[Senate Report 117-260]
[From the U.S. Government Publishing Office]


                                                    Calendar No. 651
117th Congress     }                                     {     Report
                                 SENATE
 2d Session        }                                     {    117-260
_______________________________________________________________________

                                     



                          CONTRACT ACT OF 2021

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 419

          TO AMEND TITLE 5, UNITED STATES CODE, TO PROVIDE FOR
     A FULL ANNUITY SUPPLEMENT FOR CERTAIN AIR TRAFFIC CONTROLLERS






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







               December 15, 2022.--Ordered to be printed  
               
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
39-010                   WASHINGTON : 2023
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
            Lena C. Chang, Director of Governmental Affairs
                    Gauri Verma, Research Assistant
                Pamela Thiessen, Minority Staff Director
            Sam J. Mulopulos, Minority Deputy Staff Director
       Cara G. Mumford, Minority Director of Governmental Affairs
                  Andrew J. Hopkins, Minority Counsel
                     Laura W. Kilbride, Chief Clerk











                                                     Calendar No. 651
117th Congress     }                                     {     Report
                                 SENATE
 2d Session        }                                     {    117-260

======================================================================



 
                          CONTRACT ACT OF 2021

                                _______
                                

               December 15, 2022.--Ordered to be printed

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 419]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 419) to amend title 
5, United States Code, to provide for a full annuity supplement 
for certain air traffic controllers, having considered the 
same, reports favorably without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                     Page
  I. Purpose and Summary..............................................  1
 II. Background and Need for the Legislation..........................  1
III. Legislative History..............................................  3
 IV. Section-by-Section Analysis of Bill, as Reported.................  3
  V. Evaluation of Regulatory Impact..................................  3
 VI. Changes in Existing Law Made by the Bill, as Reported............  4

                         I. Purpose and Summary

    S. 419, the Continuity for Operators with Necessary 
Training Required for ATC Contract Towers Act of 2021, or the 
CONTRACT Act of 2021, amends title 5, United States Code, to 
prevent certain retired Federal Aviation Administration (FAA) 
air traffic controllers, who choose to work at federal contract 
towers, from facing a reduction in their annuity payments.

              II. Background and need for the Legislation

    The Federal Contract Tower Program, established in 1982, 
allows the FAA to enter into contracts with private entities to 
carry out the operation of certain low-activity towers.\1\ 
There are currently 256 federal contract towers across 46 
states.\2\ Federal contract towers are an important part of the 
National Airspace System, as they manage around 28% of total 
air traffic control operations.\3\ The contract towers have a 
strong track record of assisting with disaster relief efforts, 
emergency medical operations, and national security 
operations.\4\
---------------------------------------------------------------------------
    \1\Federal Aviation Administration, Contract Towers (May 5, 2019) 
(www.faa.gov/newsroom/contract-towers).
    \2\Federal Aviation Administration, FAA Contract Towers (FCT) (Jan. 
2019) (www.faa.gov/sites/faa.gov/files/about/office_org/
headquarters_offices/ato/FCT_Map.pdf).
    \3\Department of Transportation Office of Inspector General, 
Contract Towers are More Cost Effective than Comparable FAA Towers and 
Have Similar Safety Records (Report No. AV2020028) (Apr. 28, 2020) 
(www.oig.dot.gov/sites/default/files/
FAA%20Contract%20Tower%20Update%20Final%20Report%5E04-28-2020.pdf).
    \4\See, e.g., Coalition of aviation groups included the American 
Association of Airport Executives and U.S. Contract Tower Association: 
AAAE/USCTA Lead Coalition in Asking Congress to Fully Fund Contract 
Towers (Feb. 19, 2020) (aaae.org/AAAE/AAAEMemberResponsive/
Press_Releases/2020/AAAE_USCTA021920.aspx).
---------------------------------------------------------------------------
    Approximately 47% of military operations at civilian 
airports occur at contract towers.\5\ An April 2020 report 
issued by the Department of Transportation (DOT) Office of 
Inspector General concluded that contract towers are cost-
effective and maintain similar safety records as non-contract 
towers.\6\
---------------------------------------------------------------------------
    \5\Id.
    \6\Department of Transportation Office of Inspector General, supra 
note 3.
---------------------------------------------------------------------------
    Air traffic controllers employed by DOT or the Department 
of Defense, are subject to mandatory retirement at age 56.\7\ 
Retired air traffic controllers are eligible to receive an 
annuity supplement until they are eligible to start receiving 
Social Security payments at age 62.\8\ However, the annuity 
supplement is reduced if the retired air traffic controller 
returns to work and earns more than the annual exempt amount 
under the Social Security earnings test which, for 2021, is 
$18,960.\9\
---------------------------------------------------------------------------
    \7\5 U.S.C. Sec. 8425(a).
    \8\Federal Aviation Administration, Benefits (www.faa.gov/jobs/
employment_information/benefits/compensation/#retire) (accessed Dec. 
16, 2021).
    \9\Social Security Administration, Exempt Amounts Under the 
Earnings Text (www.ssa.gov/oact/cola/rtea.html) (accessed Dec. 16, 
2021).
---------------------------------------------------------------------------
    National associations representing airport executives, 
contract towers, and air traffic controllers, have expressed a 
deep concern about workforce challenges across the aviation 
industry, as well as increasing staffing challenges in the 
Federal Contract Tower Program.\10\ These same organizations, 
reflecting both employer and employee perspectives, have 
jointly stated that, ``contract tower airports have benefited 
from the experience, expertise, and leadership of retired 
federal air traffic controllers who have gone on to serve at 
contract towers.''\11\
---------------------------------------------------------------------------
    \10\Letter from Bradley P. Van Dam, Executive Director of U.S. 
Contract Tower Association and Senior Vice President of Government 
Affairs at the American Association of Airport Executives, and Paul 
Rinaldi, President of the National Air Traffic Controllers Association, 
to Senators James Inhofe, Patty Murray, and Jerry Moran (Feb. 24, 
2021).
    \11\Id.
---------------------------------------------------------------------------
    Retired FAA air traffic controllers are allowed to work at 
federal contract towers, as long as they continue to meet the 
same qualification and training requirements as FAA air traffic 
controllers.\12\ However, if the air traffic controller is 
receiving an annuity supplement, it is subject to a reduction 
or elimination upon returning to work at one of these privately 
run towers, creating a financial disincentive to do so.\13\
---------------------------------------------------------------------------
    \12\Federal Aviation Administration, FAA Contract Tower Program 
(www.faa.gov/about/office_org/headquarters_offices/ato/service_units/
mission_support/faa_contract_tower_program) (accessed Dec. 16, 2021).
    \13\Office of Personnel Management, Retirement Services 
(www.opm.gov/retirement-services/fers-information/types-of-retirement/
#url=Annuity-Supplement) (accessed Dec. 16, 2021).
---------------------------------------------------------------------------
    The CONTRACT Act of 2021 will establish an exemption to 
allow retired FAA air traffic controllers who are receiving an 
annuity supplement to work at a federal contract tower without 
a reduction to the annuity supplement. A similar exemption 
already exists for retired FAA air traffic controllers who 
return to work as instructors.\14\ This bill will help address 
staffing challenges at federal contract towers across the 
country that provide a critical connection to the air 
transportation system.
---------------------------------------------------------------------------
    \14\5 U.S.C. 8421a(c).
---------------------------------------------------------------------------

                        III. Legislative History

    Senator James Inhofe (R-OK) introduced S. 419, the CONTRACT 
Act of 2021, on February 24, 2021, with 42 original cosponsors 
from both parties. Five Senators subsequently joined as 
cosponsors.
    The bill was referred to the Committee on Homeland Security 
and Governmental Affairs on February 24, 2021. The Committee 
considered S. 419 at a business meeting on November 3, 2021. 
The bill was ordered reported favorably by voice vote en bloc, 
with Senators Peters, Hassan, Sinema, Rosen, Padilla, Ossoff, 
Portman, Johnson, Lankford, Romney, Scott, and Hawley present.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section establishes the short title of the bill as the 
``Continuity for Operators with Necessary Training Required for 
ATC Contract Towers Act of 2021'' or the ``CONTRACT Act of 
2021.''

Sec. 2. Annuity supplement

    This section amends section 8421a of title 5, United States 
Code, which requires reductions to retirement annuity 
supplements if an individual's annual work earnings exceed a 
certain threshold amount. This section adds air traffic 
controllers within the contract tower program to the subsection 
regarding exemptions from such reductions. It amends the same 
subsection that includes an exemption for air traffic 
controllers who return to work as instructors.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

       VI. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *


PART III--EMPLOYEES

           *       *       *       *       *       *       *


Subpart G--Insurance and Annuities

           *       *       *       *       *       *       *


CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM

           *       *       *       *       *       *       *



Subchapter II--Basic Annuity

           *       *       *       *       *       *       *



SEC. 8421A. REDUCTIONS ON ACCOUNT OF EARNINGS FROM WORK PERFORMED WHILE 
                    ENTITILED TO AN ANNUITY SUPPLEMENT

    (a) * * *
    (b) * * *
    (c) This section shall not apply to an individual described 
in section 8412(e) during any period in which the individual, 
after separating from the service as described in that section, 
is employed [as an air traffic] as an--
          (1) air traffic control instructor, or supervisor 
        thereof, under contract with the Federal Aviation 
        Administration, including an instructor or supervisor 
        working at an on-site facility (such as an airport)[.]; 
        or
          (2) air traffic controller pursuant to a contract 
        made with the Secretary of Transportation under section 
        47124 of title 49.

           *       *       *       *       *       *       *


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