[Senate Report 110-328]
[From the U.S. Government Publishing Office]



110th Congress 
 2d Session                      SENATE                          Report
                                                                110-328
_______________________________________________________________________

                                     

                                                       Calendar No. 703


              SENIOR PROFESSIONAL PERFORMANCE ACT OF 2007

                               __________

                              R E P O R T

                                 of the

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1046

TO MODIFY PAY PROVISIONS RELATING TO CERTAIN SENIOR-LEVEL POSITIONS IN 
             THE FEDERAL GOVERNMENT, AND FOR OTHER PURPOSES




                 April 22, 2008.--Ordered to be printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
                     Kevin J. Landy, Chief Counsel
                   Lawrence B. Novey, Senior Counsel
   Thomas J.R. Richards, Professional Staff Member, Subcommittee on 
  Oversight of Government Management, the Federal Workforce, and the 
                          District of Columbia
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
         Amanda Wood, Minority Director of Governmental Affairs
    Theresa M. Manthripragada, Minority Professional Staff Member, 
    Subcommittee on Oversight of Government Management, the Federal 
                Workforce, and the District of Columbia
                  Trina Driessnack Tyrer, Chief Clerk


                                                       Calendar No. 703
110th Congress
                                 SENATE
                                                                 Report
 2d Session                                                     110-328

======================================================================



 
              SENIOR PROFESSIONAL PERFORMANCE ACT OF 2007

                                _______
                                

                 April 22, 2008.--Ordered to be printed

                                _______
                                

Mr. Lieberman, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1046]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1046) to modify pay 
provisions relating to certain senior-level positions in the 
Federal Government, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................6
 VI. Congressional Budget Office Cost Estimate........................6
VII. Changes in Existing Law Made by the Bill, as Reported............8

                         I. Purpose and Summary

    S. 1046 raises the maximum pay levels for certain senior 
professionals in the federal government to match the maximum 
pay levels now allowed for members of the Senior Executive 
Service (SES), and the bill generally brings the pay system for 
senior professionals more in line with the pay system for the 
SES. Just as agencies that have certified performance 
management systems may now provide to SES members higher pay 
than other agencies may provide, this bill will likewise allow 
agencies with certified performance management systems to 
provide higher pay to covered senior professionals than may 
other agencies. S. 1046 also makes a number of clarifications 
and technical corrections to the process by which agencies 
obtain such certification of their performance management 
systems.

              II. Background and Need for the Legislation

    In 2002 and 2003, Congress strengthened the connection 
between performance-management and pay for members of the SES 
and for senior professionals, including employees classified as 
senior-level (SL) or scientific and professional personnel (ST) 
by raising certain statutory pay ceilings at agencies with 
certified performance appraisal systems. A statute enacted in 
2002 raised the maximum annual pay of all senior employees at 
such agencies.\1\ The Director of OPM, with the concurrence of 
the Director of the Office of Management and Budget (OMB), was 
authorized to certify an agency's performance appraisal system 
if it makes meaningful distinctions based on relative employee 
performance. Upon certification, the maximum amount that the 
agency may pay to a senior employee in a year (including base 
pay and allowances such as premium pay, bonuses, and incentive 
awards) was raised from the current ceiling, of level I of the 
Executive Schedule, to the annual pay level of the Vice 
President.
---------------------------------------------------------------------------
    \1\Section 1322 of Public Law 107-296 (Nov. 25, 2002) (5 U.S.C. 
Sec. 5307(d)).
---------------------------------------------------------------------------
    Then in 2003 Congress built on the 2002 amendments by also 
increasing the maximum level of base pay that agencies with 
certified performance appraisal systems are allowed to pay, but 
the 2003 statute applied to SES members only.\2\ The 2003 
provisions increased the maximum allowable base pay for members 
of the SES from level IV of the Executive Schedule to level III 
and ended the locality-based comparability payments to SES 
members. The new system also replaced the six pay steps and 
corresponding pay levels with a single, broad range. Upon 
certification of their performance management systems by OPM, 
with concurrence by OMB, agencies were given the authority to 
further increase the maximum allowed base pay for their SES 
workforce from level III of the Executive Schedule to level II. 
The 2003 pay reforms were not applied to SL or ST personnel.
---------------------------------------------------------------------------
    \2\Section 1125 of Public Law 108-136.
---------------------------------------------------------------------------
    While SL and ST positions are different in some respects 
from the SES, whose members provide the executive management of 
the federal government,\3\ these other senior positions are 
also recognized as providing essential specialized skills that 
are needed to address the federal government's 21st Century 
challenges. The ST system is for specially qualified non-
executive personnel who conduct research and development 
functions in the physical, biological, medical, or engineering 
sciences, or a closely-related field.\4\ ST positions are 
graded and paid above level 15 of the General Schedule (GS-15) 
and, according to OPM, ``would be expected to have a graduate 
degree, significant research experience, and a national or 
international reputation in his/her field.''\5\ The SL system 
is for high-level non-executive positions, also graded above 
GS-15, that do not involve fundamental research and development 
responsibilities. Examples offered by OPM include ``a high 
level special assistant or a senior attorney in a highly-
specialized field who is not a manager, supervisor, or policy 
advisor.''\6\
---------------------------------------------------------------------------
    \3\5 U.S.C. Sec. 3131.
    \4\See 5 U.S.C. Sec. 3104; U.S. Office of Personnel Management, The 
Senior Executive Service (February 2004), page 8. This document is 
currently available at: http://www.opm.gov/ses/pdf/SESGUIDE04.pdf.
    \5\Id.
    \6\Id. at page 7. See 5 U.S.C. Sec. 5108.
---------------------------------------------------------------------------
    In 2006, the Government Accountability Office identified 
the difference between the maximum rate of basic pay for the 
SES and the maximum for SL and ST employees as an undesirable 
anomaly in the law.\7\ The Senior Executives Association, whose 
membership includes SL and ST employees, has requested that 
their pay systems be made comparable to that of the SES. 
Moreover, the Office of Personnel Management (OPM) has proposed 
that Congress make the pay system for senior federal employees 
comparable to the pay system for members of the SES.\8\
---------------------------------------------------------------------------
    \7\U.S. Government Accountability Office, Human Capital: Trends in 
Executive and Judicial Pay, GAO-06-708, p. 7.
    \8\Letter from Linda M. Springer, Director, OPM, to Richard B. 
Cheney, President of the United States Senate, June 8, 2007. This 
letter is currently available at: http://www.opm.gov/news_events/
congress/proposals/senior_professional_performance_act.pdf.
---------------------------------------------------------------------------
    The principal purpose of S. 1046 is to bring the pay system 
for SL and ST personnel into line with that for SES members. 
Locality-based comparability payments for SL and ST employees 
will be eliminated and replaced with a boost in the maximum pay 
level that may be paid to these employees. Specifically, the 
bill will raise the basic-pay ceiling for SL and ST personnel 
from level IV to level III of the Executive Schedule, or, 
assuming that the employing agency has a certified performance 
appraisal system, to level II of the Executive Schedule.
    The bill also makes a variety of adjustments to the 
standards and procedures for appointing and employing senior 
professional personnel, as well as clarifications and technical 
corrections to the process by which agencies obtain 
certification of their performance management systems. These 
provisions of the bill are based on legislative proposals made 
by OPM.\9\
---------------------------------------------------------------------------
    \9\Id.; Letter from Linda M. Springer, Director, OPM, to Richard B. 
Cheney, President of the United States Senate, February 7, 2007. This 
letter is currently available at: http://www.opm.gov/news_events/
congress/proposals/ses_certification.pdf.
---------------------------------------------------------------------------

                        III. Legislative History

    Senator Voinovich introduced S. 1046 on March 29, 2007. The 
bill was referred to the Committee on Homeland Security and 
Governmental Affairs and, on June 6, 2007, was further referred 
to the Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia.
    The Subcommittee subsequently favorably polled S. 1046, 
and, on June 13, 2007, the Committee considered the bill and 
ordered it reported favorably without amendment to the full 
Senate by voice vote. Senators present were: Lieberman, Levin, 
Akaka, Pryor, Tester, Collins, Stevens, Voinovich, Coleman, and 
Warner.
    The subject matter of the bill had also been considered by 
the Committee in past Congresses. In the 109th Congress, 
section 6 of S. 3492, the Federal Workforce Performance 
Appraisal and Management Improvement Act of 2006, would have 
established parity between the pay systems for members of the 
SES and SL and ST employees. The Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia held a hearing on June 29, 2006, entitled, 
Enhancing Employee Performance: A Hearing on Pending 
Legislation, at which S. 3492 was discussed. In the 108th 
Congress, S. 768, the Senior Executive Service Reform Act of 
2003, which would have made similar amendments to both the SES 
and the SL and ST pay systems, was introduced and referred to 
the Committee.

                    IV. Section-by-Section Analysis


Section 1. Short title

    This section provides that the short title of the bill is 
``The Senior Professional Performance Act of 2007.''

Section 2. Pay provisions relating to certain senior-level positions

    Subsections (a) and (b) of Section 2 amend Title 5, United 
States Code, to make the pay provisions for SL and ST employees 
comparable to the pay provisions for members of the SES as 
modified by legislation enacted in 2003. These changes will end 
the virtually automatic locality-based comparability payments 
to personnel in SL and ST positions and will increase the 
maximum levels of basic pay that agencies may provide to such 
personnel. The highest levels of basic pay will be available at 
agencies that have certified performance appraisal systems.
    Subsection (a)--Locality Pay. This subsection amends 5 
U.S.C. Sec. 5304, which generally governs locality-based 
comparability payments for federal employees, by exempting 
personnel in SL and ST positions from receiving locality pay. 
For these personnel, 5 U.S.C. Sec. 5304 currently places a cap 
on total basic pay including locality pay at no more than level 
III of the Executive Schedule; the amendments in this 
subsection of the bill also remove SL and ST personnel from 
that ceiling on basic pay.
    Subsection (b)--Access to Higher Maximum Rate of Basic Pay. 
This subsection amends 5 U.S.C. Sec. 5376, which generally 
governs the establishment of basic pay rates for SL and ST 
personnel. Counterbalancing the withdrawal of locality pay 
under subsection (a), this subsection (b) will raise the 
available pay range for SL and ST personnel by increasing the 
ceiling on their rate of basic pay from level IV to level III 
of the Executive Schedule. Moreover, if the employing agency 
has a performance appraisal system that has been certified 
under section 5 U.S.C. Sec. 5307 as making meaningful 
distinctions based on relative performance, the cap on basic 
pay will be further raised, to level II of the Executive 
Schedule. These changes will parallel the provisions enacted in 
2003 with respect to members of the SES.
    Subsection (c)--Authority for Employment; Appointments; 
Classification Standards. This subsection makes several changes 
to the standards and procedures relating to the appointment and 
employment of senior-level professional personnel. These 
changes, which were requested by OPM,\10\ are as follows:
---------------------------------------------------------------------------
    \10\Letter dated June 8, 2007, note 8 above.
---------------------------------------------------------------------------
    Paragraph (1) of this subsection amends 5 U.S.C. 
Sec. 3104(a). The current code provision authorizes agencies to 
establish ST positions under standards and procedure prescribed 
by OPM. Under the amendment, these standards and procedures 
prescribed by OPM will be published in such form as OPM may 
determine.
    Paragraph (2) amends 5 U.S.C. Sec. 3324, which now provides 
that the qualifications of a proposed appointee for a position 
classified above GS-15 must be approved by OPM. The amendment 
specifies that OPM must grant such approval on the basis of 
qualification standards developed by the employing agency, and 
that the agency must develop those qualification standards in 
accordance with criteria specified in regulation by OPM. OPM 
has also pointed out that, under its general delegation 
authority, OPM ``could and should delegate this determination 
to agency heads, where appropriate.''\11\
---------------------------------------------------------------------------
    \11\Id., Section-by-Section Analysis enclosed with the letter.
---------------------------------------------------------------------------
    Paragraph (3) amends 5 U.S.C. Sec. 3325, which now provides 
that the qualifications of a proposed appointee for an ST 
position must be approved by OPM if the appointment is made 
without competitive examination. The amendments specify that 
OPM must grant such approval on the basis of qualification 
standards developed by the employing agency, and that the 
agency must develop those qualification standards in accordance 
with criteria specified in regulation by OPM. The amendments 
also require OPM to prescribe regulations to carry out 5 U.S.C. 
Sec. 3325.
    Paragraph (4) amends 5 U.S.C. Sec. 5108(a)(2). The current 
code provision authorizes OPM to establish standards and 
procedures in accordance with which an agency may classify 
positions above GS-15. Under the amendment, these standards and 
procedures will be published in such form as OPM may determine.
    Subsection (d)--Effective Date and Application.
    Paragraph (1) states that the amendments made by Section 2 
of the bill will go into effect on the first day of the first 
pay period beginning on or after the 180th day following the 
date of enactment.
    Paragraph (2) provides that, when the amendments in Section 
2 go into effect, they may not reduce the rate of basic pay of 
any personnel in an ST or SL position. Instead, for affected 
individuals, the rate of basic pay will be deemed to be the 
rate of basic pay set for the individual, plus locality pay 
paid to the individual, as of the effective date.
    Paragraph (3) clarifies the meaning of cross references 
elsewhere in law that refer to the maximum rate of pay under 
the code provision that governs ST and SL employees' pay.

Section 3. Limitations on certain payments

    Under 5 U.S.C. Sec. 5307(d), OPM, with the concurrence of 
OMB, provide certifications to agencies that have performance 
appraisal systems that make meaningful distinctions based on 
relative performance. This certification is necessary for 
agencies to be subject to higher ceilings on aggregate annual 
pay and on rates of basic pay for their senior executives and 
other senior personnel. Section (3) makes corrections and 
clarifications to the process by which agencies' performance 
appraisal systems are certified. These corrections and 
clarifications, which were requested by OPM,\12\ are as 
follows:
---------------------------------------------------------------------------
    \12\Letter dated February 7, 2007, note 9 above.
---------------------------------------------------------------------------
    Subsection (a)--In General.
    Paragraph (1) amends 5 U.S.C. Sec. 5307(d)(2) to clarify 
that the certification applies to the performance appraisal 
system, not to the agency.
    Paragraph (2) amends 5 U.S.C. Sec. 5307(d)(3)(B) to provide 
that the certification of a performance appraisal system may be 
granted for up to 24 months, with the option of extension by 
the OPM Director for up to an additional 6 months. Under the 
current code provision, certification is effective for two 
calendar years, and OPM has pointed out that this has resulted 
in unduly short certification periods, placing agencies at an 
unintended disadvantage, when their appraisal systems are 
certified near the end of a calendar year.\13\
---------------------------------------------------------------------------
    \13\Id., Section-by-Section Analysis enclosed with the letter.
---------------------------------------------------------------------------
    Subsection (b)--Extension of Certification. To address the 
problem of performance appraisal systems that were certified 
close to the end of a calendar year prior to enactment of this 
legislation, this subsection (b) authorizes OPM to grant short 
extensions of such certifications. For certifications that are 
set to expire at the end of 2007, the extension could be up to 
June 30, 2008, or the first anniversary of the certification, 
whichever is later. For certifications set to expire at the end 
of 2008, the extension could be up to June 30, 2009, or the 
second anniversary of the certification, whichever is later.
    Subsection (c)--Effective Date. This subsection makes the 
provisions of Section 3 effective upon enactment of the 
legislation.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirement of paragraph 11(b)(1) of rule 
XXVI of the Standing Rules of the Senate the Committee has 
considered the regulatory impact of this bill. CBO states that 
there are no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and no costs on 
State, local, or tribal governments. The legislation contains 
no other regulatory impact.

             VI. Congressional Budget Office Cost Estimate

                                                September 12, 2007.
Hon. Joseph I. Lieberman, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1046, the Senior 
Professional Performance Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Barry Blom.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 1046--Senior Professional Performance Act of 2007

    Summary: S. 1046 would raise the cap on base pay for 
certain senior-level, scientific, and professional employees 
while eliminating locality-based comparability payments for 
those employees. It also would make several other small changes 
to the procedures for new appointments of senior-level, 
scientific, and professional positions classified above GS-15. 
Finally, it would allow the Director of the Office of Personnel 
Management (OPM) to extend the certification of an agency's 
performance appraisal system, which is otherwise limited to 24 
months under the bill, for up to six months. CBO estimates that 
implementing the legislation would cost the federal government 
roughly $7 million between 2008 and 2012, which would be paid 
from discretionary appropriations. Enacting the bill would not 
affect direct spending or revenues.
    S. 1046 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The following 
table shows the estimated costs of S. 1046. The costs of this 
legislation fall within nearly all budget functions.

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2008     2009     2010     2011     2012
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......................................        *        *        1        2        3
Estimated Outlays..................................................        *        *        1        2        3
----------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000.

    Basis of estimate: Under current law, senior-level (SL) and 
scientific and professional (ST) employees may receive basic 
pay up to Level IV of the Executive Schedule ($145,400); their 
maximum pay with the locality-based comparability adjustment is 
set at Level III of the Executive Schedule ($154,600). SL and 
ST employees receive the same annual across-the-board pay 
raises and locality-based comparability adjustments that 
General Schedule employees receive.
    S. 1046 would raise the cap on base pay for most SL and ST 
employees to $154,600 on the first day of the first pay period 
that occurs six months after enactment. Those employees working 
at agencies with a performance appraisal system that is 
certified as making meaningful distinctions based on relative 
performance would have their base pay capped at Level II of the 
Executive Schedule ($168,000). Locality adjustments for SL and 
ST employees would be eliminated, affecting roughly 900 
employees. The legislation specifies that no SL or ST employee 
will experience a reduction in pay (defined so as to include 
the locality adjustment).
    CBO assumes that--under both current law and under the 
proposed legislation--the number of employees in the affected 
categories will remain constant over the 2008-2012 period and 
that base pay after 2007 will increase by CBO's projection of 
the employment cost index for wages and salaries (ECI) minus 
one-half percentage point in each year. Furthermore, CBO 
estimates the average merit adjustment after 2007 will raise 
pay by an additional one-half of one percent in each year for 
employees in agencies without an OPM-certified performance 
appraisal system and by 1.0 percent for employees who fall 
under a certified system. In addition, CBO assumes that those 
agencies that have received full certification from OPM for 
their Senior Executive Service appraisal system in 2007 will 
also receive approval for their SL and ST appraisal systems. 
CBO inflated the statutory caps on base pay and overall pay 
from 2008 through 2012 by projected raises for Executive 
Schedule employees. Data about the number of employees and 
average salary in each category comes from the Office of 
Personnel Management.
    Estimated impact on the private-sector: S. 1046 contains no 
intergovernmental or private-sector mandates as defined in UMRA 
and would impose no costs on state, local, or tribal 
governments.
    Estimate prepared by: Federal costs: Barry Blom; Impact on 
state, local, and tribal governments: Elizabeth Cove; Impact on 
the private sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

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

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the following 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):

                           UNITED STATES CODE

             TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES

                          PART III--EMPLOYEES


                  Subpart B--Employment and Retention


                  CHAPTER 31--AUTHORITY FOR EMPLOYMENT


                  Subchapter I--Employment Authorities


SEC. 3104. EMPLOYMENT OF SPECIALLY QUALIFIED SCIENTIFIC AND 
                    PROFESSIONAL PERSONNEL.

    (a) The Director of the Office of Personnel Management may 
establish, and from time to time revise, the maximum number of 
scientific or professional positions for carrying out research 
and development functions which require the services of 
specially qualified personnel which may be established outside 
of the General Schedule. Any such position may be established 
by action of the Director or, under such standards and 
procedures as the Office [prescribes] prescribes and publishes 
in such form as the Office may determine (including procedures 
under which the prior approval of the Director may be 
required), by agency action.

           *       *       *       *       *       *       *


           CHAPTER 33--EXAMINATION, SELECTION, AND PLACEMENT


       Subchapter I--Examination, Certification, and Appointment


SEC. 3324. APPOINTMENTS TO POSITIONS CLASSIFIED ABOVE GS-15.

    (a) An appointment to a position classified above GS-15 
pursuant to section 5108 may be made only on approval of the 
qualifications of the proposed appointee by [the Office of 
Personnel Management] the Director of the Office of Personnel 
Management on the basis of qualification standards developed by 
the agency involved in accordance with criteria specified in 
regulations prescribed by the Director. This section does not 
apply to a position--

           *       *       *       *       *       *       *


SEC. 3325. APPOINTMENTS TO SCIENTIFIC AND PROFESSIONAL POSITIONS.

    (a) Positions established under section 3104 of this title 
are in the competitive service. However, appointments to the 
positions are made without competitive examination on approval 
of the qualifications of the proposed appointee by the Office 
of Personnel Management [or its designee for this purpose] on 
the basis of standards developed by the agency involved in 
accordance with criteria specified in regulations prescribed by 
the Director of the Office of Personnel Management.
    (b) This section does not apply to positions established 
under section 3104(c).
    (c) The Director of the Office of Personnel Management 
shall prescribe such regulations as may be necessary to carry 
out the purpose of this section.

                     Subpart D--Pay and Allowances


                       CHAPTER 51--CLASSIFICATION


SEC. 5108. CLASSIFICATION OF POSITIONS ABOVE GS-15.

    (a) The Office of Personnel Management may, for any 
Executive agency--

           *       *       *       *       *       *       *

          (2) establish standards and procedures published by 
        the Director of the Office of Personnel Management in 
        such form as the Office may determine (including 
        requiring agencies, where necessary in the judgment of 
        the Office, to obtain the prior approval of the Office) 
        in accordance with which positions may be classified 
        above GS-15.

           *       *       *       *       *       *       *


                   CHAPTER 53--PAY RATES AND SYSTEMS


                 Subchapter I--Pay Comparability System


SEC. 5304. LOCALITY-BASED COMPARABILITY PAYMENTS.

           *       *       *       *       *       *       *


    (g)(1) Except as provided in paragraph (2), comparability 
payments may not be paid at a rate which, when added to the 
rate of basic pay otherwise payable to the employee involved, 
would cause the total to exceed the rate of basic pay payable 
for level IV of the Executive Schedule.
    (2) The applicable maximum under this subsection shall be 
level III of the Executive Schedule for--
          (A) positions under subparagraphs (A)[-(C)] and (B) 
        of subsection (h)(1); and
          (B) any positions under subsection (h)(1)[(D) 
        which](C) as the President may determine.
    (h)(1) For the purpose of this subsection, the term 
``position'' means--
          [(A) a position to which section 5376 applies 
        (relating to certain senior-level positions);]
          [(B)] (A) a position to which section 5372 applies 
        (relating to administrative law judges appointed under 
        section 3105);
          [(C)] (B) a position to which section 5372a applies 
        (relating to contract appeals board members); and
          [(D)] (C) a position within an Executive agency not 
        covered under the General Schedule or any of the 
        preceding subparagraphs, the rate of basic pay for 
        which is (or, but for this section, would be) no more 
        than the rate payable for level IV of the Executive 
        Schedule; but does not include--
                  (i) a position to which subchapter IV applies 
                (relating to prevailing rate systems);
                  (ii) a position as to which a rate of pay is 
                authorized under section 5377 (relating to 
                critical positions);
                  (iii) a position to which subchapter II 
                applies (relating to the Executive Schedule);
                  (iv) a Senior Executive Service position 
                under section 3132;
                  (v) a position in the Federal Bureau of 
                Investigation and Drug Enforcement 
                Administration Senior Executive Service under 
                section 3151; [or]
                  (vi) a position in a system equivalent to the 
                system in clause (iv), as determined by the 
                President's Pay Agent designated under 
                subsection (d)[.]; or
                  (vii) a position to which section 5376 
                applies (relating to certain senior-level and 
                scientific and professional positions).
    (2)(A) Notwithstanding subsection (c)(4) or any other 
provision of this section, but subject to subparagraph (B) and 
paragraph (3), upon the request of the head of an Executive 
agency with respect to 1 or more categories of positions, the 
President may provide that each employee of such agency who 
holds a position within such category, and within the 
particular locality involved, shall be entitled to receive 
comparability payments.
    (B) A request by an agency head or exercise of authority by 
the President under subparagraph (A) shall cover--
          (i) with respect to the positions under 
        [subparagraphs (A) through (C)] subparagraphs (A) and 
        (B) of paragraph (1), all positions described in the 
        subparagraph or subparagraphs involved (excluding any 
        under clause (i), (ii), (iii), (iv), (v), [or (vi)] 
        (vi), or (vii) of such paragraph); and
          (ii) with respect to positions under [paragraph 
        (1)(D)] paragraph (1)(C), such positions as may be 
        considered appropriate (excluding any under clause (i), 
        (ii), (iii), (iv), (v), [or (vi)] (vi), or (vii) of 
        paragraph (1)).
    (C) Notwithstanding subsection (c)(4) or any other 
provision of law, but subject to paragraph (3), in the case of 
a category with positions that are in more than 1 Executive 
agency, the President may, on his own initiative, provide that 
each employee who holds a position within such category, and in 
the locality involved, shall be entitled to receive 
comparability payments. No later than 30 days before an 
employee receives comparability payments under this 
subparagraph, the President or the President's designee shall 
submit a detailed report to the Congress justifying the reasons 
for the extension, including consideration of recruitment and 
retention rates and the expense of extending locality pay.
    (3) Comparability payments under this subsection--
          (A) may be paid only in any calendar year in which 
        comparability payments under the preceding provisions 
        of this section are payable with respect to General 
        Schedule positions within the same locality;
          (B) shall take effect, within the locality involved, 
        on the first day of the first applicable pay period 
        commencing on or after such date as the President 
        designates (except that no date may be designated which 
        would require any retroactive payments), and shall 
        remain in effect through the last day of the last 
        applicable pay period commencing during that calendar 
        year;
          (C) shall be computed using the same percentage as is 
        applicable, for the calendar year involved, with 
        respect to General Schedule positions within the same 
        locality; and
          (D) shall be subject to the applicable limitation 
        under subsection (g).

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SEC. 5307. LIMITATION ON CERTAIN PAYMENTS.

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    (d)(1) Notwithstanding any other provision of this section, 
subsection (a)(1) shall be applied by substituting ``the total 
annual compensation payable to the Vice President under section 
104 of title 3'' for ``the annual rate of basic pay payable for 
level I of the Executive Schedule'' in the case of any employee 
who--
          (A) is paid under section 5376 or 5383 of this title 
        or section 332(f), 603, or 604 of title 28; and
          (B) holds a position in or under an agency which is 
        described in paragraph (2).
    (2) An agency described in this paragraph is any agency 
which, for purposes of [the calendar year involved, has been 
certified under this subsection as having a performance 
appraisal system which (as designed and applied) makes 
meaningful distinctions based on relative performance.] 
applying the limitation in the calendar year involved, has a 
performance appraisal system certified under this subsection as 
making, in its design and application, meaningful distinctions 
based on relative performance.
    (3)(A) The Office of Personnel Management and the Office of 
Management and Budget jointly shall promulgate such regulations 
as may be necessary to carry out this subsection, including the 
criteria and procedures in accordance with which any 
determinations under this subsection shall be made.
    (B) [An agency's certification under this subsection shall 
be for a period of 2 calendar years] The certification of an 
agency performance appraisal system under this subsection shall 
be for a period not to exceed 24 months beginning on the date 
of certification, unless extended by the Director of the Office 
of Personnel Management for up to 6 additional months, except 
that such certification may be terminated at any time, [for 
purposes of either or both of those years,] upon a finding that 
the actions of such agency have not remained in conformance 
with applicable requirements.

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                Subchapter VII--Miscellaneous Provisions


SEC. 5376. PAY FOR CERTAIN SENIOR-LEVEL POSITIONS.

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    (b)(1) Subject to such regulations as the Office of 
Personnel Management prescribes, the head of the agency 
concerned shall fix the rate of basic pay for any position 
within such agency to which this section applies. A rate fixed 
under this section shall be--
          (A) not less than 120 percent of the minimum rate of 
        basic pay payable for GS-15 of the General Schedule; 
        and
          (B) [not greater than the rate of basic pay payable 
        for level IV of the Executive Schedule.] subject to 
        paragraph (3), not greater than the rate of basic pay 
        payable for level III of the Executive Schedule.
The payment of a rate of basic pay under this section shall not 
be subject to the pay limitation of section 5306(e) or 5373.
    (2) Subject to paragraph (1), effective at the beginning of 
the first applicable pay period commencing on or after the 
first day of the month in which an adjustment takes effect 
under section 5303 in the rates of pay under the General 
Schedule, each rate of pay established under this section for 
positions within an agency shall be adjusted by such amount as 
the head of such agency considers appropriate.
    (3) In the case of an agency which, under section 5307(d), 
has a performance appraisal system which, as designed and 
applied, is certified as making meaningful distinctions based 
on relative performance, paragraph (1)(B) shall apply as if the 
reference to ``level III'' were a reference to ``level II''.
    (4) No employee may suffer a reduction in pay by reason of 
transfer from an agency with an applicable maximum rate of pay 
prescribed under paragraph (3) to an agency with an applicable 
maximum rate of pay prescribed under paragraph (1)(B).

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