To amend title 5, United States Code, to alleviate the pay-compression problem affecting members of the Senior Executive Service and other senior-level Federal employees, and for other purposes.

Summary: Prohibits the pay of such senior-level positions, after locality-based comparability payments, from exceeding the annual salary of the Vice President. Prohibits cash payments to the following Federal employees in a calendar year to the extent that, when added to basic pay, such amount would exceed the annual basic pay under level I of the Executive Schedule: (1) a member of the SES; (2) a member of the Federal Bureau of Investigation and Drug Enforcement Administration SES; (3) contract appeals board members; (4) certain senior-level positions; and (5) examiner-in-chief or designated examiner-in-chief in the Patent and Trademark Office, Department of Commerce.
Provides, with respect to such examiners and designated examiners: (1) an increase in the maximum pay rate to Level II of the Executive Schedule; and (2) authorized locality-based comparability payments.

SECTION 1. INCREASE IN MAXIMUM RATES OF BASIC PAY ALLOWABLE.

    (a) For Members of the Senior Executive Service.--Section 5382(b) 
of title 5, United States Code, is amended by striking ``level IV'' and 
inserting ``level II''.
    (b) For Positions Covered by Section 5376.--Section 5376(b)(1)(B) 
of title 5, United States Code, is amended by striking ``level IV'' and 
inserting ``level II''.
    (c) For Contract Appeals Board Members.--Section 5372a(b)(1) of 
title 5, United States Code, is amended by striking ``level IV'' and 
inserting ``level II''.
    (d) For Positions Covered by Section 5373.--Section 5373 of title 
5, United States Code, is amended by striking ``level IV'' and 
inserting ``level II''.
    (e) For Positions Covered by Section 5306.--Section 5306 of title 
5, United States Code, is amended by striking ``level V'' and inserting 
``level II''.

SEC. 2. MODIFIED LIMITATIONS ON CERTAIN CASH PAYMENTS.

    (a) Limitation on Locality-Based Comparability Payments for Senior-
Level Positions.--Section 5304(g)(2) of title 5, United States Code, is 
amended by striking ``level III of the Executive Schedule'' and 
inserting ``the annual rate of salary under section 104 of title 3''.
    (b) Limitation on Differentials and Other Cash Payments for Senior-
Level Positions.--
            (1) In general.--Section 5307 of title 5, United States 
        Code, is amended by redesignating subsections (b) and (c) as 
        subsections (c) and (d), respectively, and by inserting after 
        subsection (a) the following:
    ``(b)(1) In the case of an employee under paragraph (2)--
            ``(A) subsection (a) shall be applied--
                    ``(i) by substituting `the annual rate of salary 
                under section 104 of title 3' for `the annual rate of 
                basic pay payable for level I of the Executive 
                Schedule' in paragraph (1); and
                    ``(ii) by substituting `(other than section 5755)' 
                for `(other than section 5753, 5754, or 5755)' in 
                paragraph (2)(B); and
            ``(B) subsection (c) shall not be applicable.
    ``(2) This subsection applies with respect to any employee who--
            ``(A) is a member of the Senior Executive Service;
            ``(B) is a member of the Federal Bureau of Investigation 
        and Drug Enforcement Administration Senior Executive Service;
            ``(C) holds a position that is subject to section 5372a 
        (relating to contract appeals board members);
            ``(D) holds a position that is subject to section 5376 
        (relating to certain senior-level positions); or
            ``(E) holds the position of an examiner-in-chief or 
        designated examiner-in-chief in the Patent and Trademark 
        Office, Department of Commerce.''.
            (2) Conforming Amendments.--(A) Section 5307(d) of title 5, 
        United States Code, as amended by paragraph (1), is further 
        amended by striking ``subsection (b)'' each place it appears 
        and inserting ``subsection (c)''.
            (B) Sections 3152 and 5383(b) of title 5, United States 
        Code, are amended by striking ``5307'' and inserting 
        ``5307(b)''.

SEC. 3. EXAMINERS-IN-CHIEF AND DESIGNATED EXAMINERS-IN-CHIEF IN THE 
              PATENT AND TRADEMARK OFFICE.

    (a) Basic Pay.--
            (1) Examiners-in-chief.--Section 3(c) of title 35, United 
        States Code, is amended by striking ``the maximum scheduled 
        rate provided for positions in grade 17 of the General Schedule 
        of the Classification Act of 1949, as amended'' and inserting 
        ``the rate of basic pay payable for level II of the Executive 
        Schedule''.
            (2) Designated examiners-in-chief.--Section 7(c) of title 
        35, United States Code, is amended by striking ``the maximum 
        rate of basic pay payable for grade GS-16 of the General 
        Schedule under section 5332 of title 5'' and inserting ``the 
        rate of basic pay payable for level II of the Executive 
        Schedule''.
    (b) Locality-Based Comparability Payments.--Paragraph (1) of 
section 5304(h) of title 5, United States Code, is amended by striking 
``and'' at the end of subparagraph (E), by redesignating subparagraph 
(F) as subparagraph (G), and by inserting after subparagraph (E) the 
following:
            ``(F) a position specified in section 5102(c)(23) (relating 
        to examiners-in-chief and designated examiners-in-chief in the 
        Patent and Trademark Office, Department of Commerce); and''.
    (c) Conforming Amendments.--(1)(A) Section 5304(g)(2)(A) of title 
5, United States Code, is amended by striking ``(A)-(E)'' and inserting 
``(A)-(F)''.
    (B) Section 5304(h)(2)(B)(i) of section 5304 of title 5, United 
States Code, is amended by striking ``(A) through (E)'' and inserting 
``(A) through (F)''.
    (2)(A) Section 5304(g)(2)(B) of title 5, United States Code, is 
amended by striking ``(h)(1)(F)'' and inserting ``(h)(1)(G)''.
    (B) Section 5304(h)(2)(B)(ii) of title 5, United States Code, is 
amended by striking ``paragraph (1)(F)'' and inserting ``paragraph 
(1)(G)''.