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(1) in paragraph (4), by striking ‘‘and’’ after the
semicolon;
(2) by redesignating paragraph (5) as para-
graph (6); and
(3) by inserting after paragraph (4) the fol-
lowing:
‘‘(5) include a review of the performance goals
and evaluation of the performance plan relative to the
agency’s strategic human capital management; and’’.
SEC. 1312. REFORM OF THE COMPETITIVE SERVICE HIRING
PROCESS.
(a) IN GENERAL.—Chapter 33 of title 5, United States
Code, is amended—
(1) in section 3304(a)—
(A) in paragraph (1), by striking ‘‘and’’
after the semicolon;
(B) in paragraph (2), by striking the period
and inserting ‘‘; and’’; and
(C) by adding at the end of the following:
‘‘(3) authority for agencies to appoint, without
regard to the provision of sections 3309 through 3318,
candidates directly to positions for which—
‘‘(A) public notice has been given; and
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‘‘(B) the Office of Personnel Management
has determined that there exists a severe shortage
of candidates or there is a critical hiring need.
The Office shall prescribe, by regulation, criteria for identi-
fying such positions and may delegate authority to make
determinations under such criteria.’’; and
(2) by inserting after section 3318 the following:
‘‘§ 3319. Alternative ranking and selection procedures
‘‘(a) The Office, in exercising its authority under sec-
tion 3304, or an agency to which the Office has delegated
examining authority under section 1104(a)(2), may estab-
lish category rating systems for evaluating applicants for
positions in the competitive service, under 2 or more quality
categories based on merit consistent with regulations pre-
scribed by the Office of Personnel Management, rather than
assigned individual numerical ratings.
‘‘(b) Within each quality category established under
subsection (a), preference-eligibles shall be listed ahead of
individuals who are not preference eligibles. For other than
scientific and professional positions at GS–9 of the General
Schedule (equivalent or higher), qualified preference-eligi-
bles who have a compensable service-connected disability of
10 percent or more shall be listed in the highest quality
category.
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‘‘(c)(1) An appointing official may select any appli-
cant in the highest quality category or, if fewer than 3 can-
didates have been assigned to the highest quality category,
in a merged category consisting of the highest and the sec-
ond highest quality categories.
‘‘(2) Notwithstanding paragraph (1), the appointing
official may not pass over a preference-eligible in the same
category from which selection is made, unless the require-
ments of section 3317(b) or 3318(b), as applicable, are satis-
fied.
‘‘(d) Each agency that establishes a category rating
system under this section shall submit in each of the 3 years
following that establishment, a report to Congress on that
system including information on—
‘‘(1) the number of employees hired under that
system;
‘‘(2) the impact that system has had on the hir-
ing of veterans and minorities, including those who
are American Indian or Alaska Natives, Asian, Black
or African American, and native Hawaiian or other
Pacific Islanders; and
‘‘(3) the way in which managers were trained in
the administration of that system.
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‘‘(e) The Office of Personnel Management may pre-
scribe such regulations as it considers necessary to carry
out the provisions of this section.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—The
table of sections for chapter 33 of title 5, United States
Code, is amended by striking the item relating to section
3319 and inserting the following:
‘‘3319. Alternative ranking and selection procedures.’’.
SEC. 1313. PERMANENT EXTENSION, REVISION, AND EXPAN-
SION OF AUTHORITIES FOR USE OF VOL-
UNTARY SEPARATION INCENTIVE PAY AND
VOLUNTARY EARLY RETIREMENT.
(a) VOLUNTARY SEPARATION INCENTIVE PAYMENTS.—
(1) IN GENERAL.—
(A) AMENDMENT
TO
TITLE
5, 
UNITED
STATES CODE.—Chapter 35 of title 5, United
States Code, is amended by inserting after sub-
chapter I the following:
‘‘SUBCHAPTER II—VOLUNTARY SEPARATION
INCENTIVE PAYMENTS
‘‘§ 3521. Definitions
‘‘In this subchapter, the term—
‘‘(1) ‘agency’ means an Executive agency as de-
fined under section 105; and
‘‘(2) ‘employee’—
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‘‘(A) means an employee as defined under
section 2105 employed by an agency and an in-
dividual employed by a county committee estab-
lished under section 8(b)(5) of the Soil Conserva-
tion and Domestic Allotment Act (16 U.S.C.
590h(b)(5)) who—
‘‘(i) is serving under an appointment
without time limitation; and
‘‘(ii) has been currently employed for a
continuous period of at least 3 years; and
‘‘(B) shall not include—
‘‘(i) a reemployed annuitant under
subchapter III of chapter 83 or 84 or an-
other 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 subchapter III of chapter 83 or 84 or
another retirement system for employees of
the Government.
‘‘(iii) an employee who is in receipt of
a decision notice of involuntary separation
for misconduct or unacceptable perform-
ance;
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‘‘(iv) an employee who has previously
received any voluntary separation incentive
payment from the Federal Government
under this subchapter or any other author-
ity;
‘‘(v) an employee covered by statutory
reemployment rights who is on transfer em-
ployment with another organization; or
‘‘(vi) any employee who—
‘‘(I) during the 36-month period
preceding the date of separation of that
employee, performed service for which
a student loan repayment benefit was
or is to be paid under section 5379;
‘‘(II) during the 24-month period
preceding the date of separation of that
employee, performed service for which
a recruitment or relocation bonus was
or is to be paid under section 5753; or
‘‘(III) during the 12-month period
preceding the date of separation of that
employee, performed service for which
a retention bonus was or is to be paid
under section 5754.
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‘‘§ 3522. Agency plans; approval
‘‘(a) Before obligating any resources for voluntary sep-
aration incentive payments, the head of each agency shall
submit to the Office of Personnel Management a plan out-
lining the intended use of such incentive payments and a
proposed organizational chart for the agency once such in-
centive payments have been completed.
‘‘(b) The plan of an agency under subsection (a) shall
include—
‘‘(1) the specific positions and functions to be re-
duced or eliminated;
‘‘(2) a description of which categories of employ-
ees will be offered incentives;
‘‘(3) the time period during which incentives
may be paid;
‘‘(4) the number and amounts of voluntary sepa-
ration incentive payments to be offered; and
‘‘(5) a description of how the agency will operate
without the eliminated positions and functions.
‘‘(c) The Director of the Office of Personnel Manage-
ment shall review each agency’s plan an may make any
appropriate modifications in the plan, in consultation with
the Director of the Office of Management and Budget. A
plan under this section may not be implemented without
the approval of the Directive of the Office of Personnel Man-
agement.
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‘‘§ 3523. Authority to provide voluntary separation in-
centive payments
‘‘(a) A voluntary separation incentive payment under
this subchapter may be paid to an employee only as pro-
vided in the plan of an agency established under section
3522.
‘‘(b) A voluntary incentive payment—
‘‘(1) shall be offered to agency employees on the
basis of—
‘‘(A) 1 or more organizational units;
‘‘(B) 1 or more occupational series or levels;
‘‘(C) 1 or more geographical locations;
‘‘(D) skills, knowledge, or other factors re-
lated to a position;
‘‘(E) specific periods of time during which
eligible employees may elect a voluntary incen-
tive payment; or
‘‘(F) any appropriate combination of such
factors;
‘‘(2) shall be paid in a lump sum after the em-
ployee’s separation;
‘‘(3) shall be equal to the lesser of—
‘‘(A) an amount equal to the amount the
employee would be entitled to receive under sec-
tion 5595(c) if the employee were entitled to pay-
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ment under such section (without adjustment for
any previous payment made); or
‘‘(B) an amount determined by the agency
head, not to exceed $25,000;
‘‘(4) may be made only in the case of an em-
ployee who voluntarily separates (whether by retire-
ment or resignation) under this subchapter;
‘‘(5) shall not be a basis for payment, and shall
not be included in the computation, of any other type
of Government benefit;
‘‘(6) shall not be taken into account in deter-
mining the amount of any severance pay to which the
employee may be entitled under section 5595, based
on another other separation; and
‘‘(7) shall be paid from appropriations or funds
available for the payment of the basic pay of the em-
ployee.
‘‘§ 3524. Effect of subsequent employment with the
Government
‘‘(a) The term ‘employment’—
‘‘(1) in subsection (b) includes employment
under a personal services contract (or other direct
contract) with the United States Government (other
than an entity in the legislative branch); and
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‘‘(2) in subsection (c) does not include employ-
ment under such a contract.
‘‘(b) An individual who has received a voluntary sepa-
ration incentive payment under this subchapter and accepts
any employment for compensation with the Government of
the United States with 5 years after the date of the separa-
tion on which the payment is based shall be required to
pay, before the individual’s first day of employment, the
entire amount of the incentive payment to the agency that
paid the incentive payment.
‘‘(c)(1) If the employment under this section is with
an agency, other than the General Accounting Office, the
United States Postal Service, or the Postal Rate Commis-
sion, the Director of the Office of Personnel Management
may, at the request of the head of the agency, may waive
the repayment if—
‘‘(A) the individual involved possesses unique
abilities and is the only qualified applicant available
for the position; or
‘‘(B) in case of an emergency involving a direct
threat to life or property, the individual—
‘‘(i) has skills directly related to resolving
the emergency; and
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‘‘(ii) will serve on a temporary basis only
so long as that individual’s services are made
necessary by the emergency.
‘‘(2) If the employment under this section is with an
entity in the legislative branch, the head of the entity or
the appointing official may waive the repayment if the in-
dividual involved possesses unique abilities and is the only
qualified applicant available for the position.
‘‘(3) If the employment under this section is with the
judicial branch, the Director of the Administrative Office
of the United States Courts may waive the repayment if
the individual involved possesses unique abilities and is the
only qualified applicant available for the position.
‘‘§ 3525. Regulations
‘‘The Office of Personnel Management may prescribe
regulations to carry out this subchapter.’’.
(B) TECHNICAL AND CONFORMING AMEND-
MENTS.—Chapter 35 of title 5, United States
Code, is amended—
(i) by striking the chapter heading and
inserting the following:
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‘‘CHAPTER 35—RETENTION PREFERENCE,
VOLUNTARY SEPARATION INCENTIVE
PAYMENTS, RESTORATION, AND REEM-
PLOYMENT’’;
and
(ii) in the table of sections by inserting
after the item relating to section 3504 the
following:
‘‘SUBCHAPTER II—VOLUNTARY SEPARATION INCENTIVE PAYMENTS
‘‘3521. Definitions.
‘‘3522. Agency plans; approval.
‘‘3523. Authority to provide voluntary separation incentive pay-
ments.
‘‘3524. Effect of subsequent employment with the Government.
‘‘3525. Regulations.’’.
(2) ADMINISTRATIVE
OFFICE
OF
THE
UNITED
STATES COURTS.—The Director of the Administrative
Office of the United States Courts may, by regulation,
establish a program substantially similar to the pro-
gram established under paragraph (1) for individuals
serving in the judicial branch.
(3) CONTINUATION OF OTHER AUTHORITY.—Any
agency exercising any voluntary separation incentive
authority in effect on the effective date of this sub-
section may continue to offer voluntary separation in-
centives consistent with that authority until that au-
thority expires.
(4) EFFECTIVE DATE.—This subsection shall take
effect 60 days after the date of enactment of this Act.
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(b) FEDERAL EMPLOYEE VOLUNTARY EARLY RETIRE-
MENT.—
(1) CIVIL SERVICE RETIREMENT SYSTEM.—Sec-
tion 8336(d)(2) of title 5, United States Code, is
amended to read as follows:
‘‘(2)(A) has been employed continuously, by the
agency in which the employee is serving, for at least
the 31-day period ending on the date on which such
agency requests the determination referred to in sub-
paragraph (D);
‘‘(B) is serving under an appointment that is
not time limited;
‘‘(C) has not been duly notified that such em-
ployee is to be involuntarily separated for misconduct
or unacceptable performance;
‘‘(D) is separated from the service voluntarily
during a period in which, as determined by the office
of Personnel Management (upon request of the agen-
cy) under regulations prescribed by the Office—
‘‘(i) such agency (or, if applicable, the com-
ponent in which the employee is serving) is un-
dergoing substantial delayering, substantial reor-
ganization, substantial reductions in force, sub-
stantial transfer of function, or other substantial
workforce restructuring (or shaping);
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‘‘(ii) a significant percentage of employees
servicing in such agency (or component) are like-
ly to be separated or subject to an immediate re-
duction in the rate of basic pay (without regard
to subchapter VI of chapter 53, or comparable
provisions); or
‘‘(iii) identified as being in positions which
are becoming surplus or excess to the agency’s fu-
ture ability to carry out its mission effectively;
and
‘‘(E) as determined by the agency under regula-
tions prescribed by the Office, is within the scope of
the offer of voluntary early retirement, which may be
made on the basis of—
‘‘(i) 1 or more organizational units;
‘‘(ii) 1 or more occupational series or levels;
‘‘(iii) 1 or more geographical locations;
‘‘(iv) specific periods;
‘‘(v) skills, knowledge, or other factors re-
lated to a position; or
‘‘(vi) any appropriate combination of such
factors;’’.
(2) FEDERAL
EMPLOYEES’ RETIREMENT
SYS-
TEM.—Section 8414(b)(1) of title 5, United States
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Code, is amended by striking subparagraph (B) and
inserting the following:
‘‘(B)(i) has been employed continuously, by
the agency in which the employee is serving, for
at least the 31-day period ending on the date on
which such agency requests the determination re-
ferred to in clause (iv);
‘‘(ii) is serving under an appointment that
is not time limited;
‘‘(iii) has not been duly notified that such
employee is to be involuntarily separated for
misconduct or unacceptable performance;
‘‘(iv) is separate from the service volun-
tarily during a period in which, as determined
by the Office of Personnel Management (upon re-
quest of the agency) under regulations prescribed
by the Office—
‘‘(I) such agency (or, if applicable, the
component in which the employee is serv-
ing) is undergoing substantial delayering,
substantial reorganization, substantial re-
ductions in force, substantial transfer of
function, or other substantial workforce re-
structuring (or shaping);
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‘‘(II) a significant percentage of em-
ployees serving in such agency (or compo-
nent) are likely to be separated or subject to
an immediate reduction in the rate of basic
pay (without regard to subchapter VI of
chapter 53, or comparable provisions); or
‘‘(III) identified as being in positions
which are becoming surplus or excess to the
agency’s future ability to carry out its mis-
sion effectively; and
‘‘(v) as determined by the agency under reg-
ulations prescribed by the Office, is within the
scope of the offer of voluntary early retirement,
which may be made on the basis of—
‘‘(I) 1 or more organizational units;
‘‘(II) 1 or more occupational series or
levels;
‘‘(III) 1 or more geographical loca-
tions;
‘‘(IV) specific periods;
‘‘(V) skills, knowledge, or other factors
related to a position; or
‘‘(VI) any appropriate combination of
such factors.’’.
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(3) GENERAL
ACCOUNTING
OFFICE
AUTHOR-
ITY.—The amendments made by this subsection shall
not be construed to affect the authority under section
1 of Public Law 106–303 (5 U.S.C. 8336 note; 114
State. 1063).
(4) 
TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—Section 7001 of the 1998 Supplemental Ap-
propriations and Rescissions Act (Public Law 105–
174; 112 Stat. 91) is repealed.
(5) REGULATIONS.—The Office of Personnel
Management may prescribe regulations to carry out
this subsection.
(c) SENSE OF CONGRESS.—It is the sense of Congress
that the implementation of this section is intended to re-
shape the Federal workforce and not downsize the Federal
workforce.
SEC. 1314. STUDENT VOLUNTEER TRANSIT SUBSIDY.
(a) IN GENERAL.—Section 7905(a)(1) of title 5,
United States Code, is amended by striking ‘‘and a member
of a uniformed service’’ and inserting ‘‘, a member of a
uniformed service, and a student who provides voluntary
services under section 3111’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—Sec-
tion 3111(c)(1) of title 5, United States Code, is amended
by striking ‘‘chapter 81 of this title’’ and inserting ‘‘section
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7905 (relating to commuting by means other than single-
occupancy motor vehicles), chapter 81’’.
Subtitle C—Reforms Relating to the
Senior Executive Service
SEC. 1321. REPEAL OF RECERTIFICATION REQUIREMENTS
OF SENIOR EXECUTIVES.
(a) IN GENERAL.—Title 5, United States Code, is
amended—
(1) in chapter 33—
(A) in section 3393(g) by striking ‘‘3393a’’;
(B) by repealing section 3393a; and
(C) in the table of sections by striking the
item relating to section 3393a;
(2) in chapter 35—
(A) in section 3592(a)—
(i) in paragraph (1), by inserting ‘‘or’’
at the end;
(ii) in paragraph (2), by striking ‘‘or’’
at the end;
(iii) by striking paragraph (3); and
(iv) by striking the last sentence;
(B) in section 3593(a), by striking para-
graph (2) and inserting the following:
‘‘(2) the appointee left the Senior Executive
Service for reasons other than misconduct, neglect of
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duty, malfeasance, or less than fully successful execu-
tive performance as determined under subchapter II
of chapter 43.’’; and
(C) in section 3594(b)—
(i) in paragraph (1), by inserting ‘‘or’’
at the end;
(ii) in paragraph (2), by striking ‘‘or’’
at the end; and
(iii) by striking paragraph (3);
(3) in section 7701(c)(1)(A), by striking ‘‘or re-
moval from the Senior Executive Service for failure
to be recertified under section 3393a’’;
(4) in chapter 83—
(A) in section 8336(h)(1), by striking ‘‘for
failure to be recertified as a senior executive
under section 3393a or’’; and
(B) in section 8339(h), in the first sentence,
by striking ‘‘, except that such reduction shall
not apply in the case of an employee retiring
under section 8336(h) for failure to be recertified
as a senior executive’’; and
(5) in chapter 84—
(A) in section 8414(a)(1), by striking ‘‘for
failure to be recertified as a senior executive
under section 3393a or’’; and
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(B) in section 8421(a)(2), by striking ‘‘, ex-
cept that an individual entitled to an annuity
under section 8414(a) for failure to be recertified
as a senior executive shall be entitled to an an-
nuity supplement without regard to such appli-
cable retirement age’’.
(b) 
SAVINGS
PROVISION.—Notwithstanding 
the
amendments made by subsection (a)(2)(A), an appeal under
the final sentence of section 3592(a) of title 5, United States
Code, that is pending on the day before the effective date
of this section—
(1) shall not abate by reason of the enactment of
the amendments made by subsection (a)(2)(A); and
(2) shall continue as if such amendments had
not been enacted.
(c) APPLICATION.—The amendment made by sub-
section (a)(2)(B) shall not apply with respect to an indi-
vidual who, before the effective date of this section, leaves
the Senior Executive Service for failure to be recertified as
a senior executive under section 3393a of title 5, United
States Code.
SEC. 1322. ADJUSTMENT OF LIMITATION ON TOTAL AN-
NUAL COMPENSATION.
(a) IN GENERAL.—Section 5307 of title 5, United
States Code, is amended by adding at the end the following:
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‘‘(d)(1) Notwithstanding any other provision of this
section, subsection (a)(1) shall be applied by substituting
‘the total annual compensation payable to the Vice Presi-
dent under section 104 of title 3’ for ‘the annual rate of
basic pay payable for level I of the Executive Schedule’ in
the case of any employee who—
‘‘(A) is paid under section 5376 or 5383 of this
title or section 332(f), 603, or 604 of title 28; and
‘‘(B) holds a position in or under an agency
which is described in paragraph (2).
‘‘(2) An agency described in this paragraph is any
agency which, for purposes of the calendar year involved,
has been certified under this subsection as having a per-
formance appraisal system which (as designed and applied)
makes meaningful distinctions based on relative perform-
ance.
‘‘(3)(A) The Office of Personnel Management and the
Office of Management and Budget jointly shall promulgate
such regulations as may be necessary to carry out this sub-
section, including the criteria and procedures in accordance
with which any determinations under this subsection shall
be made.
‘‘(B) An agency’s certification under this subsection
shall be for a period of 2 calendar years, except that such
certification may be terminated at any time, for purposes
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of either or both of those years, upon a finding that the
actions of such agency have not remained in conformance
with applicable requirements.
‘‘(C) Any certification or decertification under this
subsection shall be made by the Office of Personnel Manage-
ment, with the concurrence of the Office of Management and
Budget.
‘‘(4) Notwithstanding any provision of paragraph (3),
any regulations, certifications, or other measures necessary
to carry out this subsection with respect to employees within
the judicial branch shall be the responsibility of the Director
of the Administrative Office of the United States Courts.
However, the regulations under this paragraph shall be con-
sistent with those promulgated under paragraph (3).’’.
(b) CONFORMING AMENDMENTS.—(1) Section 5307(a)
of title 5, United States Code, is amended by inserting ‘‘or
as otherwise provided under subsection (d),’’ after ‘‘under
law,’’.
(2) Section 5307(c) of such title is amended by striking
‘‘this section,’’ and inserting ‘‘this section (subject to sub-
section (d)),’’.
Subtitle D—Academic Training
SEC. 1331. ACADEMIC TRAINING.
(a) ACADEMIC DEGREE TRAINING.—Section 4107 of
title 5, United States Code, is amended to read as follows:
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‘‘§ 4107. Academic degree training
‘‘(a) Subject to subsection (b), an agency may select
and assign an employee to academic degree training and
may pay or reimburse the costs of academic degree training
from appropriated or other available funds if such
training—
‘‘(1) contributes significantly to—
‘‘(A) meeting an identified agency training
need;
‘‘(B) resolving an identified agency staffing
problem; or
‘‘(C) accomplishing goals in the strategic
plan of the agency;
‘‘(2) is part of a planned, systemic, and coordi-
nated agency employee development program linked
to accomplishing the strategic goals of the agency; and
‘‘(3) is accredited and is provided by a college or
university that is accredited by a nationally recog-
nized body.
‘‘(b) In exercising authority under subsection (a), an
agency shall—
‘‘(1) consistent with the merit system principles
set forth in paragraphs (2) and (7) of section 2301(b),
take into consideration the need to—
‘‘(A) maintain a balanced workforce in
which women, members of racial and ethnic mi-
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nority groups, and persons with disabilities are
appropriately represented in Government service;
and
‘‘(B) provide employees effective education
and training to improve organizational and in-
dividual performance;
‘‘(2) assure that the training is not for the sole
purpose of providing an employee an opportunity to
obtain an academic degree or qualify for appointment
to a particular position for which the academic degree
is a basic requirement;
‘‘(3) assure that no authority under this sub-
section is exercised on behalf of any employee occu-
pying or seeking to qualify for—
‘‘(A) a noncareer appointment in the senior
Executive Service; or
‘‘(B) appointment to any position that is
excepted from the competitive service because of
its confidential policy-determining, policy-mak-
ing or policy-advocating character; and
‘‘(4) to the greatest extent practicable, facilitate
the use of online degree training.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—The
table of sections for chapter 41 of title 5, United States