[Federal Register Volume 69, Number 199 (Friday, October 15, 2004)]
[Rules and Regulations]
[Pages 61143-61144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23194]



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  Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / 
Rules and Regulations  

[[Page 61143]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 730

RIN 3206-AK60


Notification of Post-Employment Restrictions

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

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SUMMARY: The Office of Personnel Management is issuing interim 
regulations requiring agencies to notify members of the Senior 
Executive Service (SES) and other employees in senior positions of 
certain post-employment conflict-of-interest restrictions. Agencies 
must provide written notification to affected employees of the new 
salary-based threshold for determining the applicability of the post-
employment conflict-of-interest restrictions.

DATES: Effective Date: January 1, 2004.
    Applicability Date: The regulations apply on the first day of the 
first applicable pay period beginning on or after October 15, 2004.
    Comment Date: Comments must be received on or before December 14, 
2004.

ADDRESSES: Send or deliver comments to Donald J. Winstead, Deputy 
Associate Director for Pay and Performance Policy, Office of Personnel 
Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415-8200; 
by FAX at (202) 606-0824; or by e-mail at [email protected].

FOR FURTHER INFORMATION CONTACT: For information, please contact Jo Ann 
Perrini by telephone at (202) 606-2858; by FAX at (202) 606-0824; or by 
e-mail at [email protected].

SUPPLEMENTARY INFORMATION: Section 1125(b) of Public Law 108-136 
established a new salary-based threshold for determining the 
applicability of certain post-employment conflict-of-interest 
restrictions under 18 U.S.C. 207(c). The new salary-based threshold 
became effective on the first day of the first applicable pay period 
beginning on or after January 1, 2004 (January 11, 2004, for most 
employees). As a result of the higher rates of basic pay established 
for members of the Senior Executive Service (SES) upon conversion to 
the new performance-based SES pay system in January 2004, the vast 
majority of SES members are now subject to the post-employment 
restrictions in 18 U.S.C. 207(c).

SES Performance-Based Pay System

    Section 1125(a) of Public Law 108-136 (November 24, 2003) amended 5 
U.S.C. 5382 to establish a new performance-based pay system for the SES 
that became effective on the first day of the first pay period 
beginning on or after January 1, 2004 (January 11, 2004, for most 
employees). On January 13, 2004, the Office of Personnel Management 
(OPM) issued interim regulations (69 FR 2048) to establish the new SES 
performance-based pay system, prescribe the rules for conversion to the 
new SES pay system, and outline the criteria for providing pay 
adjustments to SES members on or after the first applicable pay period 
beginning on or after January 1, 2004 (January 11, 2004, for most 
employees). Generally, the employee's newly converted SES rate of basic 
pay is equal to the rate of basic pay plus any applicable locality 
payment to which the employee was entitled on January 10, 2004. (In 
cases where the SES member's rate of basic pay, plus any applicable 
locality-based comparability payment under 5 U.S.C. 5304 to which the 
employee was entitled on November 24, 2003, was higher, the employee 
was entitled to that higher rate upon conversion to the new SES pay 
system.)

Post-Employment Restrictions

    Section 1125(b)(1) amended 18 U.S.C. 207(c)(2)(A)(ii) to require 
SES members and other individuals who are paid at a rate of basic pay 
that is equal to or greater than 86.5 percent of the rate for level II 
of the Executive Schedule (i.e., equal to or greater than $136,757 in 
2004) to be subject to the post-employment restrictions in 18 U.S.C. 
207(c). In addition, a grandfather provision in section 1125(b)(1) 
applies to certain SES members and other individuals for a period of 2 
years, through November 24, 2005. If such individuals, on November 23, 
2003, were subject to 18 U.S.C. 207(c) and were employed in positions 
whose rate of basic pay, exclusive of locality payments under 5 U.S.C. 
5304, was equal to or greater than the rate of basic pay payable for 
level 5 of the SES (i.e., $134,000), they will be subject to the 1-year 
post-employment restrictions in 18 U.S.C. 207(c) until November 24, 
2005, without regard to any subsequent changes in position or pay. If 
at the end of the extended coverage period (November 24, 2005), a 
covered employee is paid at a rate of basic pay that is equal to or 
greater than 86.5 percent of the rate for level II of the Executive 
Schedule, he or she will continue to be subject to the post-employment 
restrictions in 18 U.S.C. 207(c).
    The post-employment restrictions in 18 U.S.C. 207(c) require that 
for 1 year after service in a covered position ends, no former employee 
may knowingly make, with the intent to influence, any communication to 
or appearance before an employee of a department or agency in which he 
or she served in any capacity during the 1-year period prior to ending 
service in that position, if that communication or appearance is made 
on behalf of any other person (except the United States) in connection 
with any matter concerning which he or she seeks official action by 
that employee. Employees subject to 18 U.S.C. 207(c) also are subject 
to 18 U.S.C. 207(f), which imposes additional restrictions on 
representing, aiding, or advising certain foreign entities with the 
intent to influence any officer or employee of any department or agency 
of the United States.

Agency Notification Requirements

    Section 1125(b) also added a new section 7302 to chapter 73 of 
title 5, United States Code, to require OPM, in consultation with the 
Attorney General and the Office of Government Ethics, to promulgate 
regulations requiring each executive branch agency to provide written 
notification to an employee of that agency who is subject to the post-
employment conflict-of-interest

[[Page 61144]]

restrictions in 18 U.S.C. 207(c)(1) as a result of the amendment to 18 
U.S.C. 207(c)(2)(A)(ii).
    On January 6, 2004, OPM issued a memorandum providing additional 
guidance on the new salary-based threshold for determining the 
applicability of certain post-employment conflict-of-interest 
restrictions to SES members. (See ``Notification of Changes in Post-
Employment Restrictions Coverage for Members of the Senior Executive 
Service (SES)'' at http://www.opm.gov/oca/compmemo/2004/2004-01.asp.) 
In that memorandum, OPM encouraged agencies to identify and notify 
those SES members who would be covered by the post-employment 
restrictions as of January 11, 2004. We also provided written sample 
notices that agencies could use to notify their employees.
    In these interim regulations, we have added a new 5 CFR part 730, 
which requires agencies to provide written notice to affected employees 
before, or as part of, any action that affects the employee's coverage 
under 18 U.S.C. 207(c)(1), including when employment or service in a 
covered position is terminated. A copy of the written notice must be 
provided simultaneously to the Designated Agency Ethics Official (or a 
delegate) for the agency involved. The notices are to be retained for 
the particular individual as part of the OGE/GOVT-1 Governmentwide 
System of Records. (See 68 FR 3098 (January 22, 2003) (Privacy Act 
system notice).) However, post-employment restrictions apply to covered 
employees whether or not they receive a written notice from their 
agencies.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
will apply only to Federal agencies and employees.

Waiver of Notice of Proposed Rulemaking

    Pursuant to sections 553(b)(3)(B) and (d)(3), of title 5, United 
States Code, I find that good cause exists for waiving the general 
notice of proposed rulemaking and for making this rule effective in 
less than 30 days. These regulations implement section 1125(b) of 
Public Law 108-136, which requires OPM, in consultation with the 
Attorney General and the Office of Government Ethics, to promulgate 
regulations no later than 180 days after the law's effective date (by 
May 24, 2004). The waiver of the two requirements in sections 
553(b)(3)(B) and (d)(3) is necessary in order for OPM to comply with 
the law by consulting with the designated officials and promulgating 
regulations by the deadline imposed by Congress.

E.O. 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with E.O. 12866.

List of Subjects in 5 CFR Part 730

    Government employees.

Office of Personnel Management.
Kay Coles James,
Director.

0
Accordingly, OPM is adding a new part 730 to read as follows:

PART 730--NOTIFICATION OF POST-EMPLOYMENT RESTRICTIONS

Sec.
730.101 Purpose.
730.102 Definitions.
730.103 Coverage.
730.104 Notification.
730.105 Savings provision.

    Authority: 5 U.S.C. 7302 and sec. 1125(b) of the National 
Defense Authorization Act for FY 2004, Pub. L. 108-136, 117 Stat. 
1392.


Sec.  730.101  Purpose.

    This part implements 5 U.S.C. 7302, which requires agencies to 
provide written notice to senior executives and other individuals 
covered by 18 U.S.C. 207(c)(2)(A)(ii) that they are subject to certain 
post-employment conflict-of-interest restrictions in 18 U.S.C. 207(c).


Sec.  730.102  Definitions.

    Agency means an Executive agency as defined in 5 U.S.C. 105, but 
does not include the General Accounting Office.
    Senior executive means a member of the Senior Executive Service 
(SES).


Sec.  730.103  Coverage.

    (a) The following individuals are subject to the post-employment 
conflict-of-interest restrictions in 18 U.S.C. 207(c), as amended by 
section 1125(b)(1) of the National Defense Authorization Act for FY 
2004:
    (1) Any individual, including a senior executive, who is paid at a 
rate of basic pay equal to or greater than 86.5 percent of the rate for 
level II of the Executive Schedule; and
    (2) Any individual, including a senior executive, who as of 
November 23, 2003, was paid at a rate of basic pay, exclusive of any 
locality-based comparability payments under 5 U.S.C. 5304, equal to or 
greater than the rate of basic pay for level 5 of the Senior Executive 
Service on that date (i.e., $134,000). These employees are subject to 
the post-employment restrictions through November 24, 2005, without 
regard to any subsequent changes in position or pay.
    (b) Nothing in this part affects individuals serving in positions 
described in 18 U.S.C. 207(c)(2)(A)(i), (iii), (iv), or (v).


Sec.  730.104  Notification.

    (a) Agencies must provide written notification to senior executives 
and other individuals covered by the amendment to 18 U.S.C. 
207(c)(2)(A)(ii) that they are subject to the post-employment conflict-
of-interest restrictions in 18 U.S.C. 207, before, or as part of, any 
personnel action that affects the employee's coverage under 18 U.S.C. 
207(c)(1), including when employment or service in a covered position 
is terminated. A copy of the written notice must be provided 
simultaneously to the Designated Agency Ethics Official (or his or her 
delegate). The written notice must include information on the 
applicable penalties or injunctions that may be imposed under 18 U.S.C. 
216(a), (b), and (c) for violations of the post-employment restrictions 
in 18 U.S.C. 207(c). The notice also must indicate that employees 
covered by 18 U.S.C. 207(c) are subject to 18 U.S.C. 207(f), which 
imposes additional post-employment restrictions on representing, 
aiding, or advising certain foreign entities.
    (b) Notwithstanding paragraph (a) of this section, the post-
employment restrictions in 18 U.S.C. 207(c) apply to covered employees 
without regard to whether they receive written notice from their 
employing agency.


Sec.  730.105  Savings provision.

    Any post-employment restrictions established under 18 U.S.C. 207 
and applicable prior to the first day of the first pay period beginning 
on or after January 1, 2004, remain in effect.

[FR Doc. 04-23194 Filed 10-14-04; 8:45 am]
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