[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1639 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1639

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 6, 2001

 Mr. Voinovich (for himself and 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 ``Federal Employee 
Management Reform 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 EMPLOYMENT RESTRUCTURING ASSISTANCE

Sec. 101. Voluntary separation incentives.
Sec. 102. Existing authorities valid until expiration.
Sec. 103. Effective date.
    TITLE II--FEDERAL EMPLOYEE VOLUNTARY EARLY RETIREMENT AMENDMENTS

Sec. 201. Voluntary early retirement authority.
     TITLE III--CIVIL SERVICE RECRUITMENT AND RETENTION INCENTIVES

Sec. 301. Recruitment, relocation, and retention bonuses.
Sec. 302. Academic degree training.
Sec. 303. Professional credentials.
Sec. 304. Correction of pay administration problems.
Sec. 305. Civil Service Retirement System computations for part-time 
                            service.
Sec. 306. Promotional items received pursuant to official travel.
Sec. 307. Student volunteer transit subsidy.
Sec. 308. Effective date.
  TITLE IV--PROMOTION OF RESULTS-ORIENTED PERFORMANCE EVALUATION AND 
                   COMPENSATION FOR SENIOR EXECUTIVES

Sec. 401. Cap on total annual compensation.
Sec. 402. Repeal of senior executive recertification.
Sec. 403. Annual leave enhancements.
Sec. 404. Effective date.
        TITLE V--FEDERAL HUMAN RESOURCES MANAGEMENT INNOVATIONS

Sec. 501. Project management and alternative personnel systems.
Sec. 502. Effective date.
          TITLE VI--FEDERAL HUMAN RESOURCES HIRING FLEXIBILITY

Sec. 601. Employment flexibility amendments.

          TITLE I--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, geographical 
        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 favors;
            ``(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 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 
legislation 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 the 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 Administration 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 
purposes 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 restricting 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 it place the following:
        ``subchapter ii--voluntary separation incentive payments
``3521. Definitions.
``3522. Agency plans; approval.
``3523. Authority to provide voluntary separation incentive payments.
``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 term 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.

    TITLE II--FEDERAL EMPLOYEE VOLUNTARY EARLY RETIREMENT AMENDMENTS

SEC. 201. 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 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.

     TITLE III--CIVIL SERVICE RECRUITMENT AND RETENTION INCENTIVES

SEC. 301. 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 his 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. 302. 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) in 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 amending the item relating 
        to section 4107 to read as follows:

``4107. Academic degree training.''.

SEC. 303. PROFESSIONAL CREDENTIALS.

    Chapter 57 of title 5, United States Code, as amended by section 
301, is further amended--
            (1) by adding at the end 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. 304. 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 of 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 employees' 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) An 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) in 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 law or as the Office of Personnel Management may by 
regulation prescribe. 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 or 
        chapter 51 or 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. 305. 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. 306. 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 subject (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. 307. 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. 308. 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 306 and 307, 
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 304 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.

  TITLE IV--PROMOTION OF RESULTS-ORIENTED PERFORMANCE EVALUATION AND 
                   COMPENSATION FOR SENIOR EXECUTIVES

SEC. 401. 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. 402. 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. 403. 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. 404. 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.

        TITLE V--FEDERAL HUMAN RESOURCES MANAGEMENT INNOVATIONS

SEC. 501. 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--
            ``(1) `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 or 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 purpose;
                    ``(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 any 
        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 II 
        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 limit 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 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 502.
    (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 502.
    (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 
502.
    (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 502.
    (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 and 49 or pursuant to authority 
        delegated under subsection (a)(2)''.

SEC. 502. EFFECTIVE DATE.

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

          TITLE VI--FEDERAL HUMAN RESOURCES HIRING FLEXIBILITY

SEC. 601. 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), 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.''.
                                 <all>