[House Report 104-675]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-675
_______________________________________________________________________


 
             VETERANS EMPLOYMENT OPPORTUNITIES ACT OF 1996

                                _______
                                

 July 12, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3586]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Government Reform and Oversight, to whom was 
referred the bill (H.R. 3586) to amend title 5, United States 
Code, to strengthen veterans' preference, to increase 
employment opportunities for veterans, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Background and need for the legislation..........................6
 II. Legislative hearings and committee actions......................10
III. Committee hearings and written testimony........................10
 IV. Explanation of the bill.........................................12
  V. Compliance with rule XI.........................................15
 VI. Budget analysis and projections.................................15
VII. Cost estimate of the Congressional Budget Office................16
VIII.Inflationary impact statement...................................18

 IX. Changes in existing law.........................................18
  X. Committee recommendation........................................26
 XI. Congressional Accountability Act; Public Law 104-1..............26

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans Employment Opportunities Act 
of 1996''.

SEC. 2. EQUAL ACCESS FOR VETERANS.

  (a) Competitive Service.--Section 3304 of title 5, United States 
Code, is amended by adding at the end the following:
  ``(f)(1) No preference eligible, and no individual (other than a 
preference eligible) who has been separated from the armed forces under 
honorable conditions after 3 or more years of active service, shall be 
denied the opportunity to compete for an announced vacant position 
within an agency, in the competitive service or the excepted service, 
by reason of--
          ``(A) not having acquired competitive status; or
          ``(B) not being an employee of such agency.
  ``(2) Nothing in this subsection shall prevent an agency from filling 
a vacant position (whether by appointment or otherwise) solely from 
individuals on a priority placement list consisting of individuals who 
have been separated from the agency due to a reduction in force and 
surplus employees (as defined under regulations prescribed by the 
Office).''.
  (b) Civil Service Employment Information.--
          (1) Vacant positions.--Section 3327(b) of title 5, United 
        States Code, is amended by striking ``and'' at the end of 
        paragraph (1), by redesignating paragraph (2) as paragraph (3), 
        and by inserting after paragraph (1) the following:
          ``(2) each vacant position in the agency for which 
        competition is restricted to individuals having competitive 
        status or employees of such agency, excluding any position 
        under paragraph (1), and''.
          (2) Additional information.--Section 3327 of title 5, United 
        States Code, is amended by adding at the end the following:
  ``(c) Any notification provided under this section shall, for all 
positions under subsection (b)(1) as to which section 3304(f) applies 
and for all positions under subsection (b)(2), include a notation as to 
the applicability of section 3304(f) with respect thereto.
  ``(d) In consultation with the Secretary of Labor, the Office shall 
submit to Congress and the President, no less frequently than every 2 
years, a report detailing, with respect to the period covered by such 
report--
          ``(1) the number of positions listed under this section 
        during such period;
          ``(2) the number of preference eligibles and other 
        individuals described in section 3304(f)(1) referred to such 
        positions during such period; and
          ``(3) the number of preference eligibles and other 
        individuals described in section 3304(f)(1) appointed to such 
        positions during such period.''.
  (c) Governmentwide Lists.--
          (1) Vacant positions.--Section 3330(b) of title 5, United 
        States Code, is amended to read as follows:
  ``(b) The Office of Personnel Management shall cause to be 
established and kept current--
          ``(1) a comprehensive list of all announcements of vacant 
        positions (in the competitive service and the excepted service, 
        respectively) within each agency that are to be filled by 
        appointment for more than 1 year and for which applications are 
        being or will soon be accepted from outside the agency's work 
        force; and
          ``(2) a comprehensive list of all announcements of vacant 
        positions within each agency for which applications are being 
        or will soon be accepted and for which competition is 
        restricted to individuals having competitive status or 
        employees of such agency, excluding any position required to be 
        listed under paragraph (1).''.
          (2) Additional information.--Section 3330(c) of title 5, 
        United States Code, is amended by striking ``and'' at the end 
        of paragraph (2), by redesignating paragraph (3) as paragraph 
        (4), and by inserting after paragraph (2) the following:
          ``(3) for all positions under subsection (b)(1) as to which 
        section 3304(f) applies and for all positions under subsection 
        (b)(2), a notation as to the applicability of section 3304(f) 
        with respect thereto; and''.
          (3) Conforming amendment.--Section 3330(d) of title 5, United 
        States Code, is amended by striking ``The list'' and inserting 
        ``Each list under subsection (b)''.

SEC. 3. SPECIAL PROTECTIONS FOR PREFERENCE ELIGIBLES IN REDUCTIONS IN 
                    FORCE.

  Section 3502 of title 5, United States Code, as amended by section 
1034 of the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106; 110 Stat. 430), is amended by adding at the end 
the following:
  ``(g)(1) A position occupied by a preference eligible shall not be 
placed in a single-position competitive level if the preference 
eligible is qualified to perform the essential functions of any other 
position at the same grade (or occupational level) in the competitive 
area. In such cases, the preference eligible shall be entitled to be 
placed in another competitive level for which such preference eligible 
is qualified. If the preference eligible is qualified for more than one 
competitive level, such preference eligible shall be placed in the 
competitive level containing the most positions.
  ``(2) For purposes of paragraph (1)--
          ``(A) a preference eligible shall be considered qualified to 
        perform the essential functions of a position if, by reason of 
        experience, training, or education (and, in the case of a 
        disabled veteran, with reasonable accommodation), a reasonable 
        person could conclude that the preference eligible would be 
        able to perform those functions successfully within a period of 
        150 days; and
          ``(B) a preference eligible shall not be considered 
        unqualified solely because such preference eligible does not 
        meet the minimum qualification requirements relating to 
        previous experience in a specified grade (or occupational 
        level), if any, that are established for such position by the 
        Office of Personnel Management or the agency.
  ``(h) In connection with any reduction in force, a preference 
eligible whose current or most recent performance rating is at least 
fully successful (or the equivalent) shall have, in addition to such 
assignment rights as are prescribed by regulation, the right, in lieu 
of separation, to be assigned to any position within the agency 
conducting the reduction in force--
          ``(1) for which such preference eligible is qualified under 
        subsection (g)(2)--
                  ``(A) that is within the preference eligible's 
                commuting area and at the same grade (or occupational 
                level) as the position from which the preference 
                eligible was released, and that is then occupied by an 
                individual, other than another preference eligible, who 
                was placed in such position (whether by appointment or 
                otherwise) within 6 months before the reduction in 
                force if, within 12 months prior to the date on which 
                such individual was so placed in such position, such 
                individual had been employed in the same competitive 
                area as the preference eligible; or
                  ``(B) that is within the preference eligible's 
                competitive area and that is then occupied by an 
                individual, other than another preference eligible, who 
                was placed in such position (whether by appointment or 
                otherwise) within 6 months before the reduction in 
                force; or
          ``(2) for which such preference eligible is qualified that is 
        within the preference eligible's competitive area and that is 
        not more than 3 grades (or pay levels) below that of the 
        position from which the preference eligible was released, 
        except that, in the case of a preference eligible with a 
        compensable service-connected disability of 30 percent or more, 
        this paragraph shall be applied by substituting `5 grades' for 
        `3 grades'.
In the event that a preference eligible is entitled to assignment to 
more than 1 position under this subsection, the agency shall assign the 
preference eligible to any such position requiring no reduction (or, if 
there is no such position, the least reduction) in basic pay. A 
position shall not, with respect to a preference eligible, be 
considered to satisfy the requirements of paragraph (1) or (2), as 
applicable, if it does not last for at least 12 months following the 
date on which such preference eligible is assigned to such position 
under this subsection.
  ``(i) A preference eligible may challenge the classification of any 
position to which the preference eligible asserts assignment rights (as 
provided by, or prescribed by regulations described in, subsection (h)) 
in an action before the Merit Systems Protection Board.
  ``(j)(1) As soon as practicable, but not later than 120 days, after 
the date of the enactment of this subsection, each agency shall 
establish an agencywide priority placement program to facilitate 
employment placement for preference eligibles who--
          ``(A) are scheduled to be separated from service due to a 
        reduction in force; or
          ``(B) are separated from service due to a reduction in force.
  ``(2) Each agencywide priority placement program shall include 
provisions under which a vacant position shall not be filled by the 
appointment or transfer of any individual from outside of that agency 
(other than a former employee previously separated from that agency due 
to a reduction in force) or by any promotion, reassignment, or other 
personnel action involving any individual from within that agency 
(other than a preference eligible or, as defined under regulations 
prescribed by the Office, a surplus employee) if--
          ``(A) there is then available any individual described in 
        paragraph (3) who is qualified for the position; and
          ``(B) the position--
                  ``(i) is at the same grade (or pay level) or not more 
                than 2 grades (or pay levels) below that of the 
                position last held by such individual before placement 
                in the new position; and
                  ``(ii) is within the same commuting area as the 
                individual's residence or last-held position.
  ``(3) For purposes of an agencywide priority placement program under 
this subsection, an individual shall be considered to be described in 
this paragraph if such individual's most recent performance rating was 
at least fully successful (or the equivalent), and such individual is 
either--
          ``(A) a preference eligible of such agency who is scheduled 
        to be separated, as described in paragraph (1)(A); or
          ``(B) a preference eligible who became a former employee of 
        such agency as a result of a separation, as described in 
        paragraph (1)(B).
  ``(4) A preference eligible shall cease to be eligible to participate 
in a program under this subsection upon the earlier of--
          ``(A) the end of the 24-month period beginning on the date on 
        which the preference eligible first becomes eligible to 
        participate under paragraph (3); or
          ``(B) the date on which the individual accepts or declines a 
        bona fide offer (or, if the individual does not act on the 
        offer, the last day for accepting such offer) from the affected 
        agency of a position described in paragraph (2)(B).''.

SEC. 4. IMPROVED REDRESS FOR VETERANS.

  (a) In General.--Subchapter I of chapter 33 of title 5, United States 
Code, is amended by adding at the end the following:

``Sec. 3330a. Administrative redress

  ``(a)(1) Any preference eligible or other individual described in 
section 3304(f)(1) who alleges that an agency has violated such 
individual's rights under any statute or regulation relating to 
veterans' preference, or any right afforded such individual by section 
3304(f), may file a complaint with the Secretary of Labor.
  ``(2) A complaint under this subsection must be filed within 60 days 
after the date of the alleged violation, and the Secretary shall 
process such complaint in accordance with sections 4322(a) through 
(e)(1) and 4326 of title 38.
  ``(b)(1) If the Secretary of Labor is unable to resolve the complaint 
within 60 days after the date on which it is filed, the complainant may 
elect to appeal the alleged violation to the Merit Systems Protection 
Board in accordance with such procedures as the Merit Systems 
Protection Board shall prescribe, except that in no event may any such 
appeal be brought--
          ``(A) before the 61st day after the date on which the 
        complaint is filed under subsection (a); or
          ``(B) later than 15 days after the date on which the 
        complainant receives notification from the Secretary of Labor 
        under section 4322(e)(1) of title 38.
  ``(2) An appeal under this subsection may not be brought unless--
          ``(A) the complainant first provides written notification to 
        the Secretary of Labor of such complainant's intention to bring 
        such appeal; and
          ``(B) appropriate evidence of compliance with subparagraph 
        (A) is included (in such form and manner as the Merit Systems 
        Protection Board may prescribe) with the notice of appeal under 
        this subsection.
  ``(3) Upon receiving notification under paragraph (2)(A), the 
Secretary of Labor shall not continue to investigate or further attempt 
to resolve the complaint to which such notification relates.
  ``(c) This section shall not be construed to prohibit a preference 
eligible from appealing directly to the Merit Systems Protection Board 
from any action which is appealable to the Board under any other law, 
rule, or regulation, in lieu of administrative redress under this 
section.

``Sec. 3330b. Judicial redress

  ``(a) In lieu of continuing the administrative redress procedure 
provided under section 3330a(b), a preference eligible or other 
individual described in section 3304(f)(1) may elect, in accordance 
with this section, to terminate those administrative proceedings and 
file an action with the appropriate United States district court not 
later than 60 days after the date of the election.
  ``(b) An election under this section may not be made--
          ``(1) before the 121st day after the date on which the appeal 
        is filed with the Merit Systems Protection Board under section 
        3330a(b); or
          ``(2) after the Merit Systems Protection Board has issued a 
        judicially reviewable decision on the merits of the appeal.
  ``(c) An election under this section shall be made, in writing, in 
such form and manner as the Merit Systems Protection Board shall by 
regulation prescribe. The election shall be effective as of the date on 
which it is received, and the administrative proceeding to which it 
relates shall terminate immediately upon the receipt of such election.

``Sec. 3330c. Remedy

  ``(a) If the Merit Systems Protection Board (in a proceeding under 
section 3330a) or a court (in a proceeding under section 3330b) 
determines that an agency has violated a right described in section 
3330a, the Board or court (as the case may be) shall order the agency 
to comply with such provisions and award compensation for any loss of 
wages or benefits suffered by the individual by reason of the violation 
involved. If the Board or court determines that such violation was 
willful, it shall award an amount equal to backpay as liquidated 
damages.
  ``(b) A preference eligible or other individual described in section 
3304(f)(1) who prevails in an action under section 3330a or 3330b shall 
be awarded reasonable attorney fees, expert witness fees, and other 
litigation expenses.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 33 of title 5, United States Code, is amended by adding after 
the item relating to section 3330 the following:

``3330a. Administrative redress.
``3330b. Judicial redress.
``3330c. Remedy.''.

SEC. 5. EXTENSION OF VETERANS' PREFERENCE.

  (a) Amendment to Title 5, United States Code.--Paragraph (3) of 
section 2108 of title 5, United States Code, is amended by striking 
``the Federal Bureau of Investigation and Drug Enforcement 
Administration Senior Executive Service, or the General Accounting 
Office;'' and inserting ``or the Federal Bureau of Investigation and 
Drug Enforcement Administration Senior Executive Service;''.
  (b) Amendments to Title 3, United States Code.--
          (1) In general.--Chapter 2 of title 3, United States Code, is 
        amended by adding at the end the following:

``Sec. 115. Veterans' preference

  ``(a) Subject to subsection (b), appointments under sections 105, 
106, and 107 shall be made in accordance with section 2108, and 
sections 3309 through 3312, of title 5.
  ``(b) Subsection (a) shall not apply to any appointment to a position 
the rate of basic pay for which is at least equal to the minimum rate 
established for positions in the Senior Executive Service under section 
5382 of title 5 and the duties of which are comparable to those 
described in section 3132(a)(2) of such title or to any other position 
if, with respect to such position, the President makes certification--
          ``(1) that such position is--
                  ``(A) a confidential or policy-making position; or
                  ``(B) a position for which political affiliation or 
                political philosophy is otherwise an important 
                qualification; and
          ``(2) that any individual selected for such position is 
        expected to vacate the position at or before the end of the 
        President's term (or terms) of office.
Each individual appointed to a position described in the preceding 
sentence as to which the expectation described in paragraph (2) applies 
shall be notified as to such expectation, in writing, at the time of 
appointment to such position.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 2 of title 3, United States Code, is 
        amended by adding at the end the following:

``115. Veterans' preference.''.

  (c) Legislative Branch Appointments.--
          (1) In general.--Subject to paragraph (3), appointments to 
        positions in the legislative branch of the Government shall be 
        made in accordance with section 2108, and sections 3309 through 
        3312, of title 5, United States Code.
          (2) Reductions in force.--Subject to paragraph (3), 
        reductions in force in the legislative branch of the Government 
        shall provide preference eligibles with protections 
        substantially similar to those provided under subchapter I of 
        chapter 35 of title 5, United States Code.
          (3) Exclusions.--Paragraphs (1) and (2) shall not apply to--
                  (A) an appointment made by the President with the 
                advice and consent of the Senate;
                  (B) an appointment made by a Member of Congress or by 
                a committee or subcommittee of either House of 
                Congress; or
                  (C) an appointment to a position, the duties of which 
                are equivalent to those of a Senior Executive Service 
                position (within the meaning of section 3132(a)(2) of 
                title 5, United States Code).
          (4) Redress procedures.--The Board of Directors of the Office 
        of Compliance (established by section 301 of the Congressional 
        Accountability Act of 1995) shall prescribe regulations, as 
        soon as practicable after the date of the enactment of this 
        Act, to provide preference eligibles in the legislative branch 
        of the Government with administrative and judicial redress 
        procedures for alleged violations of any rights provided by 
        this subsection. Such procedures shall be substantially similar 
        to the procedures established by the amendments made by section 
        4. The regulations shall provide that the General Counsel of 
        the Office of Compliance (appointed under section 302(c) of the 
        Congressional Accountability Act of 1995) shall perform the 
        functions assigned to the Secretary of Labor under sections 
        4322 and 4326(a) of title 38, United States Code.
  (d) Judicial Branch Appointments.--
          (1) In general.--Subject to paragraph (2), appointments to 
        positions in the judicial branch of the Government shall be 
        made in accordance with section 2108, and sections 3309 through 
        3312, of title 5, United States Code.
          (2) Reductions in force.--Subject to paragraph (2), 
        reductions in force in the judicial branch of the Government 
        shall provide preference eligibles with protections 
        substantially similar to those provided under subchapter I of 
        chapter 35 of title 5, United States Code.
          (3) Exclusions.--Paragraphs (1) and (2) shall not apply to--
                  (A) an appointment made by the President, with the 
                advice and consent of the Senate;
                  (B) an appointment as a judicial officer;
                  (C) an appointment as a law clerk or secretary to a 
                justice or judge of the United States; or
                  (D) an appointment to a position, the duties of which 
                are equivalent to those of a Senior Executive Service 
                position (within the meaning of section 3132(a)(2) of 
                title 5, United States Code).
          (4) Redress procedures.--The Judicial Conference of the 
        United States shall prescribe regulations under which redress 
        procedures (substantially similar to the procedures established 
        by the amendments made by section 4) shall be available for 
        alleged violations of any rights provided by this subsection.
          (5) Definitions.--For purposes of this subsection--
                  (A) the term ``judicial officer'' means a justice, 
                judge, or magistrate judge listed in subparagraph (A), 
                (B), (F), or (G) of section 376(a)(1) of title 28, 
                United States Code; and
                  (B) the term ``justice or judge of the United 
                States'' has the meaning given such term by section 451 
                of such title 28.

SEC. 6. VETERANS' PREFERENCE REQUIRED FOR REDUCTIONS IN FORCE IN THE 
                    FEDERAL AVIATION ADMINISTRATION.

  Section 347(b) of the Department of Transportation and Related 
Agencies Appropriations Act, 1996 (109 Stat. 460) is amended by 
striking ``and'' at the end of paragraph (6), by striking the period at 
the end of paragraph (7) and inserting ``; and'', and by adding at the 
end the following:
          ``(8) sections 3501-3504, as such sections relate to 
        veterans' preference.''.

                      Short Summary of Legislation

    H.R. 3586, as amended, strengthens veterans' preference and 
increases employment opportunities for veterans. It permits 
veterans' eligible for a preference and certain other veterans 
to overcome artificial restrictions on the scope of competition 
for announced vacancies, provides preference eligibles with 
increased protections during reductions in force, establishes 
an effective redress system for veterans who believe their 
rights have been violated, extends veterans' preference to 
certain positions at the White House and in the legislative and 
judicial branches of government, and requires the Federal 
Aviation Administration to apply veterans' preference in 
reductions in force.

               I. Background and Need for the Legislation

    In general, veterans preference laws give certain veterans 
preference in appointment to civilian employment with the 
Federal Government based upon their military service. Congress 
has long recognized that this is an earned benefit, not a gift.
    The current law for today's veterans preference is the 
Veterans' Preference Act of 1944, as amended. Under the Act, 
veterans are given ``augmented scores'' of 5 or 10 points, 
depending upon their status, in examinations for employment and 
retention preference in the event of a reduction in force. The 
Act also prohibits adverse actions against veterans without 
``cause'' and required certain due process protections, such as 
notice and an opportunity to be heard, as well as appeals.
    On April 30, 1996, the Subcommittee on Civil Service held a 
hearing on veterans' preference. Testimony at that hearing 
revealed that veterans' preference in the Federal workplace is 
often ignored or circumvented and that its continued viability 
is threatened on several fronts.
    Veterans' employment in the Federal workforce is declining 
at a rapid rate. Indeed, the government is approaching 
historically low levels since the implementation of veterans' 
preference. As recently as 1984, veteran representation in the 
Federal workforce was nearly 38%, in ten years it has declined 
to 28% of the Government's employees. Veterans have borne a 
disproportionate brunt of the Government's downsizing. In part, 
this reflects the concentration of veterans in defense-related 
agencies that have accounted for 75% of recent downsizing. 
OPM's figures show that in September 1994, 65% of all veterans 
were employed in the Department of Defense, Veterans Affairs, 
and Treasury. (In comparison, these agencies account for only 
56% of the overall Federal civilian workforce.) It also 
reflects the greater average age of veterans, who have 
accounted for over 50% of all retirements from Federal civil 
service in the last five years. But these figures do suggest 
that veterans are under represented in many Federal agencies 
and support the claims that Congress must create additional 
opportunities for veterans to obtain and retain employment with 
the Federal Government.

                     Threats to veterans preference

    Many in the veterans' community have cited a variety of 
strategies recently used by agencies that threaten veterans 
preference, whether that is their intended effect or not. A 
prime example is increased usage of single position competitive 
levels in reductions in force (RIF). In addition, evidence 
suggests a deep-rooted resistance to veterans' preference in 
the bureaucracy. A 1992 GAO study of veterans' preference, 
``Federal Hiring: Does Veterans' Preference Need Updating?'', 
revealed that certificates (the list of candidates from which 
agencies may hire) headed by a veteran entitled to preference 
were returned unused at almost 1.4 times the return rate of 
certificates headed by nonveterans.1 According to another 
GAO study, one quarter of selecting officials who returned a 
certificate unused to their personnel office in 1992 did so 
when they could not hire the candidate they wanted because a 
preference-eligible veteran was ranked higher.2
---------------------------------------------------------------------------
    \1\ GAO, ``Federal Hiring: Does Veterans' Preference Need 
Updating?'', (March 1992), at 27. 70.6% of certificates headed by 
veterans were returned unused versus only 50.8% of those headed by 
nonveterans.
    \2\ GAO, ``Federal Hiring: Reconciling Managerial Flexibility With 
Veterans' Preference'', at 32 (June 1995).
---------------------------------------------------------------------------
    The use of single-position competitive levels poses a 
threat to veterans preference because it effectively eliminates 
the preference eligible's ability to compete for retention at 
his or her grade level. The case of John Davis, a decorated 
Vietnam veteran who testified at the subcommittee's April 30 
hearing, provides an example. Mr. Davis was placed in a single-
position competitive level during a RIF at the Army Corps of 
Engineers, and consequently released from his position. Many in 
the veterans' community believe the use of this device undercut 
Mr. Davis's veterans' preference rights, even though both the 
Merit Systems Protection Board and the U.S. Court of Appeals 
for the Federal Circuit upheld the agency's action.
    While there is no question that on rare occasions the use 
of single-position competitive levels is appropriate because 
positions are so truly unique that employees cannot move 
between them without disrupting productivity, the Committee 
recognizes that it carries great potential for abuse by 
enabling agencies to target individual employees and circumvent 
veterans' preference. Accordingly, the Committee looks upon the 
increasing use of single-position competitive levels--as in a 
RIF recently conducted by the U.S. Geological Survey, in which 
97.2% of 1,100 positions were placed in unique competitive 
levels--with great concern.
    The Committee also believes it is necessary to provide 
eligible veterans with stronger rights to move into other 
positions if they are released from their own jobs during a 
RIF. Again, the John Davis case illustrates why increased 
protection is needed. In that case, the evidence shows that 
before it conducted the RIF the agency actually restructured 
some positions to allow other employees to qualify for them and 
escape the RIF.3
---------------------------------------------------------------------------
    \3\ Davis v. Department of the Army, DC-0351-93-0543-I-2, initial 
decision at 15 (MSPB February 4, 1994).
---------------------------------------------------------------------------
    This legislation addresses these problems by making it more 
difficult for agencies to place preference eligibles in single-
position competitive levels. Under it, preference eligibles 
cannot be placed in such a competitive level if by reason of 
their education, training, or experience a reasonable person 
could conclude they would be able successfully to perform 
another job at the same grade and in the same competitive level 
within 150 days. In such cases, the preference eligible is 
placed in another competitive level for which he or she 
qualifies. And if the preference eligible qualifies for more 
than one competitive level, he or she is entitled to be placed 
in the competitive level with the most positions. In addition, 
the legislation provides preference eligibles with enhanced 
assignment rights to other positions and requires agencies to 
establish priority placement programs for preference eligibles 
who are separated or scheduled to be separated as a result of a 
RIF.

              Not every veteran is entitled to preference

    Not all of those who have served in the military are 
entitled to veterans preference, even though they are commonly 
thought of as veterans. Only those who meet the statutory 
definition of ``preference eligible'' are entitled to veterans 
preference.4 Today, most become eligible for veterans' 
preference by receiving a campaign badge. Consequently, many 
who have served in the armed forces do not have an advantage 
when competing for Federal jobs. Even worse, however, because 
agencies frequently restrict competition for positions to 
``status'' candidates (primarily those who are already Federal 
civilian employees) or even to those in the agency's own 
workforce, these veterans are not even able to compete for many 
positions.
---------------------------------------------------------------------------
    \4\ The law defines the terms ``veteran'' and ``preference 
eligible'' individuals to include disabled veterans, those who served 
in the military during wars, during specified periods of time, or in a 
campaign or expedition for which a campaign badge has been authorized. 
In addition, under certain circumstances, the spouses of disabled 
veterans, unmarried widows or widowers of veterans, and the mothers of 
individuals killed while in the military or of individuals with 
service-connected permanent and total disabilities are considered 
``preference eligibles.'' Special rules also apply to military 
retirees. 5 U.S.C. Sec. Sec. 2108, 3501.
---------------------------------------------------------------------------
    The Committee believes this is wrong. In his memorial day 
speech at Arlington National Cemetery, President Clinton 
observed, ``As we honor the brave sacrifices in battle that 
grace our nation's history, let us also remember to honor those 
who served in times of peace, who preserve the peace, protect 
our interests and project our values. Though they are the best-
trained, best-equipped military in the world, they, too, face 
their share of dangers.'' Accordingly, the Committee believes 
that it is incumbent upon the Federal Government to recognize 
the valuable Federal service all those who have served in the 
armed forces have performed.
    In order to address this problem, Section 2 of the 
legislation provides that preference eligibles and other 
veterans who have served honorably for at least three years 
cannot be prevented from competing for government jobs because 
they do not have ``status'' or are not employees of the hiring 
agency. This section does not confer a preference on anyone not 
otherwise entitled to one. Agencies may hire solely from a 
reemployment priority list consisting of surplus and displaced 
employees without outside competition.

                 Lack of an adequate redress mechanism

    Compounding the concerns of many veterans and veterans 
groups is the lack of an adequate redress mechanism for 
veterans whose rights are violated. There is a widespread 
consensus in the veterans' community that existing redress 
procedures are inadequate. Indeed, testimony at the 
subcommittee's hearing on April 30, 1996, identified this as 
the central defect in veterans' preference today.
    The legislation corrects this problem by creating an 
effective, yet user-friendly redress system for veterans. 
Veterans who believe their veterans' preference rights or their 
right to compete for positions under this Act may file a 
complaint with the Secretary of Labor, who is to investigate 
and attempt to resolve the complaint under procedures 
established in the Uniformed Services Employment and 
Reemployment Rights Act of 1994. The complainant may file an 
appeal with the Merit Systems Protection Board if the Secretary 
is unable to resolve the complaint or to do so within 60 days. 
The veteran is required to exhaust administrative remedies 
before the Board for a period of at least 120 days. However, 
after 120 days, but before the Board has issued a judicially 
reviewable decision on the merits of the case, the veteran may 
terminate the administrative proceeding and file a complaint in 
an appropriate United States district court. Under this 
procedure, a veteran can escape the administrative process if 
it becomes mired down, but cannot engage in forum shopping or 
obtain more than ``one bite at the apple.''

                             Other concerns

    Many positions at the White House and in the legislative 
and judicial branches of Government are not covered by current 
veterans' preference laws. The debt our Nation owes to those 
who have fought its battles should be acknowledged by all 
branches of Government. Accordingly, the legislation applies 
veterans' preference to nonpolitical positions in the White 
House and the legislative branch, as well as to many positions 
in the judicial branch.
    Under the Department of Transportation and Related Agencies 
Appropriations Act of 1996, the Federal Aviation Administration 
was permitted to establish an alternative personnel system. 
Although that Act required the FAA to follow veterans' 
preference in hiring, it did not require it to do so in RIFs. 
This has been of great concern to many veterans at the FAA, and 
the Committee believes there is no reason to deprive those 
veterans of the preference in RIFs they have earned. 
Accordingly, the legislation requires the FAA to observe 
veterans' preference in RIFs.

             II. Legislative Hearings and Committee Actions

    H.R. 3586 was introduced on June 5, 1996 by the Honorable 
John L. Mica (R-FL), Chairman of the House Subcommittee on 
Civil Service. The bill was referred to the Committee on 
Government Reform and Oversight on June 5, 1996, and it was 
referred to the Subcommittee on Civil Service on June 11, 1996. 
The subcommittee held a mark up on June 13, 1996. No amendments 
were offered, and the measure was ordered favorably reported to 
the full Committee by a voice vote. On June 20, 1996, the 
Committee on Government Reform and Oversight met to consider 
the bill. Representative Mica offered an amendment in the 
nature of a substitute, which was approved by voice vote. The 
Committee favorably reported the bill, as amended, to the full 
House by voice vote.

             III. Committee Hearings and Written Testimony

    On April 30, 1996 the Subcommittee held a hearing to 
examine whether the employment preferences accorded veterans by 
law are being faithfully applied by the Federal Government and 
ways in which opportunities can be improved.
    The first panel consisted of the Honorable Stephen E. 
Buyer, Chairman of the Subcommittee on Education, Training, 
Employment, and Housing of the Committee on Veterans' Affairs, 
and the Honorable Jon D. Fox. Among other issues, Chairman 
Buyer addressed the need to strengthen veterans' preference 
protections during reductions in force and to provide veterans 
with an effective redress system. In particular, he pointed to 
the escalating use of single-position competitive levels in 
RIFs as a threat to veterans' preference. He noted that it 
allowed managers to ``effectively dictate who will retain 
employment,'' and pointed to recent RIFs at the U.S. Geological 
Survey, GAO, and the Army's Audit Agency as examples. Chairman 
Buyer also stated that, ``There is simply no effective means by 
which a veteran may air a preference grievance, especially if 
the veteran is not hired.'' Establishing a redress system that 
provides a reasonable remedy for veterans is, he testified, a 
``primary concern.''
    Congressman Fox testified in support of H.R. 2510, his bill 
to extend veterans' preference to those who served in 
connection with Operations Desert Shield and Desert Storm. In 
his testimony, Congressman Fox pointed out that many reservists 
and National Guard members were ordered to active duty during 
the Persian Gulf War. Some were deployed to the theater of 
operations. Others were ordered to serve outside the theater. 
Those who served in the theater now qualify for veterans' 
preference. But those who served elsewhere do not, even though 
their contributions were also essential to the ultimate success 
of our military operations in the Persian Gulf.
    On the second panel were James Daub, John Davis, and John 
Fales. Mr. Daub, a reservist who was called to active duty to 
support Operations Desert Shield and Desert Storm. He pointed 
out that his unit was split into two groups, one of which was 
sent to the Desert and his group was sent to Rhein Mein Air 
Force Base in Germany. The group in Germany performed aircraft 
maintenance that could not be performed in the theater. This 
was a task that was critical to the success of our combat 
operations and a task they performed proudly and to the utmost 
of their abilities. Those who served in Southwest Asia are now 
entitled to veterans preference, whereas those such as Mr. Daub 
who were uprooted from their families and their federal jobs 
enjoy no more job protections than ``the non-veteran who was 
home with his family watching the war on CNN.'' This is a 
matter of great concern to these veterans in this era of 
government downsizing, particularly those employed at the 
Department of Defense.
    Mr. Davis, a Vietnam veteran who was awarded the 
Distinguished Flying Cross, the Bronze Star, and multiple 
awards of the Air Medal, described his experience during a RIF 
at the Army Corps of Engineers. He testified that in March 
1993, the Corps headquarters announced that it would conduct a 
50-person RIF. Mr. Davis was placed in a single-position 
competitive level. Consequently, Mr. Davis was the only 
employee covered by the RIF who was actually downgraded. (None 
were separated as a result of the RIF.) Moreover, Mr. Davis was 
not permitted assignment rights to positions for which he 
appeared capable of performing, including one job almost 
identical to the position he held before the RIF. In contrast, 
however, Mr. Davis testified, prior to the RIF management went 
to great lengths to place other individuals whose jobs were to 
be abolished into positions at their current grade levels. In 
some cases, the agency actually created positions for these 
other employees that did not exist prior to the RIF. 
Nevertheless, both the Merit Systems Protection Board and the 
United States Court of Appeals for the Federal Circuit upheld 
the agency's action.
    Mr. Fales is a decorated blinded Vietnam veteran who is a 
full-time federal employee and president of the Blinded 
American Veterans Foundation. In his testimony, Mr. Fales 
emphasized the importance of recognizing the important service 
of the hundreds of thousands of American troops supporting 
America's military missions around the world. He pointed out 
that in the past five years the military has released 800,000 
men and women from the armed forces, many of whom were not 
eligible for veterans' preference, which made their transition 
and pursuit of a federal job much more difficult. Mr. Fales 
also testified that there are many in the federal bureaucracy 
who actively seek to circumvent veterans' preference, and 
emphasized the need for improved remedies to deter future 
violations.
    The subcommittee also heard testimony from Ronald W. Drach, 
the National Employment Director for the Disabled Veterans of 
America, and Emil Naschinski, Assistant Director, National 
Economics Commission, of the American Legion. Both testified 
that the lack of an effective redress system is the key defect 
in current veterans' preference law. Mr. Drach stated that 
``there has never been a meaningful appeal/redress system 
available to an individual or a veterans' service organization 
* * * if either thought veterans' preferences were being 
violated,'' and he contended that the Office of Personnel 
Management's ``less than aggressive enforcement of veterans' 
preference'' persuaded agencies they were free to ignore 
veterans' preference. Mr. Naschinski emphasized that, ``If 
Congress is serious about improving veterans' preference, it 
must provide a clear, independent and user friendly redress 
mechanism that can be utilized by veterans who believe their 
veterans' preference rights have been violated.'' Both 
witnesses also testified to the importance of strengthening 
protections for veterans during RIFs and warned of the 
potential erosion of veterans' preference through the 
proliferation of alternative personnel systems.
    In addition to this testimony, the subcommittee also 
received several statements for the record. These included 
statements from such veterans' groups as the Veterans Economic 
Action Coalition, Vietnam Veterans of America, and the Non-
Commissioned Officers Association of the United States of 
America, and from the Honorable James B. King, the Director of 
OPM. Among other issues, these groups, too, emphasized the 
importance of establishing an effective redress system for 
veterans. Director King generally defended the Clinton 
Administration's record in implementing and enforcing veterans' 
preference.

                IV. Explanation of the Bill as Reported

                      SECTION-BY-SECTION ANALYSIS

Section 1.--Short title

    The short title of this Act is ``The Veterans' Employment 
Opportunities Act of 1996.''

Section 2.--Equal access for veterans

    Subsection (a) amends 5 U.S.C. Sec. 3304 by adding a new 
subsection (f), which provides that a preference eligible or a 
veteran who has been honorably discharged after three years of 
service in the armed forces may not be barred from competition 
for announced vacancies in the competitive or excepted service 
because he or she has not acquired competitive status or is not 
an employee of a particular agency. However, agencies are not 
prohibited from filling vacant positions solely from a priority 
placement list consisting of former employees who were 
separated from the agency due to a reduction in force and 
surplus employees.
    Subsection (b) amends 5 U.S.C. Sec. 3327 to require OPM to 
maintain and publicize to state employment services all 
vacancies for which a veteran may apply under this section.
    Subsection (c) amends 5 U.S.C. Sec. 3330(b) to require OPM 
to maintain a comprehensive governmentwide list of vacant 
positions for which veterans may apply and to make clear that 
OPM may contract for this function.

Section 3.--Special protections for preference eligibles in reductions 
        in force

    This section provides special protections for preference 
eligible employees when their agency is conducting a RIF 
(reduction in force). Congress recognizes that single-position 
competitive levels pose a threat to veterans' preference in 
RIFs, and therefore agencies are prohibited from placing any 
position occupied by a preference eligible in such a 
competitive level if the preference eligible is qualified (as 
defined in this Act) to perform the essential functions of any 
other position at the same grade and in the same competitive 
area. In such cases the preference eligible is entitled to be 
placed in another competitive level, and if the preference 
eligible is qualified for more than one other competitive 
level, he or she is entitled to be placed in the competitive 
level containing the most positions.
    Preference eligibles are also provided enhanced assignment 
rights. A preference eligible whose current or most recent 
performance rating is fully successful or better shall have 
assignment rights to:
          (1) any position for which he or she is qualified (as 
        defined in this Act) at the same grade level within the 
        agency conducting the RIF that is in the commuting area 
        and that is currently held by someone (other than 
        another preference eligible) who was placed in the 
        position within 6 months before the reduction in force 
        if, within 12 months prior to such placement, that 
        person had been employed in the same competitive area 
        as the preference eligible;
          (2) any position in the competitive area for which 
        the preference eligible is qualified (as defined in 
        this Act) and that is then held by an individual, other 
        than another preference eligible, who was placed in the 
        position within 6 months before the RIF; or
          (3) any position in the competitive area that is not 
        more than 3 grades or pay levels (5 grades or pay 
        levels in the case of a preference eligible with a 
        service-connected disability of 30% or more) below the 
        position from which the preference eligible was 
        released. The special test for determining 
        qualifications defined in this Act does not apply in 
        this situation.
    These assignment rights are in addition to any assignment 
rights positions prescribed by regulations issued by the Office 
of Personnel Management.
    For the purposes of determining whether a position may be 
put in a single-position competitive level or certain 
assignment rights of a preference eligible, the preference 
eligible shall be considered qualified for another position if 
by reason of experience, training, or education a reasonable 
person could conclude that the preference eligible would be 
able to perform the essential functions of the position 
successfully within a period of 150 days.
    A preference eligible may challenge the classification of 
any position to which he asserts assignment rights in an action 
before the Merit Systems Protection Board.
    Agencies are also required to establish agency wide 
priority placement programs for preference eligibles who are 
scheduled to be separated or are actually separated by a RIF 
and whose current or most recent performance rating was at 
least fully successful or the equivalent. The agency may not 
fill any vacancy by appointment or transfer of any person from 
outside or inside the agency (other than surplus or displaced 
employees) if there is a qualified preference eligible on the 
reemployment priority placement list. An individual may remain 
on the list for 24 months or, if earlier, until he accepts or 
declines an agency's bona fide offer of employment at a level 
not more than two grades below the position from which he was 
released and within the commuting area.

Section 4.--Improved redress for veterans

    Subsection (a) amends chapter 33 of title 5 by adding three 
new sections (sections 3330a-3330c) to create a redress system 
for veterans that is user-friendly, yet effective. This redress 
mechanism covers preference eligibles and, for violations of 
the right to compete created in section 2 of this Act, 
individuals honorably discharged from the armed forces after 
three years of service. Under this system, the individual first 
must file a complaint with the Secretary of Labor within 60 
days of the alleged violation. The Secretary will investigate 
and attempt to resolve the complaint in accordance with 
provisions of the Uniformed Services Employment and 
Reemployment Rights Act of 1994, 38 U.S.C. Sec. Sec. 4322(a)-
(e)(1), 4326. The individual may file an appeal with the Merit 
Systems Protection Board if the Secretary is unable to resolve 
the complaint within 60 days or if the Secretary notifies the 
individual that he is unable to resolve the complaint. An 
individual who elects to file an appeal with the Merit Systems 
Protection Board must notify the Secretary of this election, 
and the Secretary is to discontinue his efforts to investigate 
or resolve the complaint.
    An individual who files an appeal with the Merit Systems 
Protection Board under this section must exhaust that remedy 
for at least 120 days. At any time after that point, but before 
the Merit Systems Protection Board issues a judicially 
reviewable decision on the merits, the individual may terminate 
the administrative proceeding and file an action with the 
appropriate United States district court.
    An individual who prevails is entitled to ``make-whole'' 
relief and, if the MSPB or district court determines that the 
agency's violation was willful, monetary damages equal to the 
amount of back pay awarded. The MSPB or district court shall 
award reasonable attorney's fees and litigation expenses to an 
individual who prevails.
    Subsection (b) makes a clerical amendment to the table of 
sections at the beginning of chapter 33, of title 5, United 
States Code.

Section 5.--Extension of veterans' preference

    This section extends veterans' preference to certain 
positions in the judicial branch and to non-political jobs at 
the White House and in the legislative branch.
    Subsection (a) amends 5 U.S.C. Sec. 2108 to require the 
General Accounting Office to apply veterans' preference in 
hiring. (GAO is already covered by veterans' preference with 
respect to RIFs.)
    Subsection (b) amends title 3 of the United States Code by 
adding a new section 115 to cover certain positions at the 
White House. Positions that are equivalent to positions in the 
Senior Executive Service are exempt, as are positions that the 
President certifies are confidential or policy-making positions 
or for which political affiliation or political philosophy is 
otherwise an important qualification and whose occupants are 
expected to leave on or before the end of the President's 
Administration.
    Subsection (c) extends veterans' preference to positions in 
the legislative branch. Positions for which the appointment is 
made by the President with the advice and consent of the 
Senate, appointments by Members of Congress, and positions 
equivalent to Senior Executive Service positions are exempt. 
The Board of Directors of the Office of Compliance is required 
to establish a redress system for the legislative branch that 
is substantially similar to the system established under 
section 4 of this Act.
    Subsection (d) applies veterans' preference to positions in 
the judicial branch. It exempts positions for which the 
appointment is made by the President with the advice and 
consent of the Senate, judicial officers, appointments as law 
clerks or secretaries to judges or Justices, and positions 
equivalent to Senior Executive Service positions. The Judicial 
Conference is required to establish a redress system for the 
judicial branch that is substantially similar to the system 
established under section 4 of this Act.

Section 6.--Veterans' preference required for RIFs in the FAA

    This section amends section 347(b) of the Department of 
Transportation and Related Agencies Appropriations Act, 1996 
(109 Stat. 460) to require the Federal Aviation Administration 
to apply veterans' preference in reductions in force. Current 
law requires the FAA to apply veterans' preference in hiring.

                       V. Compliance With Rule XI

    Pursuant to rule XI, clause 2(l)(3) of the Rules of the 
House of Representatives, under the authority of rule X, clause 
2(b)(1) and clause 3(f), the results and findings from 
committee oversight activities are incorporated in the bill and 
this report.

                  VI. Budget Analysis and Projections

    Pursuant to section 308(a)(1)(A), the bill provides for an 
increase in direct spending of less than $500,000. The 
allocation in the Joint Statement of the Managers accompanying 
H. Con. Res. 178 does not provide to the Committee on 
Government Reform and Oversight any net increase in new budget 
authority or new entitlement authority subject to discretionary 
action. The estimate by the Congressional Budget Office of how 
the measure will affect budget authority, budget outlays, and 
spending authority is set forth in this report, as in any 
amount of new budget authority for assistance to State and 
local governments.

         VII. Cost Estimate of the Congressional Budget Office

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 8, 1996.
Hon. William F. Clinger, Jr.,
Chairman, Committee on Government Reform and Oversight, U.S. House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 3586, the Veterans Employment Opportunities Act 
of 1996, as ordered reported by the House Committee on 
Government Reform and Oversight on June 20, 1996. We expect 
that enacting H.R. 3586 would increase personnel recruitment 
and management costs of the federal government, though we 
cannot estimate the amount of the added costs. For most 
agencies, any increase in spending would be subject to the 
availability of appropriated funds.
    The bill could also increase direct spending by agencies 
not funded through annual appropriations. Therefore, pay-as-
you-go procedures would apply to the bill. With the possible 
exception of costs for the U.S. Postal Service, the bill's 
impact on direct spending is not likely to be significant. 
Spending by the Postal Service, however, is classified as off-
budget and is not subject to pay-as-you-go procedures.
    Bill Purpose.--H.R. 3586 would strengthen and, in the case 
of hiring, broaden the applicability of a set of laws popularly 
known as veterans' preference, which afford certain veterans 
preferential treatment in obtaining and keeping federal 
employment. Specifically, the bill would:
          Prohibit a federal agency from limiting the pool of 
        potential applicants for a vacancy to its current 
        employees or to individuals already employed by the 
        government;
          Prohibit an agency from classifying a position 
        occupied by an eligible veteran as unique for purposes 
        of a reduction-in-force (RIF) if the individual could 
        reasonably perform the essential duties of other 
        comparable positions within 150 days;
          Entitle an involuntarily separated veteran, eligible 
        for preference, to claim assignment to certain 
        positions filled by the agency in the six months prior 
        to a RIF;
          Require agencies to establish a priority placement 
        program for veterans, whereby an agency would be 
        required to offer a veteran affected by a RIF any 
        comparable vacancy located within the commuting area;
          Allow veterans to appeal alleged violations of 
        preference rights in hiring decisions to the Merit 
        System Protection Board (MSPB) and to terminate 
        proceedings with the MSPB and file an action with a 
        United States district court;
          Require either the MSPB or a court to award expenses 
        and limited damages in certain cases; and
          Extend veterans' preference to include the General 
        Accounting Office, non-political positions at the White 
        House, and certain positions within the legislative and 
        judicial branches.
    Federal Budgetary Impact.--Several provisions of H.R. 3586 
would increase the costs to the federal government to 
administer and enforce the laws governing veterans' preference. 
However, because we have no way of predicting the number of 
veterans who would be affected by the bill's provisions, 
particularly the number of veterans who might seek redress 
under the bill's expanded procedures, CBO cannot estimate the 
amount of these additional costs. Areas of potential costs 
resulting from the bill are described below.
    The largest potential budgetary impact of the bill would 
result from provisions that would allow veterans to appeal 
hiring decisions to the MSPB and to appeal both hiring and RIF 
decisions to a district court, and that would increase the 
amount of redress that an eligible veteran could receive for an 
affirmed violation. By expanding the number of veterans 
eligible to appeal hiring decisions, enacting H.R. 3586 could 
significantly increase the workload--and hence, the expenses--
of both the Department of Labor and the MSPB, which together 
would handle most appeals.
    In cases where the complainant prevails, the bill would 
require that the agency pay reasonable attorney fees, expert 
witness fees, and other litigation expenses. Currently, 
successful complainants are awarded only attorney fees. In 
cases where a violation is deemed as willful, H.R. 3586 also 
would require the MSPB or district court to order the agency to 
pay damages in addition to any lost wages or benefits. The 
amount of damages would be limited to the amount of back pay 
owed by the agency. Thus, H.R. 3586 would likely result in the 
appeal of more cases, particularly those related to grievances 
over hiring decisions, and in the awarding of higher monetary 
judgments. CBO has no basis for estimating the number or cost 
of these additional appeals.
    Second, the bill would require agencies to ensure that 
eligible veterans have the opportunity to compete for any 
vacancy. The provision would result in agencies adding to the 
Federal Job Opportunities List positions that would otherwise 
be filled by employees who work for the agency or elsewhere in 
the federal government. Thus, the bill would require agencies 
to transmit additional information to the Office of Personnel 
Management and would force agencies to delay hiring individuals 
for positions that they typically fill quickly. The extra time 
needed to provide veterans with a reasonable opportunity to 
apply and for agencies to process and consider additional 
applicants could lengthen the time positions remain vacant, and 
could impair the ability of some agencies to administer their 
programs and operations. For some agencies, this delay could 
result in extra overtime or contract costs; for others, the 
delay could reduce the amount spent on salaries and expenses.
    Third, the bill would expand existing protections for 
veterans affected by a RIF to include the right to claim 
assignment to certain comparable positions filled by the agency 
prior to a veteran's separation. At the same time, the bill 
would make it more difficult for agencies to classify a 
position held by a veteran as unique. For a RIF, the bill would 
define a position as comparable if the veteran could reasonably 
be expected to perform the essential duties within 150 days. 
Thus, enacting H.R. 3586 would make it less likely that an 
agency would lay off an eligible veteran. But since the RIF 
would still occur, we expect that any increase in costs to the 
federal government to comply with this provision would not be 
significant.
    Finally, the bill would extend certain provisions of 
veterans' preference to non-political jobs at the White House, 
and to the agencies that support the Congress and the 
judiciary, such as CBO, the Library of Congress, the Capitol 
Police, and the Administrative Office of the United States 
Courts. For those agencies that support the judiciary and the 
Congress, such an application would be difficult to implement. 
Because the employees of these agencies are not part of the 
Civil Service and since the agencies do not administer a test 
or use a point system that lends itself to factoring in the 
additional points required by law for preference-eligible 
veterans, it is uncertain how these agencies would comply with 
this provision. If the extension of veterans' preference 
resulted in the agencies instituting a new system for judging 
and hiring applicants, the associated costs could be 
significant. The bill also would direct the Office of 
Compliance and the Judicial Conference of the United States to 
establish procedures to provide veterans employed in the 
legislative and judicial branch with redress procedures similar 
to those available to executive branch employees. Thus, the 
agencies could also face new, potentially costly litigation 
related to grievances filed under this provision.
    Mandates Statement.--H.R. 3586 contains no 
intergovernmental or private-sector mandates as defined in 
Public Law 104-4 and would have no impact on the budgets of 
state, local, or tribal governments.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John R. 
Righter.
            Sincerely,
                                          Paul Van de Water
                                   (For June E. O'Neill, Director).

                  VIII. Inflationary Impact Statement

    In accordance with rule XI, clause 2(l)(4) of the Rules of 
the House of Representatives, this legislation is assessed to 
have no inflationary effect on prices and costs in the 
operation of the national economy.

       IX. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                      TITLE 5, UNITED STATES CODE

          * * * * * * *

                          PART III--EMPLOYEES

          * * * * * * *

                     Subpart A--General Provisions

                        CHAPTER 21--DEFINITIONS

          * * * * * * *

Sec. 2108. Veteran; disabled veteran; preference eligible

  For the purpose of this title--
          (1) * * *
          * * * * * * *
          (3) ``preference eligible'' means, except as provided 
        in paragraph (4) of this section--
                  (A) * * *
          * * * * * * *
        but does not include applicants for, or members of, the 
        Senior Executive Service, the Defense Intelligence 
        Senior Executive Service, the Senior Cryptologic 
        Executive Service, [the Federal Bureau of Investigation 
        and Drug Enforcement Administration Senior Executive 
        Service, or the General Accounting Office;] or the 
        Federal Bureau of Investigation and Drug Enforcement 
        Administration Senior Executive Service;
          * * * * * * *

                 Subpart B--Employment and Retention--

          * * * * * * *

           CHAPTER 33--EXAMINATION, SELECTION, AND PLACEMENT

        SUBCHAPTER I--EXAMINATION, CERTIFICATION, AND APPOINTMENT

Sec.
3301.  Civil service; generally.
     * * * * * * *
3330.  Government-wide list of vacant positions.
3330a. Administrative redress.
3330b. Judicial redress.
3330c. Remedy.
          * * * * * * *

       SUBCHAPTER I--EXAMINATION, CERTIFICATION, AND APPOINTMENT

          * * * * * * *

Sec. 3304. Competitive service; examinations

  (a) * * *
          * * * * * * *
  (f)(1) No preference eligible, and no individual (other than 
a preference eligible) who has been separated from the armed 
forces under honorable conditions after 3 or more years of 
active service, shall be denied the opportunity to compete for 
an announced vacant position within an agency, in the 
competitive service or the excepted service, by reason of--
          (A) not having acquired competitive status; or
          (B) not being an employee of such agency.
  (2) Nothing in this subsection shall prevent an agency from 
filling a vacant position (whether by appointment or otherwise) 
solely from individuals on a priority placement list consisting 
of individuals who have been separated from the agency due to a 
reduction in force and surplus employees (as defined under 
regulations prescribed by the Office).
          * * * * * * *

Sec. 3327. Civil service employment information

  (a) The Office of Personnel Management shall provide that 
information concerning opportunities to participate in 
competitive examinations conducted by, or under authority 
delegated by, the Office of Personnel Management shall be made 
available to the employment offices of the United States 
Employment Service.
  (b) Subject to such regulations as the Office may issue, each 
agency shall promptly notify the Office and the employment 
offices of the United States Employment Service of--
          (1) each vacant position in the agency which is in 
        the competitive service or the Senior Executive Service 
        and for which the agency seeks applications from 
        persons outside the Federal service, [and]
          (2) each vacant position in the agency for which 
        competition is restricted to individuals having 
        competitive status or employees of such agency, 
        excluding any position under paragraph (1), and
          [(2)] (3) the period during which applications will 
        be accepted.
As used in this subsection, ``agency'' means an agency as 
defined in section 5102(a)(1) of this title other than an 
agency all the positions in which are excepted by statute from 
the competitive service.
  (c) Any notification provided under this section shall, for 
all positions under subsection (b)(1) as to which section 
3304(f) applies and for all positions under subsection (b)(2), 
include a notation as to the applicability of section 3304(f) 
with respect thereto.
  (d) In consultation with the Secretary of Labor, the Office 
shall submit to Congress and the President, no less frequently 
than every 2 years, a report detailing, with respect to the 
period covered by such report--
          (1) the number of positions listed under this section 
        during such period;
          (2) the number of preference eligibles and other 
        individuals described in section 3304(f)(1) referred to 
        such positions during such period; and
          (3) the number of preference eligibles and other 
        individuals described in section 3304(f)(1) appointed 
        to such positions during such period.
          * * * * * * *

Sec. 3330. Government-wide list of vacant positions

  (a) For the purpose of this section, the term ``agency'' 
means an Executive agency, excluding the General Accounting 
Office and any agency (or unit thereof) whose principal 
function is the conduct of foreign intelligence or 
counterintelligence activities, as determined by the President.
  [(b) The Office of Personnel Management shall establish and 
keep current a comprehensive list of all announcements of 
vacant positions in the competitive service within each agency 
that are to be filled by appointment for more than one year and 
for which applications are being (or will soon be) accepted 
from outside the agency's work force.]
  (b) The Office of Personnel Management shall cause to be 
established and kept current--
          (1) a comprehensive list of all announcements of 
        vacant positions (in the competitive service and the 
        excepted service, respectively) within each agency that 
        are to be filled by appointment for more than 1 year 
        and for which applications are being or will soon be 
        accepted from outside the agency's work force; and
          (2) a comprehensive list of all announcements of 
        vacant positions within each agency for which 
        applications are being or will soon be accepted and for 
        which competition is restricted to individuals having 
        competitive status or employees of such agency, 
        excluding any position required to be listed under 
        paragraph (1).
  (c) Included for any position listed shall be--
          (1) a brief description of the position, including 
        its title, tenure, location, and rate of pay;
          (2) application procedures, including the period 
        within which applications may be submitted and 
        procedures for obtaining additional information; [and]
          (3) for all positions under subsection (b)(1) as to 
        which section 3304(f) applies and for all positions 
        under subsection (b)(2), a notation as to the 
        applicability of section 3304(f) with respect thereto; 
        and
          [(3)] (4) any other information which the Office 
        considers appropriate.
  (d) [The list] Each list under subsection (b) shall be 
available to members of the public.
          * * * * * * *

Sec. 3330a. Administrative redress

  (a)(1) Any preference eligible or other individual described 
in section 3304(f)(1) who alleges that an agency has violated 
such individual's rights under any statute or regulation 
relating to veterans' preference, or any right afforded such 
individual by section 3304(f), may file a complaint with the 
Secretary of Labor.
  (2) A complaint under this subsection must be filed within 60 
days after the date of the alleged violation, and the Secretary 
shall process such complaint in accordance with sections 
4322(a) through (e)(1) and 4326 of title 38.
  (b)(1) If the Secretary of Labor is unable to resolve the 
complaint within 60 days after the date on which it is filed, 
the complainant may elect to appeal the alleged violation to 
the Merit Systems Protection Board in accordance with such 
procedures as the Merit Systems Protection Board shall 
prescribe, except that in no event may any such appeal be 
brought--
          (A) before the 61st day after the date on which the 
        complaint is filed under subsection (a); or
          (B) later than 15 days after the date on which the 
        complainant receives notification from the Secretary of 
        Labor under section 4322(e)(1) of title 38.
  (2) An appeal under this subsection may not be brought 
unless--
          (A) the complainant first provides written 
        notification to the Secretary of Labor of such 
        complainant's intention to bring such appeal; and
          (B) appropriate evidence of compliance with 
        subparagraph (A) is included (in such form and manner 
        as the Merit Systems Protection Board may prescribe) 
        with the notice of appeal under this subsection.
  (3) Upon receiving notification under paragraph (2)(A), the 
Secretary of Labor shall not continue to investigate or further 
attempt to resolve the complaint to which such notification 
relates.
  (c) This section shall not be construed to prohibit a 
preference eligible from appealing directly to the Merit 
Systems Protection Board from any action which is appealable to 
the Board under any other law, rule, or regulation, in lieu of 
administrative redress under this section.

Sec. 3330b. Judicial redress

  (a) In lieu of continuing the administrative redress 
procedure provided under section 3330a(b), a preference 
eligible or other individual described in section 3304(f)(1) 
may elect, in accordance with this section, to terminate those 
administrative proceedings and file an action with the 
appropriate United States district court not later than 60 days 
after the date of the election.
  (b) An election under this section may not be made--
          (1) before the 121st day after the date on which the 
        appeal is filed with the Merit Systems Protection Board 
        under section 3330a(b); or
          (2) after the Merit Systems Protection Board has 
        issued a judicially reviewable decision on the merits 
        of the appeal.
  (c) An election under this section shall be made, in writing, 
in such form and manner as the Merit Systems Protection Board 
shall by regulation prescribe. The election shall be effective 
as of the date on which it is received, and the administrative 
proceeding to which it relates shall terminate immediately upon 
the receipt of such election.

Sec. 3330c. Remedy

  (a) If the Merit Systems Protection Board (in a proceeding 
under section 3330a) or a court (in a proceeding under section 
3330b) determines that an agency has violated a right described 
in section 3330a, the Board or court (as the case may be) shall 
order the agency to comply with such provisions and award 
compensation for any loss of wages or benefits suffered by the 
individual by reason of the violation involved. If the Board or 
court determines that such violation was willful, it shall 
award an amount equal to backpay as liquidated damages.
  (b) A preference eligible or other individual described in 
section 3304(f)(1) who prevails in an action under section 
3330a or 3330b shall be awarded reasonable attorney fees, 
expert witness fees, and other litigation expenses.
          * * * * * * *

    CHAPTER 35--RETENTION PREFERENCE, RESTORATION, AND REEMPLOYMENT

          * * * * * * *

                   SUBCHAPTER I--RETENTION PREFERENCE

          * * * * * * *

Sec. 3502. Order of retention

  (a) * * *
          * * * * * * *
  (g)(1) A position occupied by a preference eligible shall not 
be placed in a single-position competitive level if the 
preference eligible is qualified to perform the essential 
functions of any other position at the same grade (or 
occupational level) in the competitive area. In such cases, the 
preference eligible shall be entitled to be placed in another 
competitive level for which such preference eligible is 
qualified. If the preference eligible is qualified for more 
than one competitive level, such preference eligible shall be 
placed in the competitive level containing the most positions.
  (2) For purposes of paragraph (1)--
          (A) a preference eligible shall be considered 
        qualified to perform the essential functions of a 
        position if, by reason of experience, training, or 
        education (and, in the case of a disabled veteran, with 
        reasonable accommodation), a reasonable person could 
        conclude that the preference eligible would be able to 
        perform those functions successfully within a period of 
        150 days; and
          (B) a preference eligible shall not be considered 
        unqualified solely because such preference eligible 
        does not meet the minimum qualification requirements 
        relating to previous experience in a specified grade 
        (or occupational level), if any, that are established 
        for such position by the Office of Personnel Management 
        or the agency.
  (h) In connection with any reduction in force, a preference 
eligible whose current or most recent performance rating is at 
least fully successful (or the equivalent) shall have, in 
addition to such assignment rights as are prescribed by 
regulation, the right, in lieu of separation, to be assigned to 
any position within the agency conducting the reduction in 
force--
          (1) for which such preference eligible is qualified 
        under subsection (g)(2)--
                  (A) that is within the preference eligible's 
                commuting area and at the same grade (or 
                occupational level) as the position from which 
                the preference eligible was released, and that 
                is then occupied by an individual, other than 
                another preference eligible, who was placed in 
                such position (whether by appointment or 
                otherwise) within 6 months before the reduction 
                in force if, within 12 months prior to the date 
                on which such individual was so placed in such 
                position, such individual had been employed in 
                the same competitive area as the preference 
                eligible; or
                  (B) that is within the preference eligible's 
                competitive area and that is then occupied by 
                an individual, other than another preference 
                eligible, who was placed in such position 
                (whether by appointment or otherwise) within 6 
                months before the reduction in force; or
          (2) for which such preference eligible is qualified 
        that is within the preference eligible's competitive 
        area and that is not more than 3 grades (or pay levels) 
        below that of the position from which the preference 
        eligible was released, except that, in the case of a 
        preference eligible with a compensable service-
        connected disability of 30 percent or more, this 
        paragraph shall be applied by substituting ``5 grades'' 
        for ``3 grades''.
In the event that a preference eligible is entitled to 
assignment to more than 1 position under this subsection, the 
agency shall assign the preference eligible to any such 
position requiring no reduction (or, if there is no such 
position, the least reduction) in basic pay. A position shall 
not, with respect to a preference eligible, be considered to 
satisfy the requirements of paragraph (1) or (2), as 
applicable, if it does not last for at least 12 months 
following the date on which such preference eligible is 
assigned to such position under this subsection.
  (i) A preference eligible may challenge the classification of 
any position to which the preference eligible asserts 
assignment rights (as provided by, or prescribed by regulations 
described in, subsection (h)) in an action before the Merit 
Systems Protection Board.
  (j)(1) As soon as practicable, but not later than 120 days, 
after the date of the enactment of this subsection, each agency 
shall establish an agencywide priority placement program to 
facilitate employment placement for preference eligibles who--
          (A) are scheduled to be separated from service due to 
        a reduction in force; or
          (B) are separated from service due to a reduction in 
        force.
  (2) Each agencywide priority placement program shall include 
provisions under which a vacant position shall not be filled by 
the appointment or transfer of any individual from outside of 
that agency (other than a former employee previously separated 
from that agency due to a reduction in force) or by any 
promotion, reassignment, or other personnel action involving 
any individual from within that agency (other than a preference 
eligible or, as defined under regulations prescribed by the 
Office, a surplus employee) if--
          (A) there is then available any individual described 
        in paragraph (3) who is qualified for the position; and
          (B) the position--
                  (i) is at the same grade (or pay level) or 
                not more than 2 grades (or pay levels) below 
                that of the position last held by such 
                individual before placement in the new 
                position; and
                  (ii) is within the same commuting area as the 
                individual's residence or last-held position.
  (3) For purposes of an agencywide priority placement program 
under this subsection, an individual shall be considered to be 
described in this paragraph if such individual's most recent 
performance rating was at least fully successful (or the 
equivalent), and such individual is either--
          (A) a preference eligible of such agency who is 
        scheduled to be separated, as described in paragraph 
        (1)(A); or
          (B) a preference eligible who became a former 
        employee of such agency as a result of a separation, as 
        described in paragraph (1)(B).
  (4) A preference eligible shall cease to be eligible to 
participate in a program under this subsection upon the earlier 
of--
          (A) the end of the 24-month period beginning on the 
        date on which the preference eligible first becomes 
        eligible to participate under paragraph (3); or
          (B) the date on which the individual accepts or 
        declines a bona fide offer (or, if the individual does 
        not act on the offer, the last day for accepting such 
        offer) from the affected agency of a position described 
        in paragraph (2)(B).
          * * * * * * *
                              ----------                              


                      TITLE 3, UNITED STATES CODE

          * * * * * * *

            CHAPTER 2--OFFICE AND COMPENSATION OF PRESIDENT

Sec.
101.  Commencement of term of office.
     * * * * * * *
115.  Veterans' preference.
          * * * * * * *

Sec. 115. Veterans' preference

  (a) Subject to subsection (b), appointments under sections 
105, 106, and 107 shall be made in accordance with section 
2108, and sections 3309 through 3312, of title 5.
  (b) Subsection (a) shall not apply to any appointment to a 
position the rate of basic pay for which is at least equal to 
the minimum rate established for positions in the Senior 
Executive Service under section 5382 of title 5 and the duties 
of which are comparable to those described in section 
3132(a)(2) of such title or to any other position if, with 
respect to such position, the President makes certification--
          (1) that such position is--
                  (A) a confidential or policy-making position; 
                or
                  (B) a position for which political 
                affiliation or political philosophy is 
                otherwise an important qualification; and
          (2) that any individual selected for such position is 
        expected to vacate the position at or before the end of 
        the President's term (or terms) of office.
Each individual appointed to a position described in the 
preceding sentence as to which the expectation described in 
paragraph (2) applies shall be notified as to such expectation, 
in writing, at the time of appointment to such position.
          * * * * * * *
                              ----------                              


 SECTION 347 OF THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES 
                        APPROPRIATIONS ACT, 1996

  Sec. 347. (a) * * *
  (b) The provisions of title 5, United States Code, shall not 
apply to the new personnel management system developed and 
implemented pursuant to subsection (a), with the exception of--
          (1) section 2302(b), relating to whistleblower 
        protection;
          * * * * * * *
          (6) chapter 81, relating to compensation for work 
        injury; [and]
          (7) chapters 83-85, 87, and 89, relating to 
        retirement, unemployment compensation, and insurance 
        coverage[.]; and
          (8) sections 3501-3504, as such sections relate to 
        veterans' preference.
          * * * * * * *

                      X. Committee Recommendation

    On June 20, 1996, a quorum being present, the Committee 
ordered the bill, as amended, favorably reported.

 committee on government reform and oversight--104th congress--rollcall

    Date: June 20, 1996.
    Final Passage of H.R. 3586, as amended.
    Offered by: Hon. John L. Mica (R-FL).
    Voice Vote: yea.

    XI. Congressional Accountability Act; Public Law 104-1; Section 
                               102(b)(3)

    H.R. 3586, as amended by the committee, requires the 
legislative branch to apply veterans' preference in hiring and 
reductions in force.