[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1836 Reported in House (RH)]

                                                 Union Calendar No. 131
108th CONGRESS
  1st Session
                                H. R. 1836

                     [Report No. 10809116, Part I]

To make changes to certain areas of the Federal civil service in order 
    to improve the flexibility and competitiveness of Federal human 
                         resources management.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 29, 2003

 Mr. Tom Davis of Virginia (for himself and Mr. Hunter) introduced the 
   following bill; which was referred to the Committee on Government 
    Reform, and in addition to the Committees on Armed Services and 
Science, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

                              May 19, 2003

   Reported from the Committee on Government Reform with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                              May 19, 2003

   Referral to the Committee on Armed Services extended for a period 
                   ending not later than May 20, 2003

                              May 19, 2003

 Referral to the Committee on Science extended for a period ending not 
                        later than July 25, 2003

                              May 20, 2003

   Referral to the Committee on Armed Services extended for a period 
                  ending not later than July 25, 2003

                              June 3, 2003

  Referred to the Committee on Ways and Means for a period ending not 
 later than July 25, 2003 for consideration of such provisions of the 
 bill and amendment as fall within the jurisdiction of that committee 
                    pursuant to clause 1(s), rule X

                             July 25, 2003

   Committees on Armed Services, Science, Ways and Means discharged; 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed
 [For text of introduced bill, see copy of bill as introduced on April 
                               29, 2003]

_______________________________________________________________________

                                 A BILL


 
To make changes to certain areas of the Federal civil service in order 
    to improve the flexibility and competitiveness of Federal human 
                         resources management.

    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 ``Civil Service and 
National Security Personnel Improvement Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

   TITLE I--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM

Sec. 101. Short title.
Sec. 102. Department of Defense national security personnel system.

           TITLE II--DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL

Sec. 201. Modification of the overtime pay cap.
Sec. 202. Civil Service Retirement System computation for part-time 
                            service.
Sec. 203. Military leave for mobilized Federal civilian employees.
Sec. 204. Common occupational and health standards for differential 
                            payments as a consequence of exposure to 
                            asbestos.
Sec. 205. Increase in annual student loan repayment authority.
Sec. 206. Authorization for cabinet secretaries, secretaries of 
                            military departments, and heads of 
                            executive agencies to be paid on a biweekly 
                            basis.
Sec. 207. Additional classes of individuals eligible to participate in 
                            the Federal long-term care insurance 
                            program.
Sec. 208. Clarification to Hatch Act; limitation on disclosure of 
                            certain records.
Sec. 209. Senior Executive Service and performance.
Sec. 210. Design elements of pay-for-performance systems in 
                            demonstration projects.
Sec. 211. Federal flexible benefits plan administrative costs.
Sec. 212. Nonreduction in pay while Federal employee is serving on 
                            active duty in a reserve component of the 
                            uniformed services.
Sec. 213. Employee surveys.

     TITLE III--PROVISIONS RELATING TO THE SECURITIES AND EXCHANGE 
    COMMISSION AND THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

             Subtitle A--Securities and Exchange Commission

Sec. 301. Securities and Exchange Commission.

       Subtitle B--National Aeronautics and Space Administration

Sec. 311. Workforce authorities and personnel provisions.

                TITLE IV--HUMAN CAPITAL PERFORMANCE FUND

Sec. 401. Human Capital Performance Fund.

                         TITLE V--MISCELLANEOUS

Sec. 501. Prohibition on use of quotas.

   TITLE I--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM

SEC. 101. SHORT TITLE.

    This title may be cited as the ``National Security Personnel System 
Act''.

SEC. 102. DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM.

    (a) In General.--(1) Subpart I of part III of title 5, United 
States Code, is amended by adding at the end the following new chapter:

 ``CHAPTER 99--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM

``Sec.
``9901. Definitions.
``9902. Establishment of human resources management system.
``9903. Attracting highly qualified experts.
``9904. Employment of older Americans.
``9905. Special pay and benefits for certain employees outside the 
                            United States.
``Sec. 1A9901. Definitions
    ``For purposes of this chapter--
            ``(1) the term `Director' means the Director of the Office 
        of Personnel Management; and
            ``(2) the term `Secretary' means the Secretary of Defense.
``Sec. 1A9902. Establishment of human resources management system
    ``(a) In General.--Notwithstanding any other provision of this 
part, the Secretary may, in regulations prescribed jointly with the 
Director, establish, and from time to time adjust, a human resources 
management system for some or all of the organizational or functional 
units of the Department of Defense. If the Secretary certifies that 
issuance or adjustment of a regulation, or the inclusion, exclusion, or 
modification of a particular provision therein, is essential to the 
national security, the Secretary may, subject to the decision of the 
President, waive the requirement in the preceding sentence that the 
regulation or adjustment be issued jointly with the Director.
    ``(b) System Requirements.--Any system established under subsection 
(a) shall--
            ``(1) be flexible;
            ``(2) be contemporary;
            ``(3) not waive, modify, or otherwise affect--
                    ``(A) the public employment principles of merit and 
                fitness set forth in section 2301, including the 
                principles of hiring based on merit, fair treatment 
                without regard to political affiliation or other 
                nonmerit considerations, equal pay for equal work, and 
                protection of employees against reprisal for 
                whistleblowing;
                    ``(B) any provision of section 2302, relating to 
                prohibited personnel practices;
                    ``(C)(i) any provision of law referred to in 
                section 2302(b)(1), (8), and (9); or
                    ``(ii) any provision of law implementing any 
                provision of law referred to in section 2302(b)(1), 
                (8), and (9) 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 public service;
                    ``(D) any other provision of this part (as 
                described in subsection (c)); or
                    ``(E) any rule or regulation prescribed under any 
                provision of law referred to in this paragraph;
            ``(4) ensure that employees may organize, bargain 
        collectively as provided for in this chapter, and participate 
        through labor organizations of their own choosing in decisions 
        which affect them, subject to the provisions of this chapter 
        and any exclusion from coverage or limitation on negotiability 
        established pursuant to law;
            ``(5) not be limited by any specific law or authority under 
        this title that is waivable under this chapter or by any 
        provision of this chapter or any rule or regulation prescribed 
        under this title that is waivable under this chapter, except as 
        specifically provided for in this section; and
            ``(6) include a performance management system that 
        incorporates the following elements:
                    ``(A) Adherence to merit principles set forth in 
                section 2301.
                    ``(B) A fair, credible, and transparent employee 
                performance appraisal system.
                    ``(C) A link between the performance management 
                system and the agency's strategic plan.
                    ``(D) A means for ensuring employee involvement in 
                the design and implementation of the system.
                    ``(E) Adequate training and retraining for 
                supervisors, managers, and employees in the 
                implementation and operation of the performance 
                management system.
                    ``(F) A process for ensuring ongoing performance 
                feedback and dialogue between supervisors, managers, 
                and employees throughout the appraisal period, and 
                setting timetables for review;
                    ``(G) Effective safeguards to ensure that the 
                management of the system is fair and equitable and 
                based on employee performance.
                    ``(H) A means for ensuring that adequate agency 
                resources are allocated for the design, implementation, 
                and administration of the performance management 
                system.
    ``(c) Other Nonwaivable Provisions.--The other provisions of this 
part referred to in subsection (b)(3)(D) are (to the extent not 
otherwise specified in this title)--
            ``(1) subparts A, B, E, G, and H of this part; and
            ``(2) chapters 41, 45, 47, 55 (except subchapter V 
        thereof), 57, 59, 72, 73, and 79, and this chapter.
    ``(d) Limitations Relating to Pay.--(1) Nothing in this section 
shall constitute authority to modify the pay of any employee who serves 
in an Executive Schedule position under subchapter II of chapter 53 of 
this title.
    ``(2) Except as provided for in paragraph (1), the total amount in 
a calendar year of allowances, differentials, bonuses, awards, or other 
similar cash payments paid under this title to any employee who is paid 
under section 5376 or 5383 of this title or under title 10 or under 
other comparable pay authority established for payment of Department of 
Defense senior executive or equivalent employees may not exceed the 
total annual compensation payable to the Vice President under section 
104 of title 3.
    ``(3) To the maximum extent practicable, the rates of compensation 
for civilian employees at the Department of Defense shall be adjusted 
at the same rate, and in the same proportion, as are rates of 
compensation for members of the uniformed services.
    ``(e) Provisions To Ensure Collaboration With Employee 
Representatives.--(1) In order to ensure that the authority of this 
section is exercised in collaboration with, and in a manner that 
ensures the participation of, employee representatives in the planning, 
development, and implementation of any human resources management 
system or adjustments to such system under this section, the Secretary 
and the Director shall provide for the following:
            ``(A) The Secretary and the Director shall, with respect to 
        any proposed system or adjustment--
                    ``(i) provide to the employee representatives 
                representing any employees who might be affected a 
                written description of the proposed system or 
                adjustment (including the reasons why it is considered 
                necessary);
                    ``(ii) give such representatives at least 30 
                calendar days (unless extraordinary circumstances 
                require earlier action) to review and make 
                recommendations with respect to the proposal; and
                    ``(iii) give any recommendations received from such 
                representatives under clause (ii) full and fair 
                consideration in deciding whether or how to proceed 
                with the proposal.
            ``(B) Following receipt of recommendations, if any, from 
        such employee representatives with respect to a proposal 
        described in subparagraph (A), the Secretary and the Director 
        shall accept such modifications to the proposal in response to 
        the recommendations as they determine advisable and shall, with 
        respect to any parts of the proposal as to which they have not 
        accepted the recommendations--
                    ``(i) notify Congress of those parts of the 
                proposal, together with the recommendations of the 
                employee representatives;
                    ``(ii) meet and confer for not less than 30 
                calendar days with the employee representatives, in 
                order to attempt to reach agreement on whether or how 
                to proceed with those parts of the proposal; and
                    ``(iii) at the Secretary's option, or if requested 
                by a majority of the employee representatives 
                participating, use the services of the Federal 
                Mediation and Conciliation Service during such meet and 
                confer period to facilitate the process of attempting 
                to reach agreement.
            ``(C)(i) Any part of the proposal as to which the 
        representatives do not make a recommendation, or as to which 
        the recommendations are accepted by the Secretary and the 
        Director, may be implemented immediately.
            ``(ii) With respect to any parts of the proposal as to 
        which recommendations have been made but not accepted by the 
        Secretary and the Director, at any time after 30 calendar days 
        have elapsed since the initiation of the congressional 
        notification, consultation, and mediation procedures set forth 
        in subparagraph (B), if the Secretary, in his discretion, 
        determines that further consultation and mediation is unlikely 
        to produce agreement, the Secretary may implement any or all of 
        such parts (including any modifications made in response to the 
        recommendations as the Secretary determines advisable), but 
        only after 30 days have elapsed after notifying Congress of the 
        decision to implement the part or parts involved (as so 
        modified, if applicable).
            ``(iii) The Secretary shall notify Congress promptly of the 
        implementation of any part of the proposal and shall furnish 
        with such notice an explanation of the proposal, any changes 
        made to the proposal as a result of recommendations from the 
        employee representatives, and of the reasons why implementation 
        is appropriate under this subparagraph.
            ``(D) If a proposal described in subparagraph (A) is 
        implemented, the Secretary and the Director shall--
                    ``(i) develop a method for the employee 
                representatives to participate in any further planning 
                or development which might become necessary; and
                    ``(ii) give the employee representatives adequate 
                access to information to make that participation 
                productive.
    ``(2) The Secretary may, at the Secretary's discretion, engage in 
any and all collaboration activities described in this subsection at an 
organizational level above the level of exclusive recognition.
    ``(3) In the case of any employees who are not within a unit with 
respect to which a labor organization is accorded exclusive 
recognition, the Secretary and the Director may develop procedures for 
representation by any appropriate organization which represents a 
substantial percentage of those employees or, if none, in such other 
manner as may be appropriate, consistent with the purposes of this 
subsection.
    ``(f) Provisions Regarding National Level Bargaining.--(1) Any 
human resources management system implemented or modified under this 
chapter may include employees of the Department of Defense from any 
bargaining unit with respect to which a labor organization has been 
accorded exclusive recognition under chapter 71 of this title.
    ``(2) For any bargaining unit so included under paragraph (1), the 
Secretary may bargain at an organizational level above the level of 
exclusive recognition. Any such bargaining shall--
            ``(A) be binding on all subordinate bargaining units at the 
        level of recognition and their exclusive representatives, and 
        the Department of Defense and its subcomponents, without regard 
        to levels of recognition;
            ``(B) supersede all other collective bargaining agreements, 
        including collective bargaining agreements negotiated with an 
        exclusive representative at the level of recognition, except as 
        otherwise determined by the Secretary;
            ``(C) not be subject to further negotiations for any 
        purpose, including bargaining at the level of recognition, 
        except as provided for by the Secretary; and
            ``(D) except as otherwise specified in this chapter, not be 
        subject to review or to statutory third-party dispute 
        resolution procedures outside the Department of Defense.
    ``(3) The National Guard Bureau and the Army and Air Force National 
Guard are excluded from coverage under this subsection.
    ``(4) Any bargaining completed pursuant to this subsection with a 
labor organization not otherwise having national consultation rights 
with the Department of Defense or its subcomponents shall not create 
any obligation on the Department of Defense or its subcomponents to 
confer national consultation rights on such a labor organization.
    ``(g) Provisions Relating to Appellate Procedures.--(1) The 
Secretary shall--
            ``(A) establish an appeals process that provides that 
        employees of the Department of Defense are entitled to fair 
        treatment in any appeals that they bring in decisions relating 
        to their employment; and
            ``(B) in prescribing regulations for any such appeals 
        process--
                    ``(i) ensure that employees of the Department of 
                Defense are afforded the protections of due process; 
                and
                    ``(ii) toward that end, be required to consult with 
                the Merit Systems Protection Board before issuing any 
                such regulations.
    ``(2) Any regulations establishing the appeals process required by 
paragraph (1) that relate to any matters within the purview of chapter 
77 shall--
            ``(A) provide for an independent review panel, appointed by 
        the President, which shall not include the Secretary or the 
        Deputy Secretary of Defense or any of their subordinates;
            ``(B) be issued only after--
                    ``(i) notification to the appropriate committees of 
                Congress; and
                    ``(ii) consultation with the Merit Systems 
                Protection Board and the Equal Employment Opportunity 
                Commission;
            ``(C) ensure the availability of procedures that--
                    ``(i) are consistent with requirements of due 
                process; and
                    ``(ii) provide, to the maximum extent practicable, 
                for the expeditious handling of any matters involving 
                the Department of Defense; and
            ``(D) modify procedures under chapter 77 only insofar as 
        such modifications are designed to further the fair, efficient, 
        and expeditious resolution of matters involving the employees 
        of the Department of Defense.
    ``(h) Provisions Related to Separation and Retirement Incentives.--
(1) The Secretary may establish a program within the Department of 
Defense under which employees may be eligible for early retirement, 
offered separation incentive pay to separate from service voluntarily, 
or both. This authority may be used to reduce the number of personnel 
employed by the Department of Defense or to restructure the workforce 
to meet mission objectives without reducing the overall number of 
personnel. This authority is in addition to, and notwithstanding, any 
other authorities established by law or regulation for such programs.
    ``(2) For purposes of this section, the term `employee' means an 
employee of the Department of Defense, serving under an appointment 
without time limitation, except that such term does not include--
            ``(A) a reemployed annuitant under subchapter III of 
        chapter 83 or chapter 84 of this title, or another retirement 
        system for employees of the Federal Government;
            ``(B) an employee having a disability on the basis of which 
        such employee is or would be eligible for disability retirement 
        under any of the retirement systems referred to in paragraph 
        (1); or
            ``(C) for purposes of eligibility for separation incentives 
        under this section, an employee who is in receipt of a decision 
        notice of involuntary separation for misconduct or unacceptable 
        performance.
    ``(3) An employee who is at least 50 years of age and has completed 
20 years of service, or has at least 25 years of service, may, pursuant 
to regulations promulgated under this section, apply and be retired 
from the Department of Defense and receive benefits in accordance with 
chapter 83 or 84 if the employee has been employed continuously within 
the Department of Defense for more than 30 days before the date on 
which the determination to conduct a reduction or restructuring within 
1 or more Department of Defense components is approved pursuant to the 
program established under subsection (a).
    ``(4)(A) Separation pay shall be paid in a lump sum or in 
installments and shall be equal to the lesser of--
            ``(i) an amount equal to the amount the employee would be 
        entitled to receive under section 5595(c) of this title, if the 
        employee were entitled to payment under such section; or
            ``(ii) $25,000.
    ``(B) Separation pay shall not be a basis for payment, and shall 
not be included in the computation, of any other type of Government 
benefit. Separation pay shall not be taken into account for the purpose 
of determining the amount of any severance pay to which an individual 
may be entitled under section 5595 of this title, based on any other 
separation.
    ``(C) Separation pay, if paid in installments, shall cease to be 
paid upon the recipient's acceptance of employment by the Federal 
Government, or commencement of work under a personal services contract 
as described in paragraph (5).
    ``(5)(A) An employee who receives separation pay under such program 
may not be reemployed by the Department of Defense for a 12-month 
period beginning on the effective date of the employee's separation, 
unless this prohibition is waived by the Secretary on a case-by-case 
basis.
    ``(B) An employee who receives separation pay under this section on 
the basis of a separation occurring on or after the date of the 
enactment of the Federal Workforce Restructuring Act of 1994 (Public 
Law 10309236; 108 Stat. 111) and accepts employment with the Government 
of the United States, or who commences work through a personal services 
contract with the United States within 5 years after the date of the 
separation on which payment of the separation pay is based, shall be 
required to repay the entire amount of the separation pay to the 
Department of Defense. If the employment is with an Executive agency 
(as defined by section 105 of this title) other than the Department of 
Defense, the Director may, at the request of the head of that agency, 
waive the repayment if the individual involved possesses unique 
abilities and is the only qualified applicant available for the 
position. If the employment is within the Department of Defense, the 
Secretary may waive the repayment if the individual involved is the 
only qualified applicant available for the position. If the employment 
is with an entity in the legislative branch, the head of the entity or 
the appointing official may waive the repayment if the individual 
involved possesses unique abilities and is the only qualified applicant 
available for the position. If the employment 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.
    ``(6) Under this program, early retirement and separation pay may 
be offered only pursuant to regulations established by the Secretary, 
subject to such limitations or conditions as the Secretary may require.
    ``(i) Provisions Relating to Reemployment.--If annuitant receiving 
an annuity from the Civil Service Retirement and Disability Fund 
becomes employed in a position within the Department of Defense, his 
annuity shall continue. An annuitant so reemployed shall not be 
considered an employee for purposes of chapter 83 or 84.
    ``(j) Provisions Relating to Hiring.--Notwithstanding subsection 
(c), the Secretary may exercise any hiring flexibilities that would 
otherwise be available to the Secretary under section 4703.
``Sec. 1A9903. Attracting highly qualified experts
    ``(a) In General.--The Secretary may carry out a program using the 
authority provided in subsection (b) in order to attract highly 
qualified experts in needed occupations, as determined by the 
Secretary.
    ``(b) Authority.--Under the program, the Secretary may--
            ``(1) appoint personnel from outside the civil service and 
        uniformed services (as such terms are defined in section 2101 
        of this title) to positions in the Department of Defense 
        without regard to any provision of this title governing the 
        appointment of employees to positions in the Department of 
        Defense;
            ``(2) prescribe the rates of basic pay for positions to 
        which employees are appointed under paragraph (1) at rates not 
        in excess of the maximum rate of basic pay authorized for 
        senior-level positions under section 5376 of this title, as 
        increased by locality-based comparability payments under 
        section 5304 of this title, notwithstanding any provision of 
        this title governing the rates of pay or classification of 
        employees in the executive branch; and
            ``(3) pay any employee appointed under paragraph (1) 
        payments in addition to basic pay within the limits applicable 
        to the employee under subsection (d).
    ``(c) Limitation on Term of Appointment.--(1) Except as provided in 
paragraph (2), the service of an employee under an appointment made 
pursuant to this section may not exceed 5 years.
    ``(2) The Secretary may, in the case of a particular employee, 
extend the period to which service is limited under paragraph (1) by up 
to 1 additional year if the Secretary determines that such action is 
necessary to promote the Department of Defense's national security 
missions.
    ``(d) Limitations on Additional Payments.--(1) The total amount of 
the additional payments paid to an employee under this section for any 
12-month period may not exceed the lesser of the following amounts:
            ``(A) $50,000 in fiscal year 2004, which may be adjusted 
        annually thereafter by the Secretary, with a percentage 
        increase equal to one-half of 1 percentage point less than the 
        percentage by which the Employment Cost Index, published 
        quarterly by the Bureau of Labor Statistics, for the base 
        quarter of the year before the preceding calendar year exceeds 
        the Employment Cost Index for the base quarter of the second 
        year before the preceding calendar year.
            ``(B) The amount equal to 50 percent of the employee's 
        annual rate of basic pay.
For purposes of this paragraph, the term `base quarter' has the meaning 
given such term by section 5302(3).
    ``(2) An employee appointed under this section is not eligible for 
any bonus, monetary award, or other monetary incentive for service 
except for payments authorized under this section.
    ``(3) Notwithstanding any other provision of this subsection or of 
section 5307, no additional payments may be paid to an employee under 
this section in any calendar year if, or to the extent that, the 
employee's total annual compensation will exceed the maximum amount of 
total annual compensation payable at the salary set in accordance with 
section 104 of title 3.
    ``(e) Savings Provisions.--In the event that the Secretary 
terminates this program, in the case of an employee who, on the day 
before the termination of the program, is serving in a position 
pursuant to an appointment under this section--
            ``(1) the termination of the program does not terminate the 
        employee's employment in that position before the expiration of 
        the lesser of--
                    ``(A) the period for which the employee was 
                appointed; or
                    ``(B) the period to which the employee's service is 
                limited under subsection (c), including any extension 
                made under this section before the termination of the 
                program; and
            ``(2) the rate of basic pay prescribed for the position 
        under this section may not be reduced as long as the employee 
        continues to serve in the position without a break in service.
``Sec. 1A9904. Employment of older Americans
    ``(a) In General.--Notwithstanding any other provision of law, the 
Secretary may appoint older Americans into positions in the excepted 
service for a period not to exceed 2 years, provided that--
            ``(1) any such appointment shall not result in--
                    ``(A) the displacement of individuals currently 
                employed by the Department of Defense (including 
                partial displacement through reduction of nonovertime 
                hours, wages, or employment benefits); or
                    ``(B) the employment of any individual when any 
                other person is in a reduction-in-force status from the 
                same or substantially equivalent job within the 
                Department of Defense; and
            ``(2) the individual to be appointed is otherwise qualified 
        for the position, as determined by the Secretary.
    ``(b) Effect on Existing Retirement Benefits.--Notwithstanding any 
other provision of law, an individual appointed pursuant to subsection 
(a) who otherwise is receiving an annuity, pension, social security 
payment, retired pay, or other similar payment shall not have the 
amount of said annuity, pension, social security, or other similar 
payment reduced as a result of such employment.
    ``(c) Extension of Appointment.--Notwithstanding subsection (a), 
the Secretary may extend an appointment made pursuant to this section 
for up to an additional 2 years if the individual employee possesses 
unique knowledge or abilities that are not otherwise available to the 
Department of Defense.
    ``(d) Definition.--For purposes of this section, the term `older 
American' means any citizen of the United States who is at least 55 
years of age.
``Sec. 1A9905. Special pay and benefits for certain employees outside 
              the United States
    ``The Secretary may provide to certain civilian employees of the 
Department of Defense assigned to activities outside the United States 
as determined by the Secretary to be in support of Department of 
Defense activities abroad hazardous to life or health or so specialized 
because of security requirements as to be clearly distinguishable from 
normal Government employment--
            ``(1) allowances and benefits--
                    ``(A) comparable to those provided by the Secretary 
                of State to members of the Foreign Service under 
                chapter 9 of title I of the Foreign Service Act of 1980 
                (Public Law 9609465, 22 U.S.C. 4081 et seq.) or any 
                other provision of law; or
                    ``(B) comparable to those provided by the Director 
                of Central Intelligence to personnel of the Central 
                Intelligence Agency; and
            ``(2) special retirement accrual benefits and disability in 
        the same manner provided for by the Central Intelligence Agency 
        Retirement Act (50 U.S.C. 2001 et seq.) and in section 18 of 
        the Central Intelligence Agency Act of 1949 (50 U.S.C. 
        403r).''.
    (2) The table of chapters for part III of such title is amended by 
adding at the end of subpart I the following new item:

 ``99.  Department of Defense National Security Personnel System9901''.
    (b) Impact on Department of Defense Civilian Personnel.--(1) Any 
exercise of authority under chapter 99 of such title (as added by 
subsection (a)), including under any system established under such 
chapter, shall be in conformance with the requirements of this 
subsection.
    (2) No other provision of this Act or of any amendment made by this 
Act may be construed or applied in a manner so as to limit, supersede, 
or otherwise affect the provisions of this section, except to the 
extent that it does so by specific reference to this section.

           TITLE II--DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL

SEC. 201. MODIFICATION OF THE OVERTIME PAY CAP.

    Section 5542(a)(2) of title 5, United States Code, is amended--
            (1) by inserting ``the greater of'' before ``one and one-
        half''; and
            (2) by inserting ``or the hourly rate of basic pay of the 
        employee'' after ``law)'' the second place it appears.

SEC. 202. 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 paragraphs:
    ``(3) In the administration of paragraph (1)--
            ``(A) subparagraph (A) of such paragraph shall apply with 
        respect to pay for service performed before, on, or after April 
        7, 1986; and
            ``(B) subparagraph (B) of such paragraph--
                    ``(i) shall apply with respect to that portion of 
                any annuity which is attributable to service performed 
                on or after April 7, 1986; and
                    ``(ii) shall not apply with respect to that portion 
                of any annuity which is attributable to service 
                performed before April 7, 1986.
    ``(4) Paragraph (3) shall be effective with respect to any annuity 
entitlement to which is based on a separation from service occurring on 
or after the date of the enactment of this paragraph.''.

SEC. 203. MILITARY LEAVE FOR MOBILIZED FEDERAL CIVILIAN EMPLOYEES.

    (a) In General.--Subsection (b) of section 6323 of title 5, United 
States Code, is amended--
            (1) in paragraph (2)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively, and at the end of 
                clause (ii), as so redesignated, by inserting ``or''; 
                and
                    (B) by inserting ``(A)'' after ``(2)''; and
            (2) by inserting the following before the text beginning 
        with ``is entitled'':
            ``(B) performs full-time military service as a result of a 
        call or order to active duty in support of a contingency 
        operation as defined in section 101(a)(13) of title 10;''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to military service performed on or after the date of the 
enactment of this Act.

SEC. 204. COMMON OCCUPATIONAL AND HEALTH STANDARDS FOR DIFFERENTIAL 
              PAYMENTS AS A CONSEQUENCE OF EXPOSURE TO ASBESTOS.

    (a) Prevailing Rate Systems.--Section 5343(c)(4) of title 5, United 
States Code, is amended by inserting before the semicolon at the end 
the following: ``, and for any hardship or hazard related to asbestos, 
such differentials shall be determined by applying occupational safety 
and health standards consistent with the permissible exposure limit 
promulgated by the Secretary of Labor under the Occupational Safety and 
Health Act of 1970''.
    (b) General Schedule Pay Rates.--Section 5545(d) of such title is 
amended by inserting before the period at the end of the first sentence 
the following: ``, and for any hardship or hazard related to asbestos, 
such differentials shall be determined by applying occupational safety 
and health standards consistent with the permissible exposure limit 
promulgated by the Secretary of Labor under the Occupational Safety and 
Health Act of 1970''.
    (c) Applicability.--Subject to any vested constitutional property 
rights, any administrative or judicial determination after the date of 
enactment of this Act concerning backpay for a differential established 
under section 5343(c)(4) or 5545(d) of such title shall be based on 
occupational safety and health standards described in the amendments 
made by subsections (a) and (b).

SEC. 205. INCREASE IN ANNUAL STUDENT LOAN REPAYMENT AUTHORITY.

    Section 5379(b)(2)(A) of title 5, United States Code, is amended by 
striking ``$6,000'' and inserting ``$10,000''.

SEC. 206. AUTHORIZATION FOR CABINET SECRETARIES, SECRETARIES OF 
              MILITARY DEPARTMENTS, AND HEADS OF EXECUTIVE AGENCIES TO 
              BE PAID ON A BIWEEKLY BASIS.

    (a) Authorization.--Section 5504 of title 5, United States Code, is 
amended--
            (1) by redesignating subsection (c) as subsection (d);
            (2) by striking the last sentence of both subsection (a) 
        and subsection (b); and
            (3) by inserting after subsection (b) the following:
    ``(c) For the purposes of this section:
            ``(1) The term `employee' means--
                    ``(A) an employee in or under an Executive agency;
                    ``(B) an employee in or under the Office of the 
                Architect of the Capitol, the Botanic Garden, and the 
                Library of Congress, for whom a basic administrative 
                workweek is established under section 6101(a)(5) of 
                this title; and
                    ``(C) an individual employed by the government of 
                the District of Columbia.
            ``(2) The term `employee' does not include--
                    ``(A) an employee on the Isthmus of Panama in the 
                service of the Panama Canal Commission; or
                    ``(B) an employee or individual excluded from the 
                definition of employee in section 5541(2) of this title 
                other than an employee or individual excluded by 
                clauses (ii), (iii), and (xiv) through (xvii) of such 
                section.
            ``(3) Notwithstanding paragraph (2), an individual who 
        otherwise would be excluded from the definition of employee 
        shall be deemed to be an employee for purposes of this section 
        if the individual's employing agency so elects, under 
        guidelines in regulations promulgated by the Office of 
        Personnel Management under subsection (d)(2).''.
    (b) Guidelines.--Subsection (d) of section 5504 of such title, as 
redesignated by subsection (a), is amended--
            (1) by inserting ``(1)'' after ``(d)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Office of Personnel Management shall provide guidelines 
by regulation for exemptions to be made by the heads of agencies under 
subsection (c)(3). Such guidelines shall provide for such exemptions 
only under exceptional circumstances.''.

SEC. 207. ADDITIONAL CLASSES OF INDIVIDUALS ELIGIBLE TO PARTICIPATE IN 
              THE FEDERAL LONG-TERM CARE INSURANCE PROGRAM.

    (a) Certain Employees of the District of Columbia Government.--
Section 9001(1) of title 5, United States Code, is amended by striking 
``2105(c),'' and all that follows and inserting ``2105(c).''.
    (b) Former Federal Employees Who Would Be Eligible To Begin 
Receiving an Annuity Upon Attaining the Requisite Minimum Age.--Section 
9001(2) of title 5, United States Code, is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(C) any former employee who, on the basis of his 
                or her service, would meet all requirements for being 
                considered an `annuitant' within the meaning of 
                subchapter III of chapter 83, chapter 84, or any other 
                retirement system for employees of the Government, but 
                for the fact that such former employee has not attained 
                the minimum age for title to annuity.''.
    (c) Reservists Transferred to the Retired Reserve Who Are Under Age 
60.--Section 9001(4) of title 5, United States Code, is amended by 
striking ``including'' and all that follows through ``who has'' and 
inserting ``and a member who has been transferred to the Retired 
Reserve and who would be entitled to retired pay under chapter 1223 of 
title 10 but for not having''.

SEC. 208. CLARIFICATION TO HATCH ACT; LIMITATION ON DISCLOSURE OF 
              CERTAIN RECORDS.

    (a) Clarification to Hatch Act.--No Federal employee or individual 
who voluntarily separates from the civil service (including by 
transferring to an international organization in the circumstances 
described in section 3582(a) of title 5, United States Code) shall be 
subject to enforcement of the provisions of section 7326 of such title 
(including any loss of rights under subchapter IV of chapter 35 of such 
title resulting from any proceeding under such section 7326), except 
that this subsection shall not apply in the event that such employee or 
individual subsequently becomes reemployed in the civil service. The 
preceding sentence shall apply to any complaint which is filed with or 
pending before the Merit Systems Protection Board after the date of the 
enactment of this Act.
    (b) Limitation on Disclosure of Certain Records.--Notwithstanding 
any other provision of law, rule, or regulation, nothing described in 
paragraph (2) or (3) of use ``q'' of the proposed revisions published 
in the Federal Register on July 12, 2001 (66 Fed. Reg. 36613) shall be 
considered to constitute a routine use of records maintained by the 
Office of Special Counsel.
    (c) Definitions.--For purposes of this section--
            (1) the term ``Federal employee or individual'' means any 
        employee or individual, as referred to in section 7326 of title 
        5, United States Code;
            (2) the term ``civil service'' has the meaning given such 
        term by section 2101 of title 5, United States Code;
            (3) the term ``international organization'' has the meaning 
        given such term by section 3581 of title 5, United States Code; 
        and
            (4) the terms ``routine use'' and ``record'' have the 
        respective meanings given such terms under section 552a(a) of 
        title 5, United States Code.

SEC. 209. SENIOR EXECUTIVE SERVICE AND PERFORMANCE.

    (a) Senior Executive Pay.--Chapter 53 of title 5, United States 
Code, is amended--
            (1) in section 5304--
                    (A) in subsection (g)(2)--
                            (i) in subparagraph (A) by striking 
                        ``subparagraphs (A)09(E)'' and inserting 
                        ``subparagraphs (A)09(D)''; and
                            (ii) in subparagraph (B) by striking 
                        ``subsection (h)(1)(F)'' and inserting 
                        ``subsection (h)(1)(D)'';
                    (B) in subsection (h)(1)--
                            (i) by striking subparagraphs (B) and (C);
                            (ii) by redesignating subparagraphs (D), 
                        (E), and (F) as subparagraphs (B), (C), and 
                        (D), respectively;
                            (iii) in clause (ii) by striking ``or'' at 
                        the end;
                            (iv) in clause (iii) by striking the period 
                        and inserting a semicolon; and
                            (v) by adding at the end the following new 
                        clauses:
            ``(iv) a Senior Executive Service position under section 
        3132;
            ``(v) a position in the Federal Bureau of Investigation and 
        Drug Enforcement Administration Senior Executive Service under 
        section 3151; or
            ``(vi) a position in a system equivalent to the system in 
        clause (iv), as determined by the President's Pay Agent 
        designated under subsection (d).''; and
                    (C) in subsection (h)(2)(B)--
                            (i) in clause (i)--
                                    (I) by striking ``subparagraphs (A) 
                                through (E)'' and inserting 
                                ``subparagraphs (A) through (C)''; and
                                    (II) by striking ``clause (i) or 
                                (ii)'' and inserting ``clause (i), 
                                (ii), (iii), (iv), (v), or (vii)''; and
                            (ii) in clause (ii)--
                                    (I) by striking ``paragraph 
                                (1)(F)'' and inserting ``paragraph 
                                (1)(D)''; and
                                    (II) by striking ``clause (i) or 
                                (ii)'' and inserting ``clause (i), 
                                (ii), (iii), (iv), (v), or (vi)'';
            (2) by amending section 5382 to read as follows:
``Sec. 1A5382. Establishment of rates of pay for the Senior Executive 
              Service
    ``(a) Subject to regulations prescribed by the Office of Personnel 
Management, there shall be established a range of rates of basic pay 
for the Senior Executive Service, and each senior executive shall be 
paid at one of the rates within the range, based on individual 
performance, contribution to the agency's performance, or both, as 
determined under a rigorous performance management system. The lowest 
rate of the range shall not be less than the minimum rate of basic pay 
payable under section 5376, and the highest rate, for any position 
under this system or an equivalent system as determined by the 
President's Pay Agent designated under section 5304(d), shall not 
exceed the rate for level III of the Executive Schedule. The payment of 
the rates shall not be subject to the pay limitation of section 5306(e) 
or 5373.
    ``(b) Notwithstanding the provisions of subsection (a), the 
applicable maximum shall be level II of the Executive Schedule for any 
agency that is certified under section 5307 as having a performance 
appraisal system which, as designed and applied, makes meaningful 
distinctions based on relative performance.
    ``(c) No employee may suffer a reduction in pay by reason of 
transfer from an agency with an applicable maximum rate of pay 
prescribed under subsection (b) to an agency with an applicable maximum 
rate of pay prescribed under subsection (a).''; and
            (3) in section 5383--
                    (A) in subsection (a) by striking ``which of the 
                rates established under section 5382 of this title'' 
                and inserting ``which of the rates within a range 
                established under section 5382''; and
                    (B) in subsection (c) by striking ``for any pay 
                adjustment under section 5382 of this title'' and 
                inserting ``as provided in regulations prescribed by 
                the Office under section 5385''.
    (b) Post-Employment Restrictions.--(1) Clause (ii) of section 
207(c)(2)(A) of title 18, United States Code is amended to read as 
follows:
                    ``(ii) employed in a position which is not referred 
                to in clause (i) and for which that person is paid at a 
                rate of basic pay which is equal to or greater than 96 
                percent of the rate of basic pay for level II of the 
                Executive Schedule, or, for a period of 2 years 
                following the enactment of the Federal Employees Pay 
                for Performance Act of 2003, a person who, on the day 
                prior to the enactment of that Act, was employed in a 
                position which is not referred to in clause (i) and for 
                which the rate of basic pay, exclusive of any locality-
                based pay adjustment under section 5304 or section 
                5304a of title 5, was equal to or greater than the rate 
                of basic pay payable for level 5 of the Senior 
                Executive Service on the day prior to the enactment of 
                that Act,''.
    (2) Subchapter I of chapter 73 of title 5, United States Code, is 
amended by inserting at the end the following new section:
``Sec. 1A7302. Post-employment notification
    ``(a) Not later than the effective date of the amendments made by 
sections 3 and 4 of the Federal Employees Pay for Performance Act of 
2003, or 180 days after the date of enactment of that Act, whichever is 
later, the Office of Personnel Management shall, in consultation with 
the Attorney General and the Office of Government Ethics, promulgate 
regulations requiring that each Executive branch agency notify any 
employee of that agency who is subject to the provisions of section 
207(c)(1) of title 18, as a result of the amendment to section 
207(c)(2)(A)(ii) of that title by that Act.
    ``(b) The regulations shall require that notice be given before, or 
as part of, the action that affects the employee's coverage under 
section 207(c)(1) of title 18, by virtue of the provisions of section 
207(c)(2)(A)(ii) of that title, and again when employment or service in 
the covered position is terminated.''.
    (c) Clerical Amendments.--(1) The table of sections for chapter 53 
of title 5, United States Code, is amended by striking the item 
relating to section 5382 and inserting the following:

``5382. Establishment of rates of pay for the Senior Executive 
                            Service.''.
    (2) The table of sections for chapter 73 of title 5, United States 
Code, is amended by adding after the item relating to section 7301 the 
following:

``7302. Post-employment notification.''.
    (d) Effective Date and Applicability.--(1) The amendments made by 
this section shall take effect on the first day of the first pay period 
beginning on or after the first January 1 following the date of 
enactment of this section.
    (2) The amendments made by subsection (a) may not result in a 
reduction in the rate of basic pay for any senior executive during the 
first year after the effective date of those amendments.
    (3) For the purposes of paragraph (2), the rate of basic pay for a 
senior executive shall be deemed to be the rate of basic pay set for 
the senior executive under section 5383 of title 5, United States Code, 
plus applicable locality pay paid to that senior executive, as of the 
date of enactment of this Act.

SEC. 210. DESIGN ELEMENTS OF PAY-FOR-PERFORMANCE SYSTEMS IN 
              DEMONSTRATION PROJECTS.

    A pay-for-performance system may not be initiated under chapter 47 
of title 5, United States Code, after the date of enactment of this 
Act, unless it incorporates the following elements:
            (1) adherence to merit principles set forth in section 2301 
        of such title;
            (2) a fair, credible, and transparent employee performance 
        appraisal system;
            (3) a link between elements of the pay-for-performance 
        system, the employee performance appraisal system, and the 
        agency's strategic plan;
            (4) a means for ensuring employee involvement in the design 
        and implementation of the system;
            (5) adequate training and retraining for supervisors, 
        managers, and employees in the implementation and operation of 
        the pay-for-performance system;
            (6) a process for ensuring ongoing performance feedback and 
        dialogue between supervisors, managers, and employees 
        throughout the appraisal period, and setting timetables for 
        review;
            (7) effective safeguards to ensure that the management of 
        the system is fair and equitable and based on employee 
        performance; and
            (8) a means for ensuring that adequate agency resources are 
        allocated for the design, implementation, and administration of 
        the pay-for-performance system.

SEC. 211. FEDERAL FLEXIBLE BENEFITS PLAN ADMINISTRATIVE COSTS.

    (a) In General.--Notwithstanding any other provision of law, an 
agency or other employing entity of the Government which provides or 
plans to provide a flexible spending account option for its employees 
shall not impose any fee with respect to any of its employees in order 
to defray the administrative costs associated therewith.
    (b) Offset of Administrative Costs.--Each such agency or employing 
entity that offers a flexible spending account option under a program 
established or administered by the Office of Personnel Management shall 
periodically forward to such Office, or entity designated by such 
Office, the amount necessary to offset the administrative costs of such 
program which are attributable to such agency.
    (c) Reports.--(1) The Office shall submit a report to the Committee 
on Government Reform of the House of Representatives and the Committee 
on Governmental Affairs of the Senate no later than March 31, 2004, 
specifying the administrative costs associated with the Governmentwide 
program (referred to in subsection (b)) for fiscal year 2003, as well 
as the projected administrative costs of such program for each of the 5 
fiscal years thereafter.
    (2) At the end of each of the first 3 calendar years in which an 
agency or other employing entity offers a flexible spending account 
option under this section, such agency or entity shall submit a report 
to the Office of Management and Budget showing the amount of its 
employment tax savings in such year which are attributable to such 
option, net of administrative fees paid under section (b).

SEC. 212. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS SERVING ON 
              ACTIVE DUTY IN A RESERVE COMPONENT OF THE UNIFORMED 
              SERVICES.

    (a) In General.--Subchapter IV of chapter 55 of title 5, United 
States Code, is amended by adding at the end the following new section:
``Sec. 1A5538. Nonreduction in pay while serving on active duty in a 
              reserve component
    ``(a) An employee who is also a member of a reserve component and 
is absent from a position of employment with the Federal Government 
under a call or order to serve on active duty for a period of more than 
30 days shall be entitled to receive, for each pay period described in 
subsection (b), an amount equal to the difference (if any) between--
            ``(1) the amount of civilian basic pay that would otherwise 
        have been payable to the employee for such pay period if the 
        employee's civilian employment with the Government had not been 
        interrupted by the service on active duty; and
            ``(2) the amount of military compensation that is payable 
        to the employee for the service on active duty and is allocable 
        to such pay period.
    ``(b)(1) Amounts under this section shall be payable with respect 
to each pay period (which would otherwise apply if the employee's 
civilian employment had not been interrupted) that occurs--
            ``(A) while the employee serves on active duty for a period 
        of more than 30 days;
            ``(B) while the employee is hospitalized for, or 
        convalescing from, an illness or injury incurred in, or 
        aggravated during, the performance of such active duty; or
            ``(C) during the 14-day period beginning at the end of such 
        active duty or the end of the period referred to in 
        subparagraph (B).
    ``(2) Paragraph (1) shall not apply with respect to a pay period 
for which the employee receives civilian basic pay (including by taking 
any annual, military, or other paid leave) to which the employee is 
entitled by virtue of the employee's civilian employment with the 
Government.
    ``(c) Any amount payable under this section to an employee shall be 
paid--
            ``(1) by employing agency of the employee;
            ``(2) from the appropriations or fund that would be used to 
        pay the employee if the employee were in a pay status; and
            ``(3) to the extent practicable, at the same time and in 
        the same manner as would civilian basic pay if the employee's 
        civilian employment had not been interrupted.
    ``(d) In consultation with the Secretary of Defense, the Office of 
Personnel Management shall prescribe such regulations as may be 
necessary to carry out this section.
    ``(e) In consultation with the Office of Personnel Management, the 
head of each employing agency shall prescribe procedures to ensure that 
the rights under this section apply to the employees of such agency.
    ``(f) In this section:
            ``(1) The terms `active duty for a period of more than 30 
        days', `member', and `reserve component' have the meanings 
        given such terms in section 101 of title 37.
            ``(2) The term `civilian basic pay' includes any amount 
        payable under section 5304 of this title.
            ``(3) The term `employing agency', as used with respect to 
        an employee entitled to any payments under this section, means 
        the agency with respect to which the employee has reemployment 
        rights under chapter 43 of title 38. The term `agency' has the 
meaning given such term in subparagraph (C) of section 2302(a)(2) of 
this title, except that the term includes Government corporations and 
agencies excluded by clause (i) or (ii) of such subparagraph.
            ``(4) The term `military compensation' has the meaning 
        given the term `pay' in section 101(21) of title 37, except 
        that the term includes allowances provided under chapter 7 of 
        such title.''.
    (b) Clerical Amendment.--The table of sections for chapter 55 of 
title 5, United States Code, is amended by inserting after the item 
relating to section 5537 the following:

``5538. Nonreduction in pay while serving on active duty in a reserve 
                            component.''.
    (c) Application of Amendment.--Section 5538 of title 5, United 
States Code, as added by subsection (a), shall apply with respect to 
pay periods (as described in subsection (b) of such section) beginning 
on or after the date of the enactment of this Act.

SEC. 213. EMPLOYEE SURVEYS.

    (a) In General.--Each agency shall conduct an annual survey of its 
employees (including survey questions unique to the agency and 
questions prescribed under subsection (b)) to assess--
            (1) leadership and management practices that contribute to 
        agency performance; and
            (2) employee satisfaction with--
                    (A) leadership policies and practices;
                    (B) work environment;
                    (C) rewards and recognition for professional 
                accomplishment and personal contributions to achieving 
                organizational mission;
                    (D) opportunity for professional development and 
                growth; and
                    (E) opportunity to contribute to achieving 
                organizational mission.
    (b) Regulations.--The Office of Personnel Management shall issue 
regulations prescribing survey questions that should appear on all 
agency surveys under subsection (a) in order to allow a comparison 
across agencies.
    (c) Availability of Results.--The results of the agency surveys 
under subsection (a) shall be made available to the public and posted 
on the website of the agency involved, unless the head of such agency 
determines that doing so would jeopardize or negatively impact national 
security.
    (d) Agency Defined.--For purposes of this section, the term 
``agency'' means an Executive agency (as defined by section 105 of 
title 5, United States Code).

     TITLE III--PROVISIONS RELATING TO THE SECURITIES AND EXCHANGE 
    COMMISSION AND THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

             Subtitle A--Securities and Exchange Commission

SEC. 301. SECURITIES AND EXCHANGE COMMISSION.

    (a) In General.--Subchapter I of chapter 31 of title 5, United 
States Code, is amended by adding at the end the following:
``Sec. 1A3114. Appointment of accountants, economists, and examiners by 
              the Securities and Exchange Commission
    ``(a) Applicability.--This section applies with respect to any 
position of accountant, economist, and securities compliance examiner 
at the Commission that is in the competitive service.
    ``(b) Appointment Authority.--
            ``(1) In general.--The Commission may appoint candidates to 
        any position described in subsection (a)--
                    ``(A) in accordance with the statutes, rules, and 
                regulations governing appointments in the excepted 
                service; and
                    ``(B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the competitive 
                service.
            ``(2) Rule of construction.--The appointment of a candidate 
        to a position under authority of this subsection shall not be 
        considered to cause such position to be converted from the 
        competitive service to the excepted service.
    ``(c) Reports.--No later than 90 days after the end of fiscal year 
2003 (for fiscal year 2003) and 90 days after the end of fiscal year 
2005 (for fiscal years 2004 and 2005), the Commission shall submit a 
report with respect to its exercise of the authority granted by 
subsection (b) during such fiscal years to the Committee on Government 
Reform and the Committee on Financial Services of the House of 
Representatives and the Committee on Governmental Affairs and the 
Committee on Banking, Housing, and Urban Affairs of the Senate. Such 
reports shall describe the changes in the hiring process authorized by 
such subsection, including relevant information related to--
            ``(1) the quality of candidates;
            ``(2) the procedures used by the Commission to select 
        candidates through the streamlined hiring process;
            ``(3) the numbers, types, and grades of employees hired 
        under the authority;
            ``(4) any benefits or shortcomings associated with the use 
        of the authority;
            ``(5) the effect of the exercise of the authority on the 
        hiring of veterans and other demographic groups; and
            ``(6) the way in which managers were trained in the 
        administration of the streamlined hiring system.
    ``(d) Commission Defined.--For purposes of this section, the term 
`Commission' means the Security and Exchange Commission.''.
    (b) Clerical Amendment.--The table of sections for chapter 31 of 
title 5, United States Code, is amended by inserting after the item 
relating to section 3113 the following:

``3114. Appointment of accountants, economists, and examiners by the 
                            Securities and Exchange Commission.''.

       Subtitle B--National Aeronautics and Space Administration

SEC. 311. WORKFORCE AUTHORITIES AND PERSONNEL PROVISIONS.

    (a) In General.--Subpart I of part III of title 5, United States 
Code, is amended by inserting after chapter 97, as added by section 
841(a)(2) of the Homeland Security Act of 2002 (Public Law 10709296; 
116 Stat. 2229), the following:

      ``CHAPTER 98--NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

                 ``SUBCHAPTER I--WORKFORCE AUTHORITIES

``Sec.
``9801. Definitions.
``9802. Planning, notification, and reporting requirements.
``9803. Workforce authorities.
``9804. Recruitment, redesignation, and relocation bonuses.
``9805. Retention bonuses.
``9806. Term appointments.
``9807. Pay authority for critical positions.
``9808. Assignments of intergovernmental personnel.
``9809. Enhanced demonstration project authority.
``9810. Voluntary separation incentive payments.
``9811. Limitations relating to bonuses.

                 ``SUBCHAPTER II--PERSONNEL PROVISIONS

``9831. Definitions.
``9832. NASA-Industry exchange program.
``9833. Science and technology scholarship program.
``9834. Distinguished scholar appointment authority.
``9835. Travel and transportation expenses of certain new appointees.
``9836. Annual leave enhancements.
``9837. Limited appointments to Senior Executive Service positions.
``9838. Superior qualifications pay.

                 ``SUBCHAPTER I--WORKFORCE AUTHORITIES

``Sec. 1A9801. Definitions
    ``For purposes of this subchapter--
            ``(1) the term `Administration' means the National 
        Aeronautics and Space Administration;
            ``(2) the term `Administrator' means the Administrator of 
        the National Aeronautics and Space Administration;
            ``(3) the term `critical need' means a specific and 
        important requirement of the Administration's mission that the 
        Administration is unable to fulfill because the Administration 
        lacks the appropriate employees because--
                    ``(A) of the inability to fill positions; or
                    ``(B) employees do not possess the requisite 
                skills;
            ``(4) the term `employee' means an individual employed in 
        or under the Administration;
            ``(5) the term `workforce plan' means the plan required 
        under section 9802(a);
            ``(6) the term `appropriate committees of Congress' means--
                    ``(A) the Committees on Government Reform, Science, 
                and Appropriations of the House of Representatives; and
                    ``(B) the Committees on Governmental Affairs, 
                Commerce, Science, and Transportation, and 
                Appropriations of the Senate; and
            ``(7) the term `redesignation bonus' means a bonus under 
        section 9804 paid to an individual described in subsection 
        (a)(2) thereof.
``Sec. 1A9802. Planning, notification, and reporting requirements
    ``(a) Not later than 90 days before exercising any of the workforce 
authorities under this subchapter, the Administrator shall submit a 
written plan to the appropriate committees of Congress. A plan under 
this subchapter may not be implemented without the approval of the 
Office of Personnel Management.
    ``(b) A workforce plan shall include a description of--
            ``(1) each critical need of the Administration and the 
        criteria used in the identification of that need;
            ``(2)(A) the functions, approximate number, and classes or 
        other categories of positions or employees that--
                    ``(i) address critical needs; and
                    ``(ii) would be eligible for each authority 
                proposed to be exercised under section 9803; and
            ``(B) how the exercise of those authorities with respect to 
        the eligible positions or employees involved would address each 
        critical need identified under paragraph (1);
            ``(3)(A) any critical need identified under paragraph (1) 
        which would not be addressed by the authorities made available 
        under this subchapter; and
            ``(B) the reasons why those needs would not be so 
        addressed;
            ``(4) the specific criteria to be used in determining which 
        individuals may receive the benefits described under sections 
        9804, 9805 (including the criteria for granting bonuses in the 
        absence of a critical need), and 9810, and how the level of 
        those benefits will be determined;
            ``(5) the safeguards or other measures that will be applied 
        to ensure that this subchapter is carried out in a manner 
        consistent with merit system principles;
            ``(6) the means by which employees will be afforded the 
        notification required under subsections (c) and (d)(1)(B);
            ``(7) the methods that will be used to determine if the 
        authorities exercised under this subchapter have successfully 
        addressed each critical need identified under paragraph (1); 
        and
            ``(8)(A) the recruitment methods used by the Administration 
        before the enactment of this chapter to recruit highly 
        qualified individuals; and
            ``(B) the changes the Administration will implement after 
        the enactment of this chapter in order to improve its 
        recruitment of highly qualified individuals, including how it 
        intends to use--
                    ``(i) nongovernmental recruitment or placement 
                agencies; and
                    ``(ii) Internet technologies.
    ``(c) Not later than 60 days before first exercising any of the 
workforce authorities made available under this subchapter, the 
Administrator shall provide to all employees the workforce plan and any 
additional information which the Administrator considers appropriate.
    ``(d)(1)(A) The Administrator may submit any modifications to the 
workforce plan to the Office of Personnel Management. Modifications to 
the workforce plan may not be implemented without the approval of the 
Office of Personnel Management.
    ``(B) Not later than 60 days before implementing any such 
modifications, the Administrator shall provide an appropriately 
modified plan to all employees of the Administration and to the 
appropriate committees of Congress.
    ``(2) Any reference in this subchapter or any other provision of 
law to the workforce plan shall be considered to include any 
modification made in accordance with this subsection.
    ``(e) Before submitting any written plan under subsection (a) (or 
modification under subsection (d)) to the Office of Personnel 
Management, the Administrator shall--
            ``(1) provide to each employee representative representing 
        any employees who might be affected by such plan (or 
        modification) a copy of the proposed plan (or modification);
            ``(2) give each representative 30 calendar days (unless 
        extraordinary circumstances require earlier action) to review 
        and make recommendations with respect to the proposed plan (or 
        modification); and
            ``(3) give any recommendations received from any such 
        representatives under paragraph (2) full and fair consideration 
        in deciding whether or how to proceed with respect to the 
        proposed plan (or modification).
    ``(f) None of the workforce authorities made available under this 
subchapter may be exercised in a manner inconsistent with the workforce 
plan.
    ``(g) Whenever the Administration submits its performance plan 
under section 1115 of title 31 to the Office of Management and Budget 
for any year, the Administration shall at the same time submit a copy 
of such plan to the appropriate committees of Congress.
    ``(h) Not later than 6 years after date of enactment of this 
subchapter, the Administrator shall submit to the appropriate 
committees of Congress an evaluation and analysis of the actions taken 
by the Administration under this subchapter, including--
            ``(1) an evaluation, using the methods described in 
        subsection (b)(7), of whether the authorities exercised under 
        this subchapter successfully addressed each critical need 
        identified under subsection (b)(1);
            ``(2) to the extent that they did not, an explanation of 
        the reasons why any critical need (apart from the ones under 
        subsection (b)(3)) was not successfully addressed; and
            ``(3) recommendations for how the Administration could 
        address any remaining critical need and could prevent those 
        that have been addressed from recurring.
``Sec. 1A9803. Workforce authorities
    ``(a) The workforce authorities under this subchapter are the 
following:
            ``(1) The authority to pay recruitment, redesignation, and 
        relocation bonuses under section 9804.
            ``(2) The authority to pay retention bonuses under section 
        9805.
            ``(3) The authority to make term appointments and to take 
        related personnel actions under section 9806.
            ``(4) The authority to fix rates of basic pay for critical 
        positions under section 9807.
            ``(5) The authority to extend intergovernmental personnel 
        act assignments under section 9808.
            ``(6) The authority to apply subchapter II of chapter 35 in 
        accordance with section 9810.
    ``(b) No authority under this subchapter may be exercised with 
respect to any officer who is appointed by the President, by and with 
the advice and consent of the Senate.
    ``(c) Unless specifically stated otherwise, all authorities 
provided under this subchapter are subject to section 5307.
``Sec. 1A9804. Recruitment, redesignation, and relocation bonuses
    ``(a) Notwithstanding section 5753, the Administrator may pay a 
bonus to an individual, in accordance with the workforce plan and 
subject to the limitations in this section, if--
            ``(1) the Administrator determines that the Administration 
        would be likely, in the absence of a bonus, to encounter 
        difficulty in filling a position; and
            ``(2) the individual--
                    ``(A) is newly appointed as an employee of the 
                Federal Government;
                    ``(B) is currently employed by the Federal 
                Government and is newly appointed to another position 
                in the same geographic area; or
                    ``(C) is currently employed by the Federal 
                Government and is required to relocate to a different 
                geographic area to accept a position with the 
                Administration.
    ``(b) If the position is described as addressing a critical need in 
the workforce plan under section 9802(b)(2)(A), the amount of a bonus 
may not exceed--
            ``(1) 50 percent of the employee's annual rate of basic pay 
        (including comparability payments under sections 5304 and 
        5304a) as of the beginning of the service period multiplied by 
        the service period specified under subsection (d)(1)(B)(i); or
            ``(2) 100 percent of the employee's annual rate of basic 
        pay (including comparability payments under sections 5304 and 
        5304a) as of the beginning of the service period.
    ``(c) If the position is not described as addressing a critical 
need in the workforce plan under section 9802(b)(2)(A), the amount of a 
bonus may not exceed--
            ``(1) 25 percent of the employee's annual rate of basic pay 
        (including comparability payments under sections 5304 and 
        5304a) as of the beginning of the service period multiplied by 
        the service period specified under subsection (d)(1)(B)(i); or
            ``(2) 100 percent of the employee's annual rate of basic 
        pay (including comparability payments under sections 5304 and 
        5304a) as of the beginning of the service period.
    ``(d)(1)(A) Payment of a bonus under this section shall be 
contingent upon the individual entering into a service agreement with 
the Administration.
    ``(B) At a minimum, the service agreement shall include--
            ``(i) the required service period;
            ``(ii) the method of payment, including a payment schedule, 
        which may include a lump-sum payment, installment payments, or 
        a combination thereof;
            ``(iii) the amount of the bonus and the basis for 
        calculating that amount; and
            ``(iv) the conditions under which the agreement may be 
        terminated before the agreed-upon service period has been 
        completed, and the effect of the termination.
    ``(2) For purposes of determinations under subsections (b)(1) and 
(c)(1), the employee's service period shall be expressed as the number 
equal to the full years and twelfth parts thereof, rounding the 
fractional part of a month to the nearest twelfth part of a year. The 
service period may not be less than 6 months and may not exceed 4 
years.
    ``(3) A bonus under this section may not be considered to be part 
of the basic pay of an employee.
    ``(e) Before paying a bonus under this section, the Administration 
shall establish a plan for paying recruitment, redesignation, and 
relocation bonuses, subject to approval by the Office of Personnel 
Management.
    ``(f) The Administrator shall submit to the appropriate committees 
of Congress, not later than February 28 of each of the next 10 years 
beginning after the date of enactment of this subchapter, a summary of 
all bonuses paid under subsections (b) and (c) during the preceding 
year. Such summary shall include the number of bonuses paid, the total 
amount of bonuses paid, and the average percentage used in calculating 
the total average bonus amount, under each such subsection.
``Sec. 1A9805. Retention bonuses
    ``(a) Notwithstanding section 5754, the Administrator may pay a 
bonus to an employee, in accordance with the workforce plan and subject 
to the limitations in this section, if the Administrator determines 
that--
            ``(1) the unusually high or unique qualifications of the 
        employee or a special need of the Administration for the 
        employee's services makes it essential to retain the employee; 
        and
            ``(2) the employee would be likely to leave in the absence 
        of a retention bonus.
    ``(b) If the position is described as addressing a critical need in 
the workforce plan under section 9802(b)(2)(A), the amount of a bonus 
may not exceed 50 percent of the employee's annual rate of basic pay 
(including comparability payments under sections 5304 and 5304a).
    ``(c) If the position is not described as addressing a critical 
need in the workforce plan under section 9802(b)(2)(A), the amount of a 
bonus may not exceed 25 percent of the employee's annual rate of basic 
pay (including comparability payments under sections 5304 and 5304a).
    ``(d)(1)(A) Payment of a bonus under this section shall be 
contingent upon the employee entering into a service agreement with the 
Administration.
    ``(B) At a minimum, the service agreement shall include--
            ``(i) the required service period;
            ``(ii) the method of payment, including a payment schedule, 
        which may include a lump-sum payment, installment payments, or 
        a combination thereof;
            ``(iii) the amount of the bonus and the basis for 
        calculating the amount; and
            ``(iv) the conditions under which the agreement may be 
        terminated before the agreed-upon service period has been 
        completed, and the effect of the termination.
    ``(2) The employee's service period shall be expressed as the 
number equal to the full years and twelfth parts thereof, rounding the 
fractional part of a month to the nearest twelfth part of a year. The 
service period may not be less than 6 months and may not exceed 4 
years.
    ``(3) Notwithstanding paragraph (1), a service agreement is not 
required if the Administration pays a 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 Administration shall inform the employee in writing of 
any decision to change the retention bonus payments. 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.
    ``(e) A bonus under this section may not be considered to be part 
of the basic pay of an employee.
    ``(f) An employee is not entitled to a retention bonus under this 
section during a service period previously established for that 
employee under section 5753 or under section 9804.
    ``(g) The Administrator shall submit to the appropriate committees 
of Congress, not later than February 28 of each of the next 10 years 
beginning after the date of enactment of this subchapter, a summary of 
all bonuses paid under subsections (b) and (c) during the preceding 
year. Such summary shall include the number of bonuses paid, the total 
amount of bonuses paid, and the average percentage used in calculating 
the total average bonus amount, under each such subsection.
``Sec. 1A9806. Term appointments
    ``(a) The Administrator may authorize term appointments within the 
Administration under subchapter I of chapter 33, for a period of not 
less than 1 year and not more than 6 years.
    ``(b) Notwithstanding chapter 33 or any other provision of law 
relating to the examination, certification, and appointment of 
individuals in the competitive service, the Administrator may convert 
an employee serving under a term appointment to a permanent appointment 
in the competitive service within the Administration without further 
competition if--
            ``(1) such individual was appointed under open, competitive 
        examination under subchapter I of chapter 33 to the term 
        position;
            ``(2) the announcement for the term appointment from which 
        the conversion is made stated that there was potential for 
        subsequent conversion to a career-conditional or career 
        appointment;
            ``(3) the employee has completed at least 2 years of 
        current continuous service under a term appointment in the 
        competitive service;
            ``(4) the employee's performance under such term 
        appointment was at least fully successful or equivalent; and
            ``(5) the position to which such employee is being 
        converted under this section is in the same occupational 
        series, is in the same geographic location, and provides no 
        greater promotion potential than the term position for which 
        the competitive examination was conducted.
    ``(c) Notwithstanding chapter 33 or any other provision of law 
relating to the examination, certification, and appointment of 
individuals in the competitive service, the Administrator may convert 
an employee serving under a term appointment to a permanent appointment 
in the competitive service within the Administration through internal 
competitive promotion procedures if the conditions under paragraphs (1) 
through (4) of subsection (b) are met.
    ``(d) An employee converted under this section becomes a career-
conditional employee, unless the employee has otherwise completed the 
service requirements for career tenure.
    ``(e) An employee converted to career or career-conditional 
employment under this section acquires competitive status upon 
conversion.
    ``(f) The Administrator shall submit to the appropriate committees 
of Congress, not later than February 28 of each of the next 10 years 
beginning after the date of enactment of this subchapter--
            ``(1) the total number of term appointments converted 
        during the previous calendar year; and
            ``(2) of that total number, the number of conversions that 
        were made to address a critical need described in the Workforce 
        Plan pursuant to section 9802(b)(2).
``Sec. 1A9807. Pay authority for critical positions
    ``(a) In this section, the term `position' means--
            ``(1) a position to which chapter 51 applies, including a 
        position in the Senior Executive Service;
            ``(2) a position under the Executive Schedule under 
        sections 5312 through 5317;
            ``(3) a position established under section 3104; or
            ``(4) a senior-level position to which section 5376(a)(1) 
        applies.
    ``(b) Authority under this section--
            ``(1) may be exercised only with respect to a position 
        that--
                    ``(A) is described as addressing a critical need in 
                the workforce plan under section 9802(b)(2)(A); and
                    ``(B) requires expertise of an extremely high level 
                in a scientific, technical, professional, or 
                administrative field;
            ``(2) may be exercised only to the extent necessary to 
        recruit or retain an individual exceptionally well qualified 
        for the position; and
            ``(3) may be exercised only in retaining employees of the 
        Administration or in appointing individuals who were not 
        employees of another Federal agency as defined under section 
        5102(a)(1).
    ``(c)(1) Notwithstanding section 5377, the Administrator may fix 
the rate of basic pay for a position in the Administration in 
accordance with this section. The Administrator may not delegate this 
authority.
    ``(2) The number of positions with pay fixed under this section may 
not exceed 10 at any time.
    ``(d)(1) The rate of basic pay fixed under this section may not be 
less than the rate of basic pay (including any comparability payments) 
which would otherwise be payable for the position involved if this 
section had never been enacted.
    ``(2) The annual rate of basic pay fixed under this section may not 
exceed the per annum rate of salary payable under section 104 of title 
3.
    ``(3) Notwithstanding any provision of section 5307, in the case of 
an employee who, during any calendar year, is receiving pay at a rate 
fixed under this section, no allowance, differential, bonus, award, or 
similar cash payment may be paid to such employee if, or to the extent 
that, when added to basic pay paid or payable to such employee (for 
service performed in such calendar year as an employee in the executive 
branch or as an employee outside the executive branch to whom chapter 
51 applies), such payment would cause the total to exceed the per annum 
rate of salary which, as of the end of such calendar year, is payable 
under section 104 of title 3.
    ``(e) The Administrator shall submit to the appropriate committees 
of Congress, not later than February 28 of each of the next 10 years 
beginning after the date of enactment of this subchapter--
            ``(1) the number of positions for which the rate of basic 
        pay was fixed under this section during the preceding year; and
            ``(2) the number of positions for which a rate of basic pay 
        under this section was terminated during the preceding year.
``Sec. 1A9808. Assignments of intergovernmental personnel
    ``For purposes of applying the third sentence of section 3372(a) 
(relating to the authority of the head of a Federal agency to extend 
the period of an employee's assignment to or from a State or local 
government, institution of higher education, or other organization), 
the Administrator may, with the concurrence of the employee and the 
government or organization concerned, take any action which would be 
allowable if such sentence had been amended by striking `two' and 
inserting `four'.
``Sec. 1A9809. Enhanced demonstration project authority
    ``When conducting a demonstration project at the Administration, 
section 4703(d)(1)(A) may be applied by substituting `such numbers of 
individuals as determined by the Administrator' for `not more than 
5,000 individuals'.
``Sec. 1A9810. Voluntary separation incentive payments
    ``(a) In applying subchapter II of chapter 35, the Administrator 
may provide for voluntary separation incentive payments in excess of 
the dollar-amount limitation that would otherwise apply under section 
3523(b)(3)(B), subject to subsection (b).
    ``(b) Voluntary separation incentive payments described in 
subsection (a)--
            ``(1) may not exceed 50 percent of the annual rate of basic 
        pay of the employee receiving such payments (computed 
        disregarding any comparability payments under sections 
        5304095304a);
            ``(2) may not, in any calendar year, be made to more than--
                    ``(A) 10 employees; or
                    ``(B) such greater number of employees as the 
                Administrator may, with the approval of the Office of 
                Management and Budget, establish in lieu of the number 
                specified in subparagraph (A) following notification to 
                the appropriate committees of Congress;
            ``(3) may not be made to an employee if the employee has 
        within the last 12 months received, or if the employee is then 
        receiving, a bonus or allowance under section 5753 or 5754 or 
        under section 9804 or 9805; and
            ``(4) may be made only if the position in which the 
        employee is serving addresses a critical need identified in the 
        workforce plan pursuant to section 9802(b)(2).
    ``(c)(1) The proposed use of workforce authorities in this section 
shall be included in the plan required by section 3522.
    ``(2) Whenever the Office of Personnel Management approves the 
Administration's plan required in such section 3522, the Administration 
shall submit a copy of the approved plan to the appropriate committees 
of Congress within 15 days after the date on which it is so approved.
``Sec. 1A9811. Limitations relating to bonuses
    ``(a) Of the total amount in bonuses awarded under sections 9804 
and 9805, respectively, in any year, not to exceed 15 percent of any 
such total amount may be awarded to supervisors (within the meaning of 
section 7103(a)(10)).
    ``(b) A separate appropriations account shall be maintained for 
such bonuses.

                 ``SUBCHAPTER II--PERSONNEL PROVISIONS

``Sec. 1A9831. Definitions
    ``For purposes of this subchapter, the terms `Administration' and 
`Administrator' have the meanings set forth in section 9801.
``Sec. 1A9832. NASA-Industry exchange program
    ``(a) For purposes of this section, the term `detail' means--
            ``(1) the assignment or loan of an employee of the 
        Administration to a private sector organization without a 
        change of position from the Administration, or
            ``(2) the assignment or loan of an employee of a private 
        sector organization to the Administration without a change of 
        position from the private sector organization that employs the 
        individual,
whichever is appropriate in the context in which such term is used.
    ``(b)(1) On request from or with the agreement of a private sector 
organization, and with the consent of the employee concerned, the 
Administrator may arrange for the assignment of an employee of the 
Administration to a private sector organization or an employee of a 
private sector organization to the Administration. An employee of the 
Administration shall be eligible to participate in this program only if 
the employee is employed at the GS0911 level or above (or equivalent) 
and is serving under a career or career-conditional appointment or an 
appointment of equivalent tenure in the excepted service.
    ``(2) The Administrator shall provide for a written agreement 
between the Administration and the employee concerned regarding the 
terms and conditions of the employee's assignment. The agreement 
shall--
            ``(A) require the employee to serve in the Administration, 
        upon completion of the assignment, for a period equal to the 
        length of the assignment; and
            ``(B) provide that, in the event the employee fails to 
        carry out the agreement (except for good and sufficient reason, 
        as determined by the Administrator), the employee shall be 
        liable to the United States for payment of all expenses of the 
        assignment.
An amount under subparagraph (B) shall be treated as a debt due the 
United States.
    ``(3) Assignments may be terminated by the Administration or the 
private sector organization concerned for any reason at any time.
    ``(4) Assignments under this section shall be for a period of 
between 6 months and 1 year, and may be extended in 3-month increments 
for a total of not more than 1 additional year, except that no 
assignment under this section may commence after the end of the 5-year 
period beginning on the date of the enactment of this section.
    ``(c)(1) An employee of the Administration who is assigned to a 
private sector organization under this section is deemed, during the 
period of the assignment, to be on detail to a regular work assignment 
in the Administration.
    ``(2) Notwithstanding any other provision of law, an employee of 
the Administration who is assigned to a private sector organization 
under this section is entitled to retain coverage, rights, and benefits 
under subchapter I of chapter 81, and employment during the assignment 
is deemed employment by the United States, except that, if the employee 
or the employee's dependents receive from the private sector 
organization any payment under an insurance policy for which the 
premium is wholly paid by the private sector organization, or other 
benefit of any kind on account of the same injury or death, then, the 
amount of such payment or benefit shall be credited against any 
compensation otherwise payable under subchapter I of chapter 81.
    ``(3) The assignment of an employee to a private sector 
organization under this section may be made with or without 
reimbursement by the private sector organization for the travel and 
transportation expenses to or from the place of assignment, subject to 
the same terms and conditions as apply with respect to an employee of a 
Federal agency or a State or local government under section 3375, and 
for the pay, or a part thereof, of the employee during assignment. Any 
reimbursements shall be credited to the appropriation of the 
Administration used for paying the travel and transportation expenses 
or pay.
    ``(4) The Federal Tort Claims Act and any other Federal tort 
liability statute apply to an employee of the Administration assigned 
to a private sector organization under this section. The supervision of 
the duties of an employee of the Administration who is so assigned to a 
private sector organization may be governed by an agreement between the 
Administration and the organization.
    ``(d)(1) An employee of a private sector organization assigned to 
the Administration under this section is deemed, during the period of 
the assignment, to be on detail to the Administration.
    ``(2) An employee of a private sector organization assigned to the 
Administration under this section--
            ``(A) may continue to receive pay and benefits from the 
        private sector organization from which he is assigned;
            ``(B) is deemed, notwithstanding paragraph (1), to be an 
        employee of the Administration for the purposes of--
                    ``(i) chapter 73;
                    ``(ii) sections 201, 203, 205, 207, 208, 209, 603, 
                606, 607, 643, 654, 1905, and 1913 of title 18;
                    ``(iii) sections 1343, 1344, and 1349(b) of title 
                31;
                    ``(iv) the Federal Tort Claims Act and any other 
                Federal tort liability statute;
                    ``(v) the Ethics in Government Act of 1978; and
                    ``(vi) section 1043 of the Internal Revenue Code of 
                1986;
            ``(C) may not have access to any trade secrets or to any 
        other nonpublic information which is of commercial value to the 
        private sector organization from which he is assigned; and
            ``(D) is subject to such regulations as the President may 
        prescribe.
The supervision of an employee of a private sector organization 
assigned to the Administration under this section may be governed by 
agreement between the Administration and the private sector 
organization concerned. Such an assignment may be made with or without 
reimbursement by the Administration for the pay, or a part thereof, of 
the employee during the period of assignment, or for any contribution 
of the private sector organization to employee benefit systems.
    ``(3) An employee of a private sector organization assigned to the 
Administration under this section who suffers disability or dies as a 
result of personal injury sustained while performing duties during the 
assignment shall be treated, for the purpose of subchapter I of chapter 
81, as an employee as defined by section 8101 who had sustained the 
injury in the performance of duty, except that, if the employee or the 
employee's dependents receive from the private sector organization any 
payment under an insurance policy for which the premium is wholly paid 
by the private sector organization, or other benefit of any kind on 
account of the same injury or death, then, the amount of such payment 
or benefit shall be credited against any compensation otherwise payable 
under subchapter I of chapter 81.
    ``(4) A private sector organization may not charge the Federal 
Government, as direct or indirect costs under a Federal contract, the 
costs of pay or benefits paid by the organization to an employee 
assigned to the Administration under this section for the period of the 
assignment.
    ``(e)(1) The Administration shall, not later than February 28 of 
each year, prepare and submit to the appropriate committees of Congress 
a report summarizing the operation of this section during the preceding 
year.
    ``(2) Each report shall include, with respect to the period to 
which such report relates--
            ``(A) the total number of individuals assigned to, and the 
        total number of individuals assigned from, the Administration 
        during such period;
            ``(B) a brief description of each assignment included under 
        subparagraph (A), including--
                    ``(i) the name of the assigned individual, as well 
                as the private sector organization, to or from which 
                such individual was assigned;
                    ``(ii) the respective positions to and from which 
                the individual was assigned, including the duties and 
                responsibilities and the pay grade or level associated 
                with each; and
                    ``(iii) the duration and objectives of the 
                individual's assignment; and
            ``(C) such other information as the Administration 
        considers appropriate.
    ``(3) A copy of each report submitted under paragraph (1)--
            ``(A) shall be published in the Federal Register; and
            ``(B) shall be made publicly available on the Internet.
    ``(f) The Administrator, in consultation with the Director of the 
Office of Personnel Management, shall prescribe regulations for the 
administration of this section.
    ``(g) Not later than 4 years after the date of the enactment of 
this section, the General Accounting Office shall prepare and submit to 
the appropriate committees of Congress a report on the operation of 
this section. Such report shall include--
            ``(1) an evaluation of the effectiveness of the program 
        established by this section; and
            ``(2) a recommendation as to whether such program should be 
        continued (with or without modification) or allowed to lapse.
``Sec. 1A9833. Science and technology scholarship program
    ``(a)(1) The Administrator shall establish a National Aeronautics 
and Space Administration Science and Technology Scholarship Program to 
award scholarships to individuals that is designed to recruit and 
prepare students for careers in the Administration.
    ``(2) Individuals shall be selected to receive scholarships under 
this section through a competitive process primarily on the basis of 
academic merit, with consideration given to financial need and the goal 
of promoting the participation of individuals identified in section 33 
or 34 of the Science and Engineering Equal Opportunities Act.
    ``(3) To carry out the Program the Administrator shall enter into 
contractual agreements with individuals selected under paragraph (2) 
under which the individuals agree to serve as full-time employees of 
the Administration, for the period described in subsection (f)(1), in 
positions needed by the Administration and for which the individuals 
are qualified, in exchange for receiving a scholarship.
    ``(b) In order to be eligible to participate in the Program, an 
individual must--
            ``(1) be enrolled or accepted for enrollment as a full-time 
        student at an institution of higher education in an academic 
        field or discipline described in the list made available under 
        subsection (d);
            ``(2) be a United States citizen; and
            ``(3) at the time of the initial scholarship award, not be 
        an employee (as defined in section 2105).
    ``(c) An individual seeking a scholarship under this section shall 
submit an application to the Administrator at such time, in such 
manner, and containing such information, agreements, or assurances as 
the Administrator may require.
    ``(d) The Administrator shall make publicly available a list of 
academic programs and fields of study for which scholarships under the 
Program may be utilized and shall update the list as necessary.
    ``(e)(1) The Administrator may provide a scholarship under the 
Program for an academic year if the individual applying for the 
scholarship has submitted to the Administrator, as part of the 
application required under subsection (c), a proposed academic program 
leading to a degree in a program or field of study on the list made 
available under subsection (d).
    ``(2) An individual may not receive a scholarship under this 
section for more than 4 academic years, unless the Administrator grants 
a waiver.
    ``(3) The dollar amount of a scholarship under this section for an 
academic year shall be determined under regulations issued by the 
Administrator, but shall in no case exceed the cost of attendance.
    ``(4) A scholarship provided under this section may be expended for 
tuition, fees, and other authorized expenses as established by the 
Administrator by regulation.
    ``(5) The Administrator may enter into a contractual agreement with 
an institution of higher education under which the amounts provided for 
a scholarship under this section for tuition, fees, and other 
authorized expenses are paid directly to the institution with respect 
to which the scholarship is provided.
    ``(f)(1) The period of service for which an individual shall be 
obligated to serve as an employee of the Administration is, except as 
provided in subsection (h)(2), 24 months for each academic year for 
which a scholarship under this section is provided.
    ``(2)(A) Except as provided in subparagraph (B), obligated service 
under paragraph (1) shall begin not later than 60 days after the 
individual obtains the educational degree for which the scholarship was 
provided.
    ``(B) The Administrator may defer the obligation of an individual 
to provide a period of service under paragraph (1) if the Administrator 
determines that such a deferral is appropriate. The Administrator shall 
prescribe the terms and conditions under which a service obligation may 
be deferred through regulation.
    ``(g)(1) Scholarship recipients who fail to maintain a high level 
of academic standing, as defined by the Administrator by regulation, 
who are dismissed from their educational institutions for disciplinary 
reasons, or who voluntarily terminate academic training before 
graduation from the educational program for which the scholarship was 
awarded, shall be in breach of their contractual agreement and, in lieu 
of any service obligation arising under such agreement, shall be liable 
to the United States for repayment within 1 year after the date of 
default of all scholarship funds paid to them and to the institution of 
higher education on their behalf under the agreement, except as 
provided in subsection (h)(2). The repayment period may be extended by 
the Administrator when determined to be necessary, as established by 
regulation.
    ``(2) Scholarship recipients who, for any reason, fail to begin or 
complete their service obligation after completion of academic 
training, or fail to comply with the terms and conditions of deferment 
established by the Administrator pursuant to subsection (f)(2)(B), 
shall be in breach of their contractual agreement. When recipients 
breach their agreements for the reasons stated in the preceding 
sentence, the recipient shall be liable to the United States for an 
amount equal to--
            ``(A) the total amount of scholarships received by such 
        individual under this section; plus
            ``(B) the interest on the amounts of such awards which 
        would be payable if at the time the awards were received they 
        were loans bearing interest at the maximum legal prevailing 
        rate, as determined by the Treasurer of the United States,
multiplied by 3.
    ``(h)(1) Any obligation of an individual incurred under the Program 
(or a contractual agreement thereunder) for service or payment shall be 
canceled upon the death of the individual.
    ``(2) The Administrator shall by regulation provide for the partial 
or total waiver or suspension of any obligation of service or payment 
incurred by an individual under the Program (or a contractual agreement 
thereunder) whenever compliance by the individual is impossible or 
would involve extreme hardship to the individual, or if enforcement of 
such obligation with respect to the individual would be contrary to the 
best interests of the Government.
    ``(i) For purposes of this section--
            ``(1) the term `cost of attendance' has the meaning given 
        that term in section 472 of the Higher Education Act of 1965;
            ``(2) the term `institution of higher education' has the 
        meaning given that term in section 101(a) of the Higher 
        Education Act of 1965; and
            ``(3) the term `Program' means the National Aeronautics and 
        Space Administration Science and Technology Scholarship Program 
        established under this section.
    ``(j)(1) There is authorized to be appropriated to the 
Administration for the Program $10,000,000 for each fiscal year.
    ``(2) Amounts appropriated under this section shall remain 
available for 2 fiscal years.
``Sec. 1A9834. Distinguished scholar appointment authority
    ``(a) In this section--
            ``(1) the term `professional position' means a position 
        that is classified to an occupational series identified by the 
        Office of Personnel Management as a position that--
                    ``(A) requires education and training in the 
                principles, concepts, and theories of the occupation 
                that typically can be gained only through completion of 
a specified curriculum at a recognized college or university; and
                    ``(B) is covered by the Group Coverage 
                Qualification Standard for Professional and Scientific 
                Positions; and
            ``(2) the term `research position' means a position in a 
        professional series that primarily involves scientific inquiry 
        or investigation, or research-type exploratory development of a 
        creative or scientific nature, where the knowledge required to 
        perform the work successfully is acquired typically and 
        primarily through graduate study.
    ``(b) The Administration may appoint, without regard to the 
provisions of sections 3304(b) and 3309 through 3318, candidates 
directly to General Schedule professional positions in the 
Administration for which public notice has been given, if--
            ``(1) with respect to a position at the GS097 level, the 
        individual--
                    ``(A) received, from an accredited institution 
                authorized to grant baccalaureate degrees, a 
                baccalaureate degree in a field of study for which 
                possession of that degree in conjunction with academic 
                achievements meets the qualification standards as 
                prescribed by the Office of Personnel Management for 
                the position to which the individual is being 
                appointed; and
                    ``(B) achieved a cumulative grade point average of 
                3.0 or higher on a 4.0 scale and a grade point average 
                of 3.5 or higher for courses in the field of study 
                required to qualify for the position;
            ``(2) with respect to a position at the GS099 level, the 
        individual--
                    ``(A) received, from an accredited institution 
                authorized to grant graduate degrees, a graduate degree 
                in a field of study for which possession of that degree 
                meets the qualification standards at this grade level 
                as prescribed by the Office of Personnel Management for 
                the position to which the individual is being 
                appointed; and
                    ``(B) achieved a cumulative grade point average of 
                3.5 or higher on a 4.0 scale in graduate coursework in 
                the field of study required for the position;
            ``(3) with respect to a position at the GS0911 level, the 
        individual--
                    ``(A) received, from an accredited institution 
                authorized to grant graduate degrees, a graduate degree 
                in a field of study for which possession of that degree 
                meets the qualification standards at this grade level 
                as prescribed by the Office of Personnel Management for 
                the position to which the individual is being 
                appointed; and
                    ``(B) achieved a cumulative grade point average of 
                3.5 or higher on a 4.0 scale in graduate coursework in 
                the field of study required for the position; or
            ``(4) with respect to a research position at the GS0912 
        level, the individual--
                    ``(A) received, from an accredited institution 
                authorized to grant graduate degrees, a graduate degree 
                in a field of study for which possession of that degree 
                meets the qualification standards at this grade level 
                as prescribed by the Office of Personnel Management for 
                the position to which the individual is being 
                appointed; and
                    ``(B) achieved a cumulative grade point average of 
                3.5 or higher on a 4.0 scale in graduate coursework in 
                the field of study required for the position.
    ``(c) Veterans' preference procedures shall apply when selecting 
candidates under this section. Preference eligibles who meet the 
criteria for distinguished scholar appointments shall be considered 
ahead of nonpreference eligibles.
    ``(d) An appointment made under this authority shall be a career-
conditional appointment in the competitive civil service.
``Sec. 1A9835. Travel and transportation expenses of certain new 
              appointees
    ``(a) In this section, the term `new appointee' means--
            ``(1) a person newly appointed or reinstated to Federal 
        service to the Administration to--
                    ``(A) a career or career-conditional appointment;
                    ``(B) a term appointment;
                    ``(C) an excepted service appointment that provides 
                for noncompetitive conversion to a career or career-
                conditional appointment;
                    ``(D) a career or limited term Senior Executive 
                Service appointment;
                    ``(E) an appointment made under section 
                203(c)(2)(A) of the National Aeronautics and Space Act 
                of 1958 (42 U.S.C. 2473(c)(2)(A));
                    ``(F) an appointment to a position established 
                under section 3104; or
                    ``(G) an appointment to a position established 
                under section 5108; or
            ``(2) a student trainee who, upon completion of academic 
        work, is converted to an appointment in the Administration that 
        is identified in paragraph (1) in accordance with an 
        appropriate authority.
    ``(b) The Administrator may pay the travel, transportation, and 
relocation expenses of a new appointee to the same extent, in the same 
manner, and subject to the same conditions as the payment of such 
expenses under sections 5724, 5724a, 5724b, and 5724c to an employee 
transferred in the interests of the United States Government.
    ``(c) The Administrator shall submit to the appropriate committees 
of Congress, not later than February 28 of each of the next 10 years 
beginning after the date of enactment of this subchapter--
            ``(1) the average payment for travel and transportation 
        expenses of certain new appointees provided under this section 
        during the preceding year; and
            ``(2) the highest payment for travel and transportation 
        expenses to an individual appointee provided under this section 
        during the preceding year.
``Sec. 1A9836. Annual leave enhancements
    ``(a)(1) In this subsection--
            ``(A) the term `newly appointed employee' means an 
        individual who is first appointed--
                    ``(i) regardless of tenure, as an employee of the 
                Federal Government; or
                    ``(ii) as an employee of the Federal Government 
                following a break in service of at least 90 days after 
                that individual's last period of Federal employment, 
                other than--
                            ``(I) employment under the Student 
                        Educational Employment Program administered by 
                        the Office of Personnel Management;
                            ``(II) employment as a law clerk trainee;
                            ``(III) employment under a short-term 
                        temporary appointing authority while a student 
                        during periods of vacation from the educational 
                        institution at which the student is enrolled;
                            ``(IV) employment under a provisional 
                        appointment if the new appointment is permanent 
                        and immediately follows the provisional 
                        appointment; or
                            ``(V) employment under a temporary 
                        appointment that is neither full-time nor the 
                        principal employment of the individual;
            ``(B) the term `period of qualified non-Federal service' 
        means any period of service performed by an individual that--
                    ``(i) was performed in a position the duties of 
                which were directly related to the duties of the 
                position in the Administration to which that individual 
                will fill as a newly appointed employee; and
                    ``(ii) except for this section, would not otherwise 
                be service performed by an employee for purposes of 
                section 6303; and
            ``(C) the term `directly related to the duties of the 
        position' means duties and responsibilities in the same line of 
        work which require similar qualifications.
    ``(2)(A) For purposes of section 6303, the Administrator may deem a 
period of qualified non-Federal service performed by a newly appointed 
employee to be a period of service of equal length performed as an 
employee.
    ``(B) A period deemed by the Administrator under subparagraph (A) 
shall continue to apply to the employee during--
            ``(i) the period of Federal service in which the deeming is 
        made; and
            ``(ii) any subsequent period of Federal service.
    ``(3)(A) Notwithstanding section 6303(a), the annual leave accrual 
rate for an employee of the Administration in a position paid under 
section 5376 or 5383, or for an employee in an equivalent category 
whose rate of basic pay is greater than the rate payable at GS0915, 
step 10, shall be 1 day for each full biweekly pay period.
    ``(B) The accrual rate established under this paragraph shall 
continue to apply to the employee during--
            ``(i) the period of Federal service in which such accrual 
        rate first applies; and
            ``(ii) any subsequent period of Federal service.
``Sec. 1A9837. Limited appointments to Senior Executive Service 
              positions
    ``(a) In this section--
            ``(1) the term `career reserved position' means a position 
        in the Administration designated under section 3132(b) which 
        may be filled only by--
                    ``(A) a career appointee; or
                    ``(B) a limited emergency appointee or a limited 
                term appointee--
                            ``(i) who, immediately before entering the 
                        career reserved position, was serving under a 
                        career or career-conditional appointment 
                        outside the Senior Executive Service; or
                            ``(ii) whose limited emergency or limited 
                        term appointment is approved in advance by the 
                        Office of Personnel Management;
            ``(2) the term `limited emergency appointee' has the 
        meaning given under section 3132; and
            ``(3) the term `limited term appointee' means an individual 
        appointed to a Senior Executive Service position in the 
        Administration to meet a bona fide temporary need, as 
        determined by the Administrator.
    ``(b) The number of career reserved positions which are filled by 
an appointee as described under subsection (a)(1)(B) may not exceed 10 
percent of the total number of Senior Executive Service positions 
allocated to the Administration.
    ``(c) Notwithstanding sections 3132 and 3394(b)--
            ``(1) the Administrator may appoint an individual to any 
        Senior Executive Service position in the Administration as a 
        limited term appointee under this section for a period of--
                    ``(A) 4 years or less to a position the duties of 
                which will expire at the end of such term; or
                    ``(B) 1 year or less to a position the duties of 
                which are continuing; and
            ``(2) in rare circumstances, the Administrator may 
        authorize an extension of a limited appointment under--
                    ``(A) paragraph (1)(A) for a period not to exceed 2 
                years; and
                    ``(B) paragraph (1)(B) for a period not to exceed 1 
                year.
    ``(d) A limited term appointee who has been appointed in the 
Administration from a career or career-conditional appointment outside 
the Senior Executive Service shall have reemployment rights in the 
agency from which appointed, or in another agency, under requirements 
and conditions established by the Office of Personnel Management. The 
Office shall have the authority to direct such placement in any agency.
    ``(e) Notwithstanding section 3394(b) and section 3395--
            ``(1) a limited term appointee serving under a term 
        prescribed under this section may be reassigned to another 
        Senior Executive Service position in the Administration, the 
        duties of which will expire at the end of a term of 4 years or 
        less; and
            ``(2) a limited term appointee serving under a term 
        prescribed under this section may be reassigned to another 
        continuing Senior Executive Service position in the 
        Administration, except that the appointee may not serve in 1 or 
        more positions in the Administration under such appointment in 
        excess of 1 year, except that in rare circumstances, the 
Administrator may approve an extension up to an additional 1 year.
    ``(f) A limited term appointee may not serve more than 7 
consecutive years under any combination of limited appointments.
    ``(g) Notwithstanding section 5384, the Administrator may authorize 
performance awards to limited term appointees in the Administration in 
the same amounts and in the same manner as career appointees.
``Sec. 1A9838. Superior qualifications pay
    ``(a) In this section the term `employee' means an employee as 
defined under section 2105 who is employed by the Administration.
    ``(b) Notwithstanding section 5334, the Administrator may set the 
pay of an employee paid under the General Schedule at any step within 
the pay range for the grade of the position, based on the superior 
qualifications of the employee, or the special need of the 
Administration.
    ``(c) If an exercise of the authority under this section relates to 
a current employee selected for another position within the 
Administration, a determination shall be made that the employee's 
contribution in the new position will exceed that in the former 
position, before setting pay under this section.
    ``(d) Pay as set under this section is basic pay for such purposes 
as pay set under section 5334.
    ``(e) If the employee serves for at least 1 year in the position 
for which the pay determination under this section was made, or a 
successor position, the pay earned under such position may be used in 
succeeding actions to set pay under chapter 53.
    ``(f) The Administrator may waive the restrictions in subsection 
(e), based on criteria established in the plan required under 
subsection (g).
    ``(g) Before setting any employee's pay under this section, the 
Administrator shall submit a plan to the Office of Personnel 
Management, that includes--
            ``(1) criteria for approval of actions to set pay under 
        this section;
            ``(2) the level of approval required to set pay under this 
        section;
            ``(3) all types of actions and positions to be covered;
            ``(4) the relationship between the exercise of authority 
        under this section and the use of other pay incentives; and
            ``(5) a process to evaluate the effectiveness of this 
        section.''.
    (b) Technical and Conforming Amendments.--
            (1) Table of chapters.--The table of chapters for 
        subchapter I of part III of title 5, United States Code, is 
        amended by adding after the item relating to chapter 97 the 
        following:

 ``98.  National Aeronautics and Space Administration           9801''.
            (2) Compensation for certain excepted personnel.--
        Subparagraph (A) of section 203(c)(2) of the National 
        Aeronautics and Space Act of 1958 (42 U.S.C. 2473(c)(2)(A)) is 
        amended by striking ``the highest rate of grade 18 of the 
        General Schedule of the Classification Act of 1949, as 
        amended,'' and inserting ``the rate of basic pay payable for 
        level III of the Executive Schedule,''.
            (3) Compensation clarification.--Section 209 of title 18, 
        United States Code, as amended by section 209(g)(2) of the E-
        Government Act of 2002 (Public Law 10709347; 116 Stat. 2932), 
        is amended by adding at the end the following:
    ``(h) This section does not prohibit an employee of a private 
sector organization, while assigned to the National Aeronautics and 
Space Administration under section 9832 of title 5, from continuing to 
receive pay and benefits from that organization in accordance with 
section 9832 of that title.''.
            (4) Continued tsp eligibility.--Section 125(c)(1) of Public 
        Law 10009238 (5 U.S.C. 8432 note), as amended by section 
        209(g)(3) of the E-Government Act of 2002 (Public Law 10709347; 
        116 Stat. 2932), is amended--
                    (A) in subparagraph (C), by striking ``or'' at the 
                end;
                    (B) in subparagraph (D), by striking ``and'' at the 
                end and inserting ``or''; and
                    (C) by adding at the end the following:
                    ``(E) an individual assigned from the National 
                Aeronautics and Space Administration to a private 
                sector organization under section 9832 of title 5, 
                United States Code; and''.
            (5) Ethics provisions.--
                    (A) One-year restriction on certain 
                communications.--Section 207(c)(2)(A)(v) of title 18, 
                United States Code, is amended by inserting ``or 
                section 9832'' after ``chapter 37''.
                    (B) Disclosure of confidential information.--
                Section 1905 of title 18, United States Code, is 
                amended by inserting ``or section 9832'' after 
                ``chapter 37''.
            (6) Contract advice.--Section 207(l) of title 18, United 
        States Code, is amended by inserting ``or section 9832'' after 
        ``chapter 37''.
            (7) Amendments to title 5, united states code.--Title 5, 
        United States Code, is amended--
                    (A) in section 3111(d), by inserting ``or section 
                9832'' after ``chapter 37''; and
                    (B) in section 7353(b)(4), by inserting ``or 
                section 9832'' after ``chapter 37''.

                TITLE IV--HUMAN CAPITAL PERFORMANCE FUND

SEC. 401. HUMAN CAPITAL PERFORMANCE FUND.

    (a) In General.--Subpart D of part III of title 5, United States 
Code, is amended by inserting after chapter 53 the following:

              ``CHAPTER 54--HUMAN CAPITAL PERFORMANCE FUND

    ``Sec.
    ``5401. Purpose.
    ``5402. Definitions.
    ``5403. Human Capital Performance Fund.
    ``5404. Human capital performance payments.
    ``5405. Regulations.
    ``5406. Agency plan.
    ``5407. Nature of payment.
    ``5408. Appropriations.
``Sec. 1A5401. Purpose
    ``The purpose of this chapter is to promote, through the creation 
of a Human Capital Performance Fund, greater performance in the Federal 
Government. Monies from the Fund will be used to reward agencies' 
highest performing and most valuable employees. This Fund will offer 
Federal managers a new tool to recognize employee performance that is 
critical to the achievement of agency missions.
``Sec. 1A5402. Definitions
    ``For the purpose of this chapter--
            ``(1) `agency' means an Executive agency under section 105, 
        but does not include the General Accounting Office;
            ``(2) `employee' includes--
                    ``(A) an individual paid under a statutory pay 
                system defined in section 5302(1);
                    ``(B) a prevailing rate employee, as defined in 
                section 5342(a)(2); and
                    ``(C) a category of employees included by the 
                Office of Personnel Management following the review of 
                an agency plan under section 5403(b)(1);
        but does not include--
                    ``(i) an individual paid at an annual rate of basic 
                pay for a level of the Executive Schedule, under 
                subchapter II of chapter 53, or at a rate provided for 
                one of those levels under another provision of law;
                    ``(ii) a member of the Senior Executive Service 
                paid under subchapter VIII of chapter 53, or an 
                equivalent system;
                    ``(iii) an administrative law judge paid under 
                section 5372;
                    ``(iv) a contract appeals board member paid under 
                section 5372a;
                    ``(v) an administrative appeals judge paid under 
                section 5372b; and
                    ``(vi) an individual in a position which is 
                excepted from the competitive service because of its 
                confidential, policy-determining, policy-making, or 
                policy-advocating character; and
            ``(3) `Office' means the Office of Personnel Management.
``Sec. 1A5403. Human Capital Performance Fund
    ``(a) There is hereby established the Human Capital Performance 
Fund, to be administered by the Office for the purpose of this chapter.
    ``(b)(1)(A) An agency shall submit a plan as described in section 
5406 to be eligible for consideration by the Office for an allocation 
under this section. An allocation shall be made only upon approval by 
the Office of an agency's plan.
    ``(B)(i) After the reduction for training required under section 
5408, ninety percent of the remaining amount appropriated to the Fund 
may be allocated by the Office to the agencies. Of the amount to be 
allocated, an agency's pro rata distribution may not exceed its pro 
rata share of Executive branch payroll.
    ``(ii) If the Office does not allocate an agency's full pro rata 
share, the undistributed amount remaining from that share will become 
available for distribution to other agencies, as provided in 
subparagraph (C).
    ``(C)(i) After the reduction for training under section 5408, ten 
percent of the remaining amount appropriated to the Fund, as well as 
the amount of the pro rata share not distributed because of an agency's 
failure to submit a satisfactory plan, shall be allocated among 
agencies with exceptionally high-quality plans.
    ``(ii) An agency with an exceptionally high-quality plan is 
eligible to receive an additional distribution in addition to its full 
pro rata distribution.
    ``(2) Each agency is required to provide to the Office such payroll 
information as the Office specifies necessary to determine the 
Executive branch payroll.
``Sec. 1A5404. Human capital performance payments
    ``(a)(1) Notwithstanding any other provision of law, the Office may 
authorize an agency to provide human capital performance payments to 
individual employees based on exceptional performance contributing to 
the achievement of the agency mission.
    ``(2) The number of employees in an agency receiving payments from 
the Fund, in any year, shall not be more than the number equal to 15 
percent of the agency's average total civilian full- and part-time 
permanent employment for the previous fiscal year.
    ``(b)(1) A human capital performance payment provided to an 
individual employee from the Fund, in any year, shall not exceed 10 
percent of the employee's rate of basic pay.
    ``(2) The aggregate of an employee's rate of basic pay, adjusted by 
any locality-based comparability payments, and human capital 
performance pay, as defined by regulation, may not exceed the rate of 
basic pay for Executive Level IV in any year.
    ``(3) Any human capital performance payment provided to an employee 
from the Fund is in addition to any annual pay adjustment (under 
section 5303 or any similar provision of law) and any locality-based 
comparability payment that may apply.
    ``(c) No monies from the Human Capital Performance Fund may be used 
to pay for a new position, for other performance-related payments, or 
for recruitment or retention incentives paid under sections 5753 and 
5754.
    ``(d)(1) An agency may finance initial human capital performance 
payments using monies from the Human Capital Performance Fund, as 
available.
    ``(2) In subsequent years, continuation of previously awarded human 
capital performance payments shall be financed from other agency funds 
available for salaries and expenses.
``Sec. 1A5405. Regulations
    ``The Office shall issue such regulations as it determines to be 
necessary for the administration of this chapter, including the 
administration of the Fund. The Office's regulations shall include 
criteria governing--
            ``(1) an agency plan under section 5406;
            ``(2) the allocation of monies from the Fund to agencies;
            ``(3) the nature, extent, duration, and adjustment of, and 
        approval processes for, payments to individual employees under 
        this chapter;
            ``(4) the relationship to this chapter of agency 
        performance management systems;
            ``(5) training of supervisors, managers, and other 
        individuals involved in the process of making performance 
        distinctions; and
            ``(6) the circumstances under which funds may be allocated 
        by the Office to an agency in amounts below or in excess of the 
        agency's pro rata share.
``Sec. 1A5406. Agency plan
    ``(a) To be eligible for consideration by the Office for an 
allocation under this section, an agency shall--
            ``(1) develop a plan that incorporates the following 
        elements:
                    ``(A) adherence to merit principles set forth in 
                section 2301;
                    ``(B) a fair, credible, and transparent employee 
                performance appraisal system;
                    ``(C) a link between the pay-for-performance 
                system, the employee performance appraisal system, and 
                the agency's strategic plan;
                    ``(D) a means for ensuring employee involvement in 
                the design and implementation of the system;
                    ``(E) adequate training and retraining for 
                supervisors, managers, and employees in the 
                implementation and operation of the pay-for-performance 
                system;
                    ``(F) a process for ensuring ongoing performance 
                feedback and dialogue between supervisors, managers, 
                and employees throughout the appraisal period, and 
                setting timetables for review;
                    ``(G) effective safeguards to ensure that the 
                management of the system is fair and equitable and 
                based on employee performance; and
                    ``(H) a means for ensuring that adequate agency 
                resources are allocated for the design, implementation, 
                and administration of the pay-for-performance system;
            ``(2) upon approval, receive an allocation of funding from 
        the Office;
            ``(3) make payments to individual employees in accordance 
        with the agency's approved plan; and
            ``(4) provide such information to the Office regarding 
        payments made and use of funds received under this section as 
        the Office may specify.
    ``(b) The Office, in consultation with the Chief Human Capital 
Officers Council, shall review and approve an agency's plan before the 
agency is eligible to receive an allocation of funding from the Office.
    ``(c) The Chief Human Capital Officers Council shall include in its 
annual report to Congress under section 1303(d) of the Homeland 
Security Act of 2002 an evaluation of the formulation and 
implementation of agency performance management systems.
``Sec. 1A5407. Nature of payment
    ``Any payment to an employee under this section shall be part of 
the employee's basic pay for the purposes of subchapter III of chapter 
83, and chapters 84 and 87, and for such other purposes (other than 
chapter 75) as the Office shall determine by regulation.
``Sec. 1A5408. Appropriations
    ``There is authorized to be appropriated $500,000,000 for fiscal 
year 2004, and, for each subsequent fiscal year, such sums as may be 
necessary to carry out the provisions of this chapter. In the first 
year of implementation, up to 10 percent of the amount appropriated to 
the Fund shall be available to participating agencies to train 
supervisors, managers, and other individuals involved in the appraisal 
process on using performance management systems to make meaningful 
distinctions in employee performance and on the use of the Fund.''.
    (b) Clerical Amendment.--The table of chapters for part III of 
title 5, United States Code, is amended by inserting after the item 
relating to chapter 53 the following:

 ``54.  Human Capital Performance Fund                          5401''.

                         TITLE V--MISCELLANEOUS

SEC. 501. PROHIBITION ON USE OF QUOTAS.

    (a) In General.--After the date of enactment of this Act, the 
Office of Management and Budget may not establish, apply, or enforce 
any numerical goal, target, or quota for subjecting the employees of a 
department or agency of the Government to public-private competitions 
or converting such employees or the work performed by such employees to 
contractor performance under Office of Management and Budget Circular 
A-76 or any other administrative regulation, directive, or policy, 
unless the goal, target, or quota is based on considered research and 
sound analysis of past activities and is consistent with the stated 
mission of the department or agency.
    (b) Limitations.--Subsection (a) shall not--
            (1) otherwise affect the implementation or enforcement of 
        the Government Performance and Results Act of 1993 (107 Stat. 
        285); or
            (2) prevent any agency of the Executive branch from 
        subjecting work performed by Federal employees or private 
        contractors to public-private competition or conversions.




                                                 Union Calendar No. 131

108th CONGRESS

  1st Session

                               H. R. 1836

                     [Report No. 10809116, Part I]

_______________________________________________________________________

                                 A BILL

To make changes to certain areas of the Federal civil service in order 
    to improve the flexibility and competitiveness of Federal human 
                         resources management.

_______________________________________________________________________

                             July 25, 2003

 Committees on Armed Services, Science, and Ways and Means discharged; 
committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed