(c) TEMPORARY ADJUSTMENT.—Regulations issued 
under subsection (a) or (b) may provide that statutory 
limitations on the amount of such special rates may be 
temporarily raised to a higher level during the transition 
period described in section 214 ending on the first day 
of the first pay period beginning on or after January 1, 
2012, at which time any special rate of pay in excess of 
the applicable limitation shall be converted to a retained 
rate under section 5363 of title 5, United States Code. 
SEC. 214. TRANSITION SCHEDULE FOR LOCALITY-BASED 
COMPARABILITY PAYMENTS. 
Notwithstanding any other provision of this subtitle 
or section 5304 or 5304a of title 5, United States Code, 
in implementing the amendments made by this subtitle, 
for each non-foreign area determined under section 
5941(b) of that title, the applicable rate for the locality- 
based comparability adjustment that is used in the com-
putation required under section 5941(c) of that title shall 
be adjusted effective on the first day of the first pay period 
beginning on or after January 1— 
(1) in calendar year 2010, by using 1⁄3 of the 
locality pay percentage for the rest of United States 
locality pay area; 
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(2) in calendar year 2011, by using 2⁄3 of the 
otherwise applicable comparability payment approved 
by the President for each non-foreign area; and 
(3) in calendar year 2012 and each subsequent 
year, by using the full amount of the applicable com-
parability payment approved by the President for 
each non-foreign area. 
SEC. 215. SAVINGS PROVISION. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the application of this subtitle to any em-
ployee should not result in a decrease in the take 
home pay of that employee; 
(2) in calendar year 2012 and each subsequent 
year, no employee shall receive less than the Rest of 
the U.S. locality pay rate; 
(3) concurrent with the surveys next conducted 
under the provisions of section 5304(d)(1)(A) of title 
5, United States Code, beginning after the date of 
the enactment of this Act, the Bureau of Labor Sta-
tistics should conduct separate surveys to determine 
the extent of any pay disparity (as defined by sec-
tion 5302 of that title) that may exist with respect 
to positions located in the State of Alaska, the State 
of Hawaii, and the United States territories, includ-
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ing American Samoa, Guam, Commonwealth of the 
Northern Mariana Islands, Commonwealth of Puerto 
Rico, and the United States Virgin Islands; 
(4) if the surveys under paragraph (3) indicate 
that the pay disparity determined for the State of 
Alaska, the State of Hawaii, or any 1 of the United 
States territories including American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, 
Commonwealth of Puerto Rico, and the United 
States Virgin Islands exceeds the pay disparity de-
termined for the locality which (for purposes of sec-
tion 5304 of that title) is commonly known as the 
‘‘Rest of the United States’’, the President’s Pay 
Agent should take appropriate measures to provide 
that each such surveyed area be treated as a sepa-
rate pay locality for purposes of that section; and 
(5) the President’s Pay Agent will establish 1 
locality area for the entire State of Hawaii and 1 lo-
cality area for the entire State of Alaska. 
(b) SAVINGS PROVISIONS.— 
(1) IN GENERAL.—During the period described 
under section 214 of this subtitle, an employee paid 
a special rate under 5305 of title 5, United States 
Code, who the day before the date of enactment of 
this Act was eligible to receive a cost-of-living allow-
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ance under section 5941 of title 5, United States 
Code, and who continues to be officially stationed in 
an allowance area, shall receive an increase in the 
employee’s special rate consistent with increases in 
the applicable special rate schedule. For employees 
in allowance areas, the minimum step rate for any 
grade of a special rate schedule shall be increased at 
the time of an increase in the applicable locality rate 
percentage for the allowance area by not less than 
the dollar increase in the locality-based com-
parability payment for a non-special rate employee 
at the same minimum step provided under section 
214 of this subtitle, and corresponding increases 
shall be provided for all step rates of the given pay 
range. 
(2) CONTINUATION OF COST OF LIVING ALLOW-
ANCE RATE.—If an employee, who the day before 
the date of enactment of this Act was eligible to re-
ceive a cost-of-living allowance under section 5941 of 
title 5, United States Code, would receive a rate of 
basic pay and applicable locality-based comparability 
payment which is in excess of the maximum rate 
limitation set under section 5304(g) of title 5, 
United States Code, for his position (but for that 
maximum rate limitation) due to the operation of 
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this subtitle, the employee shall continue to receive 
the cost-of-living allowance rate in effect on Decem-
ber 31, 2009 without adjustment until— 
(A) the employee leaves the allowance area 
or pay system; or 
(B) the employee is entitled to receive 
basic pay (including any applicable locality- 
based comparability payment or similar supple-
ment) at a higher rate, 
but, when any such position becomes vacant, the pay 
of any subsequent appointee thereto shall be fixed in 
the manner provided by applicable law and regula-
tion. 
(3) LOCALITY-BASED
COMPARABILITY
PAY-
MENTS.—Any employee covered under paragraph (2) 
shall receive any applicable locality-based com-
parability payment extended under section 214 of 
this subtitle which is not in excess of the maximum 
rate set under section 5304(g) of title 5, United 
States Code, for his position including any future in-
crease to statutory pay limitations under 5318 of 
title 5, United States Code. Notwithstanding para-
graph (2), to the extent that an employee covered 
under that paragraph receives any amount of local-
ity-based comparability payment, the cost-of-living 
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allowance rate under that paragraph shall be re-
duced accordingly, as provided under section 
5941(c)(2)(B) of title 5, United States Code. 
SEC. 216. APPLICATION TO OTHER ELIGIBLE EMPLOYEES. 
(a) IN GENERAL.— 
(1) DEFINITION.—In this subsection, the term 
‘‘covered employee’’ means— 
(A) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
(I) was eligible to be paid a cost- 
of-living allowance under 5941 of title 
5, United States Code; and 
(II) was not eligible to be paid lo-
cality-based comparability payments 
under 5304 or 5304a of that title; or 
(ii) on or after the date of enactment 
of this Act becomes eligible to be paid a 
cost-of-living allowance under 5941 of title 
5, United States Code; or 
(B) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
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(I) was eligible to be paid an al-
lowance under section 1603(b) of title 
10, United States Code; 
(II) was eligible to be paid an al-
lowance under section 1005(b) of title 
39, United States Code; 
(III) was employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and was eligible to be paid an allow-
ance based on section 5941 of title 5, 
United States Code; or 
(IV) was eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
of-living allowance under section 5941 
of title 5, United States Code; or 
(ii) on or after the date of enactment 
of this Act— 
(I) becomes eligible to be paid an 
allowance under section 1603(b) of 
title 10, United States Code; 
(II) becomes eligible to be paid 
an allowance under section 1005(b) of 
title 39, United States Code; 
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(III) is employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and becomes eligible to be paid an al-
lowance based on section 5941 of title 
5, United States Code; or 
(IV) is eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
of-living allowance under section 5941 
of title 5, United States Code. 
(2) APPLICATION TO COVERED EMPLOYEES.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of law, for purposes of this sub-
title (including the amendments made by this 
subtitle) any covered employee shall be treated 
as an employee to whom section 5941 of title 
5, United States Code (as amended by section 
212 of this subtitle), and section 214 of this 
subtitle apply. 
(B) PAY FIXED BY STATUTE.—Pay to cov-
ered employees under section 5304 or 5304a of 
title 5, United States Code, as a result of the 
application of this subtitle shall be considered 
to be fixed by statute. 
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(C) PERFORMANCE APPRAISAL SYSTEM.— 
With respect to a covered employee who is sub-
ject to a performance appraisal system no part 
of pay attributable to locality-based com-
parability payments as a result of the applica-
tion of this subtitle including section 5941 of 
title 5, United States Code (as amended by sec-
tion 212 of this subtitle), may be reduced on 
the basis of the performance of that employee. 
(b) POSTAL EMPLOYEES IN NON-FOREIGN AREAS.— 
(1) IN GENERAL.—Section 1005(b) of title 39, 
United States Code, is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 
(B) by striking ‘‘Section 5941,’’ and in-
serting ‘‘Except as provided under paragraph 
(2), section 5941’’; 
(C) by striking ‘‘For purposes of such sec-
tion,’’ and inserting ‘‘Except as provided under 
paragraph (2), for purposes of section 5941 of 
that title,’’; and 
(D) by adding at the end the following: 
‘‘(2) On and after the date of enactment of the 
Non-Foreign Area Retirement Equity Assurance Act 
of 2009— 
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‘‘(A) the provisions of that Act and section 
5941 of title 5 shall apply to officers and em-
ployees covered by section 1003 (b) and (c) 
whose duty station is in a nonforeign area; and 
‘‘(B) with respect to officers and employees 
of the Postal Service (other than those officers 
and employees described under subparagraph 
(A)) of section 216(b)(2) of that Act shall 
apply.’’. 
(2) CONTINUATION OF COST OF LIVING ALLOW-
ANCE.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of this subtitle, any employee of 
the Postal Service (other than an employee cov-
ered by section 1003 (b) and (c) of title 39, 
United States Code, whose duty station is in a 
nonforeign area) who is paid an allowance 
under section 1005(b) of that title shall be 
treated for all purposes as if the provisions of 
this subtitle (including the amendments made 
by this subtitle) had not been enacted, except 
that the cost-of-living allowance rate paid to 
that employee— 
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(i) may result in the allowance exceed-
ing 25 percent of the rate of basic pay of 
that employee; and 
(ii) shall be the greater of— 
(I) the cost-of-living allowance 
rate in effect on December 31, 2009, 
for the applicable area; or 
(II) the applicable locality-based 
comparability pay percentage under 
section 214. 
(B) RULE OF CONSTRUCTION.—Nothing in 
this subtitle shall be construed to— 
(i) provide for an employee described 
under subparagraph (A) to be a covered 
employee as defined under subsection (a); 
or 
(ii) authorize an employee described 
under subparagraph (A) to file an election 
under section 217 of this subtitle. 
SEC. 217. ELECTION OF ADDITIONAL BASIC PAY FOR ANNU-
ITY COMPUTATION BY EMPLOYEES. 
(a) DEFINITION.—In this section the term ‘‘covered 
employee’’ means any employee— 
(1) to whom section 214 applies; 
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