B-46726, JANUARY 13, 1945, 24 COMP. GEN. 522

B-46726: Jan 13, 1945

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IS REEMPLOYED PRIOR TO EXPIRATION OF THE PERIOD COVERED BY THE PAYMENT. TO BE PAID TO THE DESIGNATED BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE IS NOT TO BE REGARDED AS SALARY OR COMPENSATION FOR ANY PURPOSE. SUCH LUMP-SUM IS TO BE SUBJECT TO TAX WILL BE FOR DETERMINATION BY THE COMMISSIONER OF INTERNAL REVENUE IN CONNECTION WITH THE TAX RETURNS OF THE PERSON OR PERSONS RECEIVING SUCH PAYMENT. IS TO BE REGARDED AS AN AMOUNT DUE FROM THE UNITED STATES WHICH IS AVAILABLE. - UNDER THE WELL- ESTABLISHED RULE WHERE THERE ARE BOTH DEBITS AND CREDITS. SUCH PAYMENTS ARE NOT TO BE REGARDED AS SALARY OR COMPENSATION STATUTES. 1945: I HAVE YOUR LETTER OF JANUARY 5. SECTIONS 1 AND 2 OF THE SAID ACT PROVIDE AS FOLLOWS: THAT WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IS SEPARATED FROM THE SERVICE OR ELECTS TO BE PAID COMPENSATION FOR LEAVE IN ACCORDANCE WITH THE ACT OF AUGUST 1.

B-46726, JANUARY 13, 1945, 24 COMP. GEN. 522

LEAVES OF ABSENCE - LUMP-SUM PAYMENTS WHERE A SEPARATED EMPLOYEE HAS BEEN PAID A LUMP SUM FOR HIS ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE, PURSUANT TO THE ACT OF DECEMBER 21, 1944, AND IS REEMPLOYED PRIOR TO EXPIRATION OF THE PERIOD COVERED BY THE PAYMENT, THE PROVISION OF THE ACT REQUIRING REFUND OF "AN AMOUNT EQUAL TO THE COMPENSATION COVERING THE PERIOD BETWEEN THE DATE OF REEMPLOYMENT AND THE EXPIRATION OF SUCH LEAVE PERIOD" CONTEMPLATES A REFUND OF THE GROSS AMOUNT OF COMPENSATION FOR SUCH UNEXPIRED LEAVE PERIOD, INCLUDING TAX WITHHELD AT TIME OF PAYMENT--- ANY ADJUSTMENT BEING A MATTER TO BE TAKEN CARE OF IN THE EMPLOYEE'S INCOME TAX RETURNS. ALL CLAIMS FOR LUMP-SUM PAYMENTS FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE DUE DECEASED EMPLOYEES UNDER SECTION 2 OF THE ACT OF DECEMBER 21, 1944, WHETHER BY THE DESIGNATED BENEFICIARY OF THE DECEASED OR BY HIS ESTATE, SHOULD BE FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT PURSUANT TO GENERAL REGULATIONS NO. 42 AND SUPPLEMENTS THERETO. THE LUMP-SUM PAYMENT FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE AUTHORIZED BY SECTION 2 OF THE ACT OF DECEMBER 21, 1944, TO BE PAID TO THE DESIGNATED BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE IS NOT TO BE REGARDED AS SALARY OR COMPENSATION FOR ANY PURPOSE, INCLUDING INCOME TAX WITHHOLDING; AND THE QUESTION AS TO THE EXTENT, IF ANY, SUCH LUMP-SUM IS TO BE SUBJECT TO TAX WILL BE FOR DETERMINATION BY THE COMMISSIONER OF INTERNAL REVENUE IN CONNECTION WITH THE TAX RETURNS OF THE PERSON OR PERSONS RECEIVING SUCH PAYMENT. THE LUMP-SUM PAYMENT FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE PROVIDED FOR BY THE ACT OF DECEMBER 21, 1944, IS TO BE REGARDED AS AN AMOUNT DUE FROM THE UNITED STATES WHICH IS AVAILABLE--- UNDER THE WELL- ESTABLISHED RULE WHERE THERE ARE BOTH DEBITS AND CREDITS--- AS A SET-OFF OR CHARGE AGAINST ANY AMOUNT DUE THE UNITED STATES, WHETHER SUCH LUMP-SUM PAYMENT BE OTHERWISE PAYABLE TO THE FORMER EMPLOYEE, OR, IF DECEASED, TO HIS DESIGNATED BENEFICIARY OR HIS ESTATE. UPON TRANSFER OR REAPPOINTMENT OF EMPLOYEES FROM POSITIONS OR EMPLOYMENT SUBJECT TO THE ANNUAL LEAVE ACT OF MARCH 14, 1936, TO OTHER FEDERAL POSITIONS OR EMPLOYMENT WITH SALARY ATTACHED AND NOT UNDER ANY LEAVE SYSTEM (SEE SECTION 6.1, SUBSECTIONS (C) AND (E), OF THE ANNUAL AND SICK LEAVE REGULATIONS), SUCH EMPLOYEES MAY BE PAID A LUMP SUM FOR ALL NON- TRANSFERABLE ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE, PURSUANT TO THE ACT OF DECEMBER 21, 1944; AND SUCH PAYMENTS ARE NOT TO BE REGARDED AS SALARY OR COMPENSATION STATUTES.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, JANUARY 13, 1945:

I HAVE YOUR LETTER OF JANUARY 5, 1945, SUBMITTING FOR DECISION SEVERAL QUESTIONS RELATIVE TO THE APPLICATION OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, PUBLIC LAW 525.

SECTIONS 1 AND 2 OF THE SAID ACT PROVIDE AS FOLLOWS:

THAT WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IS SEPARATED FROM THE SERVICE OR ELECTS TO BE PAID COMPENSATION FOR LEAVE IN ACCORDANCE WITH THE ACT OF AUGUST 1, 1941, AS AMENDED BY THE ACT OF APRIL 7, 1942, OR SECTION 4 OF THE ACT OF JUNE 23, 1943, HE SHALL BE PAID COMPENSATION IN A LUMP SUM FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE TO WHICH HE IS ENTITLED UNDER EXISTING LAW. SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE: PROVIDED, THAT IF SUCH EMPLOYEE IS REEMPLOYED IN THE FEDERAL SERVICE OR IN OR UNDER THE GOVERNMENT OF THE DISTRICT OF COLUMBIA UNDER THE SAME LEAVE SYSTEM PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY SUCH LEAVE PAYMENT, HE SHALL REFUND TO THE EMPLOYING AGENCY AN AMOUNT EQUAL TO THE COMPENSATION COVERING THE PERIOD BETWEEN THE DATE OF REEMPLOYMENT AND THE EXPIRATION OF SUCH LEAVE PERIOD, AND THE AMOUNT OF LEAVE REPRESENTED BY SUCH REFUND SHALL BE CREDITED TO HIM IN THE EMPLOYING AGENCY. IN THE CASE OF REEMPLOYMENT IN THE FEDERAL SERVICE THE SUM SO REFUNDED SHALL BE COVERED INTO THE TREASURY AS " MISCELLANEOUS RECEIPTS," AND IN CASE OF REEMPLOYMENT IN OR UNDER THE GOVERNMENT OF THE DISTRICT OF COLUMBIA THE SUM SO REFUNDED SHALL BE COVERED INTO THE TREASURY TO THE CREDIT OF THE DISTRICT OF COLUMBIA: PROVIDED FURTHER, THAT THE LUMP-SUM PAYMENT HEREIN AUTHORIZED SHALL NOT BE REGARDED, EXCEPT FOR PURPOSES OF TAXATION, AS SALARY OR COMPENSATION AND SHALL NOT BE SUBJECT TO RETIREMENT DEDUCTIONS.

SEC. 2. UPON THE DEATH OF ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT, OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, COMPENSATION FOR ALL OF HIS ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE IN A LUMP SUM EQUAL TO THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE SHALL BE PAID, UPON THE ESTABLISHMENT OF A VALID CLAIM THEREFOR, IN THE FOLLOWING ORDER OF PRECEDENCE:

FIRST, TO THE BENEFICIARY OR BENEFICIARIES, IF ANY, LAWFULLY DESIGNATED BY THE EMPLOYEE UNDER THE RETIREMENT ACT APPLICABLE TO HIS SERVICE;

SECOND, IF THERE BE NO SUCH DESIGNATED BENEFICIARY, TO THE ESTATE OF SUCH DECEASED EMPLOYEE.

THE QUESTIONS WILL BE STATED AND ANSWERED IN THE ORDER PRESENTED.

(1) WILL IT BE NECESSARY TO COLLECT THE REFUNDS REQUIRED UNDER SECTION 1 OF THE ACT IN A LUMP SUM OR MAY SUCH REFUNDS BE COLLECTED IN INSTALLMENTS, THE INSTALLMENTS TO BE SUFFICIENTLY LARGE TO INSURE LIQUIDATION OF THE INDEBTEDNESS WITHIN A REASONABLE PERIOD?

(2) IF COLLECTION OF THE REFUNDS ON AN INSTALLMENT BASIS IS PERMISSIBLE, MAY THE COLLECTION BE MADE THROUGH THE MEDIUM OF PAYROLL DEDUCTIONS?

IT IS EVIDENT NO CASES OF SUCH REFUNDS ACTUALLY HAVE ARISEN; AND, IF AN WHEN THEY DO ARISE THEY WILL BE FOR CONSIDERATION IN THE FIRST INSTANCE BY THE REEMPLOYING AGENCY. HOWEVER, IT MAY BE STATED THAT THE ACT WOULD SEEM TO CONTEMPLATE AN IMMEDIATE REFUND OF THE ENTIRE AMOUNT OF THE LUMP-SUM PAYMENT AND THAT SUCH REQUIREMENT SHOULD BE MADE A CONDITION PRECEDENT TO THE REEMPLOYMENT.

(3) SHOULD THE REFUND COLLECTED BE THE NET AMOUNT PAID THE EMPLOYEE FOR ACCUMULATED OR ACCRUED ANNUAL LEAVE FOR THE PERIOD IN QUESTION OR SHOULD THE REFUND COLLECTED BE THE GROSS COMPENSATION FOR THE PERIOD, INCLUDING THE TAX WITHHELD AT THE TIME OF PAYMENT? IF REFUND OF THE GROSS AMOUNT IS REQUIRED, WHAT PROCEDURE SHOULD BE FOLLOWED BY THE EMPLOYING AGENCY OR BY THE EMPLOYEE TO OBTAIN FOR THE EMPLOYEE A REFUND OF THE TAX WITHHELD AT THE TIME OF PAYMENT?

THE STATUTE STATES SPECIFICALLY THAT THE REFUND BE "AN AMOUNT EQUAL TO THE COMPENSATION COVERING THE PERIOD BETWEEN THE DATE OF REEMPLOYMENT AND THE EXPIRATION OF SUCH LEAVE PERIOD.' THIS IS SO PLAIN AS TO LEAVE NO ROOM FOR CONSTRUCTION; AND A REFUND OF THE AMOUNT THUS DESCRIBED LESS THE AMOUNT OF THE TAX WITHHELD AT TIME OF PAYMENT WOULD NOT SATISFY THE REQUIREMENT OF THE STATUTE. ANY ADJUSTMENT IN THE MATTER OF THE EMPLOYEE'S INCOME TAX SHOULD BE TAKEN CARE OF IN THE EMPLOYEE'S INCOME TAX RETURN, AND NEITHER THE ADMINISTRATIVE OFFICE NOR THIS OFFICE SHOULD BE CONCERNED THEREWITH.

(4) WHERE A DECEASED EMPLOYEE HAS DESIGNATED A BENEFICIARY OR BENEFICIARIES UNDER THE RETIREMENT ACT APPLICABLE TO THE DEPARTMENT, MAY THE PAYMENT FOR ACCUMULATED OR ACCRUED LEAVE BE MADE TO THE BENEFICIARY OR BENEFICIARIES BY A DISBURSING OFFICER OF THE DEPARTMENT OR SHOULD THE PAYMENT BE FORWARDED TO YOUR OFFICE FOR FINAL SETTLEMENT IN THE SAME MANNER AS IS PRESENTLY REQUIRED IN THE CASE OF THE FINAL SALARY PAYMENT OF A DECEASED EMPLOYEE?

SINCE IN MOST, IF NOT ALL, OF THE CASES THERE WILL BE DUE THE ESTATE OF A DECEASED EMPLOYEE AN AMOUNT OF UNPAID COMPENSATION IN ADDITION TO THE LUMP -SUM PAYMENT FOR LEAVE, AND AS THE ESTATE OF A DECEASED EMPLOYEE WHO HAS NOT DESIGNATED A BENEFICIARY WOULD HAVE, ALSO, A CLAIM FOR A LUMP-SUM PAYMENT FOR LEAVE DUE THE DECEASED EMPLOYEE UNDER SECTION 2 OF THE STATUTE, AND AS ALL SUCH CLAIMS ARE REQUIRED TO BE SETTLED BY THE GENERAL ACCOUNTING OFFICE PURSUANT TO GENERAL REGULATIONS NO. 42, DATED APRIL 6, 1925 (4 COMP. GEN. 1096) AND SUPPLEMENTS THERETO NOS. 1, 2, AND 3 DATED FEBRUARY 23, 1928, APRIL 21, 1928, AND DECEMBER 2, 1932, RESPECTIVELY (7 COMP. GEN. 848, 849; 12 ID. 673), I HAVE TO ADVISE THAT, IN ORDER TO PREVENT DUPLICATE PAYMENTS, TO MAINTAIN A UNIFORM PROCEDURE, AND TO MAKE AVAILABLE TO THIS OFFICE ANY AMOUNT DUE FOR APPLICATION AS A SET-OFF AGAINST INDEBTEDNESS TO THE UNITED STATES (SEE ANSWER TO QUESTION (6) (, ALL CLAIMS ARISING IN DEATH CASES SHOULD BE FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT. IN THAT CONNECTION FURTHER CONSIDERATION WILL BE GIVEN TO AN AMENDMENT TO EXISTING FORM 1055 FOR USE IN SUCH CASES. COMPARE 24 COMP. GEN. 143.

(5) IS THE PAYMENT FOR ACCUMULATED OR ACCRUED ANNUAL LEAVE DUE THE BENEFICIARY OR BENEFICIARIES OR ESTATE OF A DECEASED EMPLOYEE SUBJECT TO WITHHOLDING TAX?

CLEARLY THE AMOUNT TO BE PAID UNDER SECTION 2 OF THE STATUTE IS NOT SALARY AND THERE IS NOTHING WHATEVER IN SAID SECTION--- SIMILAR TO THE PROVISION APPEARING IN SECTIONS 1 AND 3 OF THE STATUTE--- INDICATING ANY INTENTION THAT THE LUMP-SUM PAYMENT IN DEATH CASES IS TO BE REGARDED AS SALARY OR COMPENSATION FOR TAX PURPOSES. CONSEQUENTLY, THE AMOUNT AUTHORIZED TO BE PAID IN DEATH CASES UNDER SECTION 2 OF THE STATUTE IS NOT TO BE REGARDED AS SALARY OR COMPENSATION FOR ANY PURPOSE AND THE QUESTION AS TO THE EXTENT, IF ANY, SUCH A LUMP-SUM PAYMENT TO THE BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE IS TO BE SUBJECT TO TAX WILL BE FOR DETERMINATION BY THE COMMISSIONER OF INTERNAL REVENUE IN CONNECTION WITH THE TAX RETURNS OF THE PERSON OR PERSONS RECEIVING SUCH PAYMENT.

(6) IS THE PAYMENT FOR ACCUMULATED OR ACCRUED ANNUAL LEAVE MADE TO THE BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE AVAILABLE FOR SET-OFF AGAINST INDEBTEDNESS TO THE DEPARTMENT?

A LUMP-SUM PAYMENT FOR LEAVE UNDER THE ACT OF DECEMBER 21, 1944, IS NOT A PAYMENT OF SALARY OR COMPENSATION, CURRENT OR FINAL, WITHIN THE MEANING OF THE RULE OF SET-OFF HERETOFORE STATED IN THE DECISIONS OF THIS OFFICE. SEE 24 COMP. GEN. 334, AND THE DECISIONS THEREIN CITED. HOWEVER, SUCH LUMP-SUM PAYMENT IS AN AMOUNT DUE FROM THE UNITED STATES; AND, THERE BEING NO PROVISION IN THE STATUTE TO THE CONTRARY, SUCH AMOUNT IS AVAILABLE TO THE UNITED STATES--- UNDER THE WELL-ESTABLISHED RULE WHERE THERE ARE BOTH DEBITS AND CREDITS--- AS A SET-OFF OR CHARGE AGAINST ANY AMOUNT DUE FROM THE FORMER EMPLOYEE TO THE UNITED STATES, REGARDLESS OF WHETHER SUCH LUMP- SUM PAYMENT BE OTHERWISE PAYABLE TO THE FORMER EMPLOYEE, HIS DESIGNATED BENEFICIARY, OR HIS ESTATE. COMPARE 21 COMP. GEN. 1000, WHEREIN THE SAME RULE WAS APPLIED AS TO THE AMOUNT IN THE RETIREMENT FUND AND ANNUITIES.

(7) IT IS OFTEN NECESSARY TO TRANSFER EMPLOYEES WITHIN THE DEPARTMENT FROM POSITIONS WHICH ARE SUBJECT TO THE ACT OF 14 MARCH 1936 (49 STAT. 1161) TO POSITIONS WHICH ARE EXCLUDED FROM THE PURVIEW OF THE ACT BY THE PROVISIONS OF SECTION 6.1 (C) AND 6.1 (E) OF EXECUTIVE ORDER 9414, JANUARY 13, 1944. MAY THE ACCUMULATED AND ACCRUED ANNUAL LEAVE TO THE CREDIT OF SUCH EMPLOYEES BE LIQUIDATED BY A LUMP SUM PAYMENT AT THE SAME TIME OF TRANSFER?

SECTION 3 OF THE STATUTE PROVIDES:

THAT ALL ACCUMULATED AND CURRENT ACCRUED LEAVE BE LIQUIDATED BY A LUMP- SUM PAYMENT TO ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IN CASES INVOLVING TRANSFER TO AGENCIES UNDER DIFFERENT LEAVE SYSTEMS. SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE NOT BEEN TRANSFERRED UNTIL THE EXPIRATION OF THE PERIOD OF SUCH LEAVE: PROVIDED, THAT THE LUMP-SUM PAYMENT HEREIN AUTHORIZED SHALL NOT BE REGARDED, EXCEPT FOR PURPOSES OF TAXATION, AS SALARY OR COMPENSATION AND SHALL NOT BE SUBJECT TO RETIREMENT DEDUCTIONS.

SECTIONS 6.1, 6.1 (C), AND 6.1 (E) OF THE LEAVE REGULATIONS ( EXECUTIVE ORDER 9414 OF JANUARY 13, 1944, REVISED EFFECTIVE JANUARY 1, 1945, BY THE CIVIL SERVICE COMMISSION) PROVIDE:

"THESE REGULATIONS SHALL NOT APPLY TO: * * * * * *

"/C) TEMPORARY EMPLOYEES ENGAGED ON CONSTRUCTION WORK AT HOURLY RATES.

(E) EMPLOYEES NOT REQUIRED TO BE CONTINUOUSLY EMPLOYED DURING REGULAR TOUR OF DUTY, SUCH AS (1) PER DIEM OR PER HOUR EMPLOYEES ENGAGED IN AN EMERGENCY WHO MAY BE EMPLOYED FOR MORE THAN ONE 7- OR 8 HOUR SHIFT WITHIN 24 HOURS DURING THE EMERGENCY; (2) PART-TIME OR INTERMITTENT EMPLOYEES; (3) PERSONS ENGAGED UNDER CONTRACT; (4) EMPLOYEES ENGAGED TEMPORARILY FOR LESS THAN A MONTH ON PRICE BASIS; (5) EMPLOYEES WHO ARE PAID AT HOURLY RATES BUT WHO ARE NOT ENGAGED ON CONSTRUCTION WORK, SUCH AS MECHANICS, SKILLED LABORERS, AND OTHERS ENGAGED IN VARIOUS SERVICES ON MAINTENANCE, REPAIR, CLEAN-UP WORK, ETC., WHERE EMPLOYMENT IS MORE OR LESS INTERMITTENT AND NOT ON A REGULAR AND CONTINUOUS BASIS; (6) CONSULTANTS EMPLOYED AND PAID ON THE BASIS OF "WHEN ACTUALLY EMPLOYED; , AND (7) EMPLOYEES PAID ON A FEE BASIS, SUCH AS PHYSICIANS, SURGEONS, AND OTHER CONSULTANTS.

THIS QUESTION INVOLVES THE PROPOSITION OF WHETHER, UNDER SECTION 1 OR SECTION 3 OF THE STATUTE OR UNDER BOTH SECTIONS WHEN READ TOGETHER, AN EMPLOYEE UPON TRANSFER OR REAPPOINTMENT TO A FEDERAL POSITION OR REEMPLOYMENT WITH SALARY ATTACHED AND NOT UNDER ANY LEAVE SYSTEM MAY BE PAID A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE DUE AT THE TIME. AS NO PROVISION OTHERWISE HAS BEEN MADE BY LAW OR REGULATION FOR TRANSFERRING ACCUMULATED AND CURRENT ACCRUED LEAVE OF AN EMPLOYEE TO A POSITION OR EMPLOYMENT NOT UNDER ANY LEAVE SYSTEM, AND AS THE ACT OF DECEMBER 21, 1944, PROTECTS THE RIGHT OF ALL EMPLOYEES TO ANNUAL OR VACATION LEAVE ACCRUED BUT NOT TAKEN PRIOR TO SEPARATION FROM A POSITION IN WHICH THE LEAVE WAS EARNED AND WHICH IS NOT TRANSFERABLE, THE CONCLUSION APPEARS JUSTIFIED THAT A LUMP SUM PAYMENT FOR LEAVE MAY BE MADE TO THE EMPLOYEES WHOSE CASES ARE REPRESENTED BY THIS QUESTION--- THE DUAL COMPENSATION STATUTES NOT BEING INVOLVED BECAUSE SUCH LUMP-SUM PAYMENTS ARE NOT TO BE REGARDED AS SALARY OR COMPENSATION EXCEPT FOR PURPOSES OF TAXATION. ACCORDINGLY, QUESTION (7) IS ANSWERED IN THE AFFIRMATIVE.