[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1612 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1612

To provide Federal managers with tools and flexibility in areas such as 
 personnel, budgeting, property management and disposal, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 1, 2001

 Mr. Thompson introduced the following bill; which was read twice and 
           referred to the Committee on Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
To provide Federal managers with tools and flexibility in areas such as 
 personnel, budgeting, property management and disposal, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Managerial 
Flexibility Act of 2001''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; Table of Contents.
              TITLE I--FEDERAL EMPLOYEE MANAGEMENT REFORMS

        Subtitle A--Federal Employment Restructuring Assistance

Sec. 101. Voluntary separation incentives.
Sec. 102. Existing authorities valid until expiration.
Sec. 103. Effective date.
   Subtitle B--Federal Employee Voluntary Early Retirement Amendments

Sec. 111. Voluntary early retirement authority.
     Subtitle C--Civil Service Recruitment and Retention Incentives

Sec. 121. Recruitment, relocation, and retention bonuses.
Sec. 122. Academic degree training.
Sec. 123. Professional credentials.
Sec. 124. Correction of pay administration problems.
Sec. 125. Civil Service Retirement System computations for part-time 
                            service.
Sec. 126. Promotional items received pursuant to official travel.
Sec. 127. Student volunteer transit subsidy.
Sec. 128. Effective date.
 Subtitle D--Promotion of Results-Oriented Performance Evaluation and 
                   Compensation for Senior Executives

Sec. 131. Cap on total annual compensation.
Sec. 132. Repeal of senior executive recertification.
Sec. 133. Annual leave enhancements.
Sec. 134. Effective date.
       Subtitle E--Federal Human Resources Management Innovations

Sec. 141. Project management and alternative personnel systems.
Sec. 142. Effective date.
         Subtitle F--Federal Human Resources Hiring Flexibility

Sec. 151. Employment flexibility amendments.
TITLE II--BUDGETING AND MANAGING FOR RESULTS: FULL FUNDING FOR FEDERAL 
                             RETIREE COSTS

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
                               Employees

Sec. 201. Civil Service Retirement System.
Sec. 202. Central Intelligence Agency Retirement and Disability System.
Sec. 203. Foreign Service Retirement and Disability System.
Sec. 204. Public Health Service Commissioned Corps Retirement System.
Sec. 205. National Oceanic and Atmospheric Administration Commissioned 
                            Officer Corps Retirement System.
Sec. 206. Coast Guard Military Retirement System.
 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

Sec. 211. Federal Employees Health Benefits Fund.
Sec. 212. Uniformed Services Health Benefits for Retirees.
Sec. 213. Effective date.
          TITLE III--FEDERAL PROPERTY ASSET MANAGEMENT REFORMS

Sec. 301. Definitions.
             Subtitle A--Life Cycle Planning and Management

  Subtitle B--Enhanced Authorities for Real Property Asset Management

Sec. 311. Enhanced asset management tools.
Sec. 312. Repeal of section 321 of the Federal Property and 
                            Administration Services Act.
Sec. 313 Disposal of surplus property.
   Subtitle C--Incentives for Real and Personal Property Management 
                              Improvement

Sec. 321. Proceeds from transfer or disposition of property.
Sec. 322. Relationship to other agencies' authorities to use disposal 
                            proceeds.
Sec. 323. Impact on other authorities to use disposal proceeds.
Sec. 324. Using a share of sale proceeds to maintain historic Treasury 
                            receipts.
       Subtitle D--Streamlined and Enhanced Disposal Authorities

Sec. 331. Including nonprofit organizations as eligible donees.
Sec. 332. Elimination of certain negotiated sale requirements.
Sec. 333. Exchange and sale of personal property.
Sec. 334. Expansion of abandonment authority.
Sec. 335. Clarifying certain donation authorities.
Sec. 336. Streamlining consideration of surplus real property for 
                            homeless assistance.
                       Subtitle E--Miscellaneous

Sec. 341. Scope and construction.
Sec. 342. Severability.
Sec. 343. No waiver.
Sec. 344. Agency discretion.
Sec. 345. Effective date.
Sec. 346. Report of the Comptroller General.

              TITLE I--FEDERAL EMPLOYEE MANAGEMENT REFORMS

        Subtitle A--Federal Employment Restructuring Assistance

SEC. 101. VOLUNTARY SEPARATION INCENTIVES.

    (a) Chapter 35 of title 5, United States Code, is amended--
            (1) by amending the chapter title to read as follows:

  ``CHAPTER 35--RETENTION PREFERENCE, VOLUNTARY SEPARATION INCENTIVE 
               PAYMENTS, RESTORATION, AND REEMPLOYMENT'';

            (2) by inserting after subchapter I a new subchapter II to 
        read as follows:

        ``SUBCHAPTER II--VOLUNTARY SEPARATION INCENTIVE PAYMENTS

``Sec. 3521. Definitions
    ``For the purpose of this subchapter--
            ``(1) `agency' means an Executive agency as defined by 
        section 105; and
            ``(2) `employee' means an employee as defined by section 
        2105 employed by an agency and an individual employed by a 
        county committee established under section 8(b)(5) of the Soil 
        Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) 
        who--
                    ``(A) is serving under an appointment without time 
                limitation; and
                    ``(B) has been currently employed for a continuous 
                period of at least 3 years;
        but does not include--
                            ``(i) a reemployed annuitant under 
                        subchapter III of chapter 83 or chapter 84 or 
                        another retirement system for employees of the 
                        Government;
                            ``(ii) an employee having a disability on 
                        the basis of which such employee is or would be 
                        eligible for disability retirement under 
                        subchapter III of chapter 83 or chapter 84 or 
                        another retirement system for employees of the 
                        Government;
                            ``(iii) an employee who is in receipt of a 
                        decision notice of involuntary separation for 
                        misconduct or unacceptable performance;
                            ``(iv) an employee who has previously 
                        received any voluntary separation incentive 
                        payment from the Federal Government under this 
                        subchapter or any other authority;
                            ``(v) an employee covered by statutory 
                        reemployment rights who is on transfer 
                        employment with another organization; or
                            ``(vi) any employee who, during the 24-
                        month period preceding the employee's date of 
                        separation, received and did not repay a 
                        recruitment or relocation bonus under section 
                        5753 or who, within the 12-month period 
                        preceding the employee's date of separation, 
                        received and did not repay a retention 
                        allowance under section 5754, or who, within 
                        the 36-month period preceding the employee's 
                        date of separation, received and did not repay 
                        funds provided for student loan repayment under 
                        section 5379, unless the paying agency has 
                        waived its right of recovery of those funds.
``Sec. 3522. Agency plans; approval
    ``(a) The head of each agency, prior to obligating any resources 
for voluntary separation incentive payments, shall submit to the 
Director of the Office of Management and Budget a plan outlining the 
intended use of such incentive payments that provides such information 
as the Director may require, including the information specified in 
subsection (b).
    ``(b) The agency's plan under subsection (a) shall include--
            ``(1) the positions and functions to be reduced or 
        eliminated;
            ``(2) a description of which categories of employees will 
        be offered incentives;
            ``(3) the time period during which incentives may be paid;
            ``(4) the number and amounts of voluntary separation 
        incentive payments to be offered; and
            ``(5) a description of how the agency will operate without 
        the eliminated positions and functions.
    ``(c) The Director of the Office of Management and Budget shall 
review each agency's plan and may condition the Director's approval of 
the plan upon the agency head's acceptance of modifications. A plan 
under this section may not be implemented without the approval of the 
Director, and, upon an agency head's request, the Director may approve 
for implementation changes to a plan previously approved by the 
Director.
``Sec. 3523. Authority to provide voluntary separation incentive 
              payments
    ``(a) A voluntary separation incentive payment under this 
subchapter may be paid to an employee only as provided in the agency's 
plan established under section 3522.
    ``(b) A voluntary incentive payment--
            ``(1) shall be offered to agency employees on the basis of 
        organizational unit, occupational series or level, geographic 
        location, specified periods during which eligible employees may 
        elect a voluntary separation incentive payment, skills, 
        knowledge, or other such job related factors, or a combination 
        of such factors;
            ``(2) shall be paid in a lump sum after the employee's 
        separation;
            ``(3) shall be equal to the lesser of--
                    ``(A) an amount equal to the amount the employee 
                would be entitled to receive under section 5595(c) if 
                the employee were entitled to payment under such 
                section (without adjustment for any previous payment 
                made); or
                    ``(B) an amount determined by the agency head, not 
                to exceed $25,000;
            ``(4) may be made only in the case of an employee who 
        voluntarily separates (whether by retirement or resignation) 
        under the provisions of this subchapter;
            ``(5) shall not be a basis for payment, and shall not be 
        included in the computation, of any other type of Government 
        benefit;
            ``(6) shall not be taken into account in determining the 
        amount of any severance pay to which the employee may be 
        entitled under section 5595, based on any other separation; and
            ``(7) shall be paid from appropriations or funds available 
        for the payment of the basic pay of the employee.
``Sec. 3524. Effect of subsequent employment with the Government
    ``(a) An individual who has received a voluntary separation 
incentive payment under this subchapter and accepts any employment for 
compensation with the Government of the United States (other than the 
legislative branch) within five years after the date of the separation 
on which the payment is based shall be required to pay, prior to the 
individual's first day of employment, the entire amount of the 
incentive payment to the agency that paid the incentive payment.
    ``(b)(1) If the employment under this section is with an agency 
(other than the General Accounting Office), the United States Postal 
Service, or the Postal Rate Commission, the Director of the Office of 
Personnel Management may, at the request of the head of the agency, 
waive the repayment if the individual involved possesses unique 
abilities, or, in the case of an emergency involving a direct threat to 
life or property, the individual has skills directly related to 
resolving the emergency and will serve on a temporary basis only so 
long as that individual's services are made necessary by the emergency.
    ``(2) If the employment under this section is with the judicial 
branch, the Director of the Administrative Office of the United States 
Courts may waive the repayment if the individual involved possesses 
unique abilities and is the only qualified applicant available for the 
position.
    ``(c) Employment under a personal services contract with the 
Government of the United States (other than the legislative branch) is 
included in the term `employment' with respect to subsection (a), but 
is excluded with respect to subsection (b).
``Sec. 3525. Reduction of agency employment levels
    ``(a) The total number of funded employee positions in the agency 
shall be reduced by one position for each vacancy created by the 
separation of any employee who has received, or is due to receive, a 
voluntary separation incentive payment under this subchapter. For the 
purpose of this subsection, positions shall be counted on a full-time 
equivalent basis.
    ``(b) The Director of the Office of Management and Budget shall 
monitor the agency and take any action necessary to ensure that the 
requirements of this section are met.
    ``(c) At the request of the head of an agency, the Director of the 
Office of Management and Budget may waive application of subsection (a) 
if the Director determines that the agency plan required by section 
3522 satisfactorily demonstrates downsizing or other restructuring 
within the agency would produce a cost-effective result.
``Sec. 3526. Regulations
    ``The Director of the Office of Personnel Management, with the 
concurrence of the Director of the Office of Management and Budget, may 
prescribe such regulations as may be necessary to implement the 
provisions of this subchapter.''; and
            (3) in the table of sections by striking the item relating 
        to subchapter II and the item relating to section 3551 and 
        inserting in its place the following:
        ``subchapter ii--voluntary separation incentive payments
``3521. Definitions.
``3522. Agency plans; approval.
``3523. Authority to provide voluntary separation incentive payment.
``3524. Effect of subsequent employment with the Government.
``3525. Reduction of agency employment levels.
``3526. Regulations.''.
    (b) The Director of the Administrative Office of the United States 
Courts may, by regulation, establish a program substantially similar to 
the program established by subsection (a) for individuals serving in 
the judicial branch. Waivers authorized with respect to agencies by 
section 3525 of title 5, United States Code, as enacted by subsection 
(a), shall, with respect to entities of the judicial branch, be made by 
the Director of the Administrative Office of the United States Courts.

SEC. 102. PREVIOUSLY ENACTED VOLUNTARY SEPARATION INCENTIVES.

    An agency head that has authority, under a statute enacted before 
the date of enactment of the Act, to make voluntary separation 
incentive payments, may continue to offer voluntary separation 
incentives under that statute in accordance with its terms and 
amendments.

SEC. 103. EFFECTIVE DATE.

    This subtitle and the amendments made by this subtitle shall take 
effect 60 days after the date of enactment.

   Subtitle B--Federal Employee Voluntary Early Retirement Amendments

SEC. 111. VOLUNTARY EARLY RETIREMENT AUTHORITY.

    (a) Title 5, United States Code, is amended--
            (1) by amending section 8336(d)(2) to read as follows:
            ``(2)(A) has been employed continuously, by the agency in 
        which the employee is serving, for at least the 31-day period 
        ending on the date on which such agency requests the 
        determination referred to in subparagraph (D);
            ``(B) is serving under an appointment that is not time 
        limited;
            ``(C) is not in receipt of a decision notice of involuntary 
        separation for misconduct or unacceptable performance;
            ``(D) is separated from the service voluntarily during a 
        period in which, as determined by the Office of Personnel 
        Management (upon request of the agency) under regulations 
        prescribed by the Office--
                    ``(i) such agency (or, if applicable, the component 
                in which the employee is serving) is undergoing 
                delayering, reorganization, reduction in force, or a 
                transfer of function, or other workforce restructuring 
                (or shaping); and
                    ``(ii) employees serving in such agency (or 
                component) are likely to be--
                            ``(I) separated;
                            ``(II) subject to an immediate reduction in 
                        the rate of basic pay (without regard to 
                        subchapter VI of chapter 53, or comparable 
                        provisions); or
                            ``(III) identified as being in positions 
                        which are becoming surplus or excess to the 
                        agency's future ability to carry out its 
                        mission effectively; and
            ``(E) as determined by the agency under regulations 
        prescribed by the Office, is within the scope of the offer of 
        voluntary early retirement, which may be made on the basis of--
                    ``(i) one or more organizational units;
                    ``(ii) one or more occupational series or levels;
                    ``(iii) one or more geographical locations;
                    ``(iv) specific window periods;
                    ``(v) skills, knowledge, or such other similar job 
                related factors; or
                    ``(vi) any appropriate combination of such 
                factors;''; and
            (2) by amending section 8414(b)(1)(B) to read as follows:
                    ``(B)(i) has been employed continuously, by the 
                agency in which the employee is serving, for at least 
                the 31-day period ending on the date on which such 
                agency requests the determination referred to in clause 
                (iv);
                    ``(ii) is serving under an appointment that is not 
                time limited;
                    ``(iii) is not in receipt of a decision notice of 
                involuntary separation for misconduct or unacceptable 
                performance;
                    ``(iv) is separated from the service voluntarily 
                during a period in which, as determined by the Office 
                of Personnel Management (upon request of the agency) 
                under the regulations prescribed by the Office--
                            ``(I) such agency (or, if applicable, the 
                        component in which the employee is serving) is 
                        undergoing delayering, reorganization, 
                        reduction in force or transfer of function, or 
other workforce restructuring (or shaping); and
                            ``(II) employees serving in such agency (or 
                        component) are likely to be--
                                    ``(aa) separated;
                                    ``(bb) subject to an immediate 
                                reduction in the rate of basic pay 
                                (without regard to subchapter VI of 
                                chapter 53, or comparable provisions); 
                                or
                                    ``(cc) identified as being in 
                                positions which are becoming surplus or 
                                excess to the agency's future ability 
                                to carry out its mission effectively; 
                                and
                    ``(v) as determined by the agency under regulations 
                prescribed by the Office, is within the scope of the 
                offer of voluntary early retirement, which may be made 
                on the basis of--
                            ``(I) one or more organizational units;
                            ``(II) one or more occupational series or 
                        levels;
                            ``(III) one or more geographical locations;
                            ``(IV) specific window periods;
                            ``(V) skills, knowledge, or such other 
                        similar job related factors; or
                            ``(VI) any appropriate combination of such 
                        factors;''.
    (b) Section 7001 of Public Law 105-174 (112 Stat. 91), as amended 
by section 651 of Public Law 106-58 (113 Stat. 480), is repealed.

     Subtitle C--Civil Service Recruitment and Retention Incentives

SEC. 121. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.

    (a) Chapter 57 of title 5, United States Code, is amended--
            (1) by amending sections 5753 and 5754 to read as follows:
``Sec. 5753. Recruitment and relocation bonuses
    ``(a)(1) The Office of Personnel Management may authorize the head 
of an agency to pay a bonus to an individual appointed or moved to a 
position that is likely to be difficult to fill in the absence of such 
a bonus, if the individual--
            ``(A)(i) is newly appointed as an employee of the Federal 
        Government; or
            ``(ii) is currently employed by the Federal Government and 
        moves to a new position in the same geographic area under 
        circumstances described in regulations of the Office; or
            ``(B) is currently employed by the Federal Government and 
        must relocate to accept a position stationed in a different 
        geographic area.
    ``(2) Except as provided by subsection (g), a bonus may be paid 
under this section only to an employee covered by the General Schedule 
pay system established under subchapter III of chapter 53.
    ``(b)(1) Payment of a bonus under this section shall be contingent 
upon the employee entering into a written service agreement to complete 
a period of employment with the agency, not to exceed four years. The 
office may, by regulation, prescribe a minimum service period.
    ``(2) The agreement shall set forth the length of the required 
service period, the amount of the bonus, the method of payment, and 
other terms and conditions under which the bonus is payable, subject to 
subsections (c) and (d) and regulations of the Office. The terms and 
conditions for paying a bonus, as specified in the service agreement, 
shall include the conditions under which the agreement may be 
terminated before the agreed-upon service period has been completed and 
the effect of the termination.
    ``(3) The agreement shall be made effective upon employment with 
the agency or movement to a new position or geographic area, as 
applicable, except that a service agreement with respect to a 
recruitment bonus may be made effective at a later date under 
circumstances described in regulations of the Office, such as when 
there is an initial period of formal basic training.
    ``(c)(1) Except as provided in subsection (d), a bonus under this 
section shall not exceed 25 percent of the annual rate of basic pay of 
the employee at the beginning of the service period multiplied by the 
number of years (or fractions thereof) in the service period, not to 
exceed four years.
    ``(2) A bonus under this section may be paid as an initial lump 
sum, in installments, as a final lump sum upon the completion of the 
full service period, or in a combination of these forms of payment.
    ``(3) A bonus under this section is not part of the basic pay of an 
employee for any purpose.
    ``(4) Under regulations of the Office, a recruitment bonus under 
this section may be paid to an eligible individual before he or she 
enters on duty.
    ``(d) The Office may authorize the head of an agency to waive the 
limitation in subsection (c)(1) based on a critical agency need, 
subject to regulations prescribed by the Office. Under such a waiver, 
the amount of the bonus may be up to 50 percent of the employee's 
annual rate of basic pay at the beginning of the service period 
multiplied by the number of years (or fractions thereof) in the service 
period, not to exceed 100 percent of the employee's annual rate of 
basic pay at the beginning of the service period.
    ``(e) The Office shall require that, before paying a bonus under 
this section, an agency shall establish a plan for paying recruitment 
bonuses and a plan for paying relocation bonuses, subject to 
regulations prescribed by the Office.
    ``(f) The Office shall prescribe such regulations as it considers 
necessary for the administration of this section, including regulations 
governing the repayment of a recruitment bonus in appropriate 
circumstances when the agreed-upon service period has not been 
completed.
    ``(g)(1) At the request of the head of an Executive agency, the 
Office may extend coverage under this section to categories of 
employees within the agency who otherwise would not be covered by this 
section.
    ``(2) The Office shall not extend coverage to the head of an 
Executive agency, including an Executive agency headed by a board or 
other collegial body composed of two or more individual members.
    ``(h) For purposes of this section, `employee' has the meaning 
given that term by section 2105, except that such term also includes an 
employee described in subsection (c) of such section.
``Sec. 5754. Retention bonuses
    ``(a) The Office of Personnel Management may authorize the head of 
an agency to pay a retention bonus to an employee, subject to 
regulations prescribed by the Office, if--
            ``(1) the unusually high or unique qualifications of the 
        employee or a special need of the agency for the employee's 
        services makes it essential to retain the employee; and
            ``(2) the agency determines that, in the absence of a 
        retention bonus, the employee would be likely to leave--
                    ``(A) the Federal service; or
                    ``(B) for a different position in the Federal 
                service under conditions described in regulations of 
                the Office.
    ``(b) The Office may authorize the head of an agency to pay 
retention bonuses to a group of employees in one or more categories of 
positions in one or more geographic areas, subject to the requirements 
of subsection (a)(1) and regulations prescribed by the Office, if there 
is a high risk that a significant portion of employees in the group 
would be likely to leave in the absence of retention bonuses.
    ``(c) Except as provided in subsection (i), a bonus may be paid 
only to an employee covered by the General Schedule pay system 
established under subchapter III of chapter 53.
    ``(d)(1) Payment of a retention bonus is contingent upon the 
employee entering into a written service agreement with the agency to 
complete a period of employment with the agency.
    ``(2) The agreement shall set forth the length of the required 
service period, the amount of the bonus, the method of payment, and 
other terms and conditions under which the bonus is payable, subject to 
subsections (e) and (f) and regulations of the Office. The terms and 
conditions for paying a bonus, as specified in the service agreement, 
shall include the conditions under which the agreement may be 
terminated before the agreed-upon service period has been completed and 
the effect of the termination.
    ``(3) Notwithstanding paragraph (1), a written service agreement is 
not required if the agency pays a retention bonus in biweekly 
installments and sets the installment payment at the full bonus 
percentage rate established for the employee with no portion of the 
bonus deferred. In this case, the agency shall inform the employee in 
writing of a decision to discontinue the retention bonus payments. 
Except as provided in regulations of the Office, the employee shall 
continue to accrue entitlement to the retention bonus through the end 
of the pay period in which such written notice is provided.
    ``(4) An employee may not accrue entitlement to a retention bonus 
during a service period previously established for that employee under 
section 5753.
    ``(e)(1) Except as provided in subsection (f), a retention bonus, 
which shall be stated as a percentage of the employee's basic pay for 
the service period associated with the bonus, may not exceed 25 percent 
of the employee's basic pay if paid under subsection (a) or 10 percent 
of an employee's basic pay if paid under subsection (b).
    ``(2) A retention bonus may be paid to an employee in installments 
after completion of specified periods of service or in a single lump 
sum at the end of the full period of service required by the agreement. 
An installment payment may not exceed the product derived from 
multiplying the amount of basic pay earned in the installment period by 
a percentage not to exceed the bonus percentage rate established for 
the employee. If the installment payment percentage is less than the 
bonus percentage rate, the accrued but unpaid portion of the bonus is 
payable as part of the final installment payment to the employee after 
completion of the full service period under the terms of the service 
agreement.
    ``(3) A retention bonus is not part of the basic pay of an employee 
for any purpose.
    ``(f) Upon the request of the head of an agency, the Office may 
waive the limit established under subsection (e)(1) and permit the 
agency head to pay an otherwise eligible employee or category of 
employees retention bonuses of up to 50 percent of basic pay, based on 
a critical agency need.
    ``(g) The Office shall require that, before paying a bonus under 
this section, an agency shall establish a plan for paying retention 
bonuses, subject to regulations prescribed by the Office.
    ``(h) The Office shall prescribe such regulations as it considers 
necessary for the administration of this section.
    ``(i)(1) At the request of the head of an Executive agency, the 
Office may extend coverage under this section to categories of 
employees within the agency who otherwise would not be covered by this 
section.
    ``(2) The Office shall not extend coverage under this section to 
the head of an Executive agency, including an Executive agency headed 
by a board or other collegial body composed of two or more individual 
members.
    ``(j) For purposes of this section, `employee' has the meaning 
given that term by section 2105, except that such term also includes an 
employee described in subsection (c) of such section.
            ``(2) in the table of sections by amending the item 
        relating to section 5754 to read as follows:

``5754. Retention bonuses.''.
    ``(b) Section 407 of the Federal Employees Pay Comparability Act of 
1990 (104 Stat. 1467; 5 U.S.C. 5305 note) is repealed.

SEC. 122. ACADEMIC DEGREE TRAINING.

    ``Chapter 41 of title 5, United States Code, is amended--
            (1) by amending section 4107 to read as follows:
``Sec. 4107. Academic degree training'';
    ``(a) Subject to subsection (b), an agency may select and assign an 
employee to academic degree training and may pay or reimburse the costs 
of academic degree training from appropriated or other available funds 
if such training--
            ``(1) contributes significantly to meeting an identified 
        agency training need, to resolving an identified agency 
        staffing problem, or to accomplishing goals in the agency's 
        strategic plan:
            ``(2) is part of a planned, systematic, and coordinated 
        agency employee development program linked to accomplishing the 
        agency's strategic goals and objectives; and
            ``(3) is accredited and is provided by a college or 
        university that is accredited by a nationally recognized body.
    ``(b) In exercising authority under subsection (a), an agency 
shall--
            ``(1) consistent with the merit system principles set forth 
        in paragraphs (2) and (7) of section 2301(b), take into 
        consideration the need to--
                    ``(A) maintain a balanced workforce in which women, 
                members of racial and ethnic minority groups, and 
                persons with disabilities are appropriately represented 
in Government service; and
                    ``(B) provide employees effective education and 
                training to improve organizational and individual 
                performance;
            ``(2) assure that the training is not for the sole purpose 
        of providing an employee an opportunity to obtain an academic 
        degree or to qualify for appointment to a particular position 
        for which the academic degree is a basic requirement; and
            ``(3) assure that no authority under this subsection is 
        exercised on behalf of any employee occupying or seeking to 
        qualify for appointment to any position that is excepted from 
        the competitive service because of its confidential policy-
        determining, policy-making, or policy-advocating character.''; 
        and
            (2) in the table of sections by mending the item relating 
        to section 4107 to read as follows:

``4107. Academic degree training.''.

SEC. 123. PROFESSIONAL CREDENTIALS.

    Chapter 57 of title 5, United States Code, as amended by section 
121, is further amended--
            (1) by adding at the end of the following new section:
``Sec. 5757. Expenses for credentials
    ``(a) An agency may, when consistent with the agency's strategic 
goals and objectives, use appropriated or other available funds to pay 
for--
            ``(1) employee credentials, including professional 
        accreditation, state-imposed and professional licenses, and 
        professional certifications; and
            ``(2) examinations to obtain these credentials.
    ``(b) No authority under subsection (a) may be exercised on behalf 
of any employee occupying or seeking to qualify for appointment to any 
position which is excepted from the competitive service because of its 
confidential, policy-determining, policy-making, or policy-advocating 
character.
    ``(c) An agency may, in accordance with regulations of the Office 
of Personnel Management and subject to the same terms and conditions 
that apply to continued service agreements under section 4108, require 
such an agreement in conjunction with payment of expenses authorized 
under subsection (a).''; and
            (2) in the table of sections by adding at the end the 
        following new item:

``5757. Expenses for credentials.''.

SEC. 124. CORRECTION OF PAY ADMINISTRATION PROBLEMS.

    (a) Chapter 53 of title 5, United States Code, is amended--
            (1) by amending section 5302(8) to read as follows:
            ``(8) the term `rates of pay under the General Schedule', 
        `rates of pay for the General Schedule', or `scheduled rates of 
        basic pay' means the unadjusted rates of basic pay in the 
        General Schedule as established by section 5332, excluding 
        additional pay of any kind; and'';
            (2) in section 5305--
                    (A) by amending subsection (a) to read as follows:
    ``(a)(1) Whenever the Office of Personnel Management finds that the 
Government's recruitment or retention efforts with respect to one or 
more occupations in one or more areas or locations are, or are likely 
to become, significantly handicapped due to any of the circumstances 
described in subsection (b), the Office may establish for the areas or 
locations involved, with respect to individuals in positions paid under 
any of the pay systems referred to in subsection (c), higher minimum 
rates of pay for one or more grades or levels, occupational groups, 
series, classes, or subdivisions thereof, and may make corresponding 
increases in all rates to the pay range for each such grade or level. 
However, a minimum rate so established may not exceed the maximum rate 
of basic pay (excluding any locality-based comparability payment under 
section 5304 or similar provision of law) for the grade or level by 
more than 30 percent, and no rate may be established under this section 
in excess of the rate of basic pay payable for level IV of the 
Executive Schedule. In the case of individuals not subject to the 
provisions of this title governing appointment in the competitive 
service, the President may designate another agency to authorize 
special rates under this section.
    ``(2) The head of an agency may determine that a category of 
employees of the agency will not be covered by a special rate 
authorization established under this section. The agency head shall 
provide formal written notice to the Office of Personnel Management (or 
other agency designated by the President to authorize special rates) 
which identifies the specific category or categories of employees that 
will not be covered by special rates authorized under this section. If 
the head of an agency removes a category of employees from coverage 
under a special rate authorization after that authorization takes 
effect, the loss of coverage will take effect on the first day of the 
first pay period after the date of the notice.'';
                    (B) by amending subsection (b)(4) to read as 
                follows:
            ``(4) any other circumstances which the Office of Personnel 
        Management (or such agency as the President may designate) 
        considers appropriate.'';
                    (C) in subsection (d)--
                            (i) by striking ``President'' and inserting 
                        ``Office of Personnel Management''; and
                            (ii) by striking ``he'' and inserting ``the 
                        President'';
                    (D) in subsection (e) by striking ``basic pay'' and 
                inserting ``pay'';
                    (E) by amending subsection (f) to read as follows:
    ``(f) When a schedule of special rates established under this 
section is adjusted under subsection (d), a covered employee's special 
rate will be adjusted in accordance with conversion rules prescribed by 
the Office of Personnel Management or by such agency as the President 
may designate.'';
                    (F) in subsection (g)(1)--
                            (i) by striking ``basic pay'' and inserting 
                        ``pay''; and
                            (ii) by striking ``President (or his 
                        designated agency)'' and inserting ``Office of 
                        Personnel Management (or such agency as the 
                        President may designate)'';
                    (G) by amending subsection (h) to read as follows:
    ``(h) Any employee's entitlement to a rate of pay established under 
this section terminates when the employee is entitled to a higher rate 
of pay (including basic pay as adjusted to include any locality-based 
comparability payment under section 5304 or similar provision of 
law).''; and
                    (H) by adding at the end the following new 
                subsections:
    ``(i) When an employee who is receiving a rate of pay established 
under this section moves to a new official duty station at which 
different pay schedules apply, the employee shall be entitled to the 
rates of pay applicable in the new pay area based on the employee's 
position, grade and step (or relative position in the rate range) 
before the movement, as determined under regulations prescribed by the 
Office of Personnel Management or other agency designated by the 
President under subsection (a). Such pay conversion upon geographic 
movement shall be effected before processing any other simultaneous pay 
action (other than a general pay adjustment).
    ``(j) A rate established under this section shall be considered to 
be part of basic pay for purposes of subchapter III of chapter 83, 
chapter 84, chapter 87, subchapter V of chapter 55, section 5941, and 
for such other purposes as may be expressly provided for by law or as 
the Office of Personnel Management may by regulation prescribe.'';
            (3) in section 5334--
                    (A) is subsection (b) by adding at the end the 
                following: ``If an employee's rate after promotion or 
                transfer is greater than the maximum rate of basic pay 
                for the employee's grade, that rate shall be treated as 
                a retained rate under section 5363. The Office of 
                Personnel Management shall prescribe by regulation the 
                circumstances under which and the extent to which 
                special rates under section 5305 (or similar provision 
                of law) or locality-adjusted rates under section 5304 
                (or similar provision of law) are considered to be 
                basic pay in applying the provisions of this 
                subsection.''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(g) When an employee moves to a new official duty station at 
which different pay schedules apply, the employee shall be entitled to 
the rates of pay applicable in the new pay area based on the employee's 
position, grade and step (or relative position in the rate range) 
before the movement. Such pay conversion upon geographic movement shall 
be effected before processing any other simultaneous pay action (other 
than a general pay adjustment).'';
            (4) in section 5361--
                    (A) by striking paragraphs (3) and (4) and 
                redesignating paragraphs (5)-(7) as paragraphs (3)-(5);
                    (B) in paragraph (4) as redesignated by striking 
                ``and'' at the end;
                    (C) in paragraph (5) as redesignated by striking 
                the period and inserting a semicolon; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(6) `rate of basic pay' means--
                    ``(A) the rate of pay prescribed by law or 
                regulation for the position held by an employee before 
                any deductions or additions of any kind, but including 
                any applicable locality-based payment under section 
                5304 or similar provision of law, any applicable 
                special salary rate under section 5305 or similar 
                provision of law, and any applicable existing retained 
                rate of pay established under section 5363 or similar 
                provision of law; and
                    ``(B) in the case of a prevailing rate employee, 
                the scheduled rate of pay determined under section 
                5343;
            ``(7) `former highest applicable rate of basic pay' means 
        the highest applicable rate of basic pay payable to the 
        employee immediately before the action that triggers pay 
        retention under section 5363; and
            ``(8) `highest applicable basic pay rate range' means the 
        range of rates of basic pay for the grade or level of the 
        employee's current position with the highest maximum rate, 
        except as otherwise provided in regulations prescribed by the 
        Office of Personnel Management in cases where another rate 
        range provides higher rates only in the lower portion of the 
        range.'';
            (5) in section 5363--
                    (A) in subsection (a) by amending the matter 
                following paragraph (4) to read as follows: ``is 
                entitled to pay retention under the conditions set 
                forth in this section. Notwithstanding any other 
                provision, this section may not be applied to employees 
                whose rate of basic pay is reduced solely because of 
                the recomputation of pay upon movement to a new 
                official duty station at which different pay schedules 
                apply. When a geographic move is accompanied by a 
                simultaneous pay action that reduces the employee's 
                rate of basic pay after the employee's pay has been 
                recomputed to reflect the geographic move, this section 
                shall be applied, if otherwise applicable.''; and
                    (B) by striking subsections (b) and (c) and 
                inserting the following new subsections:
    ``(b) If an employee is entitled to pay retention under subsection 
(a), the following rules apply in determining the employee's rate of 
pay:
            ``(1) If the employee's former highest applicable rate of 
        basic pay is less than or equal to the maximum rate of the 
        highest applicable basic pay rate range for the employee's 
        current position, the employee is entitled to the lowest 
        payable rate of basic pay in that rate range that equals or 
        exceeds the former rate, and pay retention ceases to apply; and
            ``(2) If the employee's former highest applicable rate of 
        basic pay exceeds the maximum rate of the highest applicable 
        basic pay rate range for the employee's current position, the 
        employee is entitled to a retained rate equal to the lesser 
        of--
                    ``(A) the employee's former highest applicable rate 
                of basic pay; or
                    ``(B) 150 percent of the maximum rate of the 
                highest applicable basic pay rate range for the 
                employee's position.
    ``(c) An employee's retained rate shall be increased at the time of 
any increase in the maximum rate of the highest applicable basic pay 
rate range for the employee's position by 50 percent of the dollar 
increase in that maximum rate.
    ``(d) The rate of pay for an employee who is receiving a retained 
rate under this section and who is moved to a new official duty station 
at which different pay schedules apply shall be determined under 
regulations prescribed by the Office of Personnel Management consistent 
with the purposes of this section.
    ``(e) A retained rate shall be considered part of basic pay for 
purposes of this subchapter and for purposes of subchapter III of 
chapter 83, chapters 84 and 87, subchapter V of chapter 55, section 
5941, and for such other purposes as may be expressly provided for by 
law or as the office of Personnel Management may by regulation 
prescribed. For other purposes, the Office shall prescribe by 
regulation what constitutes basic pay for employees receiving a 
retained rate.
    ``(f) The preceding provisions of this section do not apply (or 
shall cease to apply) to an employee who--
            ``(1) has a break in service of one workday or more;
            ``(2) is entitled by operation of this subchapter to 
        chapter 51 to 53 to a rate of basic pay which is equal to or 
higher than, or declines a reasonable offer of a position the rate of 
basic pay for which is equal to or higher than, the rate to which the 
employee is entitled under this section; or
            ``(3) is demoted for personal cause or at the employee's 
        request.''; and
            (6) in section 5365(b) by inserting after ``this 
        subchapter'' the first time it appears the following: 
        ``(subject to any conditions or limitations the Office may 
        establish)''.
    (b) Section 403(c) of the Federal Employees Pay Comparability Act 
of 1990 [Public Law 101-509, Sec. 529] is amended by striking 
everything after the parenthetical phrase and inserting the following: 
``and shall be basic pay for all purposes. The rates shall be adjusted 
at the time of adjustments in the General Schedule to maintain the step 
linkage set forth in subsection (b)(2).''.
    (c) Subject to any regulations the Office of Personnel Management 
may prescribe, any employee in a covered pay schedule who is receiving 
a retained rate under section 5363 of title 5, United States Code, or 
similar authority on the effective date of this Act shall have his or 
her pay converted on that date. The newly applicable retained rate 
shall equal the formerly applicable retained rate as adjusted to 
include any applicable locality-based payment under section 5304 of 
title 5, United States Code, or similar provision of law. Any employee 
in a covered pay system receiving a rate that exceeds the maximum rate 
of the highest applicable basic pay rate range for the employee's 
position (as defined in section 5361(8) of such title 5, as amended by 
this Act) under any authority shall be considered to be receiving a 
retained rate under section 5363 of title 5.

SEC. 125. CIVIL SERVICE RETIREMENT SYSTEM COMPUTATION FOR PART-TIME 
              SERVICE.

    Section 8339(p) of title 5, United States Code, is amended by 
adding at the end the following new paragraph:
            ``(3) In the administration of paragraph (1)--
                    ``(A) subparagraph (A) of such paragraph shall 
                apply to any service performed before, on, or after 
                April 7, 1986;
                    ``(B) subparagraph (B) of such paragraph shall 
                apply to all service performed on a part-time or full-
                time basis on or after April 7, 1986; and
                    ``(C) any service performed on a part-time basis 
                before April 7, 1986, shall be credited as service 
                performed on a full-time basis.''.

SEC. 126. PROMOTIONAL ITEMS RECEIVED PURSUANT TO OFFICIAL TRAVEL.

    (a) Travel and Transportation Allowances.--Section 404 of title 37, 
United States Code, is amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Promotional items a member receives as a consequence of 
travel paid by the United States, or accepted under the provisions of 
section 1353 of title 31, United States Code, may be retained by the 
member. Promotional items include but are not limited to frequent 
travel programs, upgrades, and access to carrier clubs or facilities. 
Such items shall be obtained under the same terms as provided the 
general public and shall be at no additional cost.''.
    (b) Per Diem Allowances.--Section 5702 of title 5, United States 
Code, is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new 
        subsection (c):
    ``(c) Notwithstanding the provisions of subsection (d), promotional 
items an employee (including justices and judges) receives as a 
consequence of travel paid by the United States, or accepted pursuant 
to the provisions of section 1353 of title 31, United States Code, may 
be retained by the employee. Promotional items include but are not 
limited to frequent travel programs, upgrades, and access to carrier 
clubs or facilities. Such items shall be obtained under the same terms 
as provided the general public and shall be at no additional cost.''.
    (c) Amendment to Foreign Service Act.--Section 901 of the Foreign 
Service Act of 1980 (22 U.S.C. 4081) is amended--
            (1) by inserting ``(a)'' before ``The Secretary''; and
            (2) by adding at the end the following new subsection (b):
    ``(b) Promotional items a member of the Service receives as a 
consequence of travel paid by the United States, or accepted pursuant 
to the provisions of section 1353 of title 31, United States Code, may 
be retained by the member. Promotional items include but are not 
limited to frequent travel programs, upgrades, and access to carrier 
clubs or facilities. Such items shall be obtained under the same terms 
as provided the general public and shall be at no additional cost.''.
    (d) Repeal of Limitation on the Use of Travel Awards.--Section 6008 
of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-
355; 108 Stat. 3367) is repealed.

SEC. 127. STUDENT VOLUNTEER TRANSIT SUBSIDY.

    (a) Section 7905 of Title 5, United States Code, is amended in 
subsection (a)(1), by striking ``and a member of a uniformed service'' 
and inserting ``, a member of a uniformed service, and a student who 
provides voluntary services pursuant to 5 U.S.C. 3111.''
    (b) Conforming Amendment.--Section 3111(c)(1) of title 5, United 
States Code, is amended by striking ``chapter 81 of this title'' and 
inserting ``section 7905 (relating to commuting by means other than 
single-occupancy motor vehicles), chapter 81.''

SEC. 128. EFFECTIVE DATE.

    (a) Except as otherwise provided by this section, the amendments 
made by the preceding sections shall take effect on the first day of 
the first pay period beginning on or after the 180th day after 
enactment of this subtitle with the exception of sections 126 and 127, 
which shall take effect immediately upon enactment of this subtitle.
    (b) A recruitment or relocation bonus service agreement that was 
authorized under section 5753 of title 5, United States Code, before 
the effective date set forth in subsection (a) shall continue, until 
its expiration, to be subject to section 5753 as in effect on the day 
before such effective date.
    (c) Payment of a retention allowance that was authorized under 
section 5754 of title 5, United States Code, before the effective date 
set forth in subsection (a) shall continue, subject to section 5754 as 
in effect on the day before such effective date, until the retention 
allowance is reauthorized or terminated (but no longer than one year 
after such effective date).
    (d) The amendments made by section 124 shall take effect on the 
date of enactment of this Act and shall apply only with respect to 
individuals who, on or after such date of enactment, separate from 
employment subject to subchapter III of chapter 83, or chapter 84, of 
title 5, United States Code.

 Subtitle D--Promotion of Results-Oriented Performance Evaluation and 
                   Compensation for Senior Executives

SECTION 131. CAP ON TOTAL ANNUAL COMPENSATION.

    Section 5307(a) of title 5, United States Code, is amended by 
adding at the end the following new paragraph:
            ``(3) Notwithstanding paragraph (1), the total payment 
        referred to under such paragraph with respect to an employee 
        paid under section 5376 or 5383 shall not exceed the total 
        annual compensation payable to the Vice President under section 
        104 of title 3, United States Code. Regulations prescribed 
        under subsection (c) may extend the application of this 
        paragraph to other equivalent categories of employees.''.

SEC. 132. REPEAL OF SENIOR EXECUTIVE RECERTIFICATION.

    (a) Title 5, United States Code, is amended--
            (1) in chapter 33--
                    (A) in section 3393(g) by striking ``3393a,'';
                    (B) by repealing section 3393a; and
                    (C) in the analysis by striking the item relating 
                to section 3393a;
            (2) in subchapter V of chapter 35--
                    (A) in section 3592(a)--
                            (i) in paragraph (1) by striking the comma 
                        at the end and inserting''; or'';
                            (ii) in paragraph (2) by striking ``of this 
                        title, or'' at the end and inserting a 
                        semicolon;
                            (iii) by striking paragraph (3); and
                            (iv) by striking the last sentence;
                    (B) in section 3593(a) by amending paragraph (2) to 
                read as follows:
            ``(2) the appointee left the Senior Executive Service for 
        reasons other than misconduct, neglect of duty, malfeasance, or 
        less than fully successful executive performance as determined 
        under subchapter II of chapter 43.''; and
                    (C) in section 3594(b)--
                            (i) in paragraph (1) by striking ``of this 
                        title; or'' at the end and inserting''; or'';
                            (ii) in paragraph (2) by striking ``of this 
                        title; or'' at the end and inserting a 
                        semicolon; and
                            (iii) by striking paragraph (3);
            (3) in section 7701(c)(1)(A) by striking ``or removal from 
        the Senior Executive Service for failure to be recertified 
        under section 3393a'';
            (4) in subchapter III of chapter 83--
                    (A) in section 8336(h)(1) by striking ``for failure 
                to be recertified as a senior executive under section 
                3393a or''; and
                    (B) in section 8339(h), in the first sentence, by 
                striking''; except that such reduction shall not apply 
                in the case of an employee retiring under section 
                8336(h) for failure to be recertified as a senior 
                executive''; and
            (5) in subchapter II of chapter 84--
                    (A) in section 8414(a)(1) by striking ``for failure 
                to be recertified as a senior executive under section 
                3393a or''; and
                    (B) in section 8421(a)(2) by striking ``, except 
                that an individual entitled to an annuity under section 
                8414(a) for failure to be recertified as a senior 
                executive shall be entitled to an annuity supplement 
                without regard to such applicable minimum retirement 
                age''.
    (b) Notwithstanding the amendments made by subsection (a)(2)(A) of 
this section, an appeal under the final sentence of section 3592(a) of 
title 5, United States Code, that is pending on the day before the 
enactment of this Act--
            (1) shall not abate by reason of the enactment of such 
        amendments; and
            (2) shall continue as if such amendments had not been 
        enacted.
    (c) The amendment made by subsection (a)(2)(B) shall not apply with 
respect to an individual who, before 90 days after the date of 
enactment of this Act, leaves the Senior Executive Service for failure 
to be recertified as a senior executive under section 3393a of title 5, 
United States Code.

SEC. 133. ANNUAL LEAVE ENHANCEMENTS.

    (a) Chapter 63 of title 5, United States Code, is amended--
            (1) in section 6303(a)--
                    (A) in paragraph (2) by striking ``and'' at the 
                end;
                    (B) in paragraph (3) by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting after paragraph (3) the following:
            ``(4) one day for each full biweekly pay period for an 
        employee in a position paid under section 5376 or 5383, or for 
        an employee in an equivalent category for which the minimum 
        rate of basic pay is greater than GS-15, step 10, to which the 
        application of the paragraph is extended by the Office by 
        regulation under section 6311.'';
            (2) by inserting after section 6304 the following new 
        section:
``Sec. 6304a. Annual leave.
    ``(a) The head of an agency may provide an annual leave credit to 
an employee who is newly appointed from outside the civil service to a 
position paid under section 5376 or 5383, or for an employee in an 
equivalent category for which the minimum rate of basic pay is greater 
than GS-15, step 10, to which the application of this section is 
extended by the Office by regulation under section 6311, when the 
agency head determines that the credit is needed to complete the 
recruitment of a highly qualified candidate.
    ``(b) The amount of the annual leave credit under subsection (a) 
may not exceed 10 full days and is in addition to annual leave accrued 
by the employee under section 6303.
    ``(c) In the case of an employee who receives an annual leave 
credit under subsection (a) and who separates prior to completing one 
year of service, the maximum amount of a lump-sum payment under section 
5551 shall be equal to the amount payable for annual leave actually 
accrued.''; and
            (3) in the table of sections by inserting the following 
        item after the item relating to section 6304:

``6304a. Annual leave credit.''.

SEC. 134. EFFECTIVE DATE.

    The amendments made by this subtitle shall take effect on the first 
day of the first pay period beginning on or after 180 days following 
the date of enactment of this subtitle.

       Subtitle E--Federal Human Resources Management Innovations

SEC. 141. PROJECT MANAGEMENT AND ALTERNATIVE PERSONNEL SYSTEMS.

    (a) Chapter 47 of title 5, United States Code, is amended--
            (1) by amending section 4701--
                    (A) in subsection (a)--
                            (i) by striking ``(a)'';
                            (ii) by amending paragraph (1) to read as 
                        follows:
            ``(1) `agency' means an Executive agency and any entity 
        that is subject to any provision of this title that could be 
        waived under section 4703, but does not include--
                    ``(A) the Federal Bureau of Investigation, the 
                Central Intelligence Agency, the Defense Intelligence 
                Agency, the National Imagery and Mapping Agency, the 
                National Security Agency, and, as determined by the 
                President, any Executive agency or unit thereof which 
                is designated by the President and which has as its 
                principal function the conduct of foreign intelligence 
                or counterintelligence activities; or
                    ``(B) the General Accounting Office;''
                            (iii) in paragraph (4) by striking ``and'' 
                        at the end;
                            (iv) by redesignating paragraph (5) as 
                        paragraph (6); and
                            (v) by inserting after paragraph (4) the 
                        following new paragraph:
            ``(5) `modification' means a significant change in one or 
        more of the elements of a demonstration project plan as 
        described in section 4703(b)(1); and''; and
                    (B) by striking subsection (b); and
            (2) in section 4703--
                    (A) in subsection (a)--
                            (i) by striking ``conduct and evaluate 
                        demonstration projects'' and inserting 
                        ``conduct, modify, and evaluate demonstration 
                        projects'';
                            (ii) by striking ``, including any law or 
                        regulation relating to--'' and all that follows 
                        and inserting a period; and
                            (iii) by adding at the end the following: 
                        ``The decision to initiate or modify a project 
                        under this section shall be made by the 
                        Office.'';
                    (B) by amending subsection (b) to read as follows;
    ``(b) Before conducting or entering into any agreement or contract 
to conduct a demonstration project, the Office shall ensure--
            ``(1) that each project has a plan which describes--
                    ``(A) its purpose;
                    ``(B) the employees to be covered;
                    ``(C) its anticipated outcomes and resource 
                implications, including how the project relates to 
                carrying out the agency's strategic plan, including 
                meeting performance goals and objectives, and 
                accomplishing its mission;
                    ``(D) the personnel policies and procedures the 
                project will use that differ from those otherwise 
                available and applicable, including a specific citation 
                of any provisions of law, rule, or regulation to be 
                waived and a specific description of any contemplated 
                action for which there is a lack of specific authority;
                    ``(E) an evaluation plan, including the methodology 
                and criteria for evaluation; and
                    ``(F) the agency's system for ensuring that the 
                project is implemented in a manner consistent with 
                merit system principles;
            ``(2) notification of the proposed project to employees who 
        are likely to be affected by the project;
            ``(3) an appropriate comment period;
            ``(4) publication of the final plan in the Federal 
        Register;
            ``(5) notification of the final project at least 30 days in 
        advance of the date any project proposed under this section is 
        to take effect to employees who are likely to be affected by 
        the project;'';
            ``(6) publication of any subsequent modification in the 
        Federal Register; and
            ``(7) notification of any subsequent modification to 
        employees who are included in the project.'';
                    (C) in subsection (c)--
                            (i) by amending paragraph (1) to read as 
                        follows:
            ``(1) any provision of chapter 63 or subpart G of part III 
        of this title;'';
                            (ii) by redesignating paragraphs (4) and 
                        (5) as paragraphs (6) and (7), respectively;
                            (iii) by inserting after paragraph (3) the 
                        following new paragraphs:
            ``(4) section 7342, 7351, or 7353;
            ``(5) Appendix 4 of this title;'';
                            (iv) in paragraph (6) as redesignated, by 
                        striking ``paragraph (1), (2), or (3) of this 
                        subsection; or'' and inserting ``paragraphs (1) 
                        through (5);''; and
                            (v) in paragraph (7) as redesignated, by 
                        adding at the end the following: 
                        ``Notwithstanding section 2302(e)(1), for 
                        purposes of applying section 2302(b)(11) in a 
                        demonstration project under this chapter, 
                        `veterans' preference requirement' means any of 
                        the specific provisions of the demonstration 
                        project plan that are designed to ensure that 
                        the project is consistent with veterans' 
                        preference principles.'';
                    (D) by amending subsections (d) and (e) to read as 
                follows:
    ``(d) Before the end of the five-year period beginning on the date 
on which a demonstration project takes effect, the Office shall 
determine whether the project shall be--
            ``(1) terminated;
            ``(2) continued beyond the end of such five-year period for 
        purposes of evaluation; or
            ``(3) converted to an alternative personnel system under 
        chapter 49.
    ``(e) The Office may terminate a demonstration project under this 
chapter if it determines that the project--
            ``(1) is not consistent with merit system principles set 
        forth in section 2301, veterans preference principles, or the 
        provisions of this chapter; or
            ``(2) otherwise imposes a substantial hardship on, or is 
        not in the best interests of, the public, the Government, 
        employees, or eligibles.
                    (E) by amending subsections (h) and (i) to read as 
                follows:
    ``(h) The Office shall ensure that each demonstration project is 
evaluated. Each evaluation shall assess--
            ``(1) the project's compliance with the plan developed 
        under subsection (b)(1); and
            ``(2) the project's impact on improving public management.
    ``(i) Upon request of the Director of the Office of Personnel 
Management, agencies shall cooperate with and assist the Office in any 
evaluation or conversion undertaken under subsection (h) and provide 
the Office with requested information and reports relating to the 
conducting of demonstration projects in their respective agencies.''.
    (b) title 5, United States Code, is amended--
            (1) by inserting after chapter 47 the following new 
        chapter:

              ``CHAPTER 49--ALTERNATIVE PERSONNEL SYSTEMS

``Sec. 4901. Definitions
    ``For the purpose of this chapter--
            ``(i) `agency' has the meaning set forth in section 
        4701(a)(1);
            ``(2) `alternative personnel system' means a system for 
        human resources management in an agency which--
                    ``(A)(i) requires a waiver (except as prohibited 
                under section 4902(c)) of one or more of the provisions 
                of this title or any rule or regulation prescribed 
                under this title; or
                    ``(ii) exercises authorities not specifically in 
                law, rule, or regulation;
                    ``(B) is designed to improve the agency's ability 
                to carry out its strategic plan and accomplish its 
                mission efficiently and effectively; and
                    ``(C)(i) is similar to one or more systems already 
                tested successfully in at least one other agency as a 
                demonstration project under chapter 47; or
                    ``(ii) has otherwise been determined by the Office 
                of Personnel Management not to require testing as a 
                demonstration project before being implemented by the 
                agency as an alternative personnel system;
            ``(3) `eligible' has the meaning set forth in section 
        4701(a)(3);
            ``(4) `employee' has the meaning set forth in section 
        4701(a)(2); and
            ``(5) `modification' means a significant change in one or 
        more of the elements of an alternative personnel system plan as 
        described in section 4902(b)(1).
``Sec. 4902. Alternative personnel systems
    ``(a) An agency may implement and subsequently modify one or more 
alternative personnel systems in accordance with the provisions of this 
chapter. An alternative personnel system shall not be limited by any 
lack of specific authority under this title to take the action 
contemplated or, except as otherwise provided in this section, by any 
provision of this title of any rule or regulation prescribed under this 
title which is inconsistent with the action.
    ``(b) Except as provided in section 4903(b), before implementing an 
alternative personnel system an agency shall--
            ``(1) develop a plan for such system which describes--
                    ``(A) its purposes;
                    ``(B) the employees to be covered;
                    ``(C) its anticipated outcomes and resource 
                implications, including how the system relates to 
                carrying out the agency's strategic plan, including 
                meeting performance goals and objectives, and 
                accomplishing its mission;
                    ``(D) the personnel policies and procedures the 
                alternative system will use that differ from those 
                otherwise available and applicable, including a 
                specific citation of any provisions of law, rule, or 
                regulation to be waived and a specific description of 
                any contemplated action for which there is a lack of 
                specific authority; and
                    ``(E) the agency's system for ensuring that the 
                alternative system is consistent with merit system 
                principles.
            ``(2) submit the plan and any subsequent modification to 
        the Office of Personnel Management for approval; and
            ``(3) provide advance notification of the plan and 
        subsequent modification to employees who are likely to be 
        affected by the alternative personnel system.
    ``(c) No alternative personnel system under this section may 
provide for a waiver of--
            ``(1) any provision of chapter 63 or subpart G of part III 
        of this title;
            ``(2)(A) any provision of law referred to in section 
        2302(b)(1); or
            ``(B) any provision of law implementing any provision of 
        law referred to in section 2302(b)(1) by--
                    ``(i) providing for equal employment opportunity 
                through affirmative action; or
                    ``(ii) providing any right or remedy available to 
                any employee or applicant for employment in the civil 
                service;
            ``(3) any provision of chapter 15 or subchapter III of 
        chapter 73;
            ``(4) section 7342, 7351, or 7353;
            ``(5) Appendix 4 of this title;
            ``(6) any rule or regulation prescribed under any provision 
        of law referred to in paragraphs (1) through (5); or
            ``(7) any provision of chapter 23, or any rule or 
        regulation prescribed under this title, if such waiver is 
        inconsistent with any merit system principle or any provision 
        thereof relating to prohibited personnel practices. 
        Notwithstanding section 2302(e)(1), for purposes of applying 
        section 2302(b)(11) in an alternative personnel system under 
        this chapter, `veterans' preference requirement' means any of 
        the specific provisions of the alternative personnel system 
        plan that are designed to ensure that the system is consistent 
        with veterans' preference principles.''
    ``(d) Employees within a unit with respect to which a labor 
organization is accorded exclusive recognition under chapter 71 shall 
not be included within any alternative personnel system implemented or 
subsequently modified under this chapter--
            ``(1) if the alternative system would violate a collective 
        bargaining agreement (as defined in section 7103(8)) between 
        the agency and the labor organization, unless there is another 
        written agreement with respect to the alternative system 
        between the agency and the organization permitting the 
        inclusion; or
            ``(2) if the alternative system would not violate such a 
        collective bargaining agreement, until there has been 
        consultation or negotiation, as appropriate, by the agency with 
        the labor organization.
    ``(e) Employees within any unit with respect to which a labor 
organization has not been accorded exclusive recognition under chapter 
71 shall not be included in any alternative personnel system 
implemented or subsequently modified under this chapter unless there 
has been agency consultation regarding the alternative system with the 
employees in the unit.
``Sec. 4903. Responsibilities of the Office of Personnel Management
    ``(a)(1) No alternative personnel system under this chapter may be 
implemented or subsequently modified without the approval of the Office 
of Personnel Management. Approval shall be based on a determination 
that the proposed alternative system or any subsequent modification 
meets all of the requirements of this chapter. The Office shall inform 
the agency of the approval or disapproval of its proposed alternative 
system within 90 days after receiving a complete plan as described in 
section 4902(b)(1).
    ``(2) The Office shall publish in the Federal Register a notice of 
its approval of each alternative personnel system. The notice shall 
include a summary of the alternative system. This notice requirement 
shall apply to a modification of an alternative personnel system which 
is determined by the Office in its sole discretion to be sufficiently 
significant to warrant publication.
    ``(b) At the request of the agency and subject to sections 
4703(d)(2) and 4902(d), the Office may convert a demonstration project 
under chapter 47 to an alternative personnel system, without requiring 
the agency to develop a plan as described in section 4902(b), when the 
Office determines that the project has demonstrated sufficient success 
to be implemented permanently in the agency. When a project is 
converted under this subsection, the demonstration project plan under 
section 4703(b)(1), including any subsequent modifications, is deemed 
to be the alternative personnel system plan under section 4902(b)(1).
    ``(c) The Office may terminate an alternative personnel system if 
it determines that the alternative system--
            ``(1) is not consistent with merit system principles set 
        forth in section 2301, veterans preference principles, or the 
        provisions of this chapter; or
            ``(2) otherwise imposes a substantial hardship on, or is 
        not in the best interests of, the public, the Government, 
        employees, or eligibles.
``Sec. 4904. Regulations
    ``The Office of Personnel Management shall prescribe regulations 
needed to administer this chapter.''; and
            (2) in the table of sections by inserting after the items 
        relating to chapter 47 the following:

              ``CHAPTER 49--ALTERNATIVE PERSONNEL SYSTEMS

``Sec.
        ``4901. Definitions.
        ``4902. Alternative personnel systems.
        ``4903. Responsibilities of the Office of Personnel Management.
        ``4904. Regulations.''.
    (c) The table of chapters for Part III of title 5, United States 
Code, is amended by inserting after the item relating to chapter 47 the 
following new item:

``49. Alternative Personnel Systems............................ 4901''.
    (d)(1) The demonstration project established under section 10 of 
the National Bureau of Standards Authorization Act for Fiscal Year 1987 
(15 U.S.C. 275 note) shall become an alternative personnel system under 
chapter 49 of title 5, United States Code, on the effective date set 
forth in section 142.
    (2) Section 10 of the National Technology Transfer and Advancement 
Act of 1995 is repealed.
    (e)(1) The demonstration project authorized by section 4703 of 
title 5, United States Code, at the Naval Weapons Center, China Lake, 
California, and at the Naval Ocean Systems Center, San Diego, 
California, as subsequently modified and continued, shall become an 
alternative personnel system under chapter 49 of title 5, United States 
Code, on the effective date set forth in section 142.
    (2) Section 342(a) of the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103-337; 108 Stat. 2663), as amended, is 
repealed. Any demonstration project authorized by such section 342(a), 
as amended, shall become a demonstration project under chapter 47 of 
title 5, United States Code, on the effective date set forth in section 
142.
    (f)(1) The demonstration project authorized by section 4703 of 
title 5, United States Code, at the United States Department of 
Agriculture, as subsequently modified and continued, shall become an 
alternative personnel system under chapter 49 of title 5 on the 
effective date set forth in section 142.
    (2) Section 749 of the Agriculture, Rural Development, Food and 
Drug Administration, and Related Agencies Appropriations Act, 1999, as 
contained in section 101(a) of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act, 1999 (Public Law 105-277), is 
repealed.
    (g) Section 1104 of title 5, United States Code, is amended--
            (1) in subsection (b)--
                    (A) by amending paragraph (1) to read as follows:
    ``(b)(1) The Office shall establish standards which shall apply 
to--
            ``(A) the activities of the Office or any other agency 
        under authority delegated under subsection (a); and
            ``(B) any agency operating a demonstration project under 
        chapter 47 or an alternative personnel system under chapter 
        49.''; and
                    (B) in paragraph (2) by striking ``of this 
                section'' and inserting ``and any activities under 
                chapter 47 or 49''; and
            (2) in subsection (c) by striking ``pursuant to authority 
        delegated under subsection
    (a)(2) of this section'' and inserting ``under chapter 47 or 49 or 
pursuant to authority delegated under subsection (a)(2)''.

SEC. 142. EFFECTIVE DATE.

    The amendments made by this subtitle shall take effect 180 days 
after enactment.

         Subtitle F--Federal Human Resources Hiring Flexibility

SEC. 151. EMPLOYMENT FLEXIBILITY AMENDMENTS.

    Chapter 33 of title 5, United States Code, is amended--
            (1) in section 3304(a)--
                    (A) in paragraph (2) by striking the period and 
                inserting ``; and''; and
                    (B) by adding at the end the following paragraph:
            ``(3) authority for agencies to appoint, without regard to 
        the provisions of sections 3309 through 3318, candidates 
        directly to positions for which--
                    ``(A) public notice has been given; and
                    ``(B) the Office of Personnel Management has 
                determined that there exists a severe shortage of 
                candidates or there is a critical hiring need. The 
                Office shall prescribe, by regulation, criteria for 
                identifying such positions and may delegate authority 
                to make determinations under such criteria.'';
            (2) by inserting after section 3318 the following new 
        section:
``Sec. 3319. Alternative ranking and selection procedures
    ``(a) Notwithstanding section 2302(b)(11) or any other provision of 
this chapter--
            ``(1) the Office, in exercising its authority under section 
        3304; or
            ``(2) an agency to which the Office has delegated examining 
        authority under section 1104(a)(2)--
may establish category rating systems for evaluating job applicants for 
positions in the competitive service, under which qualified candidates 
are divided into two or more quality categories, consistent with 
regulations prescribed by the Office of Personnel Management, rather 
than assigned individual numerical ratings.
    ``(b) Within each quality category established under subsection 
(a), preference-eligibles shall be listed ahead of individuals who are 
not preference eligibles. For other than scientific and professional 
positions at GS-9 (equivalent or higher), qualified preference-
eligibles who have a compensable service-connected disability of 10 
percent or more shall be listed in the highest quality category.
    ``(c) An appointing official may select any applicant in the 
highest quality category or, if fewer than three candidates have been 
assigned to the highest quality category, in a merged category 
consisting of the highest and the second highest quality categories. 
Notwithstanding the preceding sentence, the appointing official may not 
pass over a preference-eligible in the same category from which 
selection is made, unless the requirements of section 3317(b) or 
3318(b), as applicable, are satisfied.
    ``(d) The Office of Personnel Management may prescribe such 
regulations as it considers necessary to carry out the provisions of 
this section.''; and
            (3) in the table of sections by amending the item relating 
        to section 3319 to read as follows:

``3319. Alternative ranking and selection procedures.''

TITLE II--BUDGETING AND MANAGING FOR RESULTS: FULL FUNDING FOR FEDERAL 
                             RETIREE COSTS

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
                               Employees

SEC. 201. CIVIL SERVICE RETIREMENT SYSTEM.

    (a) Civil Service Retirement and Disability Fund.--Chapter 83 of 
title 5, United States Code, is amended--
            (1) in section 8331--
                    (A) in paragraph (17)--
                            (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; and
                            (ii) by inserting ``and standards (using 
                        dynamic assumptions)'' after ``practice'';
                    (B) by amending paragraph (18) to read as follows:
            ``(18) `Fund balance' means the current net assets of the 
        Fund available for payment of benefits, as determined by the 
        Office in accordance with appropriate accounting standards, but 
        does not include any amount attributable to--
                    ``(A) the Federal Employees' Retirement System; or
                    ``(B) contributions made under the Federal 
                Employees' Retirement Contribution Temporary Adjustment 
                Act of 1983 by or on behalf of any individual who 
                became subject to the Federal Employees' Retirement 
                System;''
                    (C) by amending paragraph (19) to read as follows:
            ``(19) `accrued liability' means the estimated excess of 
        the present value of all benefits payable from the Fund to 
        employees and Members, and former employees and Members, 
        subject to this subchapter, and their survivors, over the 
        present value of deductions to be withheld from the future 
        basic pay of employees and Members currently subject to this 
        subchapter and of future agency contributions to be made in 
        their behalf;''
                    (D) in paragraph (27) by striking ``and'' at the 
                end;
                    (E) in paragraph (28) by striking the period at the 
                end and inserting a semicolon; and
                    (F) by adding at the end the following paragraphs:
            ``(29) `dynamic assumptions' means economic assumptions 
        that are used in determining actuarial costs and liabilities of 
        a retirement system and in anticipating the effects of long-
        term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation; and
            ``(30) `unfunded liability' means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under this subchapter 
                based on the service of current or former employees or 
                Members, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of employees and Members currently subject 
                        to this chapter pursuant to section 8334;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 8334 with respect to employees and 
                        Members currently subject to this subchapter;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (18), as of the date the unfunded 
                        liability is determined; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Office of Personnel 
                        Management in accordance with generally 
                        accepted actuarial practices and principles.'';
            (2) in section 8334--
                    (A) in subsection (a)(1)--
                            (i) by striking the last two sentences;
                            (ii) by redesignating that subsection, as 
                        so amended, as (a)(1)(A); and
                            (iii) by adding at the end the following 
                        new subparagraphs:
                    ``(B) Except as provided in subparagraph (E), each 
                employing agency having any employees or Members 
                subject to subparagraph (A) shall contribute from 
                amounts available for salaries and expenses an amount 
                equal to the sum of--
                            ``(i) the product of--
                                    ``(I) the normal cost percentage, 
                                as determined for employees (other than 
                                employees covered by clause (ii)), 
                                multiplied by
                                    ``(II) the aggregate amount of 
                                basic pay payable by the agency, for 
                                the period involved, to employees 
                                (under subclause (I)) who are within 
                                such agency; and
                            ``(ii) the product of--
                                    ``(I) the normal cost percentage, 
                                as determined for Members, 
                                Congressional employees, law 
                                enforcement officers, firefighters, air 
                                traffic controllers, bankruptcy judges, 
                                Court of Federal Claims judges, United 
                                States magistrates, judges of the 
                                United States Court of Appeals for the 
                                Armed Forces, members of the Capitol 
                                Police, nuclear materials couriers, and 
                                members of the Supreme Court Police, 
                                multiplied by
                                    ``(II) the aggregate amount of 
                                basic pay payable by the agency for the 
                                period involved, to employees and 
                                Members (under subclause (I)) who are 
                                within such agency.
                    ``(C) In determining the normal cost percentage to 
                be applied under subparagraph (B), amounts provided for 
                under subparagraph (A) shall be taken into account.
                    ``(D) Contributions under this paragraph shall be 
                paid--
                            ``(i) in the case of law enforcement 
                        officers, firefighters, air traffic 
                        controllers, bankruptcy judges, Court of 
                        Federal Claims judges, United States 
                        magistrates, judges of the United States Court 
                        of Appeals for the Armed Forces, members of the 
                        Supreme Court Police, nuclear materials 
                        couriers and other employees, from the 
                        appropriations or fund used to pay such law 
                        enforcement officers, firefighters, air traffic 
                        controllers, bankruptcy judges, Court of 
                        Federal Claims judges, United States 
                        magistrates, judges of the United States Court 
                        of Appeals for the Armed Forces, members of the 
                        Supreme Court Police, nuclear materials 
                        couriers and other employees, respectively;
                            ``(ii) in the case of elected officials, 
                        from an appropriation or fund available for 
                        payment of other salaries of the same office or 
                        establishment; and
                            ``(iii) in the case of employees of the 
                        legislative branch paid by the Clerk of the 
                        House of Representatives, from the contingent 
                        fund of the House.
                    ``(E) In the case of the United States Postal 
                Service, the Metropolitan Washington Airports 
                Authority, and the government of the District of 
                Columbia an amount equal to that withheld under 
                subparagraph (A) shall be contributed from the 
                appropriation or fund used to pay the employee.''; and
                    (B) in subsection (k)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A) by striking 
                                ``the first sentence of subsection 
                                (a)(1) of this section'' and inserting 
                                ``subsection (a)(1)(A)''; and
                                    (II) by amending subparagraph (B) 
                                to read as follows:
                    ``(B) the amount of the contribution under 
                subsection (a)(1)(B) shall be the amount which would 
                have been contributed under such subsection if this 
                subsection had not been enacted.''; and
                            (ii) in paragraph (2)(C)(iii) by striking 
                        ``the first sentence of subsection (a)(1)'' and 
inserting ``subsection (a)(1)(A)''; and
            (3) in section 8348--
                    (A) by repealing subsection (f);
                    (B) by amending subsection (g) to read as follows:
    ``(g)(1)(A) Not later than June 30, 2002, the Office of the Actuary 
shall determine the unfunded liability of the Fund, as of September 30, 
2001, attributable to benefits payable under this chapter and make 
recommendations regarding its liquidation. After considering such 
recommendations, the Office shall establish an amortization schedule, 
including a series of annual installments commencing September 30, 
2002, which provides for the liquidation of such liability by September 
30, 2041.
    ``(B) The Office shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2001, through the fiscal year ending September 30, 
2036, and shall establish a new amortization schedule, including a 
series of annual installments commencing on September 30 of the 
subsequent fiscal year, which provides for the liquidation of such 
liability by September 30, 2041.
    ``(C) The Office shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2036, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability over five years.
    ``(D) Amortization schedules established under this paragraph shall 
be set in accordance with generally accepted actuarial practices and 
principles, with interest computed at the rate used in the most recent 
valuation of the Civil Service Retirement System.
    ``(2) At the end of each fiscal year, beginning on September 30, 
2002, the Office shall notify the Secretary of the Treasury of the 
amount of the first installment under the most recent amortization 
schedule established under paragraph (1). Before closing the accounts 
for the fiscal year, the Secretary shall credit that amount to the 
Fund, as a Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated.
    ``(3) For the purpose of carrying out paragraph (1) with respect to 
any fiscal year, the Office may--
            ``(A) require the Board of Actuaries of the Civil Service 
        Retirement System to make actuarial determinations and 
        valuations, make recommendations, and maintain records in 
        accordance with section 8347(f); and
            ``(B) use the latest actuarial determinations and 
        valuations made by such Board of Actuaries.'';
                    (C) in subsections (h), (i), and (m) by striking 
                ``unfunded'' and inserting ``accrued'' each time it 
                appears; and
                    (D) by adding at the end the following new 
                subsection:
    ``(n) Under regulations prescribed by the Office, the head of an 
agency may request reconsideration of any amount determined to be 
payable with respect to such agency under section 8334(a)(1)(B)-(D). 
Any such request shall be referred to the Board of Actuaries of the 
Civil Service Retirement System. The Board of Actuaries shall review 
the computations of the Office and may make any adjustment with respect 
to any such amount which the Board determines appropriate. A 
determination by the Board of Actuaries under this subsection shall be 
final.''.
    (b) Government Contributions.--Section 8423 of title 5, United 
States Code, is amended--
            (1) in subsection (a)(2) by striking ``section 8422'' and 
        inserting ``section 8422(a)''; and
            (2) in subsection (b)(2) by striking ``equal annual 
        installments'' and inserting ``annual installments set in 
        accordance with generally accepted actuarial practices and 
        principles''.

SEC. 202. CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.

    The Central Intelligence Agency Retirement Act, Public Law 88-643, 
(50 U.S.C. 2001 et seq.), 78 Stat. 1043, as amended, is further 
amended--
    (a) in section 101 (50 U.S.C. 2001)--
            (1) by amending paragraph (5) to read as follows--
            ``(5) Unfunded liability.-- ``The term `unfunded liability' 
means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under title II of this 
                Act based on the service of current or former 
                participants, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of a participants currently subject to 
                        title II of this Act pursuant to section 211;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 211 with respect to participants 
                        currently subject to title II of this Act;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (4), as of the date the unfunded 
                        liability is determined; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Director in accordance with 
                        generally accepted actuarial practices and 
                        principles.'';
            (2) in paragraph (6)--
                    (A) by striking ```normal cost''' and inserting 
                ```normal cost percentage'''; and
                    (B) by inserting ``and standards (using dynamic 
                assumptions)'' after ``practice''; and
            (3) by adding at the end the following paragraph:
            ``(10) Dynamic assumptions.--``The term `dynamic 
        assumptions' means economic assumptions that are used in 
        determining actuarial costs and liabilities of a retirement 
        system and in anticipating the effects of long-term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.'';
    (b) in section 202 (50 U.S.C. 2012) by adding at the end the 
following: ``The Fund is appropriated for the payment of benefits as 
provided by this title.'';
    (c) by amending section 211(a)(2) (50 U.S.C. 2021) to read as 
follows:
            ``(2) Agency contributions.--``The Agency shall contribute 
        to the Fund the amount computed in a manner similar to that 
        used under section 8334(a) of title 5, United States Code, 
        pursuant to determinations of the normal cost percentage of the 
        Central Intelligence Agency Retirement and Disability System by 
        the Director. Contributions under this paragraph shall be paid 
        from amounts available for salaries and expenses.''; and
    (d) in section 261 (50 U.S.C. 2091)--
            (1) by repealing subsection (c) and (d) and redesignating 
        subsection (e) as subsection (c);
            (2) by amending subsection (c), as redesignated, to read as 
        follows:
    ``(c)(1) Not later than June 30, 2002, the Director shall cause to 
be made actuarial valuations of the Fund that determine the unfunded 
liability of the Fund, as of September 30, 2001, attributable to 
benefits payable under this title and make recommendations regarding 
its liquidation. After considering such recommendations, the Director 
shall establish an amortization schedule, including a series of annual 
installments commencing September 30, 2002, which provides for the 
liquidation of such liability by September 30, 2041.
    ``(2) The Director shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2001, through the fiscal year ending September 30, 
2036, and shall establish a new amortization schedule, including a 
series of annual installments commencing on September 30 of the 
subsequent fiscal year, which provides for the liquidation of such 
liability by September 30, 2041.
    ``(3) The Director shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2036, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability over five years.
    ``(4) Amortization schedules established under this subsection 
shall be set in accordance with generally accepted actuarial practices 
and principles, with interest computed at the rate used in the most 
recent valuation of the Civil Service Retirement and Disability 
System.''; and
            (3) by adding at the end the following new subsection:
    ``(d) At the end of each fiscal year, beginning on September 30, 
2002, the Director shall notify the Secretary of the Treasury of the 
amount of the first installment under the most recent amortization 
schedule established under subsection (c). Before closing the accounts 
for that fiscal year, the Secretary shall credit that amount to the 
Fund, as a Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated. For the purposes of 
Section 504 of the National Security Act of 1947, this amount shall be 
considered authorized.''.
    (e) by adding at the end of the Central Intelligence Agency 
Retirement Act (50 U.S.C. 2001 et seq.) the following new section 308:
Sec. 308. Full funding of Retiree Costs for Employees Designated under 
              Section 302
    (a) In addition to other government contributions required by law, 
the Agency shall contribute to the Civil Service Retirement and 
Disability fund (hereinafter in this section referred to as the 
``Fund'') amounts calculated in accordance with section 8423 of title 
5, United States Code, based on the projected number of employees to be 
designated pursuant to section 302 of this Act. In addition, the 
Agency, in a manner similar to that established for employee 
contributions to the Fund by section 8422 of title 5, United States 
Code, will contribute an amount equal to the difference between that 
which would be contributed by the number of employees projected to be 
designated under section 302 and the amounts that are actually being 
deducted and contributed from the basic pay of an equal number of 
employees pursuant to section 8422. The amounts of the Agency's 
contributions under this subsection shall be determined by the Director 
of the Office of Personnel Management, in consultation with the 
Director, and shall be paid by the Agency from funds available for 
salaries and expenses. Agency employees designated pursuant to section 
302 of this Act shall, commencing with such designation, have deducted 
from their basic pay the full amount required by section 8422 of title 
5, United States Code, and such deductions shall be contributed to the 
Fund.
    (b) (1) The Director of the Office of Personnel Management, in 
consultation with the Director, shall determine the total amount of 
unpaid contributions (government and employee contributions) and 
interest attributable to the number of individuals employed with the 
Agency on September 30, 2001, who are projected to be designated under 
section 302 of this Act, but are not yet designated under that section 
as of that date. The amount shall be referred to as the section 302 
unfunded liability.
    (2) Not later than June 30, 2002, the Director of the Office of 
Personnel Management, in consultation with the Director, shall 
establish an amortization schedule, setting forth a series of annual 
installments commencing September 30, 2002, which provides for the 
liquidation of the section 302 unfunded liability by September 30, 
2011.
    (3) At the end of each fiscal year, beginning on September 30, 
2002, the Director shall notify the Secretary of the Treasury of the 
amount of the annual installment under the amortization schedule 
established under paragraph (2) of this subsection. Before closing the 
accounts for that fiscal year, the Secretary shall credit that amount 
to the Fund, out of any money in the Treasury of the United States not 
otherwise appropriated.
    (c) Amounts paid by the Agency pursuant to this section are deemed 
to be specifically authorized by the Congress for the purposes of 
section 504 of the National Security Act of 1947.

SEC. 203. FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.

    Chapter 8 of Title I of the Foreign Service Act of 1980, Public Law 
96-465, (22 U.S.C. 4041 et seq.) 94 Stat. 2071, as amended, is further 
amended--
    (a) in section 804 (22 U.S.C. 4044)--
            (1) by amending paragraph (5) to read as follows:
            ``(5) `normal cost percentage' means the entry-age normal 
        cost computed in accordance with generally accepted actuarial 
        practice and standards (using dynamic assumptions) and 
        expressed as a level percentage of aggregate basic pay;'';
            (2) by amending paragraph (14) to read as follows:
            ``(14) `unfunded liability' means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under this part based on 
                the service of current or former participants, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of participants currently subject to this 
                        part pursuant to section 805;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 805 with respect to participants 
                        currently subject to this part;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (7), as of the date the unfunded 
                        liability is determined, excluding any amount 
                        attributable to the Foreign Service Pension 
                        System, or contributions made under the Federal 
                        Employees' Retirement Contribution Temporary 
                        Adjustment Act of 1983 by or on behalf of any 
                        individual who became subject to the Foreign 
                        Service Pension System; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Secretary of the Treasury in 
                        accordance with generally accepted actuarial 
                        practices and principles.''; and
            (3) by adding at the end the following new paragraph:
            ``(15) `dynamic assumptions' means economic assumptions 
        that are used in determining actuarial costs and liabilities of 
        a retirement system and in anticipating the effects of long-
        term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.'';
    (b) in section 852 (22 U.S.C. 4071a)--
            (1) in paragraph (4)--
                    (A) by striking ``normal cost'' and inserting 
                ``normal cost percentage''; and
                    (B) by striking ``by the Secretary of State'';
            (2) in paragraph (7)--
                    (A) by striking ``supplemental'' and inserting 
                ``unfunded'';
                    (B) in subparagraph (B)(i) by striking ``(I)'' and 
                ``and (II) contributions for past civilian and military 
                service''; and
                    (C) in subparagraph (B)(ii) by inserting before the 
                semicolon ``with respect to participants currently 
                subject to this part''; and
            (3) by adding at the end the following new paragraph:
            ``(9) `dynamic assumptions' means economic assumptions that 
        are used in determining actuarial costs and liabilities of a 
        retirement system and in anticipating the effects of long-term 
        future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.'';
    (c) in section 805(a)(1) (22 U.S.C. 4045(a)(i))--
            (1) by striking the second sentence;
            (2) (by redesignating that subsection, as so amended, as 
        (a)(1)(A);
            (3) by redesignating the last sentence of that subsection, 
        as so amended as (a)(1)(C);
            (4) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) Each employing agency having participants 
                shall contribute to the Fund the amount computed in a 
                manner similar to that used under section 8334(a) of 
                title 5, United States Code, pursuant to determinations 
                of the normal cost percentage of the Foreign Service 
                Retirement and Disability System. Contributions under 
                this subparagraph shall be paid from the appropriations 
                or fund used for payment of the salary of the 
                participant.'';
            (5) in subsection (a)(2)(A) by striking ``An equal amount 
        shall be contributed by the Department'' and inserting in its 
        place ``Each employing agency having participants shall 
        contribute to the Fund the amount computed in a manner similar 
        to that used under section 8334(a) of title 5, United States 
        Code, pursuant to determinations of the normal cost percentage 
        of the Foreign Service Retirement and Disability System''; and
            (6) in subsection (a)(2)(B) by striking ``An equal amount 
        shall be contributed by the Department'' and inserting in its 
        place ``Each employing agency having participants shall 
        contribute to the Fund from amounts available for salaries and 
        expenses the amount computed in a manner similar to that used 
        under section 8334(a) of title 5, United States Code, pursuant 
        to determinations of the normal cost percentage of the Foreign 
        Service Retirement and Disability System'';
    (d) by repealing sections 821 and 822 (22 U.S.C. 4061 and 4062) and 
by adding the following new section:
Sec. 821. Unfunded liability.
    ``(a)(1) Not later than June 30, 2002, the Secretary of State shall 
cause to be made actuarial valuations of the Fund that determine the 
unfunded liability of the Fund, as of September 30, 2001, attributable 
to benefits payable under this subchapter and make recommendations 
regarding its liquidation. After considering such recommendations, the 
Secretary of State shall establish an amortization schedule, including 
a series of annual installments commencing September 30, 2002, which 
provides for the liquidation of such liability by September 30, 2041.
    ``(2) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for each 
fiscal year beginning after September 30, 2001, through the fiscal year 
ending September 30, 2036, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability by September 30, 2041.
    ``(3) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for each 
fiscal year beginning after September 30, 2036, and shall establish a 
new amortization schedule, including a series of annual installments 
commencing on September 30 of the subsequent fiscal year, which 
provides for the liquidation of such liability over five years.
    ``(4) Amortization schedules established under this subsection 
shall be set in accordance with generally accepted actuarial practices 
and principles, with interest computed at the rate used in the most 
recent valuation of the Foreign Service Retirement and Disability 
System.
    ``(b) At the end of each fiscal year, beginning on September 30, 
2002,
the Secretary of State shall notify the Secretary of the Treasury of 
the amount of the first installment under the most recent amortization 
schedule established under paragraph (1). Before closing the accounts 
for that fiscal year, the Secretary of the Treasury shall credit that 
amount to the Fund, as a Government contribution, out of any money in 
the Treasury of the United States not otherwise appropriated.'';
    (e) in section 857 (22 U.S.C. 4071f(b)(1)) by striking ``equal 
annual installments'' and inserting ``annual installments set in 
accordance with generally accepted actuarial practices and 
principles'';
    (f) in section 859 (22 U.S.C. 4071h(b)(1)) by adding ``percentage'' 
after ``normal cost'';
    (g) in section 802 (22 U.S.C. 4042) by adding at the end the 
following: ``The Fund is appropriated for the payment of benefits as 
provided by this subchapter.''; and
    (h) in section 818 (22 U.S.C. 4058) by striking ``System'' and 
inserting ``Systems under this subchapter''.

SEC. 204. PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) 
is amended by adding at the end the following new part:

 ``PART C--PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM 
                  ``ESTABLISHMENT AND PURPOSE OF FUND

    ``Sec. 251. There is established on the books of the Treasury a 
fund to be known as the Public Health Service Commissioned Corps 
Retirement Fund (hereinafter in this part referred to as the `Fund'), 
which shall be administered by the Secretary of Health and Human 
Services (hereinafter in this part referred to as the `Secretary'). The 
Fund shall be used for the accumulation of funds in order to finance on 
an actuarially sound basis liabilities of the Department of Health and 
Human Services for benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public Health 
Service and to their survivors pursuant to part A of this title.

                          ``assets of the fund

    ``Sec. 252. There shall be deposited into the Fund the following, 
which shall constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under section 255.
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund pursuant to section 
        257(d) of the Public Health Service Commissioned Corps 
        Retirement Funding Reform Act of 2001.

                        ``payment from the fund

    ``Sec. 253. There shall be paid from the Fund benefits payable on 
account of retirement, disability, or death to commissioned officers of 
the Public Health Service and to their survivors pursuant to part A of 
this title.

              ``determination of contributions to the fund

    ``Sec. 254. (a)(1) Not later than June 30, 2002, the Secretary 
shall determine the unfunded liability of the Fund attributable to 
service performed as of September 30, 2001, which is `active service' 
for the purpose of section 212. The Secretary shall establish an 
amortization schedule, including a series of annual installments 
commencing September 30, 2002, which provides for the liquidation of 
such liability by September 30, 2041.
    ``(2) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2001, through the fiscal year ending September 30, 
2036, and shall establish a new amortization schedule, including a 
series of annual installments commencing on September 30 of the 
subsequent fiscal year, which provides for the liquidation of such 
liability by September 30, 2041.
    ``(3) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2036, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability over 5 years.
    ``(b) The Secretary shall determine each fiscal year, in sufficient 
time for inclusion in the budget request for the following fiscal year, 
the total amount of Department of Health and Human Services 
contributions to be made to the Fund during the fiscal year under 
section 255(a). That amount shall be the sum of--
            ``(1) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay to be determined 
                under subsection (c)(1) at the time of the most recent 
                actuarial valuation under subsection (c); and
                    ``(B) the total amount of basic pay expected to be 
                paid during that fiscal year to commissioned officers 
                of the Public Health Service on active duty (other than 
                active duty for training); and
            ``(2) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) to be determined under subsection 
                (c)(2) at the time of the most recent actuarial 
                valuation under subsection (c); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) expected to be paid during the 
                fiscal year to commissioned officers of the Reserve 
                Corps of the Public Health Service (other than officers 
                on full-time duty other than for training) who are not 
                otherwise described in subparagraph (A).
    ``(c) Not less often than every four years thereafter (or by the 
fiscal year end prior to the effective date of any statutory change 
affecting benefits payable on account of retirement, disability, or 
death to commissioned officers or their survivors), the Secretary shall 
carry out an actuarial valuation of benefits payable on account of 
retirement, disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of this title. 
Each such actuarial valuation shall be signed by an enrolled Actuary 
and shall include--
            ``(1) a determination (using the aggregate entry-age normal 
        cost method) of a single level percentage of basic pay for 
        commissioned officers of the Public Health Service on active 
        duty (other than active duty for training); and
            ``(2) a determination (using the aggregate entry-age normal 
        cost method) of a single level percentage of basic pay and of 
        compensation (paid pursuant to section 206 of title 37, United 
        States Code) of commissioned officers of the Reserve Corps of 
        the Public Health Service (other than officers on full time 
        duty other than for training) who are not otherwise described 
        by subparagraph (1).
    ``(d) All determinations under this section shall be in accordance 
with generally accepted actuarial principles and practices and, where 
appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(e) The Secretary shall provide for the keeping of such records 
as are necessary for determining the actuarial status of the Fund.

                        ``payments into the fund

    ``Sec. 255. (a) From amounts available to the Department of Health 
and Human Services for salaries and expenses, the Secretary shall pay 
into the Fund at the end of each month the amount that is the sum of--
            ``(1) the product of--
                    ``(A) the level percentage of basic pay determined 
                using all the methods and assumptions approved for the 
                most recent (as of the first day of the current fiscal 
                year) actuarial valuation under sections 254(c)(1) 
                (except that any statutory change affecting benefits 
                payable on account of retirement, disability, or death 
                to commissioned officers or their survivors that is 
                effective after the date of that valuation and on or 
                before the first day of the current fiscal year shall 
                be used in such determination); and
                    ``(B) the total amount of basic pay accrued for 
                that month by commissioned officers of the Public 
                Health Service on active duty (other than active duty 
                for training); and
            ``(2) the product of--
                    ``(A) the level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) determined using all the methods 
                and assumptions approved for the most recent (as of the 
                first day of the current fiscal year) actuarial 
                valuation under section 254(c)(2) (except that any 
                statutory change affecting benefits payable on account 
                of retirement, disability, or death to commissioned 
                officers or their survivors that is effective after the 
                date of that valuation and on or before the first day 
                of the current fiscal year shall be used in such 
                determinations); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) accrued for that month by 
                commissioned officers of the Reserve Corps of the 
                Public Health Service (other than officers on full-time 
                duty other than for training).
    ``(b) At the end of each fiscal year, beginning on September 30, 
2002, the Secretary shall certify to the Secretary of the Treasury the 
amount of the first installment under the most recent amortization 
schedule established under section 254(a). Before closing the accounts 
for that fiscal year, the Secretary of the Treasury shall pay into the 
Fund from the General Fund of the Treasury the amount so certified. 
Such payment shall be the contribution to the Fund for the fiscal year 
beginning on the following day;

                    ``investments of assets of fund

    ``Sec. 256. The Secretary may request the Secretary of the Treasury 
to invest such portion of the Fund as is not, in the judgment of the 
Secretary, required to meet the current needs of the Fund. Such 
investments shall be made by the Secretary of the Treasury in public 
debt securities with maturities suitable to the needs of the Fund, as 
determined by the Secretary, and bearing interest at rates determined 
by the Secretary of the Treasury, taking into consideration current 
market yields on outstanding marketable obligations of the United 
States of comparable maturities. The income on such investments shall 
be credited to and form a part of the Fund.

                    ``implementation year exceptions

    ``Sec. 257. (a) To avoid funding shortfalls in the first year 
should formal actuarial determinations not be available in time for 
budget preparation, the amounts used in the first year in sections 
255(a)(1)(A) and 255(a)(2)(A) shall be set equal to those estimates in 
sections 254(b)(1)(A) and 254(b)(2)(A) if final determinations are not 
available. The original unfunded liability as defined in section 254(a) 
shall include an adjustment to correct for this difference between the 
formal actuarial determinations and the estimates in sections 
254(b)(1)(A) and 254(b)(2)(A).''.
    (b) Conforming Amendments.--
            (1) Condition of detail.--Section 214 of the Public Health 
        Service Act (42 U.S.C. 215) is amended by adding at the end the 
        following new subsection:
    ``(e) The Secretary shall condition any detail under subsection 
(a), (b), or (c) upon the agreement of the executive department, State, 
subdivision, Committee of the Congress, or institution concerned to pay 
to the Department of Health and Human Services, in advance or by way of 
reimbursement, for the full cost of the detail including that portion 
of the contributions under section 255(a) that is attributable to the 
detailed personnel.''.
            (2) Exemption from sequestration.--Section 255(g)(1)(B) of 
        the Balanced Budget and Emergency Deficit Control Act of 1985 
        (2 U.S.C. 905(g)(1)(B)) is amended--
                    (A) by inserting after the item relating to the 
                ``Pensions for former Presidents'' the following item: 
                ``Public Health Service Commissioned Corps Retirement 
                Fund (75-8274-0-7-602);'', and sec. 255(g)(1)(A) of the 
                Balanced Budget and Emergency Deficit Control Act of 
                1985 (2 U.S.C. 905(g)(1)(A)) is amended--
            (B) by inserting after the item relating to ``payment to 
        the foreign service retirement and disability fund'' the 
        following item: ``Payment to the Public Health Service 
        Commissioned Corps Retirement Fund (75-0380-0-1-551);''.
    (c) Transfer of Appropriations.--There shall be transferred into 
the Fund on October 1, 2002, any obligated or unobligated balances of 
appropriations made to the Department of Health and Human Services that 
are currently available for benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public Health 
Service and to their survivors pursuant to part A of title II of the 
Public Health Service Act, and amounts so transferred shall be part of 
the assets of the Fund.

SEC. 205. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION COMMISSIONED 
              OFFICER CORPS RETIREMENT SYSTEM.

    Title 33, United States Code, is amended by inserting after section 
853g the following new section 853g-1:
    ``(a)(1) Establishment and Purpose of the NOAA Commissioned Officer 
Corps Retirement Fund.--There is established on the books of the 
Treasury a fund to be known as the National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Retirement Fund (hereinafter 
in this section referred to as the `Fund'), which shall be administered 
by the Secretary of Commerce (hereinafter in this section referred to 
as `the Secretary'). The Fund shall be used for the accumulation of 
funds in order to finance on an actuarially sound basis liabilities of 
the Department of Commerce under military retirement and survivor 
benefit programs for the commissioned officers corps of the National 
Oceanic and Atmospheric Administration (hereinafter referred to as 
`NOAA').
    ``(2) The term `military retirement and survivor benefit program' 
means--
            ``(A) the provisions of this title and title 10 creating 
        entitlement to, or determining, the amount of retired pay;
            ``(B) the programs under the jurisdiction of the Department 
        of Defense providing annuities for survivors and members and 
        former members of the armed forces, including chapter 73 of 
        title 10, section 4 of Public Law No. 92-425, and section 5 of 
        Public Law No. 96-202, as made applicable to the NOAA 
        Commissioned Officer Corps by section 857a of title 33, United 
        States Code.
    ``(b) Assets of the Fund.--There shall be deposited into the Fund 
the following, which shall constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under section 105.
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund pursuant to section 
        108(c) of this Act.
    ``(c) Payment From the Fund.--There shall be paid from the Fund 
benefits payable on account of military retirement and survivor benefit 
programs to commissioned officers of the NOAA Commissioned Officer 
Corps and their survivors.
    ``(d)(1)(A) Determination of Contributions to the Fund. Not later 
than June 30, 2002, the Secretary shall determine the unfunded 
liability of the Fund attributable to service performed as of September 
30, 2001, which is `active service' for the purpose of section 212. The 
Secretary shall establish an amortization schedule, including a series 
of annual installments commencing September 30, 2002, which provides 
for the liquidation of such liability by September 30, 2041.
    ``(B) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2001, through the fiscal year ending September 30, 
2036, and shall establish a new amortization schedule, including a 
series of annual installments commencing on September 30 of the 
subsequent fiscal year, which provides for the liquidation of such 
liability by September 30, 2041.
    ``(C) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2036, and shall establish a new authorization 
schedule, including series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for the 
liquidation of such liability over 5 years.
    ``(2) The Secretary shall determine each fiscal year, in sufficient 
time for inclusion in the budget request for the following fiscal year, 
the total amount of Department of Commerce contributions to be made to 
the Fund during that fiscal year under (e)(a). The amount shall be the 
product of--
            ``(A) the current estimate of the value of the single level 
        percentage of basic pay to be determined under subsection (b) 
        at the time of the most recent actuarial valuation under 
        subsection (b); and
            ``(B) the total amount of basic pay expected to be paid 
        during that fiscal year to commissioned officers of NOAA on 
        active duty.
    ``(3) Not less often then every four years (or by the fiscal year 
end prior to the effective date of any statutory change affecting 
benefits payable on account of retirement, disability, or death to 
commissioned officers or their survivors), the Secretary shall carry 
out an actuarial valuation of benefits payable on account of military 
retirement and survivor benefit programs to commissioned officers of 
the NOAA Commissioned Officer Corps and to their survivors. Each such 
actuarial valuation shall be signed by an enrolled Actuary and shall 
include a determination (using the aggregate entry-age normal cost 
method) of a single level percentage of basic pay for commissioned 
officers of NOAA on active duty.
    ``(4) All determinations under this section shall be in accordance 
with generally accepted actuarial principles and practices, and, where 
appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(5) The Secretary shall provide for the keeping of such records 
as are necessary for determining the actuarial status of the Fund.
    ``(e)(1) Payments into the fund.--From amounts appropriated to the 
National Oceanic Atmospheric Administration for salaries and expenses, 
the Secretary shall pay into the Fund at the end of each month the 
amount that is the product of--
            ``(A) the level percentage of basic pay determined using 
        all the methods and assumptions approved for the most recent 
        (as of the first day of the current fiscal year) actuarial 
        valuation under section 5(c)(1) (except that any statutory 
        change affecting benefits payable on account of military 
        retirement and survivor benefit programs to commissioned 
        officers of the NOAA Commissioned Officer Corps and to their 
        survivors that is effective date after the date of that 
        valuation and on or before the first day of the current fiscal 
        year shall be used in such determination); and
            ``(B) the total amount of basic pay accrued for that month 
        by commissioned officers of NOAA on active duty.
    ``(2)(A) At the beginning of each fiscal year, the Secretary shall 
determine the sum of--
            ``(i) the amount of the payment for that year under the 
        amortization of the original unfunded liability of the Fund;
            ``(ii) the amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary for the amortization of any cumulative actuarial 
        gain or loss to the Fund, resulting from changes in benefits; 
        and
            ``(iii) the amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary for the amortization or any cumulative actuarial 
        gain or loss to the Fund resulting from changes in actuarial 
        assumptions and from experience different from the assumed 
        since the last valuation. The Secretary shall promptly certify 
        the amount of the sum to the Secretary of the Treasury.
    ``(B) Upon receiving the certification pursuance to paragraph (1), 
the Secretary of Treasury shall promptly pay into the Fund from the 
General Fund of the Treasury the amount so certified. Such payment 
shall be the contribution to the Fund for the fiscal year.
    ``(f) Investment of Assets of the Fund.--The Secretary may request 
the Secretary of the Treasury to invest such portion of the Fund as is 
not, in the judgment of the Secretary, required to meet the current 
needs of the Fund. Such investments shall be made by the Secretary of 
the Treasury in public debt securities with maturities suitable to the 
needs of the Fund, as determined by the Secretary, and bearing interest 
at rates determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. The income 
of such investments shall be credited to and form a part of the Fund.
    ``(g)(1) Implementation year exceptions.--To avoid funding 
shortfalls in the first year should formal actuarial determinations not 
be available in time for budget preparation, the amounts used in the 
first year in section 105(a)(1) shall be set equal to the estimate in 
section 104(b)(1) if final determinations are not available. The 
original unfunded liability as determined in section 104(a) shall 
include an adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in section 104(b)(1).
    ``(2) Exemption from sequestration.--Section 255(g)(1)(B) of the 
Balanced Budget and Emergency Deficit Control Act of 1985, as amended, 
(2 U.S.C. 905(g)(1)(B)) is further amended by striking `National 
Oceanic and Atmospheric Administration retirement (13-1450-0-1-306);', 
and inserting in lieu there of: the following item: `National Oceanic 
and Atmospheric Administration Commissioned Officer Corps Retirement 
Fund;';
    ``(3) Transfer of appropriations.--Any obligated and unobligated 
balance of appropriations made to the Department of Commerce that are 
currently available for benefits payable on account of military 
retirement and survivor benefit programs to commissioned officers of 
the NOAA Commissioned Officer Corps and to their survivors, and amounts 
so transferred shall be part of the assets of the Fund, effective 
October 1, 2002.
    ``(4) Effective date.--Subsection (c) (relating to payments from 
the Fund) and (e) (relating to payments into the Fund) of this section, 
shall take effect on October 1, 2002.''.

SEC. 206. COAST GUARD MILITARY RETIREMENT SYSTEM.

    (a) Title 14, United States Code, is amended by inserting after 
chapter 13, the following new chapter:

           ``CHAPTER 14--COAST GUARD MILITARY RETIREMENT FUND

``Sec.
``561. Establishment and purpose of Fund; definition.
``562. Assets of Fund.
``563. Payments for the Fund.
``564. Determinations of contributions to the Fund.
``565. Payments into the Fund.
``566. Investment of assets of Fund.
``567. Implementation year exceptions.
``Sec. 561. Establishment and purpose of Fund; definition
    ``(a) There is established on the books of the Treasury a fund to 
be known as the Coast Guard Military Retirement Fund (hereinafter in 
this chapter referred to as the `Fund'), which shall be administered by 
the Secretary of the Department of Transportation. The Fund shall be 
used for the accumulation of funds in order to finance on an 
actuarially sound basis liabilities of the Coast Guard under military 
retirement and survivor benefit programs.
    ``(b) In this chapter, `military retirement and survivor benefit 
programs' means--
            ``(1) the provisions of this title and title 10, United 
        States Code, creating entitlement to, or determining, the 
        amount of retired pay;
            ``(2) the programs providing annuities for survivors of 
        members and former members of the armed forces, including 
        chapter 73 of title 10, section 4 of Public Law 92-425, and 
        section 5 of Public Law 96-402; and
            ``(3) the authority provided in section 1048(h) of title 
        10.
    ``(c) In this chapter, reference to `the Secretary' shall mean the 
Secretary of Transportation when the Coast Guard is not operating as a 
service in the Navy. When the Coast Guard is operating as a service in 
the Navy, `the Secretary' shall refer to the Secretary of Defense.
``Sec. 562. Assets of the Fund
    ``There shall be deposited into the Fund the following, which shall 
constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under section 565 of this 
        title.
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund.
``Sec. 563. Payment from the Fund
    ``(a) There shall be paid from the Fund--
            ``(1) retired pay payable to persons on the retired list of 
        the Coast Guard;
            ``(2) retired pay payable under chapter 67 of title 10, to 
        former members of the Coast Guard and the former United States 
        Lighthouse Service;
            ``(3) benefits payable under programs that provide 
        annuities for survivors of members and former members of the 
        armed forces, including chapter 73 of title 10, section 4 of 
        Public Law 92-425, and section 5 of Public Law 96-402; and
            ``(4) amounts payable under section 108(h) of title 10.
    ``(b) The assets of the Fund are hereby made available for payments 
under subsection (a).
``Sec. 564. Determination of contributions to the Fund
    ``(a) The Secretary shall determine the amount that is the present 
value (as of October 1, 2001) of future benefits payable from the Fund 
that are attributable to service in the Coast Guard and the former 
United States Lighthouse Service preformed as of September 30, 2001. 
That amount is the original unfunded liability of the Fund. The 
Secretary shall determine by June 30, 2002, an amortization schedule 
for the liquidation of such liability over the period ending September 
30, 2041, with the first payment commencing on September 30, 2002. 
Contributions to the Fund for the liquidation of the original unfunded 
liability in accordance with such schedule shall be made as provided in 
section 565(b) of this title.
    ``(b) The Secretary shall determine each fiscal year, in sufficient 
time for inclusion in the budget request for the following fiscal year, 
the total amount of Department of Transportation, or Department of 
Defense, contributions to be made to the Fund during that fiscal year 
under section 565(a) of this title. That amount shall be the sum of the 
following:
            ``(1) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay to be determined 
                under subsection (c)(1)(A) at the time of the most 
                recent actuarial valuation under subsection (c); and
                    ``(B) the total amount of basic pay expected to be 
                paid during that fiscal year to members of the Coast 
                Guard on active duty (other than active duty for 
                training); and
            ``(2) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) to be determined under subsection 
                (c)(1)(B) at the time of the most recent actuarial 
                valuation under subsection (c); and
                    ``(B) the total amount of basic pay and 
                compensation (paid pursuant to section 206 of title 37) 
                expected to be paid during that fiscal year to members 
                of the Coast Guard Ready Reserve (other than members of 
                full-time Reserve duty other than for training) who are 
                not otherwise described in subparagraph (1)(B).
    ``(c)(1) Not less often than every four years (or prior to the 
effective date of any statutory change affecting benefits payable on 
account of retirement, disability, or death to commissioned officers or 
their survivors), the Secretary shall carry out an actuarial valuation 
of the Coast Guard military retirement and survivor benefit programs. 
Each actuarial valuation of such programs shall be signed by an 
enrolled Actuary and shall include--
            ``(A) a determination (using the aggregate entry-age normal 
        cost method) of single level percentage of basic pay for 
        members of the Coast Guard on active duty (other than active 
        duty for training); and
            ``(B) a determination (using the aggregate entry-age normal 
        cost method) of single level percentage of basic pay and of 
        compensation (paid pursuant to section 206 of title 37) for 
        members of the Ready Reserve of the Coast Guard (other than 
        members on full-time Reserve duty other than for training) who 
        are not otherwise described in subparagraph (1)(B). Such single 
        level percentages shall be used for the purpose of subsection 
        (b) and section 565(a) of this title.
    ``(2) If at the time of any such valuation the Secretary determines 
that, based upon changes in benefits since the last such valuation, 
there has been an actuarial gain or loss to the Fund, the Secretary 
shall determine an amortization method and schedule for the 
amortization of the cumulative gain or loss to the Fund created by such 
change in benefits and any previous such changes in benefits through a 
decrease or an increase in the payment that would otherwise be made to 
the Fund.
    ``(3) If at the time of any such valuation the Secretary determines 
that, based upon changes in actuarial assumptions and upon experience 
different from that assumed since the last valuation, there has been an 
actuarial gain or loss to the Fund, the Secretary shall determine an 
amortization method and schedule for the amortization of the cumulative 
gain or loss to the Fund created by such change in actuarial 
assumptions and any previous such changes in assumptions through an 
increase or decrease in the payments that would otherwise be made to 
the Fund.
    ``(4) Contributions to the Fund in accordance with amortization 
schedules under paragraphs (2) and (3) shall be made as provided in 
section 565(b) of this title.
    ``(d) All determinations under this section shall be in accordance 
with generally accepted actuarial principles and practices and, where 
appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(e) The Secretary shall provide for the keeping of such records 
as are necessary for determining the actuarial status of the Fund.
``Sec. 565. Payments into the Fund
    ``(a) From amounts appropriated to the Coast Guard for salaries and 
expenses, the Secretary shall pay into the Fund at the end of each 
month as the Department of Transportation, or Department of Defense, 
contribution to the Fund for that month the amount that is the sum of 
the following:
            ``(1) the product of--
                    ``(A) the level percentage of basic pay determined 
                using all the methods and assumptions approved for the 
                most recent (as of the first day of the current fiscal 
                year) actuarial valuation under section 564(c)(1)(A) of 
                this title (except that any statutory changes in the 
                military retirement and survivor benefit systems that 
                is effective after the date of that valuation and on or 
                before the first day of the current fiscal year shall 
                be used in such determination); and
                    ``(B) the total amount of basic pay accrued for 
                that month by members of the Coast Guard on active duty 
                (other than active duty for training); and
            ``(2) the product of--
                    ``(A) the level percentage of basic pay and of 
                compensation (accrued pursuant to section 206 of title 
                37) determined using all the methods and assumptions 
                approved for the most recent (as of the first day of 
                the current fiscal year) actuarial valuation under 
                section 564(c)(1)(B) of this title (except that any 
                statutory change in the military retirement and 
                survivor benefit systems that is effective after the 
                date of that valuation and on or before the first day 
                of the current fiscal year shall be used in such 
                determination); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) accrued for that month by members 
                of the Ready Reserve (other than members of full-time 
                Reserve duty other than for training) who are not 
                otherwise described in paragraph (1)(B).
    ``(b)(1) At the beginning of each fiscal year the Secretary of the 
Treasury shall promptly pay into the Fund from the General Fund of the 
Treasury the amount certified to the Secretary of the Treasury by the 
Secretary under paragraph (3). Such payment shall be the contribution 
to the Fund for that fiscal year required by sections 564(a) and 564(c) 
(2) and (3) of this title.
    ``(2) At the beginning of each fiscal year the Secretary shall 
determine the sum of the following:
            ``(A) The amount of the payment for that year under the 
        amortization schedule determined under section 564(a) of this 
        title for the amortization of the original unfunded liability 
        of the Fund;
            ``(B) The amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary under section 564(c)(2) of this title for the 
        amortization of any cumulative actuarial gain or loss to the 
        Fund, resulting from changes in benefits; and
            ``(C) The amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary under section 564(c)(3) of this title for the 
        amortization of any cumulative actuarial gain or loss to the 
        Fund, resulting from changes in actuarial assumptions and from 
        experience different from that assumed since the last 
        valuation.
    ``(3) The Secretary shall promptly certify the amount determined 
under paragraph (2) each year to the Secretary of the Treasury.
``Sec. 566. Investment of assets of Fund
    ``The Secretary may request the Secretary of the Treasury to invest 
such portion of the Fund as is not, in the judgment of the Secretary, 
required to meet the current needs of the Fund. Such investments shall 
be made by the Secretary of the Treasury in public debt securities with 
maturities suitable to the needs of the Fund, as determined by the 
Secretary, and bearing interest at rates determined by the Secretary of 
the Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of comparable 
maturities. The income on such investments shall be credited to and 
form a part of the Fund.
``Sec. 567. Implementation Year Exceptions
    ``To avoid funding shortfalls in the first year should formal 
actuarial determinations not be available in time for budget 
preparation, the amounts used in the first year in sections 
565(a)(1)(A) and 565(a)(2)(A) shall be set equal to those estimates in 
sections 564(b)(1)(A) and 564(b)(2)(A) if final determinations are not 
available. The original unfunded liability as defined in section 564(a) 
shall include an adjustment to correct for this difference between the 
formal actuarial determinations and the estimates in sections 
564(b)(1)(A) and 254(b)(2)(A).''.
    (b) The table of chapters at the beginning of part I, of title 14, 
as added by section 566, are amended by inserting after the item 
relating to chapter 13 the following new item:

        ``14. Coast Guard Military Retirement Fund.............  561''.
    (c) Section 255(g)(1)(B) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(B)) is amended by 
striking ``Retired Pay, Coast Guard (69-0241-0-1-403)'' and inserting 
``Coast Guard Military Retirement Fund (69-0241-01-403)''.
    (d) There shall be transferred into the Fund on October 1, 2002, 
any obligated and unobligated balances of appropriations made to the 
Department of Transportation that are currently available for retired 
pay, and amounts so transferred shall be part of the assets of the 
Fund.
    (e) Sections 563 (relating to payments from the Fund) and 565 
(relating to payments into the Fund) of title 14, United States Code, 
shall take effect on October 1, 2002.

 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

SEC. 211. FEDERAL EMPLOYEES HEALTH BENEFITS FUND.

    (a) Section 8906 of title 5, United States Code, is amended--
            (1) by redesignating subsection (c) as paragraph (c)(1) and 
        by adding at the end the following new paragraphs:
            ``(2) In addition to Government contributions required by 
        subsection (b) and paragraph (1), each employing agency shall 
        contribute amounts as determined by the Office to be necessary 
        to prefund the accruing actuarial cost of post-retirement 
        health benefits for each of the agency's current employees who 
        are eligible for Government contributions under this section. 
        Amounts under this paragraph shall be paid by the employing 
        agency separate from other contributions under this section, 
        from the appropriations or fund used for payment of the salary 
        of the employee, on a schedule to be determined by the Office.
            ``(3) Paragraph (2) shall not apply to the United States 
        Postal Service or the Government of the District of 
        Columbia.''; and
            (2) by amending paragraph 1 of subsection (g) to read:
    ``(1) Except as provided in paragraphs (2) and (3), all government 
contributions authorized by this section for health benefits for an 
annuitant shall be paid from the Employees Health Benefits Fund to the 
extent that funds are available in accordance with section 8909(j)(6) 
and, if necessary, from annual appropriations which are authorized to 
be made for that purpose and which may be made available until 
expended.''.
    (b) Section 8909 of title 5, United States Code, is amended by 
adding at the end the following new subsection:
    ``(j)(1) Not later than June 30, 2002, the Office shall determine 
the existing liability of the Fund for post-retirement health benefits, 
excluding the liability of the United States Postal Service for service 
under section 8906(g)(2), under this chapter as of September 30, 2001. 
The Office shall establish an amortization schedule, including a series 
of annual installments commencing September 30, 2002, which provides 
for the liquidation of such liability by September 30, 2041.
    ``(2) At the close of each fiscal year, for fiscal years beginning 
after September 30, 2001, the Office shall determine the supplemental 
liability of the Fund for post-retirement health benefits, excluding 
the liability attributable to the United States Postal Service for 
service subject to section 8906(g)(2), and shall establish an 
amortization schedule, including a series of annual installments 
commencing on September 30 of the subsequent fiscal year, which 
provides for liquidation of such supplemental liability over 30 years.
    ``(3) Amortization schedules established under this paragraph shall 
be set in accordance with generally accepted actuarial practices and 
principles.
    ``(4) At the end of each fiscal year on and after September 30, 
2002, the Office shall notify the Secretary of the Treasury of the 
amounts of the next installments under the most recent amortization 
schedules established under paragraphs (1) and (2). Before closing the 
accounts for the fiscal year, the Secretary shall credit the sum of 
these amounts (including in that sum any negative amount for the 
amortization of the supplemental liability) to the Fund, as a 
Government contribution, out of any money in the Treasury of the Untied 
States not otherwise appropriated.
    ``(5) For the purpose of carrying out paragraphs (1) and (2), the 
Office shall perform or arrange for actuarial determinations and 
valuations and shall prescribe retention of such records as it 
considers necessary for making periodic actuarial valuations of the 
Fund.
    ``(6) Notwithstanding subsection (b), the amounts deposited into 
the Fund pursuant to this subsection and section 8906(c)(2) to prefund 
post-retirement health benefits costs shall be segregated within the 
Fund so that such amounts, as well as earnings and proceeds under 
paragraph (c) attributable to them, may be used exclusively for the 
purpose of paying Government contributions for post-retirement health 
benefits costs. When such amounts are used in combination with amounts 
withheld from annuitants to pay for health benefits, a portion of the 
contributions shall then be set aside in the Fund as described in 
paragraph (b).
    ``(7) Under this subsection, `supplemental liability' means--
            ``(A) the actuarial present value for future post-
        retirement health benefits that are the liability of the Fund, 
        less
            ``(B) the sum of--
                    ``(i) the actuarial present value of all future 
                contributions by agencies and annuitants to the Fund 
                toward those benefits pursuant to section 8906;
                    ``(ii) the present value of all scheduled 
                amortization payments to the Fund pursuant to 
                paragraphs (1) and (2);
                    ``(iii) the Fund balance as of the date the 
                supplemental liability is determined, to the extent 
                that such balance is attributable to post-retirement 
                benefits; and
                    ``(iv) any other appropriate amount, as determined 
                by the Office in accordance with generally accepted 
                actuarial practices and principles.''.

SEC. 212. UNIFORMED SERVICES HEALTH BENEFITS FOR RETIREES.

    (a) Section 1111 of title 10, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``Medicare-Eligible''; and
                    (B) by striking ``for medicare eligible 
                beneficiaries'' and inserting ``including care provided 
                in military treatment facilities'';
            (2) in subsection (b)(1), by striking ``for medicare 
        eligible beneficiaries'', ``medicare eligible'' and ``medicare-
        eligible'';
            (3) by striking subsection (b)(2); and
            (4) by redesignating subsection (b)(3) as (b)(2);
    (b) Section 1113(a) of such title 10 is amended by striking ``for 
medicare-eligible beneficiaries'' and inserting ``including care 
provided in military treatment facilities''.
    (c) Section 1114(a)(1) of such title 10 is amended by striking 
``medicare-eligible''.
    (d) Section 1116 of such title 10 is amended--
            (1) in subsection (a), by inserting before the colon ``, 
        less the amount in paragraph (c)'';
            (2) in subsection (a)(1)(B), by adding at the end the 
        following new paragraph:
    ``The amount paid into the Fund under this subsection shall be paid 
from the funds available for the military personnel accounts.'';
            (3) in subsection (a)(2)(B), by striking ``Defense Health 
        Program'' and inserting ``military personnel accounts''; and
        (4) by adding at the end the following new subsection (c):
    ``(c) The Secretaries of Health and Human Services, Commerce, and 
Transportation shall pay into the Fund each month, from amounts 
available for salaries and expenses, the portion of the amounts 
determined by the Secretary of Defense under (a)(1) and (a)(2) which 
are attributable to service performed, respectively, by the uniformed 
services of the Coast Guard, the Commissioned Officer Corps of the 
Public Health Service, and the Commissioned Officer Corps of the 
National Oceanic and Atmospheric Administration.''.
            (5) by adding at the end the following new subsection (d):
    ``(d) To avoid funding differences in the first year should formal 
actuarial determinations not be available in time for budget 
preparation, the monthly dollar amounts used in the first year sections 
1116(a)(1)(A) and 1116(a)(2)(A) shall be set equal to those estimates 
in section 1115(b)(1)(A)(i) and 1115(b)(1)(B)(i) if formal actuarial 
determinations are not available. The original unfunded liability as 
defined in 1115(a) shall include an adjustment to correct for the 
difference between the formal actuarial determinations and the 
estimates in section 1115(b)(1).''.
    (e) Conforming Amendment.--The heading for chapter 56 of title 10, 
United States Code, is amended to read as follows:

      ``CHAPTER 56--UNIFORMED SERVICES RETIREE HEALTH CARE FUND''.

SEC. 213. EFFECTIVE DATE.

    Except as otherwise provided herein, this Title shall take effect 
upon enactment with respect to fiscal years beginning after 2002.

          TITLE III--FEDERAL PROPERTY ASSET MANAGEMENT REFORMS

SEC. 301. DEFINITIONS.

    Section 3 of the Federal Property and Administrative Services Act 
of 1949 (hereinafter in this title referred to as the ``Act''), as 
amended (40 U.S.C. Sec 472), is amended by adding at the end the 
following:
    ``(m) The term `landholding agency' means any Federal agency that, 
by specific or general statutory authority, has jurisdiction, custody, 
and control over real property, or interests therein. The term does not 
include agencies when they are disposing of real property for public 
benefit purposes pursuant to section 203 of the Act (40 U.S.C. Sec. 
484), and does not apply to Indian lands--i.e., lands held in trust or 
restricted fee status for individual Indians or Indian Tribes.''.

             Subtitle A--Life Cycle Planning and Management

    Title II of the Act, as amended, is amended by adding at the end 
thereof the following new sections:
    ``Sec. 213. (a) Asset Management Principles.--In accordance with 
the authorities vested in the Administrator under section 205(c) of 
this Act, the Administrator, in collaboration with the heads of Federal 
agencies and the Office of Management and Budget, shall establish and 
maintain current asset management principles to be applied where 
appropriate to real and personal property assets subject to this Act 
and under the jurisdiction, custody and control of such agencies. With 
respect to the outlease of Federal Property through the use of public-
private partnerships authorized in section 216(d), the Administrator 
shall require the use of the following principles: (1) under no 
circumstances shall the liability of the government arising from an 
arrangement with a non-governmental entity or from the operation of any 
partnership, cooperative venture, limited liability company, 
corporation, trust, or other business arrangement created as the result 
of an agreement with a non-governmental entity exceed the amount of the 
Federal government's capital contribution or equity contribution; (2) 
such projects will only be undertaken if the federal asset is not 
developed to its highest and best use and the project is economically 
viable; determination of economic viability would include, among other 
relevant economic factors, the internal rate of return of the 
investment to the government (with preference given to higher rates of 
return) at leaseback rates not exceeding market rates; and (3) projects 
will only be undertaken if the market conditions are favorable to 
development and `full occupancy' by government or private tenants.
    ``(b) Performance Measurement Benchmarks.--The Administrator, in 
consultation with the heads of landholding agencies, shall establish 
performance measures to determine the effectiveness of Federal real 
property management. These measures shall monitor and assess: (1) the 
disposal of non-performing real property assets; (2) the reduction in 
vacant Federal space; (3) the realization of equity value in Federal 
real property assets; (4) the value added through cooperative 
arrangements with the commercial real estate community; and (5) the 
enhancement of Federal agency productivity through an improved working 
environment. The performance measures shall be designed to: (1) enable 
the Congress and heads of agencies to track progress in the achievement 
of property management objectives on a government wide basis; and (2) 
allow for comparing the performance of agencies against industry and 
other public sector agencies in terms of performance. In developing and 
implementing the performance measures, the Administrator shall use 
existing data sources and automated data collection tools to the 
maximum extent practical.
    ``(c) Inventory Database.--In order to accumulate and maintain a 
single, comprehensive descriptive listing of all Federal real property 
interests under the custody and control of each Federal agency, the 
Administrator, in coordination with the heads of Federal agencies, 
shall collect such descriptive information, except for classified 
information, as the Administrator deems will best describe the nature, 
use, and extent of the real property holdings of the United States. For 
purposes of this section, real property holdings include all public 
lands of the United States and all real property of the United States 
located outside the States of the Union, to include, but not be limited 
to the District of Columbia, Puerto Rico, American Samoa, Guam, the 
Trust Territory of the Pacific Islands and the Virgin Islands. To 
facilitate the reporting on a uniform basis, the Administrator is 
authorized to establish data and other information technology standards 
for use by Federal agencies in developing or upgrading agency real 
property information systems.
    ``(d) Public Information Access.--The listing compiled pursuant to 
this section shall be public record; however, the Administrator is 
authorized to withhold information, including the location of 
classified facilities, when it is determined that withholding such 
information would be in the public interest. Nothing herein shall 
require the public release of information that is exempt from 
disclosure pursuant to the Freedom of Information Act, as amended (5 
U.S.C. Sec. 552).
    ``(e) Jurisdiction of Administrator.--Except for the purpose of 
maintaining the property listing described in subparagraphs (c) and 
(d), above, nothing in this section shall authorize the Administrator 
to assume jurisdiction over the acquisition, management, or disposal of 
real property not subject to this Act.
    ``Sec. 214. (a) Within 180 days of the effective date of this 
section, the head of each landholding agency shall appoint, or 
designate from among senior management officials within such agency, a 
Senior Real Property Officer. Such individual shall be selected with 
special attention to the qualifications required to administer the 
functions described under this section. The head of any landholding 
agency who so desires may also appoint a Real Property Officer for any 
major component part of an agency, and such Real Property Officers, for 
the purposes of complying with this title, shall report to the Senior 
Real Property Officer.
    ``(b) The Senior Real Property Officer for each agency shall be 
responsible for continuously monitoring agency real property assets 
to--
            ``(1) manage each asset, including but not limited to its 
        functional use, occupancy, reinvestment requirements and future 
        utility, in a manner fully consistent with and supportive of 
        the goals and objectives set forth in the agency's Strategic 
        Plan required under section 3 of the Government Performance and 
        Results Act of 1993, Public Law 103-62 (5 U.S.C. Sec. 306), 
        consistent with the framework provided by the real property 
        asset management principles published by the Administrator 
        pursuant to section 213(a), and reflected to an agency asset 
        management plan. The asset management plan shall be prepared 
        according to guidelines issued by the Administrator, shall be 
        maintained to reflect current agency program and budget 
        priorities, and be consistent with capital planning and 
        programming guidance issued by the Office of Management and 
        Budget;
            ``(2) identify real property assets that can benefit from 
        the application of the enhanced asset management tools 
        described in section 216;
            ``(3) apply enhanced asset management tools, in those cases 
        where a real property asset can so benefit, in such a way that 
        any resulting transaction will result in a fair return on the 
        Federal government investment and protect the Federal 
        government from unreasonable financial or other risks; and
            ``(4) provide to the Administrator a listing and 
        description of the real property assets, under the 
        jurisdiction, custody and control of that agency, including 
        public lands of the United States and property located in 
foreign lands, along with any other relevant information the 
Administrator may request, for inclusion in a government-wide listing 
of all Federal real property interests established and maintained in 
accordance with section 213(c) of this title.
            ``(5) determine the performance of the agency against the 
        performance measures established under section 213(b) and 
        report the results of such monitoring to the Congress in the 
        agency's budget submission under section 1005 of title 31, 
        United States Code.
    ``(c) Except as otherwise provided by Federal law, prior to a 
Federal agency acquiring any interests in real property from any non-
Federal source, the Senior Real Property Officer of the acquiring 
agency shall give first consideration to available Federal real 
property holdings.''.

  Subtitle B--Enhanced Authorities for Real Property Asset Management

SEC. 311. ENHANCED ASSET MANAGEMENT TOOLS.

    Title II of the Act, as amended, is amended by adding at the end 
thereof the following new sections:

          ``criteria for using enhanced asset management tools

    ``Sec. 215. (a) Subject to the requirements of subsection (b) of 
this section, the head of a landholding agency may apply an enhanced 
asset management tool described in section 216 to a real property 
interest under the agency's jurisdiction, custody and control when the 
head of the agency has determined that such real property interest--
            ``(1) when used to acquire replacement real property, is 
        not excess property within the meaning given in subsection 3(e) 
        of this Act (40 U.S.C. Sec. 472(e)); provided, further, the 
        agency shall include as part of the documentation required 
        under subsection (b)(3) a description of the need and mission 
        requirement fulfilled by the Federal property;
            ``(2) is used to fulfill or support a continuing mission 
        requirement of the agency; and
            ``(3) can, by applying an enhanced asset management tool, 
        improve the support of such mission.
    ``(b) Before applying an enhanced asset management tool defined in 
section 216 to a real property interest identified under subsection (a) 
of this section, the head of the agency shall determine that such 
application meets all of the following criteria:
            ``(1) Supports the goals and objectives set forth in the 
        agency's Strategic Plan required under section 3 of the 
        Government Performance and Results Act of 1993, Public Law 103-
        62 (5 U.S.C. Sec. 306) and the agency's real property asset 
        management plan as required in section 214.
            ``(2) Use of the real property is economical, cost 
        effective, and in the best interests of the United States.
            ``(3) Is documented in a business plan which, commensurate 
        with the nature of the selected tool, analyzes all reasonable 
        options for using the property; takes into account applicable 
        provisions of law including but not limited to the National 
        Environmental Policy Act of 1969, as amended; and evidences 
        compliance with the requirements of the McKinney-Vento Homeless 
        Assistance Act, including (i) describing the result of the 
        determination by the Department of Housing and Urban 
        Development of the suitability of the property for use to 
        assist the homeless; and (ii) explaining the rationale for the 
        landholding agency's decision not to make the property 
        available for use to assist the homeless.

                   ``enhanced asset management tools

    ``Sec. 216. (a) Interagency Transfers or Exchanges.--Any 
landholding agency may acquire replacement real property by transfer or 
exchange of real property subject to this Act with other Federal 
agencies under terms mutually agreeable to the agencies involved.
    ``(b) Sales To or Exchanges With Non-Federal Sources.--Any 
landholding agency may acquire replacement real property by selling or 
exchanging a real property asset or interests therein with any non-
Federal source; provided that: (1) this transaction does not conflict 
with other applicable laws governing the acquisition of interests in 
real property by Federal agencies; (2) the agency first made the 
property available for transfer or exchange to other Federal agencies; 
and (3) the transaction results in the agency receiving fair market 
value consideration, as determined by the agency head, which 
consideration may be future consideration, for the asset sold or 
exchanged.
    ``(c) Subleases.--The head of any landholding agency, by lease, 
permit, license or similar instrument, may make available to other 
Federal agencies and to non-Federal entities the unexpired portion of 
any government lease for real property; provided that the term of any 
sublease shall not exceed the unexpired portion of the term of the 
original government lease of the property and the sublease results in 
the agency receiving fair market rental value for the asset. Prior to 
subleasing to any private person or private sector entity, the Federal 
agency shall give consideration to the needs of the following entities 
with the needs of entities listed in paragraph (1) being considered 
before the needs of entities listed in paragraph (2):
            ``(1) First priority.--The needs of each of the following 
        entities, equally, shall be given first priority by the agency:
                    ``(A) Federal agencies; and
                    ``(B) Indian tribes (as defined by section 4 of the 
                Indian Health Care Improvement Act (25 U.S.C 
                Sec. 1603)), urban Indian organizations (as defined by 
                that section), and tribal organizations (as defined by 
                section 4 of the Indian Self-Determination and 
                Education Assistance Act (25 U.S.C. 450b)), through the 
                Secretaries of the Department of the Interior and the 
                Department of Health and Human Services, when the 
                property is to be used in connection with an Indian 
                Self-Determination contract or grant pursuant to the 
                Indian Self-Determination Act (25 U.S.C. 450f et seq.).
            ``(2) Second priority.--The needs of each of the following 
        entities, equally, shall be given second priority by the 
        agency:
                    ``(A) State and local governments; and
                    ``(B) Indian tribes, tribal organizations, and 
                urban Indian organizations (defined as in paragraph 
                (1)(B)), through the Secretaries of the Department of 
                the Interior the Department of Health and Human 
                Services when the property is to be used for purposes 
                other than as described in paragraph (1) and such uses 
                of the property are authorized by law other than this 
                subsection.
    ``(d) Outleases.--The head of any landholding agency may make 
available by outlease agreements with other Federal agencies and non-
Federal entities any unused or underused portion of or interest in any 
agency real and related personal property after finding that (i) there 
is no long-term mission requirement for the property, but the Federal 
Government is not permitted to dispose of it; or (ii) there is a 
continuing long-term mission requirement for the property to remain in 
Government ownership, and (iii) the use of the real property by the 
lessee will not be inconsistent with the statutory mission of the 
landholding agency; provided that such an outlease transaction to a 
non-Federal entity is conducted competitively.
            ``(1) Outlease agreements.--In order to reduce vacant space 
        and realize the equity value of Government-owned real property 
        assets, provide Federal agencies with modern functional work 
        environments, and work cooperatively with the commercial real 
        estate community, any outlease agreements authorized under this 
        subsection--
                    ``(A) may be a partnership, cooperative venture, 
                limited liability company, corporation, trust, sole 
                proprietorship, or other business arrangement;
                    ``(B) shall be for a term no longer than 50 years;
                    ``(C) shall result in the agency receiving fair 
                market value consideration, as defined by the agency 
                head, for the asset, including cash, other property 
                (either real or personal), services, and/or in-kind or 
                future consideration;
                    ``(D) may provide a leaseback option to the Federal 
                government to occupy space in any facilities acquired, 
                constructed, repaired, renovated, or rehabilitated by 
                the non-governmental entity, provided that the 
                agreement does not guarantee government occupancy; 
                provided further that any subsequent agreements to 
                leaseback space in such facilities must be in 
                accordance with the competition requirements of Title 
                III of this Act (41 U.S.C. Sec. 253 et seq.);
                    ``(E) shall provide (i) that neither the United 
                States, nor its agencies or employees, shall be liable 
                for any actions, debts or liability of the lessee, and 
                (ii) that the lessee shall not be authorized to execute 
                and shall not execute any instrument or document 
                creating or evidencing any indebtedness unless such 
                instrument or document specifically disclaims any 
                liability of the United States, and of any Federal 
                agency or employee thereunder in excess of the 
                Government's capital contribution in the lessee;
                    ``(F) shall provide (i) that the Government's 
                interest under the agreement is senior to that of any 
                lender to a non-government entity, and (ii) that under 
                no circumstances shall the liability of the United 
                States arising from its arrangement with the non-
                governmental entity or from the operations of any 
                partnership, cooperative venture, limited liability 
                company, corporation, trust, or other business 
                arrangement created as the result of the agreement with 
                a non-governmental entity exceed the amount of the 
                Federal government's capital contribution or equity 
                contribution to the partnership, cooperative venture, 
                limited liability company, corporation, trust, or other 
                business arrangement; and
                    ``(G) may contain such other terms and conditions 
                as the head of the agency making the property available 
                deems necessary to protect the interests of the Federal 
                government.
            ``(2) Order of consideration.--In making property available 
        for outlease, the landholding agency shall follow the order of 
        consideration listed in subsection (c) of this section.
            ``(3) Prerequisites to agreements.--Prior to the head of 
        any landholding agency executing any agreement authorized under 
        subsection (d) of this section that would result in the 
        development or substantial rehabilitation or renovation of 
        Federal assets in a business arrangement with a non-Federal 
        entity, the head of such agency shall undertake an analysis of 
        the proposed arrangement or transaction to determine the 
        business and legal risks and benefits to the Federal Government 
        that would likely result from the proposed arrangement or 
        transaction.
            ``(4) Scoring.--For the sole purpose of scoring lease-back 
        agreements, if the non-Federal entity shall exercise management 
        control of the business of the public-private entity and holds 
        a majority interest in ownership in the public-private venture; 
        then the project shall not be considered to be constructed on 
        government-owned land for purposes of the application of 
        scoring rules. All leaseback agreements must meet the 
        requirements of an operating lease as specified in relevant OMB 
        Circulars.
            ``(5) Authority for disposition of leased property.--If, 
        during the term of an outlease involving the development or 
        substantial rehabilitation/renovation of a Federal asset in a 
        business arrangement with a non-Federal entity, the head of the 
        agency determines that the property is no longer needed by the 
agency, the head of the agency may initiate action for the transfer to 
the lessee of all right, title, and interest of the United States in 
the property by requesting the Administrator of General Services to 
dispose of the property. A disposition under this section may be made 
for such consideration as the head of the agency and the Administration 
jointly determine is in the best interests of the United States and 
upon such other terms and conditions as the head of the agency and the 
Administrator consider appropriate.
            ``(6) Other authorities.--The authority under this 
        subsection shall not be construed to affect any other authority 
        of any agency to outlease property or to otherwise make 
        property available for any reason.
            ``(7) Sunset provision.--The authority to enter into new 
        outlease agreements under subsection 216(d) expires 10 years 
        after the date of enactment. The effectiveness of the use of 
        such authority shall be reviewed biennially by the General 
        Accounting Office.

                        ``forms of consideration

    ``Sec. 217. Notwithstanding any other provision of law, the forms 
of consideration received from an enhanced asset management tool as 
described in section 216 may include cash or cash equivalents, other 
property (either real of personal), in-kind assets, services, future 
consideration, or any combination thereof.

                        ``transactional reports

    ``Sec. 218. For those transactions authorized under section 216 
involving the sale, exchange or outlease to a non-Federal source of any 
asset valued in excess of $2 million at the time of the transaction, 
the head of the landholding agency performing the transaction shall 
submit the business plan required by subsection 215(b)(3) to the Office 
of Management and Budget and to appropriate Committees of the United 
States Senate and the House of Representatives at least 30 calendar 
days prior to final execution of such transaction. The $2 million 
threshold in this subsection may be adjusted upward or downward by the 
Administrator to reflect the annual inflation/deflation factor as 
determined by the Department of Commerce Consumer Price Index.''.

SEC. 312. REPEAL OF SECTION 321 OF THE FEDERAL PROPERTY AND 
              ADMINISTRATION SERVICES ACT.

    Section 321 of the Act of June 30, 1932, 47 Stat. 412 (40 U.S.C. 
Sec. 303b), is repealed.

SEC. 313. DISPOSAL OF SURPLUS PROPERTY.

    Subsection 203(b) of the Act, as amended to read as follow:
    ``(b)(1) The care and handling of surplus property, pending its 
disposition, and the disposal of such property, may be performed by the 
General Services Administration or, when so determined by the 
Administrator, by the executive agency in possession thereof or by any 
other executive agency consenting thereto.
    ``(2) Upon the written request of a landholding agency, the 
Administrator shall delegate all responsibilities and authorities for 
the care and handling of surplus real and related personal property, 
pending its disposition, and for the disposal of such property, 
provided to the Administrator elsewhere in this Act, to the head of the 
landholding agency. The Administrator of General Services retains the 
authority to promulgate general policies and procedures for disposing 
of such property. These policies and procedures shall require that the 
General Services Administration--
            ``(A) notify the agencies responsible elsewhere in this Act 
        for sponsoring public benefit conveyances of the availability 
        of excess property as soon as it has been declared excess and 
        solicit their input on whether their public benefit represents 
        the highest and best use of such property;
            ``(B) serve as the central point of contact for agencies, 
        prospective donees, and the public on the availability of 
        surplus property as soon as it has been declared surplus;
            ``(C) assure that the agencies with the authority to make 
        disposal decisions give full consideration to the public 
        benefit uses of surplus Federal property in making their 
        disposal decisions; and
            ``(D) serve as a clearinghouse for information on all 
        phases of the surplus property disposal process, including 
        appeals from sponsoring agencies and prospective donees that 
        insufficient consideration was given to public benefit 
        donations.''.

   Subtitle C--Incentives for Real and Personal Property Management 
                              Improvement

SEC. 321. PROCEEDS FROM TRANSFER OR DISPOSITION OF PROPERTY.

    Section 204 of the Act, as amended (40 U.S.C. Sec. 485), is amended 
as follows:
            (a) In paragraph (2) of subsection (h) by striking ``(b)'' 
        and inserting in lieu thereof ``(c)'', and by striking the 
        phrase '', to the extent provided in appropriations Acts,''.
            (b) By revising subsection (i) to read as follows:
    ``Federal agencies may retain from the proceeds of the sale of 
personal property amounts necessary to recover, to the extend 
practicable, the full costs, direct and indirect, incurred by the 
agencies in disposing of such property, including but not limited to 
the costs for warehousing, storage, environmental services, 
advertising, appraisal, and transportation. Such amounts shall be 
deposited into an account available for such expenses without regard to 
fiscal year limitations. Amounts that are not needed to pay such costs 
shall be transferred at least annually to the general fund or to a 
specific account in the Treasury as required by statute.''.
            (c) By redesignating subsections (c), (d), (e), (f), (g), 
        (h), and (i), as subsections (d), (e), (f), (g), (h), (i), and 
        (j), respectively.
            (d) By striking subsections (a) and (b) and by inserting in 
        lieu thereof the following subsections (a), (b), and (c):

          ``proceeds from transfer or disposition of property

    ``Sec. 204. (a)(1) Agency Retention of Proceeds From Real 
Property.--Proceeds resulting from the transfer or disposition of real 
and related property under this Title shall be credited to the fund, 
account (including the capital asset account provided in subsection (b) 
of this section) or appropriation of the agency which made the property 
available and shall be treated as provided in subsections (b) and (c) 
of this section.
    ``(2) Proceeds From Personal Property.--Proceeds from any transfer 
of excess personal property to a Federal agency or from any sale, 
lease, or other disposition of surplus personal property shall be 
treated as prescribed in subsection (j) or as otherwise authorized by 
law.
    ``(3) Other Proceeds.--All proceeds under this Title not deposited 
or credited to a specific agency account, shall be covered into the 
Treasury as miscellaneous receipts except as provided in subsections 
(d), (e), (f), (g), (h), (i), and (j) of this section or as otherwise 
authorized by law.
    ``(b) Monetary Proceeds to Agency Capital Asset Accounts.--Monetary 
proceeds received by agencies from the transfer or disposition of real 
and related personal property shall be credited to an existing account 
or an account to be established in the Treasury to pay for the capital 
expenditures of the particular agency making the property available, 
which account shall be known as the agency's capital asset account. 
Subject to subsection (c), any amounts credited or deposited to such 
account under this section, along with such other amounts as may be 
appropriated or credited from time to time in annual appropriations 
acts, shall be devoted to the sole purpose of funding that agency's 
capital asset expenditures, including any expenses necessary and 
incident to the agency's real property capital acquisitions, 
improvements, and dispositions, and such funds shall remain available 
until expended, in accordance with the agency's asset management plan 
as required in section 214 of the Act as amended by this title, without 
further authorization: Provided, That: (1) monies from an exchange or 
sale of real property, or a portion of a real property holding, under 
subsection 216(b) of the Act as amended by this title shall be applied 
only to the replacement of that property or to the rehabilitation of 
the portion of that real property holding that remains in Federal 
ownership, and (2) the head of each landholding agency shall include 
with the materials the agency annually submits under section 1105 of 
title 31, United States Code, a detailed accounting of all real 
property transactions carried out under Title II of the Act and of 
receipts and disbursements from the agency's capital asset account 
during the previous fiscal year.
    ``(c) Transactional and Other Costs.--Federal agencies may be 
reimbursed from the monetary proceeds of real property dispositions or 
from other available resources, including from the agency's capital 
asset account, the full costs, direct and indirect, to the agency of 
disposing of such property, including but not limited to the costs of 
site remediation, restoration or other environmental services, 
relocating affected tenants and occupants, advertising and marketing, 
community outreach, surveying, appraisal, brokerage, historic 
preservation services, title insurance, due diligence, document 
notarization and recording services and the costs of managing leases 
and providing necessary services to the lessees.''.

SEC. 322. RELATIONSHIP TO OTHER AGENCIES' AUTHORITIES TO USE DISPOSAL 
              PROCEDURES.

    Nothing in this Title shall be construed to repeal or supersede any 
other provision of Federal law directing the use of proceeds from 
specific real property transactions or directing how or where a 
particular Federal agency is to deposit, credit or use the proceeds 
from the sale, exchange or other disposition of Federal property except 
as expressly provided for herein.

SEC. 323. IMPACT ON OTHER AUTHORITIES TO USE DISPOSAL PROCEEDS.

    (a) Section 2(a) of the Land and Water Conservation Act of 1965, as 
amended (16 U.S.C. Sec. 460l-5(a)), is superseded only to the extent 
that the Federal Property and Administrative Services Act of 1949, as 
amended, or a provision of this title, provide for an alternative 
disposition of the proceeds from the disposal of any surplus real 
property and related personal property subject to this Act, or the 
disposal of any interest therein.
    (b) Subsection 3302(b) of title 31, United States Code, is 
superseded only to the extent that this Act or any other Act provides 
for the disposition of money received by the Government.

SEC. 324. USING SHARE OF SALE PROCEEDS TO MAINTAIN HISTORIC TREASURY 
              RECEIPTS.

    For purposes of implementing subtitle C of this title, the 
following shall apply:
    (a) For fiscal years 2002 through 2006, OMB shall allocate by 
agency a pro rata share of the baseline estimate of total surplus real 
property sales receipts transferred to the Land and Water Conservation 
Fund that were contained in the President's Budget for Fiscal Year 
2002, made pursuant to section 1109 of title 31, United States Code. 
OMB shall notify the affected agencies and Appropriations Committees of 
the U.S. House of Representatives and Senate in writing of this 
allocation within 30 days of enactment of this title and shall not 
subsequently revise the allocation.
    (b) On September 30 of each fiscal year, each agency shall transfer 
to the Treasury an amount equal to its allocation for that fiscal year, 
out of the proceeds realized from any sales of the agency's surplus 
real property assets during that fiscal year.
    (c) If an agency's actual sale proceeds in any fiscal year are less 
than the amount allocated to it by OMB for that fiscal year, the agency 
shall transfer all of its sale proceeds to the Treasury, and its 
allocation for the subsequent fiscal year shall be increased by the 
difference.
    (d) On September 30, 2006, if an agency has transferred less sale 
proceeds to the Treasury than its total allocation for the five years, 
the agency shall transfer the difference out of any other funds 
available to the agency.

       Subtitle D--Streamlined and Enhanced Disposal Authorities

SEC. 331. INCLUDING NONPROFIT ORGANIZATIONS AS ELIGIBLE DONEES.

    (a) Section 203 of the Act, as amended (40 U.S.C. Sec. 484), is 
amended in paragraph (k)(3) as follows--
            (1) by striking ``or municipality'' and inserting in lieu 
        thereof ``municipality, or qualified nonprofit organization 
        established for the primary purpose of preserving historic 
        monuments''; and
            (2) by inserting after the first sentence ``Such property 
        may be conveyed to a nonprofit organization only if the State, 
        political subdivision, instrumentalities thereof, and 
        municipality in which the property is located do not request 
        conveyance under this section within thirty days after notice 
        to them of the proposed conveyance by the Administrator to that 
        nonprofit organization.''.
    (b) Section 203 of the Federal Property and Administrative Services 
Act of 1949, as amended (40 U.S.C. Sec. 484), is amended by revising 
paragraph (k)(4)(C) to read as follows:
                    ``(C) the Secretary of the Interior, in the case of 
                property transferred pursuant to the Surplus Property 
                Act of 1944, as amended, and pursuant to this Act, to 
                States, political subdivisions, and instrumentalities 
                thereof, and municipalities for use as a public park or 
                public recreation area, and to State, political 
                subdivisions, and instrumentalities thereof, 
                municipalities, and nonprofit organizations for use as 
                an historic monument for the benefit of the public; 
                or''.

SEC. 332. ELIMINATION OF CERTAIN NEGOTIATED SALE REQUIREMENTS.

    (a) Section 203 of the Act, as amended (40 U.S.C. Sec. 484), is 
amended in subsection (e) as follows:
            (1) By striking subparagraphs (3)(A), (3)(B), (3)(C), and 
        (3)(E),
            (2) By redesignating subparagraph (3)(D) and subparagraphs 
        (3)(F) through (3)(I), as subparagraphs (3)(A) through (3)(E), 
        respectively,
            (3) By amending redesignated subparagraph (3)(E) to read as 
        follows:
                    ``(E) otherwise authorized by this Act or other law 
                or with respect to personal property deemed 
                advantageous to the Government.'',
            (4) By amending subparagraph (6)(A) to read as follows:
            ``(6)(A) An explanatory statement shall be prepared of the 
        circumstances of each disposal by negotiation of any real 
        property that has an estimated fair market value in excess of 
        the threshold value for which transactional reports are 
        required under Section 218.'',
            (5) By deleting subparagraphs (6)(C) and (6)(D).
    (b) Section 203 of the Federal Property and Administrative Services 
Act of 1949, as amended, is further amended by adding to the end 
thereof the following new subsection:
    ``(s) The authority of any department, agency, or instrumentality 
of the executive branch or wholly owned Government corporation to 
convey surplus real and related personal property for public airport 
purposes under subchapter II of title 49, United States Code, shall be 
subject to the requirements of this Act, and any surplus real property 
available for conveyance under that subchapter shall first be made 
available to the Administrator for disposal under this section, 
including conveyance for any public benefit purposes, including public 
airport use, as the Administrator, after consultation with the affected 
agencies, deems advisable.''.

SEC. 333. EXCHANGE AND SALE OF PERSONAL PROPERTY.

    Subsection 201(c) of the Act, as amended (40 U.S.C. Sec. 481(c)), 
is revised to read as follows:
    ``(c) In acquiring personal property or related services, or a 
combination thereof, any executive agency, under regulations to be 
prescribed by the Administrator, subject to regulations prescribed by 
the Administrator for Federal Procurement Policy pursuant to the Office 
of Federal Procurement Policy Act (41 U.S.C. Sec. 401 et seq.), may 
exchange or sell personal property and may apply the exchange allowance 
or proceeds of sale in such cases in whole or in part payment for 
similar property or related services, or a combination thereof, 
acquired: Provided, that any transaction carried out under the 
authority of this subsection shall be evidenced in writing. Sales of 
property pursuant to this subsection shall be governed by subsection 
203(e) of this title, and shall be exempted from the provisions of 
section 5 of title 41, United States Code.''.

SEC. 334. EXPANSION OF ABANDONMENT AUTHORITY.

    Subsection 202(h) of the Act, as amended (40 U.S.C. Sec. 483(h)), 
is amended to read as follows:
    ``(h) The Administrator may authorize the abandonment, destruction, 
or other disposal of property which has no commercial value or of which 
the estimated cost of continued care and handling would exceed the 
estimated fair market value.''.

SEC. 335. CLARIFYING CERTAIN DONATION AUTHORITIES.

    Subsection 203(j) of the Act, as amended (40 U.S.C. Sec. 484(j)), 
is further amended as follows:
    (a) Paragraph (j)(1) is amended--
            (1) by striking the phrase ``the fair and equitable 
        distribution, through donation,'' and inserting in lieu thereof 
        ``donation on a fair and equitable basis''; and
            (2) by striking ``paragraphs (2) and (3)'' and inserting in 
        lieu thereof ``paragraph (2)''.
    (b) Paragraph (j)(2) is deleted.
    (c) Paragraph (j)(3) is renumbered (j)(2) and amended as follows:
            (1) By deleting the introductory paragraph and inserting in 
        lieu thereof the following:
            ``(2) The Administrator shall, pursuant to criteria that 
        are based on need and utilization and established after such 
        consultation with State agencies as is feasible, allocate 
        surplus personal property among the States on a fair and 
        equitable basis, taking into account the condition of the 
        property as well as the original acquisition cost thereof, and 
        transfer to the State agency property selected by it for 
        purpose of donation within the State--''.
            (2) in subparagraph (B) by--
                    (A) deleting ``providers of assistance to homeless 
                individuals, providers of assistance to families or 
                individuals whose annual incomes are below the poverty 
                line (as that term is defined in section 673 of the 
                Community Services Block Grant Act),'';
                    (B) striking out ``schools for the mentally 
                retarded, schools for the physically handicapped'' and 
                by inserting in lieu thereof ``schools for persons with 
                mental or physical disabilities'';
                    (C) striking the word ``and'' before ``libraries''; 
                and
                    (D) inserting ``and educational activities 
                identified by the Secretary of Defense as being of 
                special interest of the Armed Services,'' following the 
                word ``region,''; and
            (3) By adding a new subparagraph (C) to read as follows:
                    ``(C) to nonprofit institutions or organizations 
                that are exempt from taxation under section 501 of 
                title 26, United States Code, and which have for their 
                primary function the provision of food, shelter, or 
                other necessities to homeless individuals or families 
                or individuals whose annual income is below the poverty 
                line (as that term is defined in section 673 of the 
                Community Service Block Grant Act) for use in assisting 
                the poor and homeless.''.
    (d) Paragraph (j)(4) is renumbered (j)(3).
    (e) Paragraph (j)(5) is renumbered (j)(4).

SEC. 336. STREAMLINING CONSIDERATION OF SURPLUS REAL PROPERTY FOR 
              HOMELESS ASSISTANCE.

    (a) Section 501 of the McKinney-Vento Homeless Assistance Act, as 
amended (42 U.S.C. Sec. 11411) is amended as follows:
            (1) In the first sentence of subsection (a), by inserting 
        before the period the following: ``, and that have not been 
        previously reported on by an agency under this subsection''.
            (2) In the second sentence of subsection (a), by inserting 
        after ``to the Secretary'' the following:

        ``, which shall not include information previously reported on 
        by an agency under this subsection''.
            (3) In subsection (b)(1), (c)(1)(A), and (c)(2)(A), by 
        striking ``45'' and inserting ``30''.
            (4) In subsection (c)(1)(A)(i), by inserting after ``(a)'' 
        the following: ``that have not been previously published''.
            (5) In subsection (c)(1)(A)(ii), by inserting after 
        ``properties'' the following: ``that have not been previously 
        published''.
            (6) By striking subsections (c)(1)(D) and (c)(4),
            (7) In subsection (c)(2)(B), by inserting at the end the 
        following new sentence: ``Such efforts as are necessary to 
        provide for the widest possible dissemination of the 
        information on such list shall include publishing the 
        information on an Internet website maintained by the Secretary 
        and providing notice of the information on such list tot he 
        local Continuum of Care organization for homeless assistance 
        within the jurisdiction in which the property is located, or if 
        there is no such organization, then to the State.''.
            (8) In subsections (d)(1) and (d)(2), by striking ``60'' 
        and inserting ``90''.
            (9) In subsection (d)(4)(A), by amending to read as 
        follows: ``(4)(A) Written notice of intent to apply for a 
        property published under subsection (c)(1)(A)(ii) of this 
        section may be filed at any time after the 90-day period 
        prescribed in paragraph (1) has expired. In such case, an 
        application submitted pursuant to the notice may be approved 
        for disposal for use to assist the homeless only if the 
        property remains available for use to assist the homeless. If 
        the property remains available for use to assist the homeless, 
        the use to assist the homeless shall be given the same priority 
        of consideration as a public health use under section 484(k) of 
        title 40, United States Code.'',
            (10) In subsection (e)(3), by inserting the following 
        sentence immediately after the first sentence: ``The Secretary 
        of Health and Human Services shall give a preference to 
        applications that contain a certification that their proposal 
        is consistent with the local Continuum of Care strategy for 
        homeless assistance.'',
            (11) In subsection (f)(3)(A), by adding at the end the 
        following: ``Such priority of consideration shall apply only 
        with respect to properties as to which the written notice of 
        intent to apply for a property set forth in subsection (d)(2) 
        of this section is received by the Secretary of Health and 
        Human Services within the 90-day period described in section 
        (d)(1).''.
            (12) In subsection (h) heading, by striking ``Applicability 
        to Property under Base Closure Process'' and inserting 
        ``Exemptions''; and
            (13) In subsection (h), by adding the following new 
        paragraph at the end:
            ``(3) The provisions of this section shall not apply to 
        buildings and property that are--
                    ``(A) in a secured area for national defense 
                purposes; or
                    ``(B) inaccessible by road and can be reached only 
                by crossing private property.''.
    (b) Within 30 days of the date of enactment of this section, the 
Secretary of Housing and Urban Development shall survey landholding 
agencies to determine whether the properties included in the last 
comprehensive list of properties published pursuant to section 
501(c)(1)(A) of the McKinney-Vento Homeless Assistance Act remain 
available for application for use to assist homeless. The Secretary 
shall publish in the Federal Register a list of all such properties. 
Such properties shall remain available for application for use to 
assist the homeless in accordance with sections 501(d) and 501(e) of 
such Act (as amended by subsection (a) of this section) as if such 
properties had been published under section 501(c)(1)(A)(ii) of such 
Act.

                       Subtitle E--Miscellaneous

SEC. 341. SCOPE AND CONSTRUCTION.

    The authorities granted by this title to the heads of Federal 
agencies for the management of real and personal property and the 
conduct of transactions involving such property, including the 
disposition of the proceeds therefrom, shall be in addition to, and not 
in lieu of, any authorities provided in any law existing on the date of 
enactment hereof. Except as expressly provided herein, nothing in this 
title shall be construed to repeal or supersede any such authorities.

SEC. 342. SEVERABILITY.

    Although this title is intended to be integrated legislation, 
should any portion or provision of this title be found to be invalid or 
otherwise unenforceable by a court of competent jurisdiction, such 
portion or portions of this title shall be considered independent and 
severable for all other provisions of this title and such invalidity 
shall not, by itself, invalidate any other provisions of this title, 
which remaining provisions shall have the full force and effect of law.

SEC. 343. NO WAIVER.

    Nothing in this title should be construed to limit or waive any 
right, remedy, immunity, or jurisdiction of any Federal agency or any 
claim, judgement, lien, or benefit due the United States of America.

SEC. 344. AGENCY DISCRETION.

    The provisions of this title, including those authorizing the 
exercise of agency discretion, are not intended to, and do not, create 
or enlarge any substantive or procedural rights or causes of action 
against the United States, it agencies, it officers, or any person.

SEC. 345. EFFECTIVE DATE.

    This title and the amendments made by its provisions shall be 
effective upon enactment of this title except as otherwise specifically 
provided for herein.

SEC. 346. REPORT OF THE COMPTROLLER GENERAL.

    Not later than five years after the date of enactment of this 
title, the Comptroller General of the United States shall submit to the 
Congress a report on the use by Federal landholding agencies of the 
authorities provided by this title.
                                 <all>