I 

111TH CONGRESS 

1ST SESSION H. R. 1266 

To provide for retirement equity for Federal employees in nonforeign areas 

outside the 48 contiguous States and the District of Columbia, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 3, 2009 

Mr. ABERCROMBIE (for himself, Ms. HIRONO, Mr. FALEOMAVAEGA, Mrs. 

CHRISTENSEN, Ms. BORDALLO, and Mr. YOUNG of Alaska) introduced 

the following bill; which was referred to the Committee on Oversight and 

Government Reform 

A BILL 

To provide for retirement equity for Federal employees in 

nonforeign areas outside the 48 contiguous States and 

the District of Columbia, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Non-Foreign Area Re5 tirement Equity Assurance Act of 2009’’ or the ‘‘Non-For6 eign AREA Act of 2009’’. 


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1 SEC. 2. EXTENSION OF LOCALITY PAY. 

2 (a) LOCALITY-BASED COMPARABILITY PAYMENTS.— 

3 Section 5304 of title 5, United States Code, is amended— 

4 (1) in subsection (f)(1), by striking subpara5 graph (A) and inserting the following: 

6 ‘‘(A) each General Schedule position in the 

7 United States, as defined under section 

8 5921(4), and its territories and possessions, in9 cluding the Commonwealth of Puerto Rico and 

10 the Commonwealth of the Northern Mariana Is11 lands, shall be included within a pay locality;’’; 

12 (2) in subsection (g)— 

13 (A) in paragraph (2)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘and’’ after the semicolon; 

16 (ii) in subparagraph (B) by striking 

17 the period and inserting ‘‘; and’’; and 

18 (iii) by adding after subparagraph (B) 

19 the following: 

20 ‘‘(C) positions under subsection (h)(1)(C) 

21 not covered by appraisal systems certified under 

22 section 5382; and’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(3) The applicable maximum under this subsection 

25 shall be level II of the Executive Schedule for positions 


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1 under subsection (h)(1)(C) covered by appraisal systems 

2 certified under section 5307(d).’’; and 

3 (3) in subsection (h)(1)— 

4 (A) in subparagraph (B), by striking 

5 ‘‘and’’ after the semicolon; 

6 (B) by redesignating subparagraph (C) as 

7 subparagraph (D); 

8 (C) by inserting after subparagraph (B) 

9 the following: 

10 ‘‘(C) a Senior Executive Service position 

11 under section 3132 or 3151, located within the 

12 United States but outside the 48 contiguous 

13 States and the District of Columbia, in which 

14 the incumbent was an individual who on the 

15 day before the date of enactment of the Non16 Foreign Area Retirement Equity Assurance Act 

17 of 2009 was eligible to receive a cost-of-living 

18 allowance under section 5941; and’’; 

19 (D) in clause (iv), by inserting ‘‘, except 

20 for members covered by subparagraph (C)’’ be21 fore the semicolon; and 

22 (E) in clause (v), by inserting ‘‘, except for 

23 members covered by subparagraph (C)’’ before 

24 the semicolon. 


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1 (b) ALLOWANCES BASED ON LIVING COSTS AND

2 CONDITIONS OF ENVIRONMENT.—Section 5941 of title 5, 

3 United States Code, is amended— 

4 (1) in subsection (a), by adding after the last 

5 sentence the following: ‘‘Notwithstanding any of the 

6 preceding provisions of this subsection, the cost-of7 living allowance rate based on paragraph (1) shall be 

8 the cost-of-living allowance rate in effect on the date 

9 of enactment of the Non-Foreign Area Retirement 

10 Equity Assurance Act of 2009, except as adjusted 

11 under subsection (c).’’; 

12 (2) by redesignating subsection (b) as sub13 section (d); and 

14 (3) by inserting after subsection (a) the fol15 lowing: 

16 ‘‘(b) This section shall apply only to areas that are 

17 designated as cost-of-living allowance areas as in effect on 

18 December 31, 2009. 

19 ‘‘(c)(1) The cost-of-living allowance rate payable 

20 under this section shall be adjusted on the first day of 

21 the first applicable pay period beginning on or after— 

22 ‘‘(A) January 1, 2010; and 

23 ‘‘(B) January 1 of each calendar year in which 

24 a locality-based comparability adjustment takes ef25 fect under paragraph (2) or (3) of section 4 of the 


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1 Non-Foreign Area Retirement Equity Assurance Act 

2 of 2009. 

3 ‘‘(2)(A) In this paragraph, the term ‘applicable local4 ity-based comparability pay percentage’ means, with re5 spect to calendar year 2010 and each calendar year there6 after, the applicable percentage under paragraph (1), (2), 

7 or (3) of section 4 of the Non-Foreign Area Retirement 

8 Equity Assurance Act of 2009, as the case may be. 

9 ‘‘(B) Each adjusted cost-of-living allowance rate 

10 under paragraph (1) shall be computed by— 

11 ‘‘(i) subtracting 65 percent of the applicable lo12 cality-based comparability pay percentage from the 

13 cost-of-living allowance percentage rate in effect on 

14 December 31, 2009; and 

15 ‘‘(ii) dividing the resulting percentage deter16 mined under clause (i) by the sum of— 

17 ‘‘(I) one; and 

18 ‘‘(II) the applicable locality-based com19 parability payment percentage expressed as a 

20 numeral. 

21 ‘‘(3) No allowance rate computed under paragraph 

22 (2) may be less than zero. 

23 ‘‘(4) Each allowance rate computed under paragraph 

24 (2) shall be paid as a percentage of basic pay (including 

25 any applicable locality-based comparability payment under 


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1 section 5304 or similar provision of law and any applicable 

2 special rate of pay under section 5305 or similar provision 

3 of law).’’. 

4 SEC. 3. ADJUSTMENT OF SPECIAL RATES. 

5 (a) IN GENERAL.—Each special rate of pay estab6 lished under section 5305 of title 5, United States Code, 

7 and payable in an area designated as a cost-of-living allow8 ance area under section 5941(a) of that title, shall be ad9 justed, on the dates prescribed by section 4 of this Act, 

10 in accordance with regulations prescribed by the Director 

11 of the Office of Personnel Management under section 8 

12 of this Act. 

13 (b) AGENCIES WITH STATUTORY AUTHORITY.— 

14 (1) IN GENERAL.—Each special rate of pay es15 tablished under an authority described under para16 graph (2) and payable in a location designated as a 

17 cost-of-living allowance area under section 

18 5941(a)(1) of title 5, United States Code, shall be 

19 adjusted in accordance with regulations prescribed 

20 by the applicable head of the agency that are con21 sistent with the regulations issued by the Director of 

22 the Office of Personnel Management under sub23 section (a). 


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1 (2) STATUTORY AUTHORITY.—The authority re2 ferred to under paragraph (1), is any statutory au3 thority that— 

4 (A) is similar to the authority exercised 

5 under section 5305 of title 5, United States 

6 Code; 

7 (B) is exercised by the head of an agency 

8 when the head of the agency determines it to be 

9 necessary in order to obtain or retain the serv10 ices of persons specified by statute; and 

11 (C) authorizes the head of the agency to 

12 increase the minimum, intermediate, or max13 imum rates of basic pay authorized under appli14 cable statutes and regulations. 

15 (c) TEMPORARY ADJUSTMENT.—Regulations issued 

16 under subsection (a) or (b) may provide that statutory 

17 limitations on the amount of such special rates may be 

18 temporarily raised to a higher level during the transition 

19 period described in section 4 ending on the first day of 

20 the first pay period beginning on or after January 1, 

21 2012, at which time any special rate of pay in excess of 

22 the applicable limitation shall be converted to a retained 

23 rate under section 5363 of title 5, United States Code. 


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1 SEC. 4. TRANSITION SCHEDULE FOR LOCALITY-BASED 

2 COMPARABILITY PAYMENTS. 

3 Notwithstanding any other provision of this Act or 

4 section 5304 or 5304a of title 5, United States Code, in 

5 implementing the amendments made by this Act, for each 

6 non-foreign area determined under section 5941(b) of that 

7 title, the applicable rate for the locality-based com8 parability adjustment that is used in the computation re9 quired under section 5941(c) of that title shall be adjusted 

10 effective on the first day of the first pay period beginning 

11 on or after January 1— 

(1) in calendar year 2010, by using 1 12 ⁄3 of the 

13 locality pay percentage for the rest of United States 

14 locality pay area; 

(2) in calendar year 2011, by using 2 15 ⁄3 of the 

16 otherwise applicable comparability payment approved 

17 by the President for each non-foreign area; and 

18 (3) in calendar year 2012 and each subsequent 

19 year, by using the full amount of the applicable com20 parability payment approved by the President for 

21 each non-foreign area. 

22 SEC. 5. SAVINGS PROVISION. 

23 (a) SENSE OF CONGRESS.—It is the sense of Con24 gress that— 


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1 (1) the application of this Act to any employee 

2 should not result in a decrease in the take home pay 

3 of that employee; 

4 (2) in calendar year 2012 and each subsequent 

5 year, no employee shall receive less than the Rest of 

6 the U.S. locality pay rate; 

7 (3) concurrent with the surveys next conducted 

8 under the provisions of section 5304(d)(1)(A) of title 

9 5, United States Code, beginning after the date of 

10 the enactment of this Act, the Bureau of Labor Sta11 tistics should conduct separate surveys to determine 

12 the extent of any pay disparity (as defined by sec13 tion 5302 of that title) that may exist with respect 

14 to positions located in the State of Alaska, the State 

15 of Hawaii, and the United States territories, includ16 ing American Samoa, Guam, the Commonwealth of 

17 the Northern Mariana Islands, the Commonwealth 

18 of Puerto Rico, and the United States Virgin Is19 lands; 

20 (4) if the surveys under paragraph (3) indicate 

21 that the pay disparity determined for the State of 

22 Alaska, the State of Hawaii, or any 1 of the United 

23 States territories, including American Samoa, Guam, 

24 the Commonwealth of the Northern Mariana Is25 lands, the Commonwealth of Puerto Rico, and the 


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1 United States Virgin Islands, exceeds the pay dis2 parity determined for the locality which (for pur3 poses of section 5304 of that title) is commonly 

4 known as the ‘‘Rest of the United States’’, the 

5 President’s Pay Agent should take appropriate 

6 measures to provide that each such surveyed area be 

7 treated as a separate pay locality for purposes of 

8 that section; and 

9 (5) the President’s Pay Agent will establish 1 

10 locality area for the entire State of Hawaii and 1 lo11 cality area for the entire State of Alaska. 

12 (b) SAVINGS PROVISIONS.— 

13 (1) IN GENERAL.—During the period described 

14 under section 4 of this Act, an employee paid a spe15 cial rate under 5305 of title 5, United States Code, 

16 who the day before the date of enactment of this Act 

17 was eligible to receive a cost-of-living allowance 

18 under section 5941 of title 5, United States Code, 

19 and who continues to be officially stationed in an al20 lowance area, shall receive an increase in the em21 ployee’s special rate consistent with increases in the 

22 applicable special rate schedule. For employees in al23 lowance areas, the minimum step rate for any grade 

24 of a special rate schedule shall be increased at the 

25 time of an increase in the applicable locality rate 


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1 percentage for the allowance area by not less than 

2 the dollar increase in the locality-based com3 parability payment for a non-special rate employee 

4 at the same minimum step provided under section 4 

5 of this Act, and corresponding increases shall be 

6 provided for all step rates of the given pay range. 

7 (2) CONTINUATION OF COST-OF-LIVING ALLOW8 ANCE RATE.—If an employee, who the day before 

9 the date of enactment of this Act was eligible to re10 ceive a cost-of-living allowance under section 5941 of 

11 title 5, United States Code, would receive a rate of 

12 basic pay and applicable locality-based comparability 

13 payment which is in excess of the maximum rate 

14 limitation set under section 5304(g) of title 5, 

15 United States Code, for his position (but for that 

16 maximum rate limitation) due to the operation of 

17 this Act, the employee shall continue to receive the 

18 cost-of-living allowance rate in effect on December 

19 31, 2009 without adjustment until— 

20 (A) the employee leaves the allowance area 

21 or pay system; or 

22 (B) the employee is entitled to receive 

23 basic pay (including any applicable locality24 based comparability payment or similar supple25 ment) at a higher rate, 


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1 but, when any such position becomes vacant, the pay 

2 of any subsequent appointee thereto shall be fixed in 

3 the manner provided by applicable law and regula4 tion. 

5 (3) LOCALITY-BASED COMPARABILITY PAY6 MENTS.—Any employee covered under paragraph (2) 

7 shall receive any applicable locality-based com8 parability payment extended under section 4 of this 

9 Act which is not in excess of the maximum rate set 

10 under section 5304(g) of title 5, United States Code, 

11 for his position including any future increase to stat12 utory pay limitations under 5318 of title 5, United 

13 States Code. Notwithstanding paragraph (2), to the 

14 extent that an employee covered under that para15 graph receives any amount of locality-based com16 parability payment, the cost-of-living allowance rate 

17 under that paragraph shall be reduced accordingly, 

18 as provided under section 5941(c)(2)(B) of title 5, 

19 United States Code. 

20 SEC. 6. APPLICATION TO OTHER ELIGIBLE EMPLOYEES. 

21 (a) IN GENERAL.— 

22 (1) DEFINITION.—In this subsection, the term 

23 ‘‘covered employee’’ means— 

24 (A) any employee who— 


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1 (i) on the day before the date of en2 actment of this Act— 

3 (I) was eligible to be paid a cost4 of-living allowance under 5941 of title 

5 5, United States Code; and 

6 (II) was not eligible to be paid lo7 cality-based comparability payments 

8 under 5304 or 5304a of that title; or 

9 (ii) on or after the date of enactment 

10 of this Act becomes eligible to be paid a 

11 cost-of-living allowance under 5941 of title 

12 5, United States Code; or 

13 (B) any employee who— 

14 (i) on the day before the date of en15 actment of this Act— 

16 (I) was eligible to be paid an al17 lowance under section 1603(b) of title 

18 10, United States Code; 

19 (II) was eligible to be paid an al20 lowance under section 1005(b) of title 

21 39, United States Code; 

22 (III) was employed by the Trans23 portation Security Administration of 

24 the Department of Homeland Security 

25 and was eligible to be paid an allowVerDate Nov 24 2008 21:48 Mar 04, 2009 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1266.IH H1266

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1 ance based on section 5941 of title 5, 

2 United States Code; or 

3 (IV) was eligible to be paid under 

4 any other authority a cost-of-living al5 lowance that is equivalent to the cost6 of-living allowance under section 5941 

7 of title 5, United States Code; or 

8 (ii) on or after the date of enactment 

9 of this Act— 

10 (I) becomes eligible to be paid an 

11 allowance under section 1603(b) of 

12 title 10, United States Code; 

13 (II) becomes eligible to be paid 

14 an allowance under section 1005(b) of 

15 title 39, United States Code; 

16 (III) is employed by the Trans17 portation Security Administration of 

18 the Department of Homeland Security 

19 and becomes eligible to be paid an al20 lowance based on section 5941 of title 

21 5, United States Code; or 

22 (IV) is eligible to be paid under 

23 any other authority a cost-of-living al24 lowance that is equivalent to the costVerDate Nov 24 2008 21:48 Mar 04, 2009 Jkt 079200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H1266.IH H1266

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1 of-living allowance under section 5941 

2 of title 5, United States Code. 

3 (2) APPLICATION TO COVERED EMPLOYEES.— 

4 (A) IN GENERAL.—Notwithstanding any 

5 other provision of law, for purposes of this Act 

6 (including the amendments made by this Act) 

7 any covered employee shall be treated as an em8 ployee to whom section 5941 of title 5, United 

9 States Code (as amended by section 2 of this 

10 Act), and section 4 of this Act apply. 

11 (B) PAY FIXED BY STATUTE.—Pay to cov12 ered employees under section 5304 or 5304a of 

13 title 5, United States Code, as a result of the 

14 application of this Act shall be considered to be 

15 fixed by statute. 

16 (C) PERFORMANCE APPRAISAL SYSTEM.— 

17 With respect to a covered employee who is sub18 ject to a performance appraisal system, no part 

19 of pay attributable to locality-based com20 parability payments as a result of the applica21 tion of this Act, including section 5941 of title 

22 5, United States Code (as amended by section 

23 2 of this Act), may be reduced on the basis of 

24 the performance of that employee. 

25 (b) POSTAL EMPLOYEES IN NON-FOREIGN AREAS.— 


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1 (1) IN GENERAL.—Section 1005(b) of title 39, 

2 United States Code, is amended— 

3 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 

4 (B) by striking ‘‘Section 5941,’’ and in5 serting ‘‘Except as provided under paragraph 

6 (2), section 5941’’; 

7 (C) by striking ‘‘For purposes of such sec8 tion,’’ and inserting ‘‘Except as provided under 

9 paragraph (2), for purposes of section 5941 of 

10 that title,’’; and 

11 (D) by adding at the end the following: 

12 ‘‘(2) On and after the date of enactment of the Non13 Foreign Area Retirement Equity Assurance Act of 2009— 

14 ‘‘(A) the provisions of that Act and section 

15 5941 of title 5 shall apply to officers and employees 

16 covered by section 1003(b) and (c) whose duty sta17 tion is in a nonforeign area; and 

18 ‘‘(B) with respect to officers and employees of 

19 the Postal Service (other than those officers and em20 ployees described under subparagraph (A)), section 

21 6(b)(2) of that Act shall apply.’’. 

22 (2) CONTINUATION OF COST-OF-LIVING ALLOW23 ANCE.— 

24 (A) IN GENERAL.—Notwithstanding any 

25 other provision of this Act, any employee of the 


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1 Postal Service (other than an employee covered 

2 by subsection (b) or (c) of section 1003 of title 

3 39, United States Code, whose duty station is 

4 in a nonforeign area) who is paid an allowance 

5 under section 1005(b) of that title shall for all 

6 purposes be treated as if the provisions of this 

7 Act (including the amendments made by this 

8 Act) had not been enacted, except that the cost9 of-living allowance rate paid to that employee— 

10 (i) may result in the allowance exceed11 ing 25 percent of the rate of basic pay of 

12 that employee; and 

13 (ii) shall be the greater of— 

14 (I) the cost-of-living allowance 

15 rate in effect on December 31, 2009, 

16 for the applicable area; or 

17 (II) the applicable locality-based 

18 comparability pay percentage under 

19 section 4. 

20 (B) RULE OF CONSTRUCTION.—Nothing in 

21 this Act shall be construed to— 

22 (i) provide for an employee described 

23 under subparagraph (A) to be a covered 

24 employee, as defined under subsection (a); 

25 or 


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1 (ii) authorize an employee described 

2 under subparagraph (A) to file an election 

3 under section 7 of this Act. 

4 SEC. 7. ELECTION OF ADDITIONAL BASIC PAY FOR ANNU5 ITY COMPUTATION BY EMPLOYEES. 

6 (a) DEFINITION.—In this section, the term ‘‘covered 

7 employee’’ means any employee— 

8 (1) to whom section 4 applies; 

9 (2) who is separated from service by reason of 

10 retirement under chapter 83 or 84 of title 5, United 

11 States Code, during the period of January 1, 2010, 

12 through December 31, 2012; and 

13 (3) who files an election with the Office of Per14 sonnel Management under subsection (b). 

15 (b) ELECTION.— 

16 (1) IN GENERAL.—An employee described 

17 under subsection (a)(1)–(2) may file an election with 

18 the Office of Personnel Management to be covered 

19 under this section. 

20 (2) DEADLINE.—An election under this sub21 section may be filed not later than December 31, 

22 2012. 

23 (c) COMPUTATION OF ANNUITY.— 

24 (1) IN GENERAL.—Except as provided under 

25 paragraph (2), for purposes of the computation of 


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1 an annuity of a covered employee any cost-of-living 

2 allowance under section 5941 of title 5, United 

3 States Code, paid to that employee during the first 

4 applicable pay period beginning on or after January 

5 1, 2010, through the first applicable pay period end6 ing on or after December 31, 2012, shall be consid7 ered basic pay, as defined under section 8331(3) or 

8 8401(4) of that title. 

9 (2) LIMITATION.—The amount of the cost-of10 living allowance which may be considered basic pay 

11 under paragraph (1) may not exceed the amount of 

12 the locality-based comparability payments the em13 ployee would have received during that period for 

14 the applicable pay area if the limitation under sec15 tion 4 of this Act did not apply. 

16 (d) CIVIL SERVICE RETIREMENT AND DISABILITY

17 RETIREMENT FUND.— 

18 (1) EMPLOYEE CONTRIBUTIONS.—A covered 

19 employee shall pay into the Civil Service Retirement 

20 and Disability Retirement Fund— 

21 (A) an amount equal to the difference be22 tween— 

23 (i) employee contributions that would 

24 have been deducted and withheld from pay 

25 under section 8334 or 8422 of title 5, 


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1 United States Code, during the period de2 scribed under subsection (c) of this section 

3 if the cost-of-living allowances described 

4 under that subsection had been treated as 

5 basic pay under section 8331(3) or 

6 8401(4) of title 5, United States Code; and 

7 (ii) employee contributions that were 

8 actually deducted and withheld from pay 

9 under section 8334 or 8422 of title 5, 

10 United States Code, during that period; 

11 and 

12 (B) interest as prescribed under section 

13 8334(e) of title 5, United States Code, based on 

14 the amount determined under subparagraph 

15 (A). 

16 (2) AGENCY CONTRIBUTIONS.— 

17 (A) IN GENERAL.—The employing agency 

18 of a covered employee shall pay into the Civil 

19 Service Retirement and Disability Retirement 

20 Fund an amount for applicable agency con21 tributions based on payments made under para22 graph (1). 

23 (B) SOURCE.—Amounts paid under this 

24 paragraph shall be contributed from the appro25 priation or fund used to pay the employee. 


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1 (3) REGULATIONS.—The Office of Personnel 

2 Management may prescribe regulations to carry out 

3 this section. 

4 SEC. 8. REGULATIONS. 

5 (a) IN GENERAL.—The Director of the Office of Per6 sonnel Management shall prescribe regulations to carry 

7 out this Act, including— 

8 (1) rules for special rate employees described 

9 under section 3; 

10 (2) rules for adjusting rates of basic pay for 

11 employees in pay systems administered by the Office 

12 of Personnel Management when such employees are 

13 not entitled to locality-based comparability payments 

14 under section 5304 of title 5, United States Code, 

15 without regard to otherwise applicable statutory pay 

16 limitations during the transition period described in 

17 section 4 ending on the first day of the first pay pe18 riod beginning on or after January 1, 2012; and 

19 (3) rules governing establishment and adjust20 ment of saved or retained rates for any employee 

21 whose rate of pay exceeds applicable pay limitations 

22 on the first day of the first pay period beginning on 

23 or after January 1, 2012. 

24 (b) OTHER PAY SYSTEMS.—With the concurrence of 

25 the Director of the Office of Personnel Management, the 


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1 administrator of a pay system not administered by the Of2 fice of Personnel Management shall prescribe regulations 

3 to carry out this Act with respect to employees in such 

4 pay system, consistent with the regulations issued by the 

5 Office under subsection (a). 

6 SEC. 9. EFFECTIVE DATES. 

7 (a) IN GENERAL.—Except as provided by subsection 

8 (b), this Act (including the amendments made by this Act) 

9 shall take effect on the date of enactment of this Act. 

10 (b) LOCALITY PAY AND SCHEDULE.—The amend11 ments made by section 2 and the provisions of section 4 

12 shall take effect on the first day of the first applicable 

13 pay period beginning on or after January 1, 2010. 

Æ 


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