; and (B) a foster child but only if the child lives with the employee in a regular parent-child relationship. (2) Order of precedence A death gratuity paid under subsection (b) with respect to an employee shall be paid in the following order of precedence: (A) (i) To the beneficiary designated to receive the gratuity by the employee in a signed and witnessed official Federal Government form that is received by the agency employing the employee before the date of the death of the employee. (ii) A designation, change, or cancellation of beneficiary in a will, or another document not described in clause (i), shall have no force or effect for the purposes of that clause. (B) If there is no beneficiary described in subparagraph (A), to the surviving spouse of the employee. (C) If neither subparagraph (A) nor (B) applies, to any child (or grandchild if the child who is the parent of such grandchild is deceased) such that each such child or grandchild (as the case may be) receives an equal amount of the gratuity. (D) If none of subparagraph (A), (B), or (C) applies, to the surviving parents of the employee such that each such surviving parent receives an equal amount of the gratuity. (E) If none of subparagraphs (A) through (D) applies, to the duly appointed executor or administrator of the estate of the employee. (F) If none of subparagraphs (A) through (E) applies, to the person designated according to the laws of the State in which the insured individual legally resided. (d) Tax treatment A payment under this section shall not be includible in the gross income of the recipient for purposes of the Internal Revenue Code of 1986. . (2) Repeal of death gratuity payment authority Section 651 of the Treasury, Postal Service, and General Government Appropriations Act, 1997 ( 5 U.S.C. 8133 note) is repealed. (3) Technical and conforming amendments (A) Subchapter heading The heading for subchapter VII of chapter 55 of title 5, United States Code, is amended by striking employees and inserting persons and payments for