SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Employment Reduction 
Assistance Act of 1996''.

SEC. 2. DEFINITIONS.

    For the purpose of this Act--
            (1) the term ``agency'' means an Executive agency (as 
        defined by section 105 of title 5, United States Code), but 
        does not include the Department of Defense, the Central 
        Intelligence Agency, or the General Accounting Office; and
            (2) the term ``employee'' means an employee (as defined by 
        section 2105 of title 5, United States Code) who--
                    (A) is employed by an agency;
                    (B) is serving under an appointment without time 
                limitation; and
                    (C) has been currently employed for a continuous 
                period of at least 12 months;
        but does not include--
                            (i) a reemployed annuitant under subchapter 
                        III of chapter 83 or chapter 84 of title 5, 
                        United States Code, or another retirement 
                        system for employees of the Government;
                            (ii) an employee having a disability on the 
                        basis of which such employee is or would be 
                        eligible for disability retirement under the 
                        applicable retirement system referred to in 
                        clause (i);
                            (iii) an employee who is in receipt of a 
                        specific notice of involuntary separation for 
                        misconduct or unacceptable performance;
                            (iv) an employee who, upon completing an 
                        additional period of service as referred to in 
                        section 3(b)(2)(B)(ii) of the Federal Workforce 
                        Restructuring Act of 1994 (Public Law 103-226; 
                        108 Stat. 111), would qualify for a voluntary 
                        separation incentive payment under section 3 of 
                        such Act;
                            (v) an employee who has previously received 
                        any voluntary separation incentive payment by 
                        the Federal Government under this Act or any 
                        other authority and has not repaid such 
                        payment; or
                            (vi) an employee covered by statutory 
                        reemployment rights who is on transfer to 
                        another organization.

SEC. 3. AGENCY PLANS; APPROVAL.

    (a) If the head of an agency determines that, in order to improve 
the efficiency of operations or to meet anticipated levels of budgetary 
resources, the number of employees employed by the agency must be 
reduced, the head of the agency may submit a plan to the Director of 
the Office of Management and Budget to pay voluntary separation 
incentives under this Act to employees of the agency who agree to 
separate from the agency, by retirement or resignation. The plan shall 
specify the planned employment reductions and the manner in which such 
reductions will improve operating efficiency or meet anticipated budget 
levels. The plan shall include a proposed period of time for the 
payment of voluntary separation incentives by the agency, and a 
proposed coverage for offers of incentives to agency employees, which 
may be on the basis of--
            (1) any component of the agency;
            (2) any occupation or levels of an occupation;
            (3) any geographic location; or
            (4) any appropriate combination of the factors in 
        paragraphs (1)-(3).
    (b) The Director of the Office of Management and Budget shall 
review each plan submitted to the Director under subsection (a) and 
approve or disapprove such plan, and may make appropriate modifications 
in the plan with respect to the time period in which voluntary 
separation incentives may be paid or with respect to the coverage of 
incentives on the basis of the factors in subsection (a) (1)-(4).

SEC. 4. VOLUNTARY SEPARATION INCENTIVE PAYMENTS.

    (a) In order to receive a voluntary separation incentive payment, 
an employee must separate from service with the employee's agency 
voluntarily (whether by retirement or resignation) during the period of 
time for which the payment of incentives has been authorized for the 
employee under the agency plan under section 3. An employee's agreement 
to separate with an incentive payment is binding upon the employee and 
the agency, unless the employee and the agency mutually agree 
otherwise.
    (b) A voluntary separation incentive payment--
            (1) shall be paid in a lump sum after the employee's 
        separation;
            (2) shall be equal to the lesser of--
                    (A) an amount equal to the amount the employee 
                would be entitled to receive under section 5595(c) of 
                title 5, United States Code (without adjustment for any 
                previous payment made under such section), if the 
                employee were entitled to payment under such section; 
                or
                    (B) if the employee separates--
                            (i) during fiscal year 1996 or 1997, 
                        $25,000;
                            (ii) during fiscal year 1998, $20,000;
                            (iii) during fiscal year 1999, $15,000; or
                            (iv) during fiscal year 2000, $10,000;
            (3) shall not be a basis for payment, and shall not be 
        included in the computation, of any other type of Government 
        benefit, except that this paragraph shall not apply to 
        unemployment compensation funded in whole or in part with 
        Federal funds;
            (4) shall not be taken into account in determining the 
        amount of severance pay to which an employee may be entitled 
        under section 5595 of title 5, United States Code, based on any 
        other separation; and
            (5) shall be paid from the appropriations or funds 
        available for payment of the basic pay of the employee.

SEC. 5. EFFECT OF SUBSEQUENT EMPLOYMENT WITH THE GOVERNMENT.

    (a) An individual who has received a voluntary separation incentive 
payment under this Act and accepts any employment with the Government 
of the United States within 5 years after the date of the separation on 
which the payment is based shall be required to repay, prior to the 
individual's first day of employment, the entire amount of the 
incentive payment to the agency that paid the incentive payment.
    (b)(1) If the employment under subsection (a) is with an Executive 
agency (as defined by section 105 of title 5, United States Code), the 
United States Postal Service, or the Postal Rate Commission, the 
Director of the Office of Personnel Management may, at the request of 
the head of the agency, waive the repayment if the individual involved 
possesses unique abilities and is the only qualified applicant 
available for the position.
    (2) If the employment under subsection (a) is with an entity in the 
legislative branch, the head of the entity or the appointing official 
may waive the repayment if the individual involved possesses unique 
abilities and is the only qualified applicant available for the 
position.
    (3) If the employment under subsection (a) is with the judicial 
branch, the Director of the Administrative Office of the United States 
Courts may waive the repayment if the individual applicant available 
for the position.
    (c) For the purpose of this section, the term ``employment''--
            (1) includes employment of any length or under any type of 
        appointment, but does not include employment that is without 
        compensation; and
            (2) includes employment under a personal services contract, 
        as defined by the Director of the Office of Personnel 
        Management.

SEC. 6. ADDITIONAL AGENCY CONTRIBUTIONS TO THE RETIREMENT FUND.

    (a) In addition to any other payments which it is required to make 
under subchapter III of chapter 83 or chapter 84 of title 5, United 
States Code, an agency shall remit to the Office of Personnel 
Management for deposit in the Treasury of the United States to the 
credit of the Civil Service Retirement and Disability Fund an amount 
equal to 15 percent of the final basic pay of each employee of the 
agency who is covered under subchapter III of chapter 83 or chapter 84 
of title 5 to whom a voluntary separation incentive has been paid under 
this Act.
    (b) For the purpose of this section, the term ``final basic pay'', 
with respect to an employee, means the total amount of basic pay which 
would be payable for a year of service by such employee, computed using 
the employee's final rate of basic pay, and, if last serving on other 
than a full-time basis, with appropriate adjustment therefor.

SEC. 7. REDUCTION OF AGENCY EMPLOYMENT LEVELS.

    (a) Total full-time equivalent employment in each agency shall be 
reduced by one for each separation of an employee who receives a 
voluntary separation incentive payment under this Act. The reduction 
will be calculated by comparing the agency's full-time equivalent 
employment for the fiscal year in which the voluntary separation 
payments are made with the actual full-time equivalent employment for 
the prior fiscal year.
    (b) The Office of Management and Budget shall monitor all agencies 
and take any action necessary to ensure that the requirements of this 
section are met.
    (c) The President shall take appropriate action to ensure that 
functions involving more than 10 full-time equivalent employees are not 
converted to contracts by reason of the enactment of this Act, except 
in cases in which a cost comparison demonstrates such contracts would 
be to the advantage of the Government.
    (d) The provisions of subsections (a) and (c) of this section may 
be waived upon a determination by the President that--
            (1) the existence of a state of war or other national 
        emergency so requires; or
            (2) the existence of an extraordinary emergency which 
        threatens life, health, safety, property, or the environment so 
        requires.

SEC. 8. REPORTS.

    (a) Each agency which has received approval under section 3 of this 
Act to pay voluntary separation incentives shall, for each applicable 
quarter of each fiscal year and not later than 30 days after the date 
of such quarter, submit to the Office of Personnel Management a report 
providing--
            (1) the number of employees who receive voluntary 
        separation incentives for each type of separation involved;
            (2) the average amount of the incentives paid;
            (3) the average grade or pay level of the employees who 
        received incentives; and
            (4) such other information as the Office may require.
    (b) No later than March 31st of each fiscal year, the Office of 
Personnel Management shall submit to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform and 
Oversight of the House of Representatives a report which, with respect 
to the preceding fiscal year, shall include--
            (1) for each agency which had approval to pay voluntary 
        separation incentives during such preceding fiscal year, and on 
        a combined basis for all such agencies--
                    (A) the number of employees who received voluntary 
                separation incentives;
                    (B) the average amount of such incentives; and
                    (C) the average grade or pay level of the employees 
                who received incentives; and
            (2) the number of waivers made under section 5 of this Act 
        in the repayment of voluntary separation incentives, and for 
        each such waiver--
                    (A) the reasons for the waiver; and
                    (B) the title and grade or pay level of the 
                position filled by each employee to whom the waiver 
                applied.
    (c) Section 6 of the Federal Workforce Restructuring Act of 1994 
(Public Law 103-226; 108 Stat. 111) is amended--
            (1) by striking out ``December 31st'' and inserting ``March 
        31st''; and
            (2) by striking out paragraphs (1)-(4) and inserting in 
        lieu thereof the following:
            ``(1) for each agency which paid voluntary separation 
        incentives under section 3 during such preceding fiscal year, 
        and on a combined basis for all such agencies--
                    ``(A) the number of employees who received 
                voluntary separation incentives;
                    ``(B) the average amount of such incentives; and
                    ``(C) the average grade or pay level of the 
                employees who received incentives; and
            ``(2) the number of waivers made by each agency or other 
        authority under section 3 or the amendments made by section 8 
        in the repayment of voluntary separation incentives, and for 
        each such waiver--
                    ``(A) the reasons for the waiver; and
                    ``(B) the title and grade or pay level of the 
                position filled by each employee to whom the waiver 
                applied.''.

SEC. 9. VOLUNTARY PARTICIPATION IN REDUCTIONS IN FORCE.

    Section 3502(f) of title 5, United States Code, is amended--
            (1) in paragraph (1) by striking out ``The Secretary of 
        Defense or the Secretary of a military department'' and 
        inserting in lieu thereof ``Under procedures prescribed by 
        Office of Personnel Management, the head of an agency'';
            (2) by amending paragraph (3) to read as follows:
            ``(3) An employee with critical knowledge and skills may 
        not participate in a voluntary release under paragraph (1) if 
        the head of the agency determines that such participation would 
        impair the performance of the agency's mission.'';
            (3) by striking out paragraph (4); and
            (4) by redesignating paragraph (5) as paragraph (4), and by 
        amending such paragraph by striking out ``September 30, 1996'' 
        and inserting ``September 30, 2000''.

SEC. 10. CONTINUED HEALTH INSURANCE COVERAGE.

    Section 8905a(d)(4) of title 5, United States Code, is amended--
            (1) in subparagraph (A) by striking out ``in or under the 
        Department of Defense'';
            (2) in subparagraph (B)--
                    (A) immediately after ``enactment'' by inserting 
                the following ``(or, as applicable, amendment)'';
                    (B) in clause (i) and (ii) each by striking out 
                ``October 1, 1999'' and inserting ``October 1, 2000''; 
                and
                    (C) in clause (ii) by striking out ``February 1, 
                2000'' and inserting ``February 1, 2001''; and
            (3) in subparagraph (C) immediately after ``identified'' by 
        inserting ``by the agency''.

SEC. 11. REGULATIONS.

    The Director of the Office of Personnel Management may prescribe 
any regulations necessary to administer the provisions of this Act.

SEC. 12. EFFECTIVE DATE.

    (a) The provisions of this Act shall take effect on the date of 
enactment of this Act.
    (b) No voluntary separation incentive under this Act may be paid 
based on the separation of an employee after September 30, 2000.
Federal Employment Reduction Assistance Act of 1996 - Authorizes the head of an agency to submit a plan to the Director of the Office of Management and Budget to pay voluntary separation incentives to employees of the agency who agree to separate from the agency by retirement or resignation. 
(Sec. 4) Provides that a voluntary separation incentive payment be paid in a lump sum after the employee's separation and be equal to the lesser of:  (1) the amount the employee would have been entitled to receive (without adjustment for any previous payment); or (2) if the employee separates during a certain fiscal year, according to a specified payment amount for such fiscal year, from FY 1996 through FY 2000. 
(Sec. 5) Prescribes that an individual who has received a voluntary separation incentive payment and accepts any subsequent employment with the Government within five years after the date of separation shall be required to repay, prior to the first day of employment, the entire amount of the incentive payment to the agency that paid the incentive payment.  Provides for waiver of repayment if the individual involved possesses unique abilities and is the only qualified applicant for the position. 
(Sec. 6) Requires that an agency make a contribution to the Civil Service Retirement and Disability Fund in an amount equal to 15 percent of the final basic pay of each agency employee to whom a voluntary separation incentive has been paid. 
(Sec. 7) Mandates the reduction of total full-time equivalent employment in each agency by one for each employee receiving a voluntary separation payment.  Requires that the President take appropriate action to ensure that functions involving more than ten full-time equivalent employees are not converted to contracts except in cases in which a cost comparison demonstrates that such contracts would be to the advantage of the Government.  Provides for the preceding two clauses to be waived upon a determination by the President that the existence of a state of war or other national emergency, or the existence of an extraordinary emergency so requires. 
(Sec. 8) Mandates certain reports. 
Makes technical amendments to the Federal Workforce Restructuring Act of 1994. 
(Sec. 9) Modifies requirements regarding the order of retention in a voluntary participation in a reduction in force. 
(Sec. 10) Provides for continued health insurance coverage for separated employees.
Federal Employment Reduction Assistance Act of 1996