[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 129 Enrolled Bill (ENR)]
S.129
One Hundred Eighth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twentieth day of January, two thousand and four
An Act
To provide for reform relating to Federal employment, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Workforce
Flexibility Act of 2004''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT
Sec. 101. Recruitment, relocation, and retention bonuses.
Sec. 102. Streamlined critical pay authority.
TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND
BENEFITS
Sec. 201. Agency training.
Sec. 202. Annual leave enhancements.
Sec. 203. Compensatory time off for travel.
TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION
Sec. 301. Corrections relating to pay administration.
Sec. 302. Technical corrections.
TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT
SEC. 101. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.
(a) Bonuses.--
(1) In general.--Chapter 57 of title 5, United States Code, is
amended by striking sections 5753 and 5754 and inserting the
following:
``Sec. 5753. Recruitment and relocation bonuses
``(a)(1) This section may be applied to--
``(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
``(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Executive
agency.
``(2) A bonus may not be paid under this section to an individual
who is appointed to or who holds--
``(A) a position to which an individual is appointed by the
President, by and with the advice and consent of the Senate;
``(B) a position in the Senior Executive Service as a noncareer
appointee (as such term is defined under section 3132(a)); or
``(C) a position which has been excepted from the competitive
service by reason of its confidential, policy-determining, policy-
making, or policy-advocating character.
``(3) In this section, the term `employee' has the meaning given
that term in section 2105, except that such term also includes an
employee described in subsection (c) of that section.
``(b) The Office of Personnel Management may authorize the head of
an agency to pay a bonus under this section to an individual only if--
``(1) the position to which such individual is appointed (as
described in paragraph (2)(A)) or to which such individual moves or
must relocate (as described in paragraph (2)(B)) is likely to be
difficult to fill in the absence of such a bonus; and
``(2) the individual--
``(A) is newly appointed as an employee of the Federal
Government; or
``(B)(i) is currently employed by the Federal Government;
and
``(ii)(I) moves to a new position in the same geographic
area under circumstances described in regulations of the
Office; or
``(II) must relocate to accept a position in a different
geographic area.
``(c)(1) Payment of a bonus under this section shall be contingent
upon the employee entering into a written service agreement to complete
a period of employment with the agency, not longer than 4 years. The
Office may, by regulation, prescribe a minimum service period for
purposes of this section.
``(2)(A) The agreement shall include--
``(i) the commencement and termination dates of the required
service period (or provisions for the determination thereof);
``(ii) the amount of the bonus;
``(iii) the method of payment; and
``(iv) other terms and conditions under which the bonus is
payable, subject to the requirements of this section and
regulations of the Office.
``(B) The terms and conditions for paying a bonus, as specified in
the service agreement, shall include--
``(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been
completed; and
``(ii) the effect of the termination.
``(C) The required service period shall commence upon the
commencement of service with the agency or movement to a new position
or geographic area, as applicable, unless the service agreement
provides for a later commencement date in circumstances and to the
extent allowable under regulations of the Office, such as when there is
an initial period of formal basic training.
``(d)(1) Except as provided in subsection (e), a bonus under this
section shall not exceed 25 percent of the annual rate of basic pay of
the employee at the beginning of the service period multiplied by the
number of years (including a fractional part of a year, as determined
under regulations of the Office) in the required service period of the
employee involved.
``(2) A bonus under this section may be paid as an initial lump
sum, in installments, as a final lump sum upon the completion of the
full period of service required by the agreement, or in a combination
of these forms of payment.
``(3) A bonus under this section is not part of the basic pay of an
employee for any purpose.
``(4) Under regulations of the Office, a recruitment bonus under
this section may be paid to an eligible individual before that
individual enters on duty.
``(e) The Office may authorize the head of an agency to waive the
limitation under subsection (d)(1) based on a critical agency need,
subject to regulations prescribed by the Office. Under such a waiver,
the maximum bonus allowable shall--
``(1) be equal to the maximum that would be determined if
subsection (d)(1) were applied by substituting `50' for `25'; but
``(2) in no event exceed 100 percent of the annual rate of
basic pay of the employee at the beginning of the service period.
Nothing in this subsection shall be considered to permit the waiver of
any requirement under subsection (c).
``(f) The Office shall require that an agency establish a plan for
the payment of recruitment bonuses before paying any such bonuses, and
a plan for the payment of relocation bonuses before paying any such
bonuses, subject to regulations prescribed by the Office.
``(g) The Office may prescribe regulations to carry out this
section, including regulations relating to the repayment of a bonus
under this section in appropriate circumstances when the agreed-upon
service period has not been completed.
``Sec. 5754. Retention bonuses
``(a)(1) This section may be applied to--
``(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
``(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Executive
agency.
``(2) A bonus may not be paid under this section to an individual
who is appointed to or who holds--
``(A) a position to which an individual is appointed by the
President, by and with the advice and consent of the Senate;
``(B) a position in the Senior Executive Service as a noncareer
appointee (as such term is defined under section 3132(a)); or
``(C) a position which has been excepted from the competitive
service by reason of its confidential, policy-determining, policy-
making, or policy-advocating character.
``(3) In this section, the term `employee' has the meaning given
that term in section 2105, except that such term also includes an
employee described in subsection (c) of that section.
``(b) The Office of Personnel Management may authorize the head of
an agency to pay a retention bonus to an employee if--
``(1) the unusually high or unique qualifications of the
employee or a special need of the agency for the employee's
services makes it essential to retain the employee; and
``(2) the agency determines that, in the absence of a retention
bonus, the employee would be likely to leave--
``(A) the Federal service; or
``(B) for a different position in the Federal service under
conditions described in regulations of the Office.
``(c) The Office may authorize the head of an agency to pay
retention bonuses to a group of employees in 1 or more categories of
positions in 1 or more geographic areas, subject to the requirements of
subsection (b)(1) and regulations prescribed by the Office, if there is
a high risk that a significant portion of employees in the group would
be likely to leave in the absence of retention bonuses.
``(d)(1) Payment of a retention bonus is contingent upon the
employee entering into a written service agreement with the agency to
complete a period of employment with the agency.
``(2)(A) The agreement shall include--
``(i) the length of the required service period;
``(ii) the amount of the bonus;
``(iii) the method of payment; and
``(iv) other terms and conditions under which the bonus is
payable, subject to the requirements of this section and
regulations of the Office.
``(B) The terms and conditions for paying a bonus, as specified in
the service agreement, shall include--
``(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been
completed; and
``(ii) the effect of the termination.
``(3)(A) Notwithstanding paragraph (1), a written service agreement
is not required if the agency pays a retention bonus in biweekly
installments and sets the installment payment at the full bonus
percentage rate established for the employee with no portion of the
bonus deferred.
``(B) If an agency pays a retention bonus in accordance with
subparagraph (A) and makes a determination to terminate the payments,
the agency shall provide written notice to the employee of that
determination. Except as provided in regulations of the Office, the
employee shall continue to be paid the retention bonus through the end
of the pay period in which such written notice is provided.
``(4) A retention bonus for an employee may not be based on any
period of such service which is the basis for a recruitment or
relocation bonus under section 5753.
``(e)(1) Except as provided in subsection (f), a retention bonus,
which shall be stated as a percentage of the employee's basic pay for
the service period associated with the bonus, may not exceed--
``(A) 25 percent of the employee's basic pay if paid under
subsection (b); or
``(B) 10 percent of an employee's basic pay if paid under
subsection (c).
``(2)(A) A retention bonus may be paid to an employee in
installments after completion of specified periods of service or in a
single lump sum at the end of the full period of service required by
the agreement.
``(B) An installment payment is derived by multiplying the amount
of basic pay earned in the installment period by a percentage not to
exceed the bonus percentage rate established for the employee.
``(C) If the installment payment percentage established for the
employee is less than the bonus percentage rate established for the
employee, the accrued but unpaid portion of the bonus is payable as
part of the final installment payment to the employee after completion
of the full service period under the terms of the service agreement.
``(D) For purposes of this paragraph, the bonus percentage rate
established for an employee means the bonus percentage rate established
for such employee in accordance with paragraph (1) or subsection (f),
as the case may be.
``(3) A retention bonus is not part of the basic pay of an employee
for any purpose.
``(f) Upon the request of the head of an agency, the Office may
waive the limit established under subsection (e)(1) and permit the
agency head to pay an otherwise eligible employee or category of
employees retention bonuses of up to 50 percent of basic pay, based on
a critical agency need.
``(g) The Office shall require that, before paying any bonuses
under this section, an agency shall establish a plan for the payment of
any such bonuses, subject to regulations prescribed by the Office.
``(h) The Office may prescribe regulations to carry out this
section.''.
(2) Clerical amendment.--The table of sections for chapter 57
of title 5, United States Code, is amended by striking the item
relating to section 5754 and inserting the following:
``5754. Retention bonuses.''.
(3) Sense of congress.--It is the sense of the Congress that
the Director of the Office of Personnel Management--
(A) should, each time a bonus is paid under the amendment
made by paragraph (1) to recruit or relocate a Federal employee
from one Government agency to another within the same
geographic area or to retain a Federal employee who might
otherwise leave one Government agency for another within the
same geographic area, be notified of that payment within 60
days after the date on which such bonus is paid; and
(B) should monitor the payment of such bonuses (in the
circumstances described in subparagraph (A)) to ensure that
they are an effective use of the Federal Government's funds and
have not adversely affected the ability of those Government
agencies that lost employees to other Government agencies (in
such circumstances) to carry out their mission.
(b) Relocation Payments.--Section 407 of the Federal Employees Pay
Comparability Act of 1990 (5 U.S.C. 5305 note; 104 Stat. 1467) is
repealed.
(c) Reports.--
(1) Recruitment and relocation bonuses.--
(A) In general.--The Office of Personnel Management shall
submit to the Committee on Governmental Affairs of the Senate
and the Committee on Government Reform of the House of
Representatives annually, for each of the first 5 years during
which section 5753 of title 5, United States Code (as amended
by subsection (a)(1)) is in effect, a report on the operation
of such section.
(B) Contents.--Each report submitted under this paragraph
shall include, with respect to the period covered by such
report, a description of how the authority to pay bonuses under
the section of title 5, United States Code, referred to in
subparagraph (A) was used by the respective agencies,
including, with respect to each such agency and each type of
bonus under such section--
(i) the number and dollar-amount of bonuses paid--
(I) to individuals holding positions within each
pay grade, pay level, or other pay classification; and
(II) if applicable, to individuals who moved
between positions that were in different agencies but
the same geographic area (including the names of the
agencies involved); and
(ii) a determination of the extent to which such
bonuses furthered the purposes of such section.
(2) Retention bonuses.--
(A) In general.--The Office of Personnel Management shall
submit to the Committee on Governmental Affairs of the Senate
and the Committee on Government Reform of the House of
Representatives annually, for each of the first 5 years during
which section 5754 of title 5, United States Code (as amended
by subsection (a)(1)) is in effect, a report on the operation
of such section.
(B) Contents.--Each report submitted under this paragraph
shall include, with respect to the period covered by such
report, a description of how the authority to pay bonuses under
the section of title 5, United States Code, referred to in
subparagraph (A) was used by the respective agencies,
including, with respect to each such agency--
(i) the number and dollar-amount of bonuses paid--
(I) to individuals holding positions within each
pay grade, pay level, or other pay classification; and
(II) if applicable, to prevent individuals from
moving between positions that were in different
agencies but the same geographic area (including the
names of the agencies involved); and
(ii) a determination of the extent to which such
bonuses furthered the purposes of such section.
(d) Effective Date and Application.--
(1) Effective date.--Except as provided under paragraphs (2)
and (3), this section shall take effect on the first day of the
first applicable pay period beginning on or after the 180th day
after the date of the enactment of this Act.
(2) Application to agreements.--A recruitment or relocation
bonus service agreement that was authorized under section 5753 of
title 5, United States Code, before the effective date under
paragraph (1) shall continue, until its expiration, to be subject
to such section as in effect on the day before such effective date.
(3) Application to allowances.--Payment of a retention
allowance that was authorized under section 5754 of title 5, United
States Code, before the effective date under paragraph (1) shall
continue, subject to such section as in effect on the day before
such effective date, until the retention allowance is reauthorized
or terminated (but no longer than 1 year after such effective
date).
SEC. 102. STREAMLINED CRITICAL PAY AUTHORITY.
Section 5377 of title 5, United States Code, is amended--
(1) by striking ``Office of Personnel Management'' each place
it appears and inserting ``Office of Management and Budget'';
(2) by striking ``Office of Management and Budget'' each place
it appears and inserting ``Office of Personnel Management'';
(3) in subsection (g), by striking ``prescribing regulations
under this section or''; and
(4) in subsection (h), by striking ``Committee on Post Office
and Civil Service'' and inserting ``Committee on Government
Reform''.
TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND
BENEFITS
SEC. 201. AGENCY TRAINING.
(a) Training To Accomplish Performance Plans and Strategic Goals.--
Section 4103 of title 5, United States Code, is amended by adding at
the end the following:
``(c) The head of each agency shall, on a regular basis--
``(1) evaluate each program or plan established, operated, or
maintained under subsection (a) with respect to accomplishing
specific performance plans and strategic goals in performing the
agency mission; and
``(2) modify such program or plan as needed to accomplish such
plans and goals.''.
(b) Specific Training Programs.--
(1) In general.--Chapter 41 of title 5, United States Code, is
amended by adding after section 4120 the following:
``Sec. 4121. Specific training programs
``In consultation with the Office of Personnel Management, the head
of each agency shall establish--
``(1) a comprehensive management succession program to provide
training to employees to develop managers for the agency; and
``(2) a program to provide training to managers on actions,
options, and strategies a manager may use in--
``(A) relating to employees with unacceptable performance;
``(B) mentoring employees and improving employee
performance and productivity; and
``(C) conducting employee performance appraisals.''.
(2) Clerical amendment.--The table of sections for chapter 41
of title 5, United States Code, is amended by adding at the end the
following:
``4121. Specific training programs.''.
SEC. 202. ANNUAL LEAVE ENHANCEMENTS.
(a) Creditability of Prior Nongovernmental Service for Purposes of
Determining Rate of Leave Accrual.--
(1) In general.--Section 6303 of title 5, United States Code,
is amended by adding at the end the following:
``(e)(1) Not later than 180 days after the date of the enactment of
this subsection, the Office of Personnel Management shall prescribe
regulations under which, for purposes of determining years of service
under subsection (a), credit shall, in the case of a newly appointed
employee, be given for any prior service of such employee that would
not otherwise be creditable for such purposes, if--
``(A) such service--
``(i) was performed in a position the duties of which
directly relate to the duties of the position to which such
employee is so appointed; and
``(ii) meets such other requirements as the Office may
prescribe; and
``(B) in the judgment of the head of the appointing agency, the
application of this subsection is necessary in order to achieve an
important agency mission or performance goal.
``(2) Service described in paragraph (1)--
``(A) shall be creditable, for the purposes described in
paragraph (1), as of the effective date of the employee's
appointment; and
``(B) shall not thereafter cease to be so creditable, unless
the employee fails to complete a full year of continuous service
with the agency.
``(3) An employee shall not be eligible for the application of
paragraph (1) on the basis of any appointment if, within 90 days before
the effective date of such appointment, such employee has held any
position in the civil service.''.
(2) Conforming amendment.--The second sentence of section
6303(a) of title 5, United States Code, is amended by striking the
period and inserting ``, and for all service which is creditable by
virtue of subsection (e).''.
(b) Other Annual Leave Enhancements.--Section 6303 of title 5,
United States Code, is amended by adding after subsection (e) (as added
by subsection (a)) the following:
``(f) Notwithstanding any other provision of this section, the rate
of accrual of annual leave under subsection (a) shall be 1 day for each
full biweekly pay period in the case of any employee who holds a
position which is subject to--
``(1) section 5376 or 5383; or
``(2) a pay system equivalent to either of the foregoing, as
determined by the Office of Personnel Management.''.
(c) Applicability.--None of the amendments made by subsection (a)
shall apply in the case of any employee holding a position pursuant to
an appointment made before the effective date of the regulations
implementing such amendments.
SEC. 203. COMPENSATORY TIME OFF FOR TRAVEL.
(a) In General.--Subchapter V of chapter 55 of title 5, United
States Code, is amended by adding at end the following:
``Sec. 5550b. Compensatory time off for travel
``(a) Notwithstanding section 5542(b)(2), each hour spent by an
employee in travel status away from the official duty station of the
employee, that is not otherwise compensable, shall be treated as an
hour of work or employment for purposes of calculating compensatory
time off.
``(b) An employee who has any hours treated as hours of work or
employment for purposes of calculating compensatory time under
subsection (a), shall not be entitled to payment for any such hours
that are unused as compensatory time.''.
(b) Clerical Amendment.--The table of sections for chapter 55 of
title 5, United States Code, is amended by inserting after the item
relating to section 5550a the following:
``5550b. Compensatory time off for travel.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the earlier of--
(1) the effective date of any regulations prescribed to carry
out such amendments; or
(2) the 90th day after the date of the enactment of this Act.
TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION
SEC. 301. CORRECTIONS RELATING TO PAY ADMINISTRATION.
(a) In General.--Chapter 53 of title 5, United States Code, is
amended--
(1) in section 5302, by striking paragraph (8) and inserting
the following:
``(8) the term `rates of pay under the General Schedule',
`rates of pay for the General Schedule', or `scheduled rates of
basic pay' means the rates of basic pay under the General Schedule
as established by section 5332, excluding pay under section 5304
and any other additional pay of any kind; and'';
(2) in section 5305--
(A) by striking subsection (a) and inserting the following:
``(a)(1) Whenever the Office of Personnel Management finds that the
Government's recruitment or retention efforts with respect to 1 or more
occupations in 1 or more areas or locations are, or are likely to
become, significantly handicapped due to any of the circumstances
described in subsection (b), the Office may establish for the areas or
locations involved, with respect to individuals in positions paid under
any of the pay systems referred to in subsection (c), higher minimum
rates of pay for 1 or more grades or levels, occupational groups,
series, classes, or subdivisions thereof, and may make corresponding
increases in all rates of the pay range for each such grade or level.
However, a minimum rate so established may not exceed the maximum rate
of basic pay (excluding any locality-based comparability payment under
section 5304 or similar provision of law) for the grade or level by
more than 30 percent, and no rate may be established under this section
in excess of the rate of basic pay payable for level IV of the
Executive Schedule. In the case of individuals not subject to the
provisions of this title governing appointment in the competitive
service, the President may designate another agency to authorize
special rates under this section.
``(2) The head of an agency may determine that a category of
employees of the agency will not be covered by a special rate
authorization established under this section. The head of an agency
shall provide written notice to the Office of Personnel Management (or
other agency designated by the President to authorize special rates
under the last sentence of paragraph (1)) which identifies the specific
category or categories of employees that will not be covered by special
rates authorized under this section. If the head of an agency removes a
category of employees from coverage under a special rate authorization
after that authorization takes effect, the loss of coverage will take
effect on the first day of the first pay period after the date of the
notice.'';
(B) in subsection (b), by striking paragraph (4) and
inserting the following:
``(4) any other circumstances which the Office of Personnel
Management (or such other agency as the President may under the
last sentence of subsection (a)(1) designate) considers
appropriate.'';
(C) in subsection (d)--
(i) by striking ``President'' and inserting ``Office of
Personnel Management''; and
(ii) by striking ``or by such agency as he may
designate'' and inserting ``(or by such other agency as the
President may designate under the last sentence of
subsection (a)(1))'';
(D) in subsection (e), by striking ``basic pay'' and
inserting ``pay'';
(E) by striking subsection (f) and inserting the following:
``(f) When a schedule of special rates established under this
section is adjusted under subsection (d), a covered employee's special
rate will be adjusted in accordance with conversion rules prescribed by
the Office of Personnel Management (or by such other agency as the
President may under the last sentence of subsection (a)(1)
designate).'';
(F) in subsection (g)(1)--
(i) by striking ``basic pay'' and inserting ``pay'';
and
(ii) by striking ``President (or his designated
agency)'' and inserting ``Office of Personnel Management
(or such other agency as the President may under the last
sentence of subsection (a)(1) designate)'';
(G) by striking subsection (h) and inserting the following:
``(h) An employee shall not for any purpose be considered to be
entitled to a rate of pay established under this section with respect
to any period for which such employee is entitled to a higher rate of
basic pay under any other provision of law. For purposes of this
subsection, the term `basic pay' includes any applicable locality-based
comparability payment under section 5304 or similar provision of
law.''; and
(H) by adding at the end the following:
``(i) If an employee who is receiving a rate of pay under this
section becomes subject, by virtue of moving to a new official duty
station, to a different pay schedule, such employee's new rate of pay
shall be initially established under conversion rules prescribed by the
Office of Personnel Management (or such other agency as the President
may under the last sentence of subsection (a)(1) designate) in
conformance with the following:
``(1) First, determine the rate of pay to which such employee
would be entitled at the new official duty station based on such
employee's position, grade, and step (or relative position in the
rate range) before the move.
``(2) Then, if (in addition to the change in pay schedule) the
move also involves any personnel action or other change requiring a
rate adjustment under any other provision of law, rule, or
regulation, apply the applicable rate adjustment provisions,
treating the rate determined under paragraph (1) as if it were the
rate last received by the employee before the rate adjustment.
``(j) A rate determined under a schedule of special rates
established under this section shall be considered to be part of basic
pay for purposes of subchapter III of chapter 83, chapter 84, chapter
87, subchapter V of chapter 55, and section 5941, and for such other
purposes as may be expressly provided for by law or as the Office of
Personnel Management may by regulation prescribe.'';
(3) in section 5334--
(A) in subsection (b), by adding at the end the following:
``If an employee's rate after promotion or transfer is greater than the
maximum rate of basic pay for the employee's grade, that rate shall be
treated as a retained rate under section 5363. The Office of Personnel
Management shall prescribe by regulation the circumstances under which
and the extent to which special rates under section 5305 (or similar
provision of law) or locality-adjusted rates under section 5304 (or
similar provision of law) are considered to be basic pay in applying
this subsection.''; and
(B) by adding at the end the following:
``(g) In the case of an employee who--
``(1) moves to a new official duty station, and
``(2) by virtue of such move, becomes subject to a different
pay schedule,
any rate adjustment under the preceding provisions of this section,
with respect to such employee in connection with such move, shall be
made--
``(A) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station based
on such employee's position, grade, and step (or relative position
in the rate range) before the move, and
``(B) then, by applying the provisions of this section that
would otherwise apply (if any), treating the rate determined under
subparagraph (A) as if it were the rate last received by the
employee before the rate adjustment.'';
(4) in section 5361--
(A) by amending paragraph (4) to read as follows:
``(4) `rate of basic pay' means--
``(A) the rate of basic pay payable to an employee under
law or regulations before any deductions or additions of any
kind, but including--
``(i) any applicable locality-based comparability
payment under section 5304 or similar provision of law;
``(ii) any applicable special pay under section 5305 or
similar provision of law; and
``(iii) subject to such regulations as the Office of
Personnel Management may prescribe, any applicable existing
retained rate of pay established under section 5363 or
similar provision of law; and
``(B) in the case of a prevailing rate employee, the
scheduled rate of pay determined under section 5343;'';
(B) in paragraph (6), by striking ``and'' at the end;
(C) in paragraph (7), by striking the period and inserting
``; and''; and
(D) by adding at the end the following:
``(8) `retained rate' means the rate of basic pay to which an
employee is entitled under section 5363(b)(2).'';
(5) in section 5363--
(A) in subsection (a), by striking the matter following
paragraph (4) and inserting the following:
``is entitled to a rate of basic pay in accordance with regulations
prescribed by the Office of Personnel Management in conformity with the
provisions of this section.''; and
(B) by striking subsections (b) and (c) and inserting the
following:
``(b)(1)(A) If, as a result of any event described in subsection
(a), the employee's former rate of basic pay is less than or equal to
the maximum rate of basic pay payable for the grade of the employee's
position immediately after the occurrence of the event involved, the
employee is entitled to basic pay at the lowest rate of basic pay
payable for such grade that equals or exceeds such former rate of basic
pay.
``(B) This section shall cease to apply to an employee to whom
subparagraph (A) applies once the appropriate rate of basic pay has
been determined for such employee under this paragraph.
``(2)(A) If, as a result of any event described in subsection (a),
the employee's former rate of basic pay is greater than the maximum
rate of basic pay payable for the grade of the employee's position
immediately after the occurrence of the event involved, the employee is
entitled to basic pay at a rate equal to the lesser of--
``(i) the employee's former rate of basic pay; or
``(ii) 150 percent of the maximum rate of basic pay payable for
the grade of the employee's position immediately after the
occurrence of the event involved,
as adjusted by subparagraph (B).
``(B) A rate to which an employee is entitled under this paragraph
shall be increased at the time of any increase in the maximum rate of
basic pay payable for the grade of the employee's position by 50
percent of the dollar amount of each such increase.
``(3) For purposes of this subsection, the term `former rate of
basic pay', as used with respect to an employee in connection with an
event described in subsection (a), means the rate of basic pay last
received by such employee before the occurrence of such event.
``(c)(1) Notwithstanding any other provision of this section, in
the case of an employee who--
``(A) moves to a new official duty station, and
``(B) in conjunction with such move, becomes subject to both a
different pay schedule and (disregarding this subsection) the
preceding provisions of this section,
this section shall be applied--
``(i) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station based
on such employee's position, grade, and step (or relative position
in the pay range) before the move, and
``(ii) then, by applying the provisions of this section that
would apply (if any), treating the rate determined under clause (i)
as if it were the rate last received by the employee before the
application of this section.
``(2) A reduction in an employee's rate of basic pay resulting from
a determination under paragraph (1)(ii) is not a basis for an
entitlement under this section.
``(3) The rate of basic pay for an employee who is receiving a
retained rate at the time of moving to a new official duty station at
which different pay schedules apply shall be subject to regulations
prescribed by the Office of Personnel Management consistent with the
purposes of this section.
``(d) A retained rate shall be considered part of basic pay for
purposes of this subchapter and for purposes of subchapter III of
chapter 83, chapters 84 and 87, subchapter V of chapter 55, section
5941, and for such other purposes as may be expressly provided for by
law or as the Office of Personnel Management may by regulation
prescribe. The Office shall, for any purpose other than any of the
purposes referred to in the preceding sentence, prescribe by regulation
what constitutes basic pay for employees receiving a retained rate.
``(e) This section shall not apply, or shall cease to apply, to an
employee who--
``(1) has a break in service of 1 workday or more;
``(2) is entitled, by operation of this subchapter, chapter 51
or 53, or any other provision of law, to a rate of basic pay which
is equal to or higher than, or declines a reasonable offer of a
position the rate of basic pay for which is equal to or higher
than, the retained rate to which the employee would otherwise be
entitled; or
``(3) is demoted for personal cause or at the employee's
request.''; and
(6) in section 5365(b), by inserting after ``provisions of this
subchapter'' the following: ``(subject to any conditions or
limitations the Office may establish)''.
(b) Special Rates for Law Enforcement Officers.--Section 403(c) of
the Federal Employees Pay Comparability Act of 1990 (5 U.S.C. 5305
note) is amended by striking all after ``provision of law)'' and
inserting ``and shall be basic pay for all purposes. The rates shall be
adjusted at the time of adjustments in the General Schedule to maintain
the step linkage set forth in subsection (b)(2).''.
(c) Repeal.--Section 4505a(a)(2) of title 5, United States Code, is
amended--
(1) by striking ``(2)(A)'' and inserting ``(2)''; and
(2) by striking subparagraph (B).
(d) Effective Date; Conversion Rules.--
(1) Effective date.--This section shall take effect on the
first day of the first applicable pay period beginning on or after
the 180th day after the date of the enactment of this Act.
(2) Conversion rules.--
(A) Individuals receiving a retained rate or a rate greater
than the maximum rate for the grade.--Subject to any
regulations the Office of Personnel Management may prescribe,
an employee under a covered pay schedule who, on the day before
the effective date of this section, is receiving a retained
rate under section 5363 of title 5, United States Code, or is
receiving under similar authority a rate of basic pay that is
greater than the maximum rate of basic pay payable for the
grade of the employee's position shall have that rate converted
as of the effective date of this section, and the employee
shall be considered to be receiving a retained rate under
section 5363 of such title (as amended by this section). The
newly applicable retained rate shall equal the formerly
applicable retained rate as adjusted to include any applicable
locality-based payment under section 5304 of title 5, United
States Code, or similar provision of law.
(B) Definition.--For purposes of this paragraph, the term
``covered pay schedule'' has the meaning given such term by
section 5361 of title 5, United States Code.
SEC. 302. TECHNICAL CORRECTIONS.
(a)(1) Section 5304 of title 5, United States Code, as amended by
section 1125 of the National Defense Authorization Act for Fiscal Year
2004 (Public Law 108-136), is amended--
(A) in subsection (g)(2)(A), by striking ``(A)-(D)'' and
inserting ``(A)-(C)''; and
(B) in subsection (h)(2)(B)(i), by striking ``or (vii)'' and
inserting ``or (vi)''.
(2) The amendments made by this subsection shall take effect as if
included in the enactment of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108-136).
(b) Section 5314 of title 5, United States Code, is amended by
adding at the end the following:
``Administrator of the Office of Electronic Government.''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.