[Congressional Record Volume 150, Number 130 (Monday, October 11, 2004)]
[Senate]
[Pages S11263-S11267]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               FEDERAL WORKFORCE FLEXIBILITY ACT OF 2004

  Mr. SESSIONS. Mr. President, I ask the Chair lay before the Senate a 
message from the House of Representatives on the bill (S. 129) to 
provide for reform relating to Federal employment, and for other 
purposes.

[[Page S11264]]

  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

                                 S. 129

       Resolved, That the bill from the Senate (S. 129) entitled 
     ``An Act to provide for reform relating to Federal 
     employment, and for other purposes'', do pass with the 
     following amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Federal 
     Workforce Flexibility Act of 2004''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.

     TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT

Sec. 101. Recruitment, relocation, and retention bonuses.
Sec. 102. Streamlined critical pay authority.

 TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND 
                                BENEFITS

Sec. 201. Agency training.
Sec. 202. Annual leave enhancements.
Sec. 203. Compensatory time off for travel.

          TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION

Sec. 301. Corrections relating to pay administration.
Sec. 302. Technical corrections.

     TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT

     SEC. 101. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.

       (a) Bonuses.--
       (1) In general.--Chapter 57 of title 5, United States Code, 
     is amended by striking sections 5753 and 5754 and inserting 
     the following:

     ``Sec. 5753. Recruitment and relocation bonuses

       ``(a)(1) This section may be applied to--
       ``(A) employees covered by the General Schedule pay system 
     established under subchapter III of chapter 53; and
       ``(B) employees in a category approved by the Office of 
     Personnel Management at the request of the head of an 
     Executive agency.
       ``(2) A bonus may not be paid under this section to an 
     individual who is appointed to or who holds--
       ``(A) a position to which an individual is appointed by the 
     President, by and with the advice and consent of the Senate;
       ``(B) a position in the Senior Executive Service as a 
     noncareer appointee (as such term is defined under section 
     3132(a)); or
       ``(C) a position which has been excepted from the 
     competitive service by reason of its confidential, policy-
     determining, policy-making, or policy-advocating character.
       ``(3) In this section, the term `employee' has the meaning 
     given that term in section 2105, except that such term also 
     includes an employee described in subsection (c) of that 
     section.
       ``(b) The Office of Personnel Management may authorize the 
     head of an agency to pay a bonus under this section to an 
     individual only if--
       ``(1) the position to which such individual is appointed 
     (as described in paragraph (2)(A)) or to which such 
     individual moves or must relocate (as described in paragraph 
     (2)(B)) is likely to be difficult to fill in the absence of 
     such a bonus; and
       ``(2) the individual--
       ``(A) is newly appointed as an employee of the Federal 
     Government; or
       ``(B)(i) is currently employed by the Federal Government; 
     and
       ``(ii)(I) moves to a new position in the same geographic 
     area under circumstances described in regulations of the 
     Office; or
       ``(II) must relocate to accept a position in a different 
     geographic area.
       ``(c)(1) Payment of a bonus under this section shall be 
     contingent upon the employee entering into a written service 
     agreement to complete a period of employment with the agency, 
     not longer than 4 years. The Office may, by regulation, 
     prescribe a minimum service period for purposes of this 
     section.
       ``(2)(A) The agreement shall include--
       ``(i) the commencement and termination dates of the 
     required service period (or provisions for the determination 
     thereof);
       ``(ii) the amount of the bonus;
       ``(iii) the method of payment; and
       ``(iv) other terms and conditions under which the bonus is 
     payable, subject to the requirements of this section and 
     regulations of the Office.
       ``(B) The terms and conditions for paying a bonus, as 
     specified in the service agreement, shall include--
       ``(i) the conditions under which the agreement may be 
     terminated before the agreed-upon service period has been 
     completed; and
       ``(ii) the effect of the termination.
       ``(C) The required service period shall commence upon the 
     commencement of service with the agency or movement to a new 
     position or geographic area, as applicable, unless the 
     service agreement provides for a later commencement date in 
     circumstances and to the extent allowable under regulations 
     of the Office, such as when there is an initial period of 
     formal basic training.
       ``(d)(1) Except as provided in subsection (e), a bonus 
     under this section shall not exceed 25 percent of the annual 
     rate of basic pay of the employee at the beginning of the 
     service period multiplied by the number of years (including a 
     fractional part of a year, as determined under regulations of 
     the Office) in the required service period of the employee 
     involved.
       ``(2) A bonus under this section may be paid as an initial 
     lump sum, in installments, as a final lump sum upon the 
     completion of the full period of service required by the 
     agreement, or in a combination of these forms of payment.
       ``(3) A bonus under this section is not part of the basic 
     pay of an employee for any purpose.
       ``(4) Under regulations of the Office, a recruitment bonus 
     under this section may be paid to an eligible individual 
     before that individual enters on duty.
       ``(e) The Office may authorize the head of an agency to 
     waive the limitation under subsection (d)(1) based on a 
     critical agency need, subject to regulations prescribed by 
     the Office. Under such a waiver, the maximum bonus allowable 
     shall--
       ``(1) be equal to the maximum that would be determined if 
     subsection (d)(1) were applied by substituting `50' for `25'; 
     but
       ``(2) in no event exceed 100 percent of the annual rate of 
     basic pay of the employee at the beginning of the service 
     period.

     Nothing in this subsection shall be considered to permit the 
     waiver of any requirement under subsection (c).
       ``(f) The Office shall require that an agency establish a 
     plan for the payment of recruitment bonuses before paying any 
     such bonuses, and a plan for the payment of relocation 
     bonuses before paying any such bonuses, subject to 
     regulations prescribed by the Office.
       ``(g) The Office may prescribe regulations to carry out 
     this section, including regulations relating to the repayment 
     of a bonus under this section in appropriate circumstances 
     when the agreed-upon service period has not been completed.

     ``Sec. 5754. Retention bonuses

       ``(a)(1) This section may be applied to--
       ``(A) employees covered by the General Schedule pay system 
     established under subchapter III of chapter 53; and
       ``(B) employees in a category approved by the Office of 
     Personnel Management at the request of the head of an 
     Executive agency.
       ``(2) A bonus may not be paid under this section to an 
     individual who is appointed to or who holds--
       ``(A) a position to which an individual is appointed by the 
     President, by and with the advice and consent of the Senate;
       ``(B) a position in the Senior Executive Service as a 
     noncareer appointee (as such term is defined under section 
     3132(a)); or
       ``(C) a position which has been excepted from the 
     competitive service by reason of its confidential, policy-
     determining, policy-making, or policy-advocating character.
       ``(3) In this section, the term `employee' has the meaning 
     given that term in section 2105, except that such term also 
     includes an employee described in subsection (c) of that 
     section.
       ``(b) The Office of Personnel Management may authorize the 
     head of an agency to pay a retention bonus to an employee 
     if--
       ``(1) the unusually high or unique qualifications of the 
     employee or a special need of the agency for the employee's 
     services makes it essential to retain the employee; and
       ``(2) the agency determines that, in the absence of a 
     retention bonus, the employee would be likely to leave--
       ``(A) the Federal service; or
       ``(B) for a different position in the Federal service under 
     conditions described in regulations of the Office.
       ``(c) The Office may authorize the head of an agency to pay 
     retention bonuses to a group of employees in 1 or more 
     categories of positions in 1 or more geographic areas, 
     subject to the requirements of subsection (b)(1) and 
     regulations prescribed by the Office, if there is a high risk 
     that a significant portion of employees in the group would be 
     likely to leave in the absence of retention bonuses.
       ``(d)(1) Payment of a retention bonus is contingent upon 
     the employee entering into a written service agreement with 
     the agency to complete a period of employment with the 
     agency.
       ``(2)(A) The agreement shall include--
       ``(i) the length of the required service period;
       ``(ii) the amount of the bonus;
       ``(iii) the method of payment; and
       ``(iv) other terms and conditions under which the bonus is 
     payable, subject to the requirements of this section and 
     regulations of the Office.
       ``(B) The terms and conditions for paying a bonus, as 
     specified in the service agreement, shall include--
       ``(i) the conditions under which the agreement may be 
     terminated before the agreed-upon service period has been 
     completed; and
       ``(ii) the effect of the termination.
       ``(3)(A) Notwithstanding paragraph (1), a written service 
     agreement is not required if the agency pays a retention 
     bonus in biweekly installments and sets the installment 
     payment at the full bonus percentage rate established for the 
     employee with no portion of the bonus deferred.
       ``(B) If an agency pays a retention bonus in accordance 
     with subparagraph (A) and makes a determination to terminate 
     the payments, the agency shall provide written notice to the 
     employee of that determination. Except as provided in 
     regulations of the Office, the employee shall continue to be 
     paid the retention bonus through the end of the pay period in 
     which such written notice is provided.
       ``(4) A retention bonus for an employee may not be based on 
     any period of such service which is the basis for a 
     recruitment or relocation bonus under section 5753.
       ``(e)(1) Except as provided in subsection (f), a retention 
     bonus, which shall be stated as a percentage of the 
     employee's basic pay for the service period associated with 
     the bonus, may not exceed--
       ``(A) 25 percent of the employee's basic pay if paid under 
     subsection (b); or
       ``(B) 10 percent of an employee's basic pay if paid under 
     subsection (c).
       ``(2)(A) A retention bonus may be paid to an employee in 
     installments after completion of

[[Page S11265]]

     specified periods of service or in a single lump sum at the 
     end of the full period of service required by the agreement.
       ``(B) An installment payment is derived by multiplying the 
     amount of basic pay earned in the installment period by a 
     percentage not to exceed the bonus percentage rate 
     established for the employee.
       ``(C) If the installment payment percentage established for 
     the employee is less than the bonus percentage rate 
     established for the employee, the accrued but unpaid portion 
     of the bonus is payable as part of the final installment 
     payment to the employee after completion of the full service 
     period under the terms of the service agreement.
       ``(D) For purposes of this paragraph, the bonus percentage 
     rate established for an employee means the bonus percentage 
     rate established for such employee in accordance with 
     paragraph (1) or subsection (f), as the case may be.
       ``(3) A retention bonus is not part of the basic pay of an 
     employee for any purpose.
       ``(f) Upon the request of the head of an agency, the Office 
     may waive the limit established under subsection (e)(1) and 
     permit the agency head to pay an otherwise eligible employee 
     or category of employees retention bonuses of up to 50 
     percent of basic pay, based on a critical agency need.
       ``(g) The Office shall require that, before paying any 
     bonuses under this section, an agency shall establish a plan 
     for the payment of any such bonuses, subject to regulations 
     prescribed by the Office.
       ``(h) The Office may prescribe regulations to carry out 
     this section.''.
       (2) Clerical amendment.--The table of sections for chapter 
     57 of title 5, United States Code, is amended by striking the 
     item relating to section 5754 and inserting the following:

``5754. Retention bonuses.''.

       (3) Sense of congress.--It is the sense of the Congress 
     that the Director of the Office of Personnel Management--
       (A) should, each time a bonus is paid under the amendment 
     made by paragraph (1) to recruit or relocate a Federal 
     employee from one Government agency to another within the 
     same geographic area or to retain a Federal employee who 
     might otherwise leave one Government agency for another 
     within the same geographic area, be notified of that payment 
     within 60 days after the date on which such bonus is paid; 
     and
       (B) should monitor the payment of such bonuses (in the 
     circumstances described in subparagraph (A)) to ensure that 
     they are an effective use of the Federal Government's funds 
     and have not adversely affected the ability of those 
     Government agencies that lost employees to other Government 
     agencies (in such circumstances) to carry out their mission.
       (b) Relocation Payments.--Section 407 of the Federal 
     Employees Pay Comparability Act of 1990 (5 U.S.C. 5305 note; 
     104 Stat. 1467) is repealed.
       (c) Reports.--
       (1) Recruitment and relocation bonuses.--
       (A) In general.--The Office of Personnel Management shall 
     submit to the Committee on Governmental Affairs of the Senate 
     and the Committee on Government Reform of the House of 
     Representatives annually, for each of the first 5 years 
     during which section 5753 of title 5, United States Code (as 
     amended by subsection (a)(1)) is in effect, a report on the 
     operation of such section.
       (B) Contents.--Each report submitted under this paragraph 
     shall include, with respect to the period covered by such 
     report, a description of how the authority to pay bonuses 
     under the section of title 5, United States Code, referred to 
     in subparagraph (A) was used by the respective agencies, 
     including, with respect to each such agency and each type of 
     bonus under such section--
       (i) the number and dollar-amount of bonuses paid--

       (I) to individuals holding positions within each pay grade, 
     pay level, or other pay classification; and
       (II) if applicable, to individuals who moved between 
     positions that were in different agencies but the same 
     geographic area (including the names of the agencies 
     involved); and

       (ii) a determination of the extent to which such bonuses 
     furthered the purposes of such section.
       (2) Retention bonuses.--
       (A) In general.--The Office of Personnel Management shall 
     submit to the Committee on Governmental Affairs of the Senate 
     and the Committee on Government Reform of the House of 
     Representatives annually, for each of the first 5 years 
     during which section 5754 of title 5, United States Code (as 
     amended by subsection (a)(1)) is in effect, a report on the 
     operation of such section.
       (B) Contents.--Each report submitted under this paragraph 
     shall include, with respect to the period covered by such 
     report, a description of how the authority to pay bonuses 
     under the section of title 5, United States Code, referred to 
     in subparagraph (A) was used by the respective agencies, 
     including, with respect to each such agency--
       (i) the number and dollar-amount of bonuses paid--

       (I) to individuals holding positions within each pay grade, 
     pay level, or other pay classification; and
       (II) if applicable, to prevent individuals from moving 
     between positions that were in different agencies but the 
     same geographic area (including the names of the agencies 
     involved); and

       (ii) a determination of the extent to which such bonuses 
     furthered the purposes of such section.
       (d) Effective Date and Application.--
       (1) Effective date.--Except as provided under paragraphs 
     (2) and (3), this section shall take effect on the first day 
     of the first applicable pay period beginning on or after the 
     180th day after the date of the enactment of this Act.
       (2) Application to agreements.--A recruitment or relocation 
     bonus service agreement that was authorized under section 
     5753 of title 5, United States Code, before the effective 
     date under paragraph (1) shall continue, until its 
     expiration, to be subject to such section as in effect on the 
     day before such effective date.
       (3) Application to allowances.--Payment of a retention 
     allowance that was authorized under section 5754 of title 5, 
     United States Code, before the effective date under paragraph 
     (1) shall continue, subject to such section as in effect on 
     the day before such effective date, until the retention 
     allowance is reauthorized or terminated (but no longer than 1 
     year after such effective date).

     SEC. 102. STREAMLINED CRITICAL PAY AUTHORITY.

       Section 5377 of title 5, United States Code, is amended--
       (1) by striking ``Office of Personnel Management'' each 
     place it appears and inserting ``Office of Management and 
     Budget'';
       (2) by striking ``Office of Management and Budget'' each 
     place it appears and inserting ``Office of Personnel 
     Management'';
       (3) in subsection (g), by striking ``prescribing 
     regulations under this section or''; and
       (4) in subsection (h), by striking ``Committee on Post 
     Office and Civil Service'' and inserting ``Committee on 
     Government Reform''.

 TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND 
                                BENEFITS

     SEC. 201. AGENCY TRAINING.

       (a) Training To Accomplish Performance Plans and Strategic 
     Goals.--Section 4103 of title 5, United States Code, is 
     amended by adding at the end the following:
       ``(c) The head of each agency shall, on a regular basis--
       ``(1) evaluate each program or plan established, operated, 
     or maintained under subsection (a) with respect to 
     accomplishing specific performance plans and strategic goals 
     in performing the agency mission; and
       ``(2) modify such program or plan as needed to accomplish 
     such plans and goals.''.
       (b) Specific Training Programs.--
       (1) In general.--Chapter 41 of title 5, United States Code, 
     is amended by adding after section 4120 the following:

     ``Sec. 4121. Specific training programs

       ``In consultation with the Office of Personnel Management, 
     the head of each agency shall establish--
       ``(1) a comprehensive management succession program to 
     provide training to employees to develop managers for the 
     agency; and
       ``(2) a program to provide training to managers on actions, 
     options, and strategies a manager may use in--
       ``(A) relating to employees with unacceptable performance;
       ``(B) mentoring employees and improving employee 
     performance and productivity; and
       ``(C) conducting employee performance appraisals.''.
       (2) Clerical amendment.--The table of sections for chapter 
     41 of title 5, United States Code, is amended by adding at 
     the end the following:

``4121. Specific training programs.''.

     SEC. 202. ANNUAL LEAVE ENHANCEMENTS.

       (a) Creditability of Prior Nongovernmental Service for 
     Purposes of Determining Rate of Leave Accrual.--
       (1) In general.--Section 6303 of title 5, United States 
     Code, is amended by adding at the end the following:
       ``(e)(1) Not later than 180 days after the date of the 
     enactment of this subsection, the Office of Personnel 
     Management shall prescribe regulations under which, for 
     purposes of determining years of service under subsection 
     (a), credit shall, in the case of a newly appointed employee, 
     be given for any prior service of such employee that would 
     not otherwise be creditable for such purposes, if--
       ``(A) such service--
       ``(i) was performed in a position the duties of which 
     directly relate to the duties of the position to which such 
     employee is so appointed; and
       ``(ii) meets such other requirements as the Office may 
     prescribe; and
       ``(B) in the judgment of the head of the appointing agency, 
     the application of this subsection is necessary in order to 
     achieve an important agency mission or performance goal.
       ``(2) Service described in paragraph (1)--
       ``(A) shall be creditable, for the purposes described in 
     paragraph (1), as of the effective date of the employee's 
     appointment; and
       ``(B) shall not thereafter cease to be so creditable, 
     unless the employee fails to complete a full year of 
     continuous service with the agency.
       ``(3) An employee shall not be eligible for the application 
     of paragraph (1) on the basis of any appointment if, within 
     90 days before the effective date of such appointment, such 
     employee has held any position in the civil service.''.
       (2) Conforming amendment.--The second sentence of section 
     6303(a) of title 5, United States Code, is amended by 
     striking the period and inserting ``, and for all service 
     which is creditable by virtue of subsection (e).''.
       (b) Other Annual Leave Enhancements.--Section 6303 of title 
     5, United States Code, is amended by adding after subsection 
     (e) (as added by subsection (a)) the following:
       ``(f) Notwithstanding any other provision of this section, 
     the rate of accrual of annual leave under subsection (a) 
     shall be 1 day for each full biweekly pay period in the case 
     of any employee who holds a position which is subject to--
       ``(1) section 5376 or 5383; or
       ``(2) a pay system equivalent to either of the foregoing, 
     as determined by the Office of Personnel Management.''.

[[Page S11266]]

       (c) Applicability.--None of the amendments made by 
     subsection (a) shall apply in the case of any employee 
     holding a position pursuant to an appointment made before the 
     effective date of the regulations implementing such 
     amendments.

     SEC. 203. COMPENSATORY TIME OFF FOR TRAVEL.

       (a) In General.--Subchapter V of chapter 55 of title 5, 
     United States Code, is amended by adding at end the 
     following:

     ``Sec. 5550b. Compensatory time off for travel

       ``(a) Notwithstanding section 5542(b)(2), each hour spent 
     by an employee in travel status away from the official duty 
     station of the employee, that is not otherwise compensable, 
     shall be treated as an hour of work or employment for 
     purposes of calculating compensatory time off.
       ``(b) An employee who has any hours treated as hours of 
     work or employment for purposes of calculating compensatory 
     time under subsection (a), shall not be entitled to payment 
     for any such hours that are unused as compensatory time.''.
       (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 5550a the following:

``5550b. Compensatory time off for travel.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the earlier of--
       (1) the effective date of any regulations prescribed to 
     carry out such amendments; or
       (2) the 90th day after the date of the enactment of this 
     Act.

          TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION

     SEC. 301. CORRECTIONS RELATING TO PAY ADMINISTRATION.

       (a) In General.--Chapter 53 of title 5, United States Code, 
     is amended--
       (1) in section 5302, by striking paragraph (8) and 
     inserting the following:
       ``(8) the term `rates of pay under the General Schedule', 
     `rates of pay for the General Schedule', or `scheduled rates 
     of basic pay' means the rates of basic pay under the General 
     Schedule as established by section 5332, excluding pay under 
     section 5304 and any other additional pay of any kind; and'';
       (2) in section 5305--
       (A) by striking subsection (a) and inserting the following:
       ``(a)(1) Whenever the Office of Personnel Management finds 
     that the Government's recruitment or retention efforts with 
     respect to 1 or more occupations in 1 or more areas or 
     locations are, or are likely to become, significantly 
     handicapped due to any of the circumstances described in 
     subsection (b), the Office may establish for the areas or 
     locations involved, with respect to individuals in positions 
     paid under any of the pay systems referred to in subsection 
     (c), higher minimum rates of pay for 1 or more grades or 
     levels, occupational groups, series, classes, or subdivisions 
     thereof, and may make corresponding increases in all rates of 
     the pay range for each such grade or level. However, a 
     minimum rate so established may not exceed the maximum rate 
     of basic pay (excluding any locality-based comparability 
     payment under section 5304 or similar provision of law) for 
     the grade or level by more than 30 percent, and no rate may 
     be established under this section in excess of the rate of 
     basic pay payable for level IV of the Executive Schedule. In 
     the case of individuals not subject to the provisions of this 
     title governing appointment in the competitive service, the 
     President may designate another agency to authorize special 
     rates under this section.
       ``(2) The head of an agency may determine that a category 
     of employees of the agency will not be covered by a special 
     rate authorization established under this section. The head 
     of an agency shall provide written notice to the Office of 
     Personnel Management (or other agency designated by the 
     President to authorize special rates under the last sentence 
     of paragraph (1)) which identifies the specific category or 
     categories of employees that will not be covered by special 
     rates authorized under this section. If the head of an agency 
     removes a category of employees from coverage under a special 
     rate authorization after that authorization takes effect, the 
     loss of coverage will take effect on the first day of the 
     first pay period after the date of the notice.'';
       (B) in subsection (b), by striking paragraph (4) and 
     inserting the following:
       ``(4) any other circumstances which the Office of Personnel 
     Management (or such other agency as the President may under 
     the last sentence of subsection (a)(1) designate) considers 
     appropriate.'';
       (C) in subsection (d)--
       (i) by striking ``President'' and inserting ``Office of 
     Personnel Management''; and
       (ii) by striking ``or by such agency as he may designate'' 
     and inserting ``(or by such other agency as the President may 
     designate under the last sentence of subsection (a)(1))'';
       (D) in subsection (e), by striking ``basic pay'' and 
     inserting ``pay'';
       (E) by striking subsection (f) and inserting the following:
       ``(f) When a schedule of special rates established under 
     this section is adjusted under subsection (d), a covered 
     employee's special rate will be adjusted in accordance with 
     conversion rules prescribed by the Office of Personnel 
     Management (or by such other agency as the President may 
     under the last sentence of subsection (a)(1) designate).'';
       (F) in subsection (g)(1)--
       (i) by striking ``basic pay'' and inserting ``pay''; and
       (ii) by striking ``President (or his designated agency)'' 
     and inserting ``Office of Personnel Management (or such other 
     agency as the President may under the last sentence of 
     subsection (a)(1) designate)'';
       (G) by striking subsection (h) and inserting the following:
       ``(h) An employee shall not for any purpose be considered 
     to be entitled to a rate of pay established under this 
     section with respect to any period for which such employee is 
     entitled to a higher rate of basic pay under any other 
     provision of law. For purposes of this subsection, the term 
     `basic pay' includes any applicable locality-based 
     comparability payment under section 5304 or similar provision 
     of law.''; and
       (H) by adding at the end the following:
       ``(i) If an employee who is receiving a rate of pay under 
     this section becomes subject, by virtue of moving to a new 
     official duty station, to a different pay schedule, such 
     employee's new rate of pay shall be initially established 
     under conversion rules prescribed by the Office of Personnel 
     Management (or such other agency as the President may under 
     the last sentence of subsection (a)(1) designate) in 
     conformance with the following:
       ``(1) First, determine the rate of pay to which such 
     employee would be entitled at the new official duty station 
     based on such employee's position, grade, and step (or 
     relative position in the rate range) before the move.
       ``(2) Then, if (in addition to the change in pay schedule) 
     the move also involves any personnel action or other change 
     requiring a rate adjustment under any other provision of law, 
     rule, or regulation, apply the applicable rate adjustment 
     provisions, treating the rate determined under paragraph (1) 
     as if it were the rate last received by the employee before 
     the rate adjustment.
       ``(j) A rate determined under a schedule of special rates 
     established under this section shall be considered to be part 
     of basic pay for purposes of subchapter III of chapter 83, 
     chapter 84, chapter 87, subchapter V of chapter 55, and 
     section 5941, and for such other purposes as may be expressly 
     provided for by law or as the Office of Personnel Management 
     may by regulation prescribe.'';
       (3) in section 5334--
       (A) in subsection (b), by adding at the end the following:

     ``If an employee's rate after promotion or transfer is 
     greater than the maximum rate of basic pay for the employee's 
     grade, that rate shall be treated as a retained rate under 
     section 5363. The Office of Personnel Management shall 
     prescribe by regulation the circumstances under which and the 
     extent to which special rates under section 5305 (or similar 
     provision of law) or locality-adjusted rates under section 
     5304 (or similar provision of law) are considered to be basic 
     pay in applying this subsection.''; and
       (B) by adding at the end the following:
       ``(g) In the case of an employee who--
       ``(1) moves to a new official duty station, and
       ``(2) by virtue of such move, becomes subject to a 
     different pay schedule,

     any rate adjustment under the preceding provisions of this 
     section, with respect to such employee in connection with 
     such move, shall be made--
       ``(A) first, by determining the rate of pay to which such 
     employee would be entitled at the new official duty station 
     based on such employee's position, grade, and step (or 
     relative position in the rate range) before the move, and
       ``(B) then, by applying the provisions of this section that 
     would otherwise apply (if any), treating the rate determined 
     under subparagraph (A) as if it were the rate last received 
     by the employee before the rate adjustment.'';
       (4) in section 5361--
       (A) by amending paragraph (4) to read as follows:
       ``(4) `rate of basic pay' means--
       ``(A) the rate of basic pay payable to an employee under 
     law or regulations before any deductions or additions of any 
     kind, but including--
       ``(i) any applicable locality-based comparability payment 
     under section 5304 or similar provision of law;
       ``(ii) any applicable special pay under section 5305 or 
     similar provision of law; and
       ``(iii) subject to such regulations as the Office of 
     Personnel Management may prescribe, any applicable existing 
     retained rate of pay established under section 5363 or 
     similar provision of law; and
       ``(B) in the case of a prevailing rate employee, the 
     scheduled rate of pay determined under section 5343;'';
       (B) in paragraph (6), by striking ``and'' at the end;
       (C) in paragraph (7), by striking the period and 
     inserting``; and''; and
       (D) by adding at the end the following:
       ``(8) `retained rate' means the rate of basic pay to which 
     an employee is entitled under section 5363(b)(2).'';
       (5) in section 5363--
       (A) in subsection (a), by striking the matter following 
     paragraph (4) and inserting the following:

     ``is entitled to a rate of basic pay in accordance with 
     regulations prescribed by the Office of Personnel Management 
     in conformity with the provisions of this section.''; and
       (B) by striking subsections (b) and (c) and inserting the 
     following:
       ``(b)(1)(A) If, as a result of any event described in 
     subsection (a), the employee's former rate of basic pay is 
     less than or equal to the maximum rate of basic pay payable 
     for the grade of the employee's position immediately after 
     the occurrence of the event involved, the employee is 
     entitled to basic pay at the lowest rate of basic pay payable 
     for such grade that equals or exceeds such former rate of 
     basic pay.
       ``(B) This section shall cease to apply to an employee to 
     whom subparagraph (A) applies once the appropriate rate of 
     basic pay has been determined for such employee under this 
     paragraph.
       ``(2)(A) If, as a result of any event described in 
     subsection (a), the employee's former rate of

[[Page S11267]]

     basic pay is greater than the maximum rate of basic pay 
     payable for the grade of the employee's position immediately 
     after the occurrence of the event involved, the employee is 
     entitled to basic pay at a rate equal to the lesser of--
       ``(i) the employee's former rate of basic pay; or
       ``(ii) 150 percent of the maximum rate of basic pay payable 
     for the grade of the employee's position immediately after 
     the occurrence of the event involved,
     as adjusted by subparagraph (B).
       ``(B) A rate to which an employee is entitled under this 
     paragraph shall be increased at the time of any increase in 
     the maximum rate of basic pay payable for the grade of the 
     employee's position by 50 percent of the dollar amount of 
     each such increase.
       ``(3) For purposes of this subsection, the term `former 
     rate of basic pay', as used with respect to an employee in 
     connection with an event described in subsection (a), means 
     the rate of basic pay last received by such employee before 
     the occurrence of such event.
       ``(c)(1) Notwithstanding any other provision of this 
     section, in the case of an employee who--
       ``(A) moves to a new official duty station, and
       ``(B) in conjunction with such move, becomes subject to 
     both a different pay schedule and (disregarding this 
     subsection) the preceding provisions of this section,
     this section shall be applied--
       ``(i) first, by determining the rate of pay to which such 
     employee would be entitled at the new official duty station 
     based on such employee's position, grade, and step (or 
     relative position in the pay range) before the move, and
       ``(ii) then, by applying the provisions of this section 
     that would apply (if any), treating the rate determined under 
     clause (i) as if it were the rate last received by the 
     employee before the application of this section.
       ``(2) A reduction in an employee's rate of basic pay 
     resulting from a determination under paragraph (1)(ii) is not 
     a basis for an entitlement under this section.
       ``(3) The rate of basic pay for an employee who is 
     receiving a retained rate at the time of moving to a new 
     official duty station at which different pay schedules apply 
     shall be subject to regulations prescribed by the Office of 
     Personnel Management consistent with the purposes of this 
     section.
       ``(d) A retained rate shall be considered part of basic pay 
     for purposes of this subchapter and for purposes of 
     subchapter III of chapter 83, chapters 84 and 87, subchapter 
     V of chapter 55, section 5941, and for such other purposes as 
     may be expressly provided for by law or as the Office of 
     Personnel Management may by regulation prescribe. The Office 
     shall, for any purpose other than any of the purposes 
     referred to in the preceding sentence, prescribe by 
     regulation what constitutes basic pay for employees receiving 
     a retained rate.
       ``(e) This section shall not apply, or shall cease to 
     apply, to an employee who--
       ``(1) has a break in service of 1 workday or more;
       ``(2) is entitled, by operation of this subchapter, chapter 
     51 or 53, or any other provision of law, to a rate of basic 
     pay which is equal to or higher than, or declines a 
     reasonable offer of a position the rate of basic pay for 
     which is equal to or higher than, the retained rate to which 
     the employee would otherwise be entitled; or
       ``(3) is demoted for personal cause or at the employee's 
     request.''; and
       (6) in section 5365(b), by inserting after ``provisions of 
     this subchapter'' the following: ``(subject to any conditions 
     or limitations the Office may establish)''.
       (b) Special Rates for Law Enforcement Officers.--Section 
     403(c) of the Federal Employees Pay Comparability Act of 1990 
     (5 U.S.C. 5305 note) is amended by striking all after 
     ``provision of law)'' and inserting ``and shall be basic pay 
     for all purposes. The rates shall be adjusted at the time of 
     adjustments in the General Schedule to maintain the step 
     linkage set forth in subsection (b)(2).''.
       (c) Repeal.--Section 4505a(a)(2) of title 5, United States 
     Code, is amended--
       (1) by striking ``(2)(A)'' and inserting ``(2)''; and
       (2) by striking subparagraph (B).
       (d) Effective date; conversion rules.--
       (1) Effective date.--This section shall take effect on the 
     first day of the first applicable pay period beginning on or 
     after the 180th day after the date of the enactment of this 
     Act.
       (2) Conversion rules.--
       (A) Individuals receiving a retained rate or a rate greater 
     than the maximum rate for the grade.--Subject to any 
     regulations the Office of Personnel Management may prescribe, 
     an employee under a covered pay schedule who, on the day 
     before the effective date of this section, is receiving a 
     retained rate under section 5363 of title 5, United States 
     Code, or is receiving under similar authority a rate of basic 
     pay that is greater than the maximum rate of basic pay 
     payable for the grade of the employee's position shall have 
     that rate converted as of the effective date of this section, 
     and the employee shall be considered to be receiving a 
     retained rate under section 5363 of such title (as amended by 
     this section). The newly applicable retained rate shall equal 
     the formerly applicable retained rate as adjusted to include 
     any applicable locality-based payment under section 5304 of 
     title 5, United States Code, or similar provision of law.
       (B) Definition.--For purposes of this paragraph, the term 
     ``covered pay schedule'' has the meaning given such term by 
     section 5361 of title 5, United States Code.

     SEC. 302. TECHNICAL CORRECTIONS.

       (a)(1) Section 5304 of title 5, United States Code, as 
     amended by section 1125 of the National Defense Authorization 
     Act for Fiscal Year 2004 (Public Law 108-136), is amended--
       (A) in subsection (g)(2)(A), by striking ``(A)-(D)'' and 
     inserting ``(A)-(C)''; and
       (B) in subsection (h)(2)(B)(i), by striking ``or (vii)'' 
     and inserting ``or (vi)''.
       (2) The amendments made by this subsection shall take 
     effect as if included in the enactment of the National 
     Defense Authorization Act for Fiscal Year 2004 (Public Law 
     108-136).
       (b) Section 5314 of title 5, United States Code, is amended 
     by adding at the end the following:
       ``Administrator of the Office of Electronic Government.''.

  Mr. SESSIONS. Madam President, I ask unanimous consent that the 
Senate concur in the House amendment, the motion to reconsider be laid 
upon the table, and that any statements relating to the bill be printed 
in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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