introduced bill's "dependents" to those
within the reported bill's definition of "family member". The reported
bill also allows payment of medical and health-related expenses by
advancement or reimbursement.
The committee believes these changes represent the best approach
to meeting the medical and healthcare needs of the hostages and their
family members.
Civil actions
H.R. 7085 as introduced, extended the applicability of certain bene-
fits of the Soldiers' and Sailors' Civil Relief Act of 1940 to any Amer-
ican citizen in a missing status or cut off from regular postal com-
munications as a result of hostile action against the United States
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
9
abroad. The Act generally permits a court to stay certain civil actions
until the individual is in a position to respond. In keeping with the
reported bill's status as a temporary measure, extension of the Soldiers'
and Sailors' Act's benefits is limited to those qualifying as "American
hostages".
The reported bill also provides that for purposes of this legislation,
Richard Starr of Edmonds, Washington, is deemed an American hos-
tage who entered into a captive status on or after November 4, 1979.
Starr was kidnapped by communist guerrillas on February 14, 1977,
while serving as a Peace Corps volunteer in Colombia. He was released
on or about February 10, 1980. Without this provision, the fact that
Starrs initial capture predates November 4, 1979 (the day the bill iden-
tifies as the beginning of the hostage period would preclude his eligi-
bility for the special personnel benefits.
According to a Peace Corps spokesman, Starr, 32, is now a research
biologist at a national park in the Pacific Northwest. It is the commit-
tee's intent that Mr. Starr be entitled to the benefits of H.R. 7085.
The committee amendment strikes out all of title I of the introduced
bill arid inserts in lieu thereof a new text. This substitute text is ex-
plained below.
Section 101-Definitions
Section 101 defines certain terms for purposes of title I.
Paragraph (1) defines the term "American hostage". This is a key
term since it establishes the class of individuals who will be eligible
for benefits under the bill. "American hostage" is defined to mean
any individual who while (A) in the civil service or the uniformed
services of the United States (as those terms are defined in section
2101 of title 5, United States Code), or (B) a citizen or resident
alien of the United States rendering personal service to the United
States abroad similar to the service of a civil officer or employee of
the United States (as determined by the Secretary of State), is
placed in a captive status during the hostage period. The "civil
service" consists of "all appointive positions in the executive, judi-
cial, and legislative branches . . ." and "uniformed services" means
the Army, Navy, Air Force, Marine Corps, Coast Guard, the com-
missioned corps of the Public Health Service, and the commissioned
corps of the National Oceanic and Atmospheric Administration (5
U.S.C. 2101). Paragraph (B), relating to individuals rendering per-
sonal service to the United States abroad, covers, for example, indi-
viduals employed by contract to perform services for the Govern-
ment such as educational instruction.
Paragraph (2) defines "family member" and provides that when
used with respect to any American hostage the term means (A) any
dependent (as defined in section 5561 of title 5, United States Code)
of a hostage, and (B) any member of the hostage's family or house-
hold (as determined under regulations prescribed by the Secretary
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
10
of State). The term "family member" is important since it estab-
lishes the class of individuals who will qualify for reimbursement
for medical expenses under section 103 of the bill. In amending the
bill, the committee chose to define the term broadly to ensure that
individuals in need of medical assistance and reimbursements there-
for contemplated under section 103 would not be denied reimburse-
ment because they were not technically "dependent" on the hostage,
or the "primary next of kin". The Secretary is granted discretion
in determining in any instance who qualifies as a `family member".
Paragraph (3) (A) defines "captive status" to mean a missing
status arising because of a hostile action abroad which is directed
against the United States during the hostage period.
Paragraph (3) (B) defines "missing status" by cross-reference to
appropriate definitions relating to civilian employees (5 U.S.C. 5561
(5)) and members of the military (37 U.S.C. 551(2) ). With respect to
other individuals, the Secretary is given the authority to prescribe
what constitutes a "missing status". Section 5561 of title 5 definies
"missing status" as : (A) missing; (B) missing in action; (C) interned
in a foreign country; (D) captured, beleaguered, or besieged by at
hostile force; or (D) detained in a foreign country unwillingly. An
employee determined to be absent from his post of duty without au-
thority is not deemed to be in a missing status. Section 551(2) of title
37 is virtually identical.
Paragraph (4) defines other terms used in the bill by cross-refer-
ence to definitions contained in title 5, United States Code. The terms
"pay and allowances", "employee", and "agency" are given the mean-
ings in section 5561 of title 5, and the terms "civil service", "uniformed
services", and "armed forces" are given the meanings in section 2101
of title 5.
Section 10.-Savings fund
Section 102 (a) authorizes the Secretary of the Treasury to establish
a savings fund to which the head of an agency may allot all or any
portion of pay and allowances of an American hostage which are for
pay periods during which the American hostage is in a captive status.
Allotments which are, or may be, in effect under section 5563 of title
5, section 553 of title 37, or any other provision of law, will be honored,
but funds not subject to such an allotment may be paid into the! sav-
ings fund.
Section 102(b) provides that amounts allotted to the savings fund
shall bear interest at a rate which, for any calendar quarter, shall be
equal to the average rate paid on United States Treasury bills with
three-month maturities issued during the preceding calendar quarter.
The interest compounds quarterly.
Section 102 (c) provides for the allotment to the savings fund or pay
and allowances due an American hostage prior to the establishment
of the savings fund. It further provides that interest on these amounts
shall be calculated as if the allotment had occurred at the end of the
applicable pay period, and thus provides for retroactive interest
payments.
Section 102(d) provides that amounts in the savings fund credited
to any American hostage' shall be considered as pay and allowances
for purposes of section 5563 of title 5 (or in the case of a member of
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
11
the uniformed services, for purposes of section 553 of title 37), and
shall otherwise be subject to withdrawal under procedures which the
Secretary of the Treasury shall establish. Sections 5563 of title 5 and
553 of title 37 authorize an agency head to make allotments for
various purposes when an employee or member of the uniformed forces
is in a missing status.
Section 103-Medical and health care and related expenses
Section 103 provides that under regulations prescribed by the Presi-
dent, the head of an agency may pay (by advancement or reimburse-
ment) any individual who is an American hostage, or a family member
of an American hostage, for medical and health care, and other ex-
penses related to such care, to the extent the care is (1) incident to that
individual being an American hostage, and (2) not covered by
insurance.
Section 104-Education and training
Section 104 is intended to provide educational and training benefits
to spouses and children of American hostages. The benefits are in-
tended to be equivalent to those provided for families of missing mem-
bers of the armed forces under chapter 35 of title 38, United States
Code.
Section 104 (a) provides that under regulations prescribed by the
President, the head of an agency shall pay (by advancement or reim-
bursement) a spouse or child of an American hostage for expenses
incurred for subsistence, tuition, fees, supplies, books, equipment, and
other educational expenses while attending an educational or training
institution. Payment shall not exceed the maximum amount authorized
to be paid under section 1732 of title 38, relating to payments to fam-
ilies of missing members of the armed forces.
Section 104(b) prescribes the periods of education and training
for which payments may be made. Paragraph (1) provides that pay-
ment may be made for education and training which occurs (A)
after the ninetieth day after the date the individual is placed in a cap-
tive status, and (B) on or before (i) the end of the semester or quar-
ter (as appropriate) during which the individual ceases to be in a
captive status or (ii) if the eductional or training institution is not
operated on a semester or quarter system, the earlier of the end of the
course during which the individual ceases to be in a captive status
or the end of the 12: week period following the date the individual
ceases to be in that status. The President is authorized to extend the
period if special circumstances such as continued incapacity of the
American hostage, justify an extension.
Paragraph (2) provides that in the event an American hostage dies
and the death is incident to that individual being an American hos-
tage, payments may be made for education and training which occur
after the date of death.
Paragraph (3) provides that in no event may educational assistance
be provided for a period in excess of 45-months (or the equivalent
thereof in part-time training).
Section 104(c) provides that educational assistance shall be dis-
continued if the conduct or educational progress of the individual
receiving the asssistance is unsatisfactory under standards consistent
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-000038000300030007-1
12
with those established pursuant to section 1724 of title 38, United
States Code, relating to discontinuance for unsatisfactory progress.
Section 104(d) provides that the preceding provisions of section
104 shall not apply with respect to any individual who is eligible
for educational assistance under chapter 35 of title 38, United 'States
Code, thus preventing double coverage for family members of mem-
bers of the armed forces who currently are eligible for benefits under
the title 38 provisions.
Section 104(e) provides that regulations prescribed by the Presi-
dent under section 104 shall provide that the educational assistance
program under that section be consistent with the educational assist-
ance program under chapters 35 and 36 of title 38, United States Code.
This recognizes that section 104 is intended to provide the same educa-
tional assistance benefits for families of civilian American hostages
as are currently provided to families of members of the military.
Section 105-Extension of applicability of certain benefits of the Sol-
diers' and Sailors' Civil Relief Act of 191x0
Section 105 provides that under regulations prescribed by the Presi-
dent, an American hostage is entitled to the benefits under certain
provisions of the Soldiers' and Sailors' Civil Relief Act of 1940 (50
U.S.C. App. 501 et seq.). 'Sections 104, 105, 106, 400 through 408, 501
through 512, and 514 are specifically made inapplicable.
Section 105(b) provides, in essence, for the substitution of certain
terms for purposes of applying the Soldiers' and Sailors' Civil Relief
Act to the American hostages. Section 105 (c) provides that the pre-
ceding provisions of section 105 shall not apply with respect to any
American hostage who is already covered by the Act by reason of
being in the armed forces. This precludes double coverage for mem-
bers of the military.
Section 106-Applicability to Colombian hostage
Section 106 provides that notwithstanding the requirements of
section 101 (1), for purposes of the Act, Richard Starr of Edmonds,
Washington, who as a Peace Corps volunteer was held captive in
Colombia and released on or about February 10, 1980, shall be held
and considered to be an American hostage placed in a captive or
missing status on November 4, 1979. Since Mr. Starr was taken hos-
tage prior to November 4, 1979, he technically does not fall within
the definition of "American hostage" in section 101(1) and, absent
special provision, would not be eligible for the benefits provided by
the bill. Section 106 ensures that eligibility.
Section 107-Effective date
Section 107 provides that the preceding provisions of title I shall
take effect as of November 4, 1979.
TITLE H-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954
The committee amendment does not amend title II of the bill
which is within the jurisdiction of the Committee on Ways and
Means.
dFer Release 2007!05!21 sIA-PflPR~; nnnn-ARnnn-innn-innm 1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
13
COST
Set forth below is the cost estimate of the Congressional Budget
Office with respect to title I of H.R. 7085, which the committee adopts
for the purpose of clause 7 of House rule XIII.
U.S. CONGRESS,
CONGRESSIONAL BUDGET OFFICE,
Washington, D.C., September 8,1980.
Hon. JAMES M. HANLEY,
Chairman, Post O ffiee and (livi7, Rer,iee Committee,
U.S. House of Representatives, Washington, D.C.
DEAR MR. CHAIRMAN : Pursuant to Section 403 of the Congres-
sional Budget Act of 1974, the Congressional Budget Office has pre-
pared the attached cost estimate for H.R. 7085, the Hostage Relief
Act of 1980.
Should the committee so desire, we would be pleased to provide
further detail on the attached cost estimate.
Sincerely,
ROBERT R. REISCHAUER
(For Alice M. Rivlin, Director).
CONGRESSIONAL BUDGET OFFICES-COST ESTIMATE
1. Bill number : H.R. 7085.
2. Bill title : Hostage Relief Act of 1980.
3. Bill status: As ordered reported by the House Post Office and
Civil Service Committee on August 27,1980.
4. Bill purpose: H.R. 8075 authorizes pay, educational, and medical
benefits for the 51 hostages still in Iran, the thirteen hostages released
earlier, the six individuals who sought refuge in the Canadian Em-
bassy, and two Peace Corps employees and Ambassador Asencio who
were taken hostage in other countries.
Title I authorizes :
-the establishment of an interest-bearing savings fund to which
the pay and allowances of a hostage may be alloted during the
period of captivity ;
-the payment of medical benefits to a hostage and his or her family
members, to the extent that the medical care is incident to the
individual being a hostage and the care is not covered by
insurance;
-the payment of educational benefits for the spouse or child of a
hostage during the period of captivity (beginning after the nine-
tieth day of captivity and not to exceed a total of forty-five
months) ; and
-the extension of certain provisions of the Soldier's and Sailors'
Civil Relief Act to all the hostages.
Title II amends the Internal Revenue Code to provide income tax
relief to the hostages. A cost estimate for Title II will be provided to
the House Ways and Means Committee when it reports the bill.
5. Cost estimate: The costs of Title I of.H.R. 7085 are estimated to
total less than $500,000 in fiscal year 1981. This total represents costs
incurred during fiscal year 1980 which would outlay in fiscal year 1981
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP-85-00003R000300030007-1
14
plus the potential cost if the hostages were held for all of fiscal year
1981.
6. Basis of estimate :
Savings Fund.-The savings fund is not expected to result in addi-
tional costs. The salaries deposited into the fund reduce by a corre-
sponding amount the money the U.S. Treasury must borrow daily
and thus the interest it must pay. This amount of interest is estimated
to be approximately equal to the interest that the U.S. Treasury. will
pay into the savings fund, resulting in no net additional cost.
Medical Care
Function 050.-The medical care of military personnel is available
at no charge in military facilities. The medical care of dependents of
military personnel is available at military facilities or through the
CHAMPUS program. It is assumed that if dependents of hostages
require medical care, it will be obtained in military facilities, result-
ing in virtually no additional cost. The Department of Defense esti-
mates the cost of medical care for non-dependent family members of
military personnel to be approximately $40,000.
Function 150.-The Department of State estimates eligible medical
costs for the Foreign Service hostages and their family members to be
approximately $350,000. This assumes that approximately 45 of the
eligible people will require extensive psychiatric care for 100 weeks
at $60 per week, and approximately $100,000 will be required for gen-
eral health care and medical travel relating to the hostage situation.
The two Peace Corps hostages and their family members have in-
curred no eligible medical costs.
Educational Benefits
Function 050.-No additional educational assistance costs occur for
military personnel because the dependents of military personnel who
are missing or held hostage are already eligible for educational benefits.
Function 150.-The Department of State estimate that 14 indivi-
duals will be eligible for educational benefits at a total cost of approx-
imately $80,000. The two Peace Corps hostages have no dependents or
spouses and thus will incur no additional cost.
Other Provisions
Function 050.-The bill extends certain provisions of the Soldiers'
and Sailors' Civil Relief Act to the hostages. This Act exempts the
hostages from certain civil liabilities during their captivity. No ad-
ditional costs are incurred for military personnel since they are already
covered by the Act.
Function 150.-The extension of these provisions to the Foreign
Service and Peace Corps hostages will incur no additional cost.
7. Estimate comparison : None.
8. Previous GBO estimate : None.
9. Estimate prepared by : Linda Gard, Alice Hughey.
10. Estimate approved by :
C. G. NUCKOLS
(For James L. Blum, Assistant Director for Budget Analysis).
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
15
Under the rules of the House, the Committee on Post Office and
Civil Service is vested with legislative and oversight jurisdiction over
the subject matter of title I of H.R. 7085, and as a result of its con-
sideration has concluded that there is ample justification for amend-
ing the law in the manner provided under H.R. 7085.
The committee received no report of oversight findings or recom-
mendations from the Committee on Government Operations pursuant
to clause 4 (c) (2) of House rule X.
Pursuant to clause 2(1) (4) of House rule XI, the committee has
concluded that the enactment of H.R. 7085 will have no inflationary
impact on the national economy.
U.S. HOUSE OF REPRESENTATIVES,
COMMITTEE ON ARMED SERVICES,
Washington, D.C., September 2,1980.
Hon. JAMES A. HANLEY,
Chairman, Post Office and Civil Service Committee,
House of Representatives, Washington, D.C.
DEAR MR. CHAIRMAN : This responds to your letter of August 26,
1980, concerning the inclusion of military personnel in the provisions
of the bill, H.R. 7085, the Hostage Relief Act of 1980.
I believe that benefits to be made available to the civilian hostages
in Iran should apply equally to American service members. H.R. 7085
is structured after the benefits available to service members in a missing
or prisoner-of-war status during Vietnam and their families. No au-
thority exists today for providing those benefits for service members
entering that status after the cessation of that period of conflict.
Although the Committee on Armed Services has jurisdiction over all
pay and benefits for members of the military, in order to avoid delays
in action on this bill, I would have no objection to the extension of these
benefits to service members in this particular circumstance.
I am pleased that the authority is temporary; I would hope that the
report language would direct the Executive branch to establish an
interagency committee to evaluate the viability of future permanent
legislation.
If our staffs can work together on the final form of the legislation,
I believe we can avoid the necessity of sequential referral.
I appreciate your efforts in this area and your contacting this com-
mittee regarding this matter.
Sincerely,
MELVIN PRICE, Chairman.
Set forth below are the views of the Department of State and the
International Communication Agency.
 Approved For Release 2007/05/21 : CIA-RDP85-00003R000300030007-1
16
DEPARTMENT OF STATE,
Washington, D.C., August 26,1980.
Hon. JAMES M. HANI.EY,
Chairman, Commuzttee on Post Office and Civil Service,
House of Representatives.
DEAR MR. CHAIRMAN : In response to your request of May 5, we sub-
mit the following report on H.R. 7085, the "Hostage Relief Act of
1980." The Administration strongly supports this bill because, with
certain amendments, it would provide appropriate relief to individ-
uals held hostage in a foreign land as a result of a hostile action against
the United States.
Despite the best efforts of our Government, 52 American hostages
are still being held in Iran. They have been incarcerated cruelly and
unjustly since last November 4. They and their families have suffered
extreme mental anguish. We must act now to alleviate-to the extent
that we can-the burdens of the hostages and their families, and to be
certain, that upon their return home, all necessary assistance' is
provided.
We believe H.R. 7085 goes a long way toward meeting those objec-
tives for Foreign Service and Federal civilian employees. The bill does
not cover the 21 members of the Armed Forces who are among the hos-
tages. We recommend strongly that the bill be amended to extend the
same provisions to members of the Armed Forces.
H.R. 7085 is designed as permanent legislation applicable to all
future employees taken hostage in the attacks against the U.S. as well
as to those now in Iran and to those victimized by other attacks against
the U.S. since our Tehran embassy was overrun November 4, 1979.
The Administration would prefer to have this bill enacted as a tem-
porary measure, to expire upon release of the hostages in Iran, pend-
ing completion of a thorough and independent study of the problems
drawing on the experiences of the hostages. We are therefore enclosing
an amendment for this purpose.
Title I of the bill would amend the Missing Persons Act as codi-
fied in chapter 55, title 5, U.S. Code, by adding several new sections.
Proposed new section 5569 (a) of title 5 would authorize a savings
program to which agency heads could allot salaries of the hostages,
or the portion of salaries not allotted for the support of dependents.
Interest would be paid at Treasury bill interest rates. This would
provide an appropriate and safe savings program during the period
of captivity.
Proposed new section 5569(b) of title 5 would authorize agency
heads to reimburse employees and their dependents for reasonable ex-
penses incurred because of their ordeal, up to $25,000 per year. The
primary need here is to provide necessary medical and psychiatric care
to the hostages' families who have been placed under tremendous
psychological stress during the long incarceration of their loved ones.
Aedquate medical and psychotherapeutic help for employees can,
in most cases, be provided under existing law. Authority is needed to
provide necessary care to wives, parents and children of hostages for
illnesses or injuries which were exacerbated by or resulted from the
response of these relatives to the hostages' ordeal. We suggest that the
section be amended so that necessary care can be extended to parents
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
17
and other primary next of kin who may not be dependent on the em-
ployee for support, because they have suffered just as much as depend-
entsby the attack on the U.S. Also, we believe the provision should
be limited to reimbursements for necessary medical and related ex-
penses not otherwise reimbursed and that the $25,000 annual limitation
should be removed so that the exceptional case may be adequately
covered. We have enclosed language to accomplish these changes with
our recommended amendments.
Proposed new section 5569 (c) would authorize spouses of civilian
hostages who are held for over 90 days to attend training or educa-
tional courses with the benefits granted being equivalent to those cur-
rently authorized spouses of military personnel in a missing status.
This provision would be helpful to a spouse who wishes training to
enter or reeinter the labor market during a period of extended incar-
ceration of an employee. We propose that the section be revised to
cover dependent children of the hostages and surviving children and
spouse of an employee who dies as a result of a hostile action. This
would provide the same coverage as now authorized for military per-
sonnel being held as hostages or who die from a service-connected
cause. Language for this purpose is also included in our suggested
amendments.
Proposed section 5570 would extend the Soldier's and Sailor's Civil
Relief Act of 1940 to any U.S. citizen who is in a missing status or
cut-off from regular postal communications as a result of hostile
action against the United States abroad. This Act permits the court
to stay certain types of civil actions until an individual is restored to
a status where he or she can respond to the action in question. For
example, under this Act the court could stay a foreclosure on an em-
ployee's home for non-payment of taxes during a period of captivity.
Title II of the bill would amend the Internal Revenue Code to pro-
vide certain tax exemptions and tax deferments for civilian employees
taken hostage as a result of a hostile action against the United States.
This title would extend to civilian employees held as a hostage the
same tax exemptions granted Federal civilian employees and military
personnel interned as POWs during the Vietnam conflict, and to the
members of the crew of the U.S.S. Pueblo illegally interned in North
Korea in 1968.
The Department is pleased to endorse the tax provisions of this
bill for this group of Federal employees and to recommend that the
same provisions be extended to members of the Armed Forces who are
in like situations. It does so on a one-time basis without prejudice to
future consideration of the appropriateness of a tax exemption in
permanent hostage relief legislation.
The Department of the Treasury in its testimony on this bill before
the Foreign Affairs Committee on July 24 indicated that it had no
objections to the tax provisions and will be submitting a separate report
to you on this subject. Its report will include an estimate of the revenue
loss to be expected if the bill is enacted.
For purposes of this bill "hostile action" is defined as "an action
abroad which is directed against the United States and occurs on or
after November 1, 1979, which the Secretary of State identifies in
a letter to the Secretary [of the Treasury] and which letter is pub-
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
18
lished in the Federal Register." This would include an attack against
a U.S. Embassy or other installation abroad. It would also include
the seizure and prolonged detention of an official or employee of the
United States whether or not the initial seizure occurred during
an attack directed against the United States.
Section 201 of the bill would extend section 112 of the Internal
Revenue Code to Federal civilian employees who are hostages. It
would exempt from gross income Federal compensation received
for each month of captivity. Section 112 now applies to members
of the Armed Forces in a combat zone. It was extended to the Fed-
eral civilian and military POWs in Vietnam, and to the military
and civilian members of the Pueblo crew.
Section 202 of the bill would extend section 692 of the Internal
Revenue Code to the survivors of any Federal employee who may
die while in active service as a result of hostile action against the
United States abroad. Such person's tax liability for the year of
death and for any prior taxable year during which such individual
was in a missing status would be abated. Any tax for such years
which has already been collected would be subject to a claim for
refund. Section 692 now applies to members of the Armed Forces
who die as a result of service in a combat zone. It covers members
of the military held as POWs in a combat zone and was extended
to military members of the crew of the U.S.S. Pueblo who died as
a result of their captivity.
Section 203 of the bill would give the spouse of any U.S. citizen
who is taken hostage the right to file a joint return as is now author-
ized for spouses of members of the uniformed services and Federal
employees who are in a missing status as a result of service in a
combat zone. (Iran, of course, has not been declared a combat zone).
Section 204 of the bill would amend section 7508 of the Internal
Revenue Code to defer, during the period of captivity, the tax
liability of any U.S. citizen held hostage. Section 7508 now covers
members of the Armed Forces and defers their tax liability while
they are serving in a combat zone. The amendment would replace
section 5568 of title 5, a similar but more limited provision.
The Administration opposes the granting of medical expense re-
imbursement, special training, and income tax exemption to hostages
who are not Federal employees or members of the military. The
scope of Federal compensation for non-Federal employee hostages
would be among the matters to be reviewed by the study to which I
previously referred. Although most provisions of the bill would be
applicable only to Federal employees as broadly defined in the bill,
sections 102(c) and 205 would make those provisions applicable to
all of the hostages in Iran including the one who is a private citizen
and who was captured because he happened to be in the Embassy
at the time of the takeover. Our list of suggested amendments would
delete those two sections.
Our estimate of the cost of title I of this bill is stated below. The
estimate is based upon the cost for civilian hostages taken captive in
attacks against the United States since November, 1979. If the bill
is amended to cover ' Members of the Armed Forces, as we strongly
recommend, there would be additional costs. We believe that these
could best be estimated by the Department of Defense.
Approved For Release 900710-519A - C'IA-RnPSr)-nnnniROO0300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
19
Reimbursement for medical expenses under proposed new section 5569
(b) of 5 U.S.C.:
First year----------------------------------------------------
$200,000
Second year--------------------------------------------------
155,000
Third through fifth year---------------------------------------
0
We did not estimate a cost for proposed new section 5569 (c) of title
5 authorizing educational assistance for spouses because we do not be-
lieve it could be implemented before all remaining hostages are re-
leased. However, should it be, the maximum monthly rate for educa-
tional assistance that would be payable under that section for a spouse
with two dependents would be $422 per month. Other sections of the
bill would have minimal or no cost.
The amendments to the bill involving title 5 recommended by the
Administration are enclosed for your consideration.
The return of the hostages to their families is the paramount con-
sideration for all of us and benefits for their suffering cannot be
viewed in the same light. Nevertheless, if legislation along the lines
of this bill, and amendments, can be passed, it would demonstrate to
the hostages and their families that a caring government and nation
share their concerns and are interested in their welfare. We strongly
recommend that you act favorably on this legislation as soon as pos-
sible during this Session of Congress.
We are advised by the Office of Management and Budget that there
is no objection from the standpoint of the Administration's program,
J. BRIAN ATwooD,
Assistant Secretary for Congressional Relations.
Enclosure : Proposed Amendments.
INTERNATIONAL COMMUNICATION AGENCY,
Washington, D.C., August 20,1980.
Hon. JAMES M. HANLEY,
Chairman, Committee on Post Office and Civil Service,
House of Representatives.
DEAR MR. CHAIRMAN : In response to your request, we are pleased
to submit our comments on the Hostage Relief Act of 1980 (H.R.
7085) introduced in the House on April 17.
We support the Hostage Relief Act of 1980, because it will provide
relief where no adequate legislative coverage now exists. One desirable
feature is that it applies to U.S. hostages anywhere and not to just
one individual group. We recommend that H.R. 7085 be amended to
cover military personnel held hostage in Iran since they would have
no coverage whatsoever without the amendment. However, we believe
all coverage under the Act should expire with the Iranian hostage
crisis, with permanent legislation to be based on the report of an
interagency committee which would be established to study and make
recommendations on the matter. Such a report would provide for
comprehensive review of all problems associated with hostages who
are Federal personnel.
Title I of the proposed Act revises 5 USC 5569 to provide, inter
alia, for the establishment of a salary savings program by the Secre-
tary of the Treasury. The Act also authorizes the President to issue
to the submission of this report.
Sincerely,
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
 Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1
20
regulations providing for the reimbursement to a hostage employee
or his or her dependent for the expenses of travel, rest and recupera-
tion, and medical care. We support reimbursement of expenses for
medical and health care on the basis of need. We do not think that
reimbursement of medical and health care should be subject to a
dollar limitation but rather to a standard of reasonableness, because
it is impossible to determine the cost of such care, particularly psy-
chiatric treatment. We do not support reimbursement for travel or
rest and recuperation because the cost of such reimbursement for
dependents, we believe, would be subject to possible abuse and exces-
sive cost to Government.
Title I also authorizes the spouse of a hostage employee to be reim-
bursed the educational or training expenses of efforts to re-enter the
job market, after the employee had been held hostage for ninety days
(5 USC 5569(c)). We support this provision but believe it should
be extended alternatively to a dependent child of the hostage. These
suggested revisions are based on similar benefits given to the spouses
and dependent children of military personnel who are taken prisoner
during hostilities.
Title I further extends the benefits of the Soldiers and Sailors Civil
Relief Act of 1940 to any U.S. citizen who is in a missing status. This
would enable the Federal and State courts to suspend certain actions
against these citizens until they are in a position to defend their
interests (5 USC 5570). We support this provision.
We support the income tax provisions contained in the bill.
Enactment of the proposed Act with the suggested revisions would
go a long way toward affirming our support, concern and care for our
employees and their families.
Sincerely,
JOHN E. REINHARDT, Director.
The provisions of the bill, as reported, within the jurisdiction of
the Committee on Post Office and Civil Service do not amend existing
law.
0
Approved For Release 2007/05/21: CIA-RDP85-00003R000300030007-1