[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[Senate]
[Pages S11553-S11555]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SIMPSON (by request):
  S. 2151. A bill to provide a temporary authority for the use of 
voluntary separation incentives by Department of Veterans Affairs 
offices that are reducing employment levels, and for other purposes; to 
the Committee on Veterans' Affairs.


the department of veterans affairs employment reduction assistance act 
                                of 1996

  Mr. SIMPSON. Mr. President, as chairman of the Veterans' Affairs 
Committee, I have today introduced, at the request of the Secretary of 
Veterans Affairs, S. 2151, the ``Department of Veterans Affairs 
Employment Reduction Assistance Act of 1996'' relating to the 
Department of Veterans Affairs' authority to offer separation 
incentives to achieve reductions in employment levels. The Secretary of 
Veterans Affairs submitted this legislation to the President of the 
Senate by letter dated September 11, 1996.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter and the 
enclosed analysis of the draft legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2151

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     except as otherwise expressly provided, whenever in this Act 
     an amendment is expressed in terms of an amendment to a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of title 38, 
     United States Code.

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Department Of Veterans 
     Affairs Employment Reduction Assistance Act of 1996.''

     SEC. 2. DEFINITIONS.

       For the purpose of this Act--
       (1) ``Department'' means the Department of Veterans 
     Affairs.
       (2) ``employee'' means an employee (as defined by section 
     2105 of title 5, United States Code) who--
       (A) is employed by the Department of Veterans Affairs;
       (B) is serving under an appointment without time 
     limitation; and
       (C) has been currently employed for a continuous period of 
     at least 12 months; but does not include--
       (i) a reemployed annuitant under subchapter III of chapter 
     83 or chapter 84 of title 5, United States Code, or another 
     retirement system for employees of the Federal Government;
       (ii) an employee having a disability on the basis of which 
     such employee is eligible for disability retirement under the 
     applicable retirement system referred to in clause (i);
       (iii) an employee who is in receipt of a specific notice of 
     involuntary separation for misconduct or performance;
       (iv) an employee who has accepted a final offer of a 
     voluntary separation incentive payment, payable upon 
     completion of an additional period of service as referred to 
     in section 3(b)(2)(B)(ii) of the Federal Workforce 
     Restructuring Act of 1994 (Public Law 103-226; 108 Stat. 
     111);
       (v) an employee who previously has received any voluntary 
     separation incentive payment by the Federal Government under 
     this Act or any other authority and has not repaid such 
     payment; or
       (vi) an employee covered by statutory reemployment rights 
     who is on transfer to another organization.
       (3) ``Secretary'' means the Secretary of Veterans Affairs.

     SEC. 3. DEPARTMENT PLANS; APPROVAL.

       (a) If the Secretary determines that, in order to improve 
     the efficiency of operations or to meet actual or anticipated 
     levels of budgetary or staffing resources, the number of 
     employees employed by the Department must be reduced, the 
     Secretary may submit a plan to the Director of the Office of 
     Management and Budget to pay voluntary separation incentives 
     under this Act to employees of the Department who agree to 
     separate from the Department by retirement or resignation. 
     The plan shall specify the planned employment reductions and 
     the manner in which such reductions will improve operating 
     efficiency or meet actual or anticipated levels of budget or 
     staffing resources. The plan shall include a proposed period 
     of time for the payment of voluntary separation incentives by 
     the Department and a proposed coverage for offers of 
     incentives to Department employees, targeting positions in 
     accordance with the Department's strategic alignment plan and 
     downsizing initiatives. The proposed coverage may be based 
     on--
       (1) any component of the Department;
       (2) any occupation, occupation level or type of position;
       (3) any geographic location; or
       (4) any appropriate combination of the factors in 
     paragraphs (1), (2), and (3).
       (b) The Director of the Office of Management and Budget 
     shall approve or disapprove each plan submitted under 
     subsection (a),

[[Page S11554]]

     and may make appropriate modifications to the plan with 
     respect to the time period in which voluntary separation 
     incentives may be paid or with respect to the coverage of 
     incentives on the basis of the factors in subsection (a) (1) 
     through (4).

     SEC. 4. VOLUNTARY SEPARATION INCENTIVE PAYMENTS.

       (a) In order to receive a voluntary separation incentive 
     payment, an employee must separate from service with the 
     Department voluntarily (whether by retirement or resignation) 
     during the period of time for which the payment of incentives 
     has been authorized for the employee under the Department 
     plan under section 3.
       (b) A voluntary separation incentive payment--
       (1) shall be paid in a lump sum at the time of the 
     employee's separation:
       (2) shall be equal to the lesser of--
       (A) an amount equal to the amount the employee would be 
     entitled to receive under section 5595(c) of title 5, United 
     States Code (without adjustment for any previous payment made 
     under that section), if the employee were entitled to payment 
     under that section; if the employee were entitled to payment 
     under that action; or
       (B) if the employee separates--
       (i) during fiscal year 1996 or 1997, $25,000;
       (ii) during fiscal year 1998, $20,000;
       (iii) during fiscal year 1999, $15,000;
       (iv) during fiscal year 2000, $10,000;
       (3) shall not be a basis for payment, and shall not be 
     included in the computation, of any other type of Government 
     benefit, except that this paragraph shall not apply to 
     unemployment compensation funded in whole or in part with 
     Federal funds;
       (4) shall not be taken into account in determining the 
     amount of severance pay to which an employee may be entitled 
     under section 5595 of title 5, United States Code, based on 
     any other separation; and
       (5) shall be paid from the appropriations or funds 
     available for payment of the basic pay of the employee.

     SEC. 5. EFFECT OF SUBSEQUENT EMPLOYMENT WITH THE GOVERNMENT.

       (a) An individual who has received a voluntary separation 
     incentive payment under this Act and accepts any employment 
     with the Government of the United States within 5 years after 
     the date of the separation on which the payment is based 
     shall be required to repay, prior to the individual's first 
     day of employment, the entire amount of the incentive payment 
     to the Department.
       (b)(1) If the employment under subsection (a) is with an 
     Executive agency (as defined by section 105 of title 5, 
     United States Code), the United States Postal Service, or the 
     Postal Rate Commission, the Director of the Office of 
     personnel Management may, at the request of the head of the 
     agency, waive the repayment if the individual involved 
     possesses unique abilities and is the only qualified 
     applicant available for the position.
       (2) If the employment under subsection (a) 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.
       (3) If the employment under subsection (a) is with the 
     judicial branch, the Director of the Administrative Office of 
     the United States Courts may waive the repayment if the 
     individual involved possesses unique abilities and is the 
     only qualified applicant available for the position.
       (c) For the purpose of this section, the term 
     ``employment''--
       (1) includes employment of any length or under any type of 
     appointment, but does not include employment that is without 
     compensation; and
       (2) includes employment under a personal services contract, 
     as defined by the Director of the Office of Personnel 
     Management.

     SEC. 6. ADDITIONAL AGENCY CONTRIBUTIONS TO THE RETIREMENT 
                   FUND.

       (a) In addition to any other payments which it is required 
     to make under subchapter III of chapter 83 or chapter 84 of 
     title 5, United States Code, the Department shall remit to 
     the Office of Personnel Management for deposit in the 
     Treasury of the United States to the credit of the Civil 
     Service Retirement and Disability Fund an amount equal to 15 
     percent of the final basic pay of each employee of the 
     Department who is covered under subchapter III of chapter 83 
     or chapter 84 of title 5 to whom a voluntary separation 
     incentive has been paid under this Act.
       (b) For the purpose of this section, the term ``final basic 
     pay'', with respect to an employee, means the total amount of 
     basic pay that would be payable for a year of service by that 
     employee, computed using the employee's final rate of basic 
     pay, and, if last serving on other than a full-time basis, 
     with appropriate adjustment therefor.

     SEC. 7. REDUCTION OF AGENCY EMPLOYMENT LEVELS.

       (a) Total full-time equivalent employment in the Department 
     shall be reduced by one for each separation of an employee 
     who receives a voluntary separation incentive payment under 
     this Act. The reduction will be calculated by comparing the 
     Department's full-time equivalent employment for the fiscal 
     year in which the voluntary separation payments are made with 
     the actual full-time equivalent employment for the prior 
     fiscal year.
       (b) The Office of Management and Budget shall monitor the 
     Department and take any action necessary to ensure that the 
     requirements of this section are met.
       (c) Subsection (a) of this section may be waived upon a 
     determination by the President that--
       (1) the existence of a state of war or other national 
     emergency so requires; or
       (2) the existence of an extraordinary emergency which 
     threatens life, health, safety, property, or the environment 
     so requires.

     SEC. 8. REPORTS.

       (a) The Department, for each applicable quarter of each 
     fiscal year and not later than 30 days after the date of such 
     quarter, shall submit to the Office of Personnel Management a 
     report stating--
       (1) the number of employees who receive voluntary 
     separation incentives for each type of separation involved;
       (2) the average amount of the incentives paid;
       (3) the average grade or pay level of the employees who 
     received incentives; and
       (4) such other information as the Office may require.
       (b) No later than March 31st of each fiscal year, the 
     Office of Personnel Management shall submit to the Committee 
     on Governmental Affairs of the Senate and the Committee on 
     Government Reform and Oversight of the House of 
     Representatives a report which, with respect to the preceding 
     fiscal year, shall include--
       (1) the number of employees who received voluntary 
     separation incentives;
       (2) the average amount of such incentives;
       (3) the average grade or pay level of the employees who 
     received incentives; and
       (4) the number of waivers made under section 5 of this Act 
     in the repayment of voluntary separation incentives, and for 
     each such waiver--
       (A) the reasons for the waiver; and
       (B) the title and grade or pay level of the position filled 
     by each employee to whom the waiver applied.

     SEC. 9. VOLUNTARY PARTICIPATION IN REDUCTIONS IN FORCE.

       Section 3502(f) of title 5, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``, the Secretary of 
     Veterans Affairs,'' after ``Defense'';
       (2) in paragraph (3), by inserting ``, the Department of 
     Veterans Affairs,'' after ``Defense'';
       (3) by striking paragraph (4); and
       (4) by redesignating paragraph (5) as paragraph (4); and
       (5) by amending such paragraph (4), as so redesignated, by 
     striking ``1996'' and inserting ``2000'' in lieu thereof.

     SEC. 10. CONTINUED HEALTH INSURANCE COVERAGE.

       Section 8905a(d)(4) of title 5, United States Code, is 
     amended--
       (1) in subparagraph (A) by striking ``in or under the 
     Department of Defense'';
       (2) in subparagraph (B)--
       (A) by striking ``1999'' in clause (i) and (ii) and 
     inserting ``2000''; and
       (B) by striking ``2000'' in clause (ii) and inserting 
     ``2001''; and
       (3) in subparagraph (C) by inserting ``by the agency'' 
     after ``identified''.

     SEC. 11. REGULATIONS.

       The Director of the Office of Personnel Management may 
     prescribe any regulations necessary to administer the 
     provisions of this Act.

     SEC. 12. LIMITATION; SAVINGS CLAUSE.

       (a) No voluntary separation incentive under this Act may be 
     paid based on the separation of an employee after September 
     30, 2000;
       (b) This Act supplements and does not supersede other 
     authority of the Secretary of Veterans Affairs.
                                                                    ____


                         Analysis of Draft Bill

       The first section provides a title for the bill, the 
     ``Department of Veterans Affairs Employment Reduction 
     Assistance Act of 1996.''
       Section 2 provide definitions of ``Department'', 
     ``employee'', and ``Secretary.'' Among the provisions, an 
     employee who has received any previous voluntary separation 
     incentive from the Federal Government and has not repaid the 
     incentive is excluded from any incentives under this Act.
       Section 3 provides that, when the VA Secretary determines 
     that employment in the agency must be reduced in order to 
     improve operating efficiency or meet anticipated budget or 
     staffing levels, the Secretary may submit a plan to the 
     Director of the Office of Management and Budget for payment 
     of voluntary separation incentives to Department employees. 
     The plan must specify the manner in which the planned 
     employment reductions will improve efficiency or meet budget 
     or staffing levels. The plan must also include a proposed 
     time period for payment of separation incentives, and a 
     proposed coverage for offers of incentives to Department 
     employees, targeting positions in accordance with VA's 
     strategic alignment plan. Coverage may be on the basis of any 
     component of the Department, any occupation or levels of an 
     occupation, any geographic location, or any appropriate 
     combination of these factors. The Director of the Office of 
     Management and Budget shall approve or disapprove each plan 
     submitted, and may modify the plan with respect to the time 
     period for incentives or the coverage of incentive offers.
       Section 4 provides that in order to receive a voluntary 
     separation incentive, an employee covered by an offer of 
     incentives must

[[Page S11555]]

     separate from service with the agency (whether by retirement 
     or resignation) within the time period specified in the 
     agency's plan as approved. For an employee who separates, the 
     voluntary separation incentive is an amount equal to the 
     lesser of the amount that the employee's severance pay would 
     be if the employee were entitled to severance pay under 
     section 5595 of title 5, United States Code (without 
     adjustment for any previous severance pay), or whichever of 
     the following amounts is applicable based on the date of 
     separation: $25,000 during fiscal year 1996 or 1997; $20,000 
     during fiscal year 1998; $15,000 during fiscal year 1999; 
     or $10,000 during fiscal year 2000. These reductions in 
     incentive amount for each year an employee delays 
     separation would encourage eligible employees to take the 
     incentive at an earlier point.
       Section 5 provides that any employee who receives a 
     voluntary separation incentive under this Act and then 
     accepts any employment with the Government within 5 years 
     after separating must, prior to the first day of such 
     employment, repay the entire amount of the incentive to the 
     agency that paid the incentive. If the subsequent employment 
     is with the Executive branch, including the United States 
     Postal Service, the Director of the Office of Personnel 
     Management may waive the repayment at the request of the 
     agency head if the individual possesses unique abilities and 
     is the only qualified applicant available for the position. 
     For subsequent employment in the legislative branch, the head 
     of the entity or the appointing official may waive repayment 
     on the same basis. If the subsequent employment is in the 
     judicial branch, the Director of the Administrative Office of 
     the United States Courts may waive repayment on the same 
     criteria. For the purpose of the repayment and waiver 
     provisions, employment includes employment under a personal 
     services contract, as defined by the Director of the Office 
     of Personnel Management.
       Section 6 requires additional agency contributions to the 
     Civil Service Retirement and Disability Fund in amounts equal 
     to 15 percent of the final basic pay of each employee of the 
     Department who is covered by the Civil Service Retirement 
     System to whom a voluntary separation incentive is paid under 
     this Act.
       Section 7 provides that full-time equivalent employment 
     (FTEE) in the Department will be reduced by one for each 
     separation of an employee who receives a voluntary separation 
     incentive under this Act, and directs the Office of 
     Management and Budget to take any action necessary to ensure 
     compliance. Reductions will be calculated by using the 
     Department's actual FTEE levels. For example, if the 
     Department's FTEE usage in FY 1996 is 1,050 FTEEs, and 50 
     FTEEs separate during FY 1997 using voluntary separation 
     incentive payments provided under this Act, then 
     the Department's staffing levels at the end of FY 1997 
     shall not exceed 1,000 FTEEs. The President may waive the 
     reduction in FTEE in the event of war or emergency.
       Section 8 requires the Department to report to the Office 
     of Personnel Management (OPM) on a quarterly basis: the 
     number of employees receiving incentive payments for each 
     type of separation; the average amount of incentive payments; 
     the average grade or pay of employees receiving incentive 
     payments; and other information OPM may require. This section 
     also requires the Office of Personnel Management to report by 
     March 31st of each year to the Senate Committee on 
     Governmental Affairs and the House Committee on Government 
     Reform and Oversight concerning the Department's use of 
     voluntary separation incentives in the previous fiscal year. 
     The report must show the number of employees who received 
     incentives, the average amount of the incentives, and the 
     average grade or pay level of the employees who received 
     incentives. The report must also include the number of 
     waivers made under the provisions of section 5 in the 
     repayment of incentives upon subsequent employment with the 
     Government, the reasons for each waiver, and the title and 
     grade or pay level of each employee to whom the waiver 
     applied.
       Section 9 amends section 3502(f) of title 5 to authorize 
     the Secretary to allow an employee to volunteer for 
     separation in a reduction-in-force when this will result in 
     retaining an employee in a similar position who would 
     otherwise be released in the reduction-in-force. Section 9 
     also changes section 3502(f)'s sunset date from 1996 to 2000.
       Section 10 amends section 8905a(d)(4) to provide that 
     employees who are involuntarily separated in a reduction in 
     force, or who voluntarily separate from a surplus position 
     that has been specifically identified for elimination in the 
     reduction in force, can continue health benefits coverage for 
     18 months and be required to pay only the employee's share of 
     the premium. Section 10 also extends section 8905a(d)(4) 
     sunset provisions.
       Section 11 provides that the Director of OPM may prescribe 
     any regulations necessary to administer the provisions of the 
     Act.
       Section 12 provides that no voluntary separation incentive 
     under the Act may be paid based on the separation of an 
     employee after September 30, 2000, and that the Act 
     supplements and does not supersede other authority of the 
     Secretary.
                                                                    ____



                                Secretary of Veterans Affairs,

                               Washington, DC, September 11, 1996.
     Hon. Albert Gore, Jr.,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: We are submitting a draft bill 
     ``Department of Veterans Affairs Employment Reduction 
     Assistance Act of 1996.'' We request that it be referred to 
     the appropriate committee for prompt consideration and 
     enactment.
       In the next several years, VA will undergo dramatic change. 
     VA believes that separation incentives can be an appropriate 
     tool for those VA components that are redesigning their 
     employment mix when the use of incentives is property related 
     to the specific changes that are needed within those 
     components and thus will reshape the agency for the future. 
     They can also be an invaluable tool for components that are 
     restructuring and reengineering, such as the Veterans Health 
     Administration and the Veterans Benefits Administration, as 
     they move towards primary care and new methods of delivering 
     services to veterans. Further, it is vital to provide for 
     consistent administration of any incentive programs that 
     prove necessary for different components, and to 
     appropriately limit the time period for any incentive offers.
       This initiative is based on VA's experience with voluntary 
     separation incentives under the Federal Workforce 
     Restructuring Act of 1994. The Restructuring Act provided 
     Federal civilian agencies, including VA, with authority to 
     offer voluntary separation incentives for a 1-year period 
     that ended March 31, 1995. VA generally used these incentives 
     successfully to help avoid involuntary separations and to 
     achieve reductions in administrative overhead and supervisory 
     positions, and the Restructuring Act provided a useful 
     framework for consistent administration of incentive 
     programs in many different VA components.
       This proposal would provide an overall system for the 
     limited use of voluntary separation incentives by VA. When 
     the Secretary determines that employment in particular 
     organizations must be reduced in order to meet restructuring 
     goals, the Secretary may submit a plan to the Director of the 
     Office of Management and Budget for payment of voluntary 
     separation incentives to Department employees. The plan must 
     specify how the planned employment reductions will improve 
     efficiency or meet budget or staffing levels. The plan must 
     also include a proposed time period for payment of 
     incentives, and a proposed coverage for offers of incentives 
     to agency employees on the needed organizational, 
     occupational, or geographic basis, targeting positions in 
     accordance with VA's strategic alignment plan. The Director 
     of the Office of Management and Budget would approve or 
     disapprove each plan submitted, and would have authority to 
     modify the time period for incentives or coverage of 
     incentive offers. We believe that these provisions for plan 
     approval will ensure that separation incentives are 
     appropriately targeted within the Department in view of the 
     specific cuts that are needed, and are offered on a timely 
     basis. Although the Department's full-time equivalent 
     employment would be reduced by one for each employee of the 
     Department who receives an incentive, we believe that service 
     to veterans will improve as a result of the reengineering 
     that is happening simultaneously within the system.
       The authority for separation incentives would be in effect 
     for the period starting with the enactment of this Act and 
     ending September 30, 2000. The amount of an employee's 
     incentive would be the lesser of the amount that the 
     employee's severance pay would be, or whichever of the 
     following amounts is applicable based on the year of 
     separation in accordance with the agency plan; for employees 
     who retire, $25,000 during fiscal year 1996 or 1997, 
     $20,000 during fiscal year 1998, $15,000 during fiscal 
     year 1999, and $10,000 during fiscal year 2000.
       These reductions in the incentive amount for each year an 
     employee delays separation would encourage employees to take 
     the incentives during the first year of eligibility. An 
     employee who receives an incentive and then accepts any 
     employment with the Government within 5 years after 
     separating must, prior to the first day of employment, repay 
     the entire amount of the entire amount of the incentive. The 
     repayment requirement could be waived only under very 
     stringent circumstances of agency need.
       In order to further assist VA components in making needed 
     changes, the bill would authorize VA, under appropriate 
     conditions, to allow an employee to volunteer for separation 
     in a reduction-in-force when this will prevent the 
     involuntary separation of an employee in a similar position. 
     In addition, in order to minimize the impact of reduction-in-
     force actions on employees, the bill provides that employees 
     who are involuntarily separated in reductions-in-force can 
     continue their health insurance coverage for 18 months while 
     continuing to pay only the premium that would apply to a 
     current employee.
       This proposal would provide a very useful tool to assist in 
     reorganizing VA and reengineering services provided to 
     veterans, quickly, effectively, and humanely. We also believe 
     that it is a tool that will allow significant cost savings. 
     If the proposal is enacted, we will report, on an annual 
     basis, cost savings associated with separation incentives as 
     well as where such funds have been redirected to improve the 
     provision of services to veterans.
                                 ______