I 
108TH CONGRESS 
1ST SESSION H. R. 1836
To make changes to certain areas of the Federal civil service in order 
to improve the flexibility and competitiveness of Federal human resources 
management. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 29, 2003
Mr. TOM DAVIS of Virginia (for himself and Mr. HUNTER) introduced the fol-
lowing bill; which was referred to the Committee on Government Reform, 
and in addition to the Committees on Armed Services and Science, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To make changes to certain areas of the Federal civil service 
in order to improve the flexibility and competitiveness 
of Federal human resources management.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Civil Service and National Security Personnel Improve-
ment Act’’.
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—DEPARTMENT OF DEFENSE NATIONAL SECURITY 
PERSONNEL SYSTEM 
Sec. 101. Short title. 
Sec. 102. Department of Defense national security personnel system. 
TITLE II—DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL 
Sec. 201. Modification of the overtime pay cap. 
Sec. 202. Civil Service Retirement System computation for part-time service. 
Sec. 203. Military leave for mobilized Federal civilian employees. 
Sec. 204. Common occupational and health standards for differential payments 
as a consequence of exposure to asbestos. 
Sec. 205. Increase in annual student loan repayment authority. 
Sec. 206. Authorization for cabinet secretaries, secretaries of military depart-
ments, and heads of executive agencies to be paid on a bi-
weekly basis. 
Sec. 207. Additional classes of individuals eligible to participate in the Federal 
long-term care insurance program. 
TITLE III—PROVISIONS RELATING TO THE SECURITIES AND EX-
CHANGE COMMISSION AND THE NATIONAL AERONAUTICS AND 
SPACE ADMINISTRATION 
Subtitle A—Securities and Exchange Commission 
Sec. 301. Securities and Exchange Commission. 
Subtitle B—National Aeronautics and Space Administration 
Sec. 311. Workforce authorities and personnel provisions. 
Sec. 312. Effective date. 
TITLE IV—HUMAN CAPITAL PERFORMANCE FUND 
Sec. 401. Human Capital Performance Fund.
TITLE I—DEPARTMENT OF DE-
FENSE NATIONAL SECURITY 
PERSONNEL SYSTEM 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘National Security Per-
sonnel System Act’’.
SEC. 102. DEPARTMENT OF DEFENSE NATIONAL SECURITY 
PERSONNEL SYSTEM. 
(a) IN GENERAL.—(1) Subpart I of part III of title 
5, United States Code, is amended by adding at the end 
the following new chapter: 
‘‘CHAPTER 99—DEPARTMENT OF DEFENSE 
NATIONAL SECURITY PERSONNEL SYSTEM
‘‘Sec. 
‘‘9901. Definitions. 
‘‘9902. Establishment of human resources management system. 
‘‘9903. Attracting highly qualified experts. 
‘‘9904. Employment of older Americans. 
‘‘9905. Special pay and benefits for certain employees outside the United 
States.
‘‘§ 9901. Definitions 
‘‘For purposes of this chapter—
‘‘(1) the term ‘Director’ means the Director of 
the Office of Personnel Management; and 
‘‘(2) the term ‘Secretary’ means the Secretary 
of Defense. 
‘‘§ 9902. Establishment of human resources manage-
ment system 
‘‘(a) IN GENERAL.—(1) Notwithstanding any other 
provision of this part or of part II of this title, the Sec-
retary may, in regulations prescribed jointly with the Di-
rector, establish, and from time to time adjust, a human 
resources management system for some or all of the orga-
nizational or functional units of the Department of De-
fense. If the Secretary certifies that issuance or adjust-
ment of a regulation, or the inclusion, exclusion, or modi-
fication of a particular provision therein, is essential to 
the national security, the Secretary may, subject to the 
direction of the President, waive the requirement in the 
preceding sentence that the regulation or adjustment be 
issued jointly with the Director. 
‘‘(2) Any regulations established pursuant to this 
chapter shall be established as internal rules of depart-
mental procedure, consistent with section 553 of this title. 
‘‘(b) SYSTEM REQUIREMENTS.—Any system estab-
lished under subsection (a) shall—
‘‘(1) be flexible; 
‘‘(2) be contemporary; 
‘‘(3) not waive, modify, or otherwise affect—
‘‘(A) the public employment principles of 
merit and fitness set forth in section 2301, in-
cluding the principles of hiring based on merit, 
fair treatment without regard to political affili-
ation or other nonmerit considerations, equal 
pay for equal work, and protection of employees 
against reprisal for whistleblowing; 
‘‘(B) any provision of section 2302, relat-
ing to prohibited personnel practices;
‘‘(C)(i) any provision of law referred to in 
section 2302(b)(1), (8), and (9); or 
‘‘(ii) any provision of law implementing 
any provision of law referred to in section 
2302(b)(1), (8), and (9) by—
‘‘(I) providing for equal employment 
opportunity through affirmative action; or 
‘‘(II) providing any right or remedy 
available to any employee or applicant for 
employment in the public service; 
‘‘(D) any other provision of this part (as 
described in subsection (c)); or 
‘‘(E) any rule or regulation prescribed 
under any provision of law referred to in this 
paragraph; 
‘‘(4) ensure that employees may organize, bar-
gain collectively as provided for in this chapter, and 
participate through labor organizations of their own 
choosing in decisions which affect them, subject to 
the provisions of this chapter and any exclusion from 
coverage or limitation on negotiability established 
pursuant to law; and 
‘‘(5) not be limited by any specific law or au-
thority under this title that is waivable under this 
chapter or by any provision of this chapter or any
rule or regulation prescribed under this title that is 
waivable under this chapter, except as specifically 
provided for in this section. 
‘‘(c) OTHER NONWAIVABLE PROVISIONS.—The other 
provisions of this part referred to in subsection (b)(3)(D) 
are (to the extent not otherwise specified in this title)—
‘‘(1) subparts A, E, G, and H of this part; 
‘‘(2) chapters 34, 45, 47, 57, 72, 73, and 79; 
and 
‘‘(3) sections 3131, 3132(a), 3305(b), 3309, 
3310, 3311, 3312, 3313, 3314, 3315, 3316, 
3317(b), 3318, 3320, 3351, 3352, 3363, 3501, 
3502(b), and 3504. 
‘‘(d) LIMITATIONS RELATING TO PAY.—(1) Nothing 
in this section shall constitute authority to modify the pay 
of any employee who serves in an Executive Schedule posi-
tion under subchapter II of chapter 53 of this title. 
‘‘(2) Except as provided for in paragraph (1), the 
total amount in a calendar year of allowances, differen-
tials, bonuses, awards, or other similar cash payments 
paid under this title to any employee who is paid under 
section 5376 or 5383 of this title or under title 10 or 
under other comparable pay authority established for pay-
ment of Department of Defense senior executive or equiva-
lent employees may not exceed the total annual compensa-
tion payable to the Vice President under section 104 of 
title 3. 
‘‘(e) PROVISIONS TO ENSURE COLLABORATION WITH 
EMPLOYEE REPRESENTATIVES.—(1) In order to ensure 
that the authority of this section is exercised in collabora-
tion with, and in a manner that ensures the participation 
of, employee representatives in the planning, development, 
and implementation of any human resources management 
system or adjustments to such system under this section, 
the Secretary and the Director shall provide for the fol-
lowing: 
‘‘(A) The Secretary and the Director shall, with 
respect to any proposed system or adjustment—
‘‘(i) provide to the employee representa-
tives representing any employees who might be 
affected a written description of the proposed 
system or adjustment (including the reasons 
why it is considered necessary); 
‘‘(ii) give such representatives at least 30 
calendar 
days 
(unless 
extraordinary 
cir-
cumstances require earlier action) to review and 
make recommendations with respect to the pro-
posal; and 
‘‘(iii) give any recommendations received 
from such representatives under clause (ii) full
and fair consideration in deciding whether or 
how to proceed with the proposal. 
‘‘(B) Following receipt of recommendations, if 
any, from such employee representatives with re-
spect to a proposal described in subparagraph (A), 
the Secretary and the Director shall accept such 
modifications to the proposal in response to the rec-
ommendations as they determine advisable and shall, 
with respect to any parts of the proposal as to which 
they have not accepted the recommendations—
‘‘(i) notify Congress of those parts of the 
proposal, together with the recommendations of 
the employee representatives; 
‘‘(ii) meet and confer for not less than 30 
calendar days with the employee representa-
tives, in order to attempt to reach agreement on 
whether or how to proceed with those parts of 
the proposal; and 
‘‘(iii) at the Secretary’s option, or if re-
quested by a majority of the employee rep-
resentatives participating, use the services of 
the Federal Mediation and Conciliation Service 
during such meet and confer period to facilitate 
the process of attempting to reach agreement.
‘‘(C)(i) Any part of the proposal as to which the 
representatives do not make a recommendation, or 
as to which the recommendations are accepted by 
the Secretary and the Director, may be implemented 
immediately. 
‘‘(ii) With respect to any parts of the proposal 
as to which recommendations have been made but 
not accepted by the Secretary and the Director, at 
any time after 30 calendar days have elapsed since 
the initiation of the congressional notification, con-
sultation, and mediation procedures set forth in sub-
paragraph (B), if the Secretary determines, in the 
Secretary’s sole and unreviewable discretion, that 
further consultation and mediation is unlikely to 
produce agreement, the Secretary may implement 
any or all of such parts, including any modifications 
made in response to the recommendations as the 
Secretary determines advisable. 
‘‘(iii) The Secretary shall notify Congress 
promptly of the implementation of any part of the 
proposal and shall furnish with such notice an expla-
nation of the proposal, any changes made to the pro-
posal as a result of recommendations from the em-
ployee representatives, and of the reasons why im-
plementation is appropriate under this subpara-
graph. 
‘‘(D) If a proposal described in subparagraph 
(A) is implemented, the Secretary and the Director 
shall—
‘‘(i) develop a method for the employee 
representatives to participate in any further 
planning or development which might become 
necessary; and 
‘‘(ii) give the employee representatives ade-
quate access to information to make that par-
ticipation productive. 
‘‘(2) The Secretary may, at the Secretary’s discre-
tion, engage in any and all collaboration activities de-
scribed in this subsection at an organizational level above 
the level of exclusive recognition. 
‘‘(3) In the case of any employees who are not within 
a unit with respect to which a labor organization is ac-
corded exclusive recognition, the Secretary and the Direc-
tor may develop procedures for representation by any ap-
propriate organization which represents a substantial per-
centage of those employees or, if none, in such other man-
ner as may be appropriate, consistent with the purposes 
of this subsection.
receipt of a decision notice of involuntary separation 
for misconduct or unacceptable performance. 
‘‘(3) An employee who is at least 50 years of age and 
has completed 20 years of service, or has at least 25 years 
of service, may, pursuant to regulations promulgated 
under this section, apply and be retired from the Depart-
ment of Defense and receive benefits in accordance with 
chapter 83 or 84 if the employee has been employed con-
tinuously within the Department of Defense for more than 
30 days before the date on which the determination to con-
duct a reduction or restructuring within 1 or more Depart-
ment of Defense Component is approved pursuant to the 
program established under subsection (a). 
‘‘(4)(A) Separation pay shall be paid in a lump sum 
or in installments and shall be equal to the lesser of—
‘‘(i) an amount equal to the amount the em-
ployee would be entitled to receive under section 
5595(c) of this title, if the employee were entitled to 
payment under such section; or 
‘‘(ii) $25,000. 
‘‘(B) Separation pay shall not be a basis for payment, 
and shall not be included in the computation, of any other 
type of Government benefit. Separation pay shall not be 
taken into account for the purpose of determining the 
amount of any severance pay to which an individual may
be entitled under section 5595 of this title, based on any 
other separation. 
‘‘(C) Separation pay, if paid in installments, shall 
cease to be paid upon the recipient’s acceptance of employ-
ment by the Federal Government, or commencement of 
work under a personal services contract as described in 
paragraph (6). 
‘‘(5)(A) An employee who receives separation pay 
under such program may not be reemployed by the De-
partment of Defense for a 12-month period beginning on 
the effective date of the employee’s separation, unless this 
prohibition is waived by the Secretary on a case-by-case 
basis. 
‘‘(B) An employee who receives separation pay under 
this section on the basis of a separation occurring on or 
after the date of the enactment of the Federal Workforce 
Restructuring Act of 1994 (Public Law 103–236; 108 
Stat. 111) and accepts employment with the Government 
of the United States, or who commences work through a 
personal services contract with the United States within 
5 years after the date of the separation on which payment 
of the separation pay is based, shall be required to repay 
the entire amount of the separation pay to the Depart-
ment of Defense. If the employment is with an Executive 
agency (as defined by section 105 of this title) other than
the Department of Defense, the Director may, at the re-
quest of the head of that agency, waive the repayment if 
the individual involved possesses unique abilities and is the 
only qualified applicant available for the position. If the 
employment is within the Department of Defense, the Sec-
retary may waive the repayment if the individual involved 
is the only qualified applicant available for the position. 
If the employment 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 pos-
sesses unique abilities and is the only qualified applicant 
available for the position. If the employment 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. 
‘‘(6) Under this program, early retirement and sepa-
ration pay may be offered only pursuant to regulations 
established by the Secretary, subject to such limitations 
or conditions as the Secretary may require. 
‘‘(i) PROVISIONS RELATING TO REEMPLOYMENT.—
If annuitant receiving an annuity from the Civil Service 
Retirement and Disability Fund becomes employed in a 
position within the Department of Defense, his annuity
shall continue. An annuitant so reemployed shall not be 
considered an employee for purposes of chapter 83 or 84. 
‘‘§ 9903. Attracting highly qualified experts 
‘‘(a) IN GENERAL.—The Secretary may carry out a 
program using the authority provided in subsection (b) in 
order to attract highly qualified experts in needed occupa-
tions, as determined by the Secretary. 
‘‘(b) AUTHORITY.—Under the program, the Sec-
retary may—
‘‘(1) appoint personnel from outside the civil 
service and uniformed services (as such terms are 
defined in section 2101 of this title) to positions in 
the Department of Defense without regard to any 
provision of this title governing the appointment of 
employees to positions in the Department of De-
fense; 
‘‘(2) prescribe the rates of basic pay for posi-
tions to which employees are appointed under para-
graph (1) at rates not in excess of the maximum 
rate of basic pay authorized for senior-level positions 
under section 5376 of this title, as increased by lo-
cality-based comparability payments under section 
5304 of this title, notwithstanding any provision of 
this title governing the rates of pay or classification 
of employees in the executive branch; and
‘‘(3) pay any employee appointed under para-
graph (1) payments in addition to basic pay within 
the limits applicable to the employee under sub-
section (d). 
‘‘(c) LIMITATION ON TERM OF APPOINTMENT.—(1) 
Except as provided in paragraph (2), the service of an em-
ployee under an appointment made pursuant to this sec-
tion may not exceed 5 years. 
‘‘(2) The Secretary may, in the case of a particular 
employee, extend the period to which service is limited 
under paragraph (1) by up to 1 additional year if the Sec-
retary determines that such action is necessary to promote 
the Department of Defense’s national security missions. 
‘‘(d) LIMITATIONS ON ADDITIONAL PAYMENTS.—(1) 
The total amount of the additional payments paid to an 
employee under this section for any 12-month period may 
not exceed the lesser of the following amounts: 
‘‘(A) $50,000 in fiscal year 2004, which may be 
adjusted annually thereafter by the Secretary, with 
a percentage increase equal to one-half of one per-
centage point less than the percentage by which the 
Employment Cost Index, published quarterly by the 
Bureau of Labor Statistics, for the base quarter of 
the year before the preceding calendar year exceeds
the Employment Cost Index for the base quarter of 
the second year before the preceding calendar year. 
‘‘(B) The amount equal to 50 percent of the 
employee’s annual rate of basic pay. 
For purposes of this paragraph, the term ‘base quarter’ 
has the meaning given such term by section 5302(3). 
‘‘(2) An employee appointed under this section is not 
eligible for any bonus, monetary award, or other monetary 
incentive for service except for payments authorized under 
this section. 
‘‘(3) Notwithstanding any other provision of this sub-
section or of section 5307, no additional payments may 
be paid to an employee under this section in any calendar 
year if, or to the extent that, the employee’s total annual 
compensation will exceed the maximum amount of total 
annual compensation payable at the salary set in accord-
ance with section 104 of title 3. 
‘‘(e) SAVINGS PROVISIONS.—In the event that the 
Secretary terminates this program, in the case of an em-
ployee who, on the day before the termination of the pro-
gram, is serving in a position pursuant to an appointment 
under this section—
‘‘(1) the termination of the program does not 
terminate the employee’s employment in that posi-
tion before the expiration of the lesser of—
‘‘(A) the period for which the employee 
was appointed; or 
‘‘(B) the period to which the employee’s 
service is limited under subsection (c), including 
any extension made under this section before 
the termination of the program; and 
‘‘(2) the rate of basic pay prescribed for the po-
sition under this section may not be reduced as long 
as the employee continues to serve in the position 
without a break in service. 
‘‘§ 9904. Employment of older Americans 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, the Secretary may appoint older Americans 
into positions in the excepted service for a period not to 
exceed 2 years, provided that—
‘‘(1) any such appointment shall not result in—
‘‘(A) the displacement of individuals cur-
rently employed by the Department of Defense 
(including partial displacement through reduc-
tion of nonovertime hours, wages, or employ-
ment benefits); or 
‘‘(B) the employment of any individual 
when any other person is in a reduction-in-force 
status from the same or substantially equivalent 
job within the Department of Defense; and
‘‘(2) the individual to be appointed is otherwise 
qualified for the position, as determined by the Sec-
retary. 
‘‘(b) EFFECT
ON EXISTING RETIREMENT BENE-
FITS.—Notwithstanding any other provision of law, an in-
dividual appointed pursuant to subsection (a) who other-
wise is receiving an annuity, pension, social security pay-
ment, retired pay, or other similar payment shall not have 
the amount of said annuity, pension, social security, or 
other similar payment reduced as a result of such employ-
ment. 
‘‘(c) 
EXTENSION
OF
APPOINTMENT.—Notwith-
standing subsection (a), the Secretary may extend an ap-
pointment made pursuant to this section for up to an addi-
tional 2 years if the individual employee possesses unique 
knowledge or abilities that are not otherwise available to 
the Department of Defense. 
‘‘(d) DEFINITION.—For purposes of this section, the 
term ‘older American’ means any citizen of the United 
States who is at least 55 years of age. 
‘‘§ 9905. Special pay and benefits for certain employ-
ees outside the United States 
‘‘The Secretary may provide to certain civilian em-
ployees of the Department of Defense assigned to activi-
ties outside the United States as determined by the Sec-
retary to be in support of Department of Defense activities 
abroad hazardous to life or health or so specialized be-
cause of security requirements as to be clearly distinguish-
able from normal government employment—
‘‘(1) allowances and benefits—
‘‘(A) comparable to those provided by the 
Secretary of State to members of the Foreign 
Service under chapter 9 of title I of the Foreign 
Service Act of 1980 (Public Law 96–465, 22 
U.S.C. 4081 et seq.) or any other provision of 
law; or 
‘‘(B) comparable to those provided by the 
Director of Central Intelligence to personnel of 
the Central Intelligence Agency; and 
‘‘(2) special retirement accrual benefits and dis-
ability in the same manner provided for by the Cen-
tral Intelligence Agency Retirement Act (50 U.S.C. 
2001 et seq.) and in section 18 of the Central Intel-
ligence Agency Act of 1949 (50 U.S.C. 403r).’’. 
(2) The table of chapters for part III of such title 
is amended by adding at the end of subpart I the following 
new item:
‘‘99. Department of Defense National Security Personnel System .......... 9901.’’.
(b) IMPACT ON DEPARTMENT OF DEFENSE CIVILIAN 
PERSONNEL.—(1) Any exercise of authority under chap-
ter 99 of such title (as added by subsection (a)), including
under any system established under such chapter, shall 
be in conformance with the requirements of this sub-
section. 
(2) No other provision of this Act or of any amend-
ment made by this Act may be construed or applied in 
a manner so as to limit, supersede, or otherwise affect the 
provisions of this section, except to the extent that it does 
so by specific reference to this section. 
(c) CONFORMING AMENDMENTS.—(1) Section 6 of 
the Civil Service Miscellaneous Amendments Act of 1983 
(Public Law 98–224; 98 Stat. 49), as amended, is re-
pealed. 
(2) Section 342 of the National Defense Authoriza-
tion Act for Fiscal Year 1995 (Public Law 103–337; 108 
Stat. 2721), as amended, is repealed. 
(3) Section 1101 of the Strom Thurmond National 
Defense Authorization Act for Fiscal Year 1999 (Public 
Law 105–261; 112 Stat. 2139), as amended, is repealed. 
(4) Section 4308 of the National Defense Authoriza-
tion Act for Fiscal Year 1996 (Public Law 104–106; 110 
Stat. 669), as amended, is repealed.
TITLE II—DEPARTMENT OF 
DEFENSE CIVILIAN PERSONNEL 
SEC. 201. MODIFICATION OF THE OVERTIME PAY CAP. 
Section 5542(a)(2) of title 5, United States Code, is 
amended—
(1) by inserting ‘‘the greater of’’ before ‘‘one 
and one-half’’; and 
(2) by inserting ‘‘or the hourly rate of basic pay 
of the employee’’ after ‘‘law)’’ the second place it ap-
pears.
SEC. 202. CIVIL SERVICE RETIREMENT SYSTEM COMPUTA-
TION FOR PART-TIME SERVICE. 
Section 8339(p) of title 5, United States Code, is 
amended by adding at the end the following new para-
graphs: 
‘‘(3) In the administration of paragraph (1)—
‘‘(A) subparagraph (A) of such paragraph shall 
apply with respect to pay for service performed be-
fore, on, or after April 7, 1986; and 
‘‘(B) subparagraph (B) of such paragraph—
‘‘(i) shall apply with respect to that portion 
of any annuity which is attributable to service 
performed on or after April 7, 1986; and
‘‘(ii) shall not apply with respect to that 
portion of any annuity which is attributable to 
service performed before April 7, 1986. 
‘‘(4) Paragraph (3) shall be effective with respect to 
any annuity entitlement to which is based on a separation 
from service occurring on or after the date of the enact-
ment of this paragraph.’’. 
SEC. 203. MILITARY LEAVE FOR MOBILIZED FEDERAL CI-
VILIAN EMPLOYEES. 
(a) IN GENERAL.—Subsection (b) of section 6323 of 
title 5, United States Code, is amended—
(1) in paragraph (2)—
(A) by redesignating subparagraphs (A) 
and (B) as clauses (i) and (ii), respectively, and 
at the end of clause (ii), as so redesignated, by 
inserting ‘‘or’’; and 
(B) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by inserting the following before the text be-
ginning with ‘‘is entitled’’: 
‘‘(B) performs full-time military service as a re-
sult of a call or order to active duty in support of 
a contingency operation as defined in section 
101(a)(13) of title 10;’’.
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to military service performed on 
or after the date of the enactment of this Act.
SEC. 204. COMMON OCCUPATIONAL AND HEALTH STAND-
ARDS FOR DIFFERENTIAL PAYMENTS AS A 
CONSEQUENCE OF EXPOSURE TO ASBESTOS. 
(a) 
PREVAILING
RATE
SYSTEMS.—Section 
5343(c)(4) of title 5, United States Code, is amended by 
inserting before the semicolon at the end the following: 
‘‘, and for any hardship or hazard related to asbestos, such 
differentials shall be determined by applying occupational 
safety and health standards consistent with the permis-
sible exposure limit promulgated by the Secretary of 
Labor under the Occupational Safety and Health Act of 
1970’’. 
(b) GENERAL
SCHEDULE
PAY
RATES.—Section 
5545(d) of such title is amended by inserting before the 
period at the end of the first sentence the following: ‘‘, 
and for any hardship or hazard related to asbestos, such 
differentials shall be determined by applying occupational 
safety and health standards consistent with the permis-
sible exposure limit promulgated by the Secretary of 
Labor under the Occupational Safety and Health Act of 
1970’’.
(c) APPLICABILITY.—Subject to any vested constitu-
tional property rights, any administrative or judicial deter-
mination after the date of enactment of this Act con-
cerning backpay for a differential established under sec-
tions 5343(c)(4) or 5545(d) of such title shall be based 
on occupational safety and health standards described in 
the amendments made by subsections (a) and (b). 
SEC. 205. INCREASE IN ANNUAL STUDENT LOAN REPAY-
MENT AUTHORITY. 
Section 5379(b)(2)(A) of title 5, United States Code, 
is 
amended 
by 
striking 
‘‘$6,000’’ 
and 
inserting 
‘‘$10,000’’. 
SEC. 206. AUTHORIZATION FOR CABINET SECRETARIES, 
SECRETARIES OF MILITARY DEPARTMENTS, 
AND HEADS OF EXECUTIVE AGENCIES TO BE 
PAID ON A BIWEEKLY BASIS. 
(a) AUTHORIZATION.—Section 5504 of title 5, United 
States Code, is amended—
(1) by redesignating subsection (c) as sub-
section (d); 
(2) by striking the last sentence of both sub-
section (a) and subsection (b); and 
(3) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) For the purposes of this section:
lations promulgated by the Office of Personnel Man-
agement under subsection (d)(2).’’. 
(b) GUIDELINES.—Subsection (d) of section 5504 of 
such title, as redesignated by subsection (a), is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) The Office of Personnel Management shall pro-
vide guidelines by regulation for exemptions to be made 
by the heads of agencies under subsection (c)(3). Such 
guidelines shall provide for such exemptions only under 
exceptional circumstances.’’. 
SEC. 207. ADDITIONAL CLASSES OF INDIVIDUALS ELIGIBLE 
TO PARTICIPATE IN THE FEDERAL LONG-
TERM CARE INSURANCE PROGRAM. 
(a) CERTAIN EMPLOYEES OF THE DISTRICT OF CO-
LUMBIA
GOVERNMENT.—Section 9001(1) of title 5, 
United States Code, is amended by striking ‘‘2105(c),’’ 
and all that follows and inserting ‘‘2105(c).’’. 
(b) FORMER FEDERAL EMPLOYEES WHO WOULD BE 
ELIGIBLE TO BEGIN RECEIVING AN ANNUITY UPON AT-
TAINING
THE
REQUISITE
MINIMUM
AGE.—Section 
9001(2) of title 5, United States Code, is amended—
(1) in subparagraph (A), by striking ‘‘and’’ at 
the end;
(2) in subparagraph (B), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(C) any former employee who, on the 
basis of his or her service, would meet all re-
quirements for being considered an ‘annuitant’ 
within the meaning of subchapter III of chapter 
83, chapter 84, or any other retirement system 
for employees of the Government, but for the 
fact that such former employee has not attained 
the minimum age for title to annuity.’’. 
(c) RESERVISTS TRANSFERRED TO THE RETIRED 
RESERVE WHO ARE UNDER AGE 60.—Section 9001(4) 
of title 5, United States Code, is amended by striking ‘‘in-
cluding’’ and all that follows through ‘‘who has’’ and in-
serting ‘‘and a member who has been transferred to the 
Retired Reserve and who would be entitled to retired pay 
under chapter 1223 of title 10 but for not having’’.
TITLE III—PROVISIONS RELAT-
ING TO THE SECURITIES AND 
EXCHANGE COMMISSION AND 
THE 
NATIONAL 
AERO-
NAUTICS AND SPACE ADMIN-
ISTRATION 
Subtitle A—Securities and 
Exchange Commission 
SEC. 301. SECURITIES AND EXCHANGE COMMISSION. 
Subchapter I of chapter 31 of title 5, United States 
Code, is amended by adding at the end the following: 
‘‘§ 3114. 
APPOINTMENT 
OF 
ACCOUNTANTS, 
ECONOMISTS, 
AND 
EXAMINERS 
BY 
THE 
SECURITIES 
AND 
EXCHANGE 
COMMISSION. 
‘‘(a) APPLICABILITY.—This section applies with re-
spect to any position of accountant, economist, and securi-
ties compliance examiner at the Commission that is in the 
competitive service. 
‘‘(b) APPOINTMENT AUTHORITY.—
‘‘(1) IN GENERAL.—The Commission may ap-
point candidates to any position described in sub-
section (a)—
‘‘(A) in accordance with the statutes, rules, 
and regulations governing appointments in the 
excepted service; and 
‘‘(B) notwithstanding any statutes, rules, 
and regulations governing appointments in the 
competitive service. 
‘‘(2) RULE OF CONSTRUCTION.—The appoint-
ment of a candidate to a position under authority of 
this subsection shall not be considered to cause such 
position to be converted from the competitive service 
to the excepted service. 
‘‘(c) REPORTS.—No later than 90 days after the end 
of fiscal year 2003 (for fiscal year 2003) and 90 days after 
the end of fiscal year 2005 (for fiscal years 2004 and 
2005), the Commission shall submit a report with respect 
to its exercise of the authority granted by subsection (b) 
during such fiscal years to the Committee on Government 
Reform and the Committee on Financial Services of the 
House of Representatives and the Committee on Govern-
mental Affairs and the Committee on Banking, Housing, 
and Urban Affairs of the Senate. Such reports shall de-
scribe the changes in the hiring process authorized by such 
subsection, including relevant information related to—
‘‘(1) the quality of candidates;
‘‘(2) the procedures used by the Commission to 
select candidates through the streamlined hiring 
process; 
‘‘(3) the numbers, types, and grades of employ-
ees hired under the authority; 
‘‘(4) any benefits or shortcomings associated 
with the use of the authority; 
‘‘(5) the effect of the exercise of the authority 
on the hiring of veterans and other demographic 
groups; and 
‘‘(6) the way in which managers were trained in 
the administration of the streamlined hiring system. 
‘‘(c) COMMISSION DEFINED.—For purposes of this 
section, the term ‘Commission’ means the Security and 
Exchange Commission.’’. 
Subtitle B—National Aeronautics 
and Space Administration 
SEC. 311. WORKFORCE AUTHORITIES AND PERSONNEL 
PROVISIONS. 
(a) IN GENERAL.—Subpart I of part III of title 5, 
United States Code, is amended by inserting after chapter 
97, as added by section 841(a)(2) of the Homeland Secu-
rity Act of 2002 (Public Law 107–296; 116 Stat. 2229), 
the following:
‘‘CHAPTER 98—NATIONAL AERONAUTICS 
AND SPACE ADMINISTRATION
‘‘SUBCHAPTER I—WORKFORCE AUTHORITIES 
‘‘Sec. 
‘‘9801. Definitions. 
‘‘9802. Planning, notification, and reporting requirements. 
‘‘9803. Workforce authorities. 
‘‘9804. Recruitment, redesignation, and relocation bonuses. 
‘‘9805. Retention bonuses. 
‘‘9806. Term appointments. 
‘‘9807. Pay authority for critical positions. 
‘‘9808. Assignments of intergovernmental personnel. 
‘‘9809. Enhanced demonstration project authority. 
‘‘SUBCHAPTER II—PERSONNEL PROVISIONS 
‘‘9831. Definitions. 
‘‘9832. Administration and private sector exchange assignments. 
‘‘9833. Science and technology scholarship program. 
‘‘9834. Distinguished scholar appointment authority. 
‘‘9835. Travel and transportation expenses of certain new appointees. 
‘‘9836. Annual leave enhancements. 
‘‘9837. Limited appointments to Senior Executive Service positions. 
‘‘9838. Superior qualifications pay.
‘‘SUBCHAPTER I—WORKFORCE AUTHORITIES 
‘‘§ 9801. Definitions 
‘‘For purposes of this subchapter—
‘‘(1) the term ‘Administration’ means the Na-
tional Aeronautics and Space Administration; 
‘‘(2) the term ‘Administrator’ means the Ad-
ministrator of the National Aeronautics and Space 
Administration; 
‘‘(3) the term ‘critical need’ means a specific 
and important requirement of the Administration’s 
mission that the Administration is unable to fulfill 
because the Administration lacks the appropriate 
employees because—
‘‘(A) of the inability to fill positions; or 
‘‘(B) employees do not possess the req-
uisite skills; 
‘‘(4) the term ‘employee’ means an individual 
employed in or under the Administration; and 
‘‘(5) the term ‘workforce plan’ means the plan 
required under section 9802(a). 
‘‘§ 9802. Planning, notification, and reporting require-
ments 
‘‘(a) Before exercising any of the workforce authori-
ties under this subchapter, the Administrator shall submit 
a written plan to the Office of Personnel Management for 
approval. A plan under this subchapter may not be imple-
mented without the approval of the Office of Personnel 
Management. 
‘‘(b) A workforce plan shall include a description of—
‘‘(1) each critical need of the Administration 
and the criteria used in the identification of that 
need; 
‘‘(2)(A) the functions, approximate number, 
and classes or other categories of positions or em-
ployees that—
‘‘(i) address critical needs; and
‘‘(ii) would be eligible for each authority 
proposed to be exercised under section 9803; 
and 
‘‘(B) how the exercise of those authorities with 
respect to the eligible positions or employees involved 
would address each critical need identified under 
paragraph (1); 
‘‘(3)(A) any critical need identified under para-
graph (1) which would not be addressed by the au-
thorities made available under section 9803; and 
‘‘(B) the reasons why those needs would not be 
so addressed; 
‘‘(4) the specific criteria to be used in deter-
mining which individuals may receive the benefits 
described under sections 9804 and 9805 (including 
the criteria for granting bonuses in the absence of 
a critical need), and how the level of those benefits 
will be determined; 
‘‘(5) the safeguards or other measures that will 
be applied to ensure that this subchapter is carried 
out in a manner consistent with merit system prin-
ciples; 
‘‘(6) the means by which employees will be af-
forded the notification required under subsections 
(c) and (d)(1)(B);
‘‘(7) the methods that will be used to determine 
if the authorities exercised under section 9803 have 
successfully addressed each critical need identified 
under paragraph (1); and 
‘‘(8)(A) the recruitment methods used by the 
Administration before the enactment of this chapter 
to recruit highly qualified individuals; and 
‘‘(B) the changes the Administration will imple-
ment after the enactment of this chapter in order to 
improve its recruitment of highly qualified individ-
uals, including how it intends to use—
‘‘(i) nongovernmental recruitment or place-
ment agencies; and 
‘‘(ii) Internet technologies. 
‘‘(c) Not later than 60 days before first exercising 
any of the workforce authorities made available under this 
subchapter, the Administrator shall provide to all employ-
ees the workforce plan and any additional information 
which the Administrator considers appropriate. 
‘‘(d)(1)(A) The Administrator may submit any modi-
fications to the workforce plan to the Office of Personnel 
Management. Modifications to the workforce plan may not 
be implemented without the approval of the Office of Per-
sonnel Management.
‘‘(B) Not later than 60 days before implementing any 
such modifications, the Administrator shall provide an ap-
propriately modified plan to all employees of the Adminis-
tration. 
‘‘(2) Any reference in this subchapter or any other 
provision of law to the workforce plan shall be considered 
to include any modification made in accordance with this 
subsection. 
‘‘(e) None of the workforce authorities made available 
under section 9803 may be exercised in a manner incon-
sistent with the workforce plan. 
‘‘(f) Whenever the Administration submits its per-
formance plan under section 1115 of title 31 to the Office 
of Management and Budget for any year, the Administra-
tion shall at the same time submit a copy of such plan 
to—
‘‘(1) the Committee on Governmental Affairs 
and the Committee on Appropriations of the Senate; 
and 
‘‘(2) the Committee on Government Reform and 
the Committee on Appropriations of the House of 
Representatives. 
‘‘§ 9803. Workforce authorities 
‘‘(a) The workforce authorities under this subchapter 
are the following:
‘‘(1) The authority to pay recruitment, redesig-
nation, and relocation bonuses under section 9804. 
‘‘(2) The authority to pay retention bonuses 
under section 9805. 
‘‘(3) The authority to make term appointments 
and to take related personnel actions under section 
9806. 
‘‘(4) The authority to fix rates of basic pay for 
critical positions under section 9807. 
‘‘(5) The authority to extend intergovernmental 
personnel act assignments under section 9808. 
‘‘(b) No authority under this subchapter may be exer-
cised with respect to any officer who is appointed by the 
President, by and with the advice and consent of the Sen-
ate. 
‘‘(c) Unless specifically stated otherwise, all authori-
ties provided under this subchapter are subject to section 
5307.
‘‘§ 9804. Recruitment, redesignation, and relocation 
bonuses 
‘‘(a) Notwithstanding section 5753, the Adminis-
trator may pay a bonus to an individual, in accordance 
with the workforce plan and subject to the limitations in 
this section, if—
‘‘(1) the Administrator determines that the Ad-
ministration would be likely, in the absence of a 
bonus, to encounter difficulty in filling a position; 
and 
‘‘(2) the individual—
‘‘(A) is newly appointed as an employee of 
the Federal Government; 
‘‘(B) is currently employed by the Federal 
Government and is newly appointed to another 
position in the same geographic area; or 
‘‘(C) is currently employed by the Federal 
Government and is required to relocate to a dif-
ferent geographic area to accept a position with 
the Administration. 
‘‘(b) If the position is described as addressing a crit-
ical 
need 
in 
the 
workforce 
plan 
under 
section 
9802(b)(2)(A), the amount of a bonus may not exceed—
‘‘(1) 50 percent of the employee’s annual rate 
of basic pay (including comparability payments 
under sections 5304 and 5304a) as of the beginning 
of the service period multiplied by the service period 
specified under subsection (d)(1)(B)(i); or 
‘‘(2) 100 percent of the employee’s annual rate 
of basic pay (including comparability payments
under sections 5304 and 5304a) as of the beginning 
of the service period. 
‘‘(c) If the position is not described as addressing a 
critical need in the workforce plan under section 
9802(b)(2)(A), the amount of a bonus may not exceed—
‘‘(1) 25 percent of the employee’s annual rate 
of basic pay (including comparability payments 
under sections 5304 and 5304a) as of the beginning 
of the service period multiplied by the service period 
specified under subsection (d)(1)(B)(i); or 
‘‘(2) 100 percent of the employee’s annual rate 
of basic pay (including comparability payments 
under sections 5304 and 5304a) as of the beginning 
of the service period. 
‘‘(d)(1)(A) Payment of a bonus under this section 
shall be contingent upon the individual entering into a 
service agreement with the Administration. 
‘‘(B) At a minimum, the service agreement shall in-
clude—
‘‘(i) the required service period; 
‘‘(ii) the method of payment, including a pay-
ment schedule, which may include a lump-sum pay-
ment, installment payments, or a combination there-
of;
‘‘(iii) the amount of the bonus and the basis for 
calculating that amount; and 
‘‘(iv) the conditions under which the agreement 
may be terminated before the agreed-upon service 
period has been completed, and the effect of the ter-
mination. 
‘‘(2) For purposes of determinations under sub-
sections (b)(1) and (c)(1), the employee’s service period 
shall be expressed as the number equal to the full years 
and twelfth parts thereof, rounding the fractional part of 
a month to the nearest twelfth part of a year. The service 
period may not be less than 6 months and may not exceed 
4 years. 
‘‘(3) A bonus under this section may not be consid-
ered to be part of the basic pay of an employee. 
‘‘(e) Before paying a bonus under this section, the 
Administration shall establish a plan for paying recruit-
ment, redesignation, and relocation bonuses, subject to ap-
proval by the Office of Personnel Management. 
‘‘§ 9805. Retention bonuses 
‘‘(a) Notwithstanding section 5754, the Adminis-
trator may pay a bonus to an employee, in accordance with 
the workforce plan and subject to the limitations in this 
section, if the Administrator determines that—
‘‘(1) the unusually high or unique qualifications 
of the employee or a special need of the Administra-
tion for the employee’s services makes it essential to 
retain the employee; and 
‘‘(2) the employee would be likely to leave in 
the absence of a retention bonus. 
‘‘(b) If the position is described as addressing a crit-
ical 
need 
in 
the 
workforce 
plan 
under 
section 
9802(b)(2)(A), the amount of a bonus may not exceed 50 
percent of the employee’s annual rate of basic pay (includ-
ing comparability payments under sections 5304 and 
5304a). 
‘‘(c) If the position is not described as addressing a 
critical need in the workforce plan under section 
9802(b)(2)(A), the amount of a bonus may not exceed 25 
percent of the employee’s annual rate of basic pay (includ-
ing comparability payments under sections 5304 and 
5304a). 
‘‘(d)(1)(A) Payment of a bonus under this section 
shall be contingent upon the employee entering into a serv-
ice agreement with the Administration. 
‘‘(B) At a minimum, the service agreement shall in-
clude—
‘‘(i) the required service period;
‘‘(ii) the method of payment, including a pay-
ment schedule, which may include a lump-sum pay-
ment, installment payments, or a combination there-
of; 
‘‘(iii) the amount of the bonus and the basis for 
calculating the amount; and 
‘‘(iv) the conditions under which the agreement 
may be terminated before the agreed-upon service 
period has been completed, and the effect of the ter-
mination. 
‘‘(2) The employee’s service period shall be expressed 
as the number equal to the full years and twelfth parts 
thereof, rounding the fractional part of a month to the 
nearest twelfth part of a year. The service period may not 
be less than 6 months and may not exceed 4 years. 
‘‘(3) Notwithstanding paragraph (1), a service agree-
ment is not required if the Administration pays a bonus 
in biweekly installments and sets the installment payment 
at the full bonus percentage rate established for the em-
ployee, with no portion of the bonus deferred. In this case, 
the Administration shall inform the employee in writing 
of any decision to change the retention bonus payments. 
The employee shall continue to accrue entitlement to the 
retention bonus through the end of the pay period in which 
such written notice is provided.
‘‘(e) A bonus under this section may not be consid-
ered to be part of the basic pay of an employee. 
‘‘(f) An employee is not entitled to a retention bonus 
under this section during a service period previously estab-
lished for that employee under section 5753 or under sec-
tion 9804. 
‘‘§ 9806. Term appointments 
‘‘(a) The Administrator may authorize term appoint-
ments within the Administration under subchapter I of 
chapter 33, for a period of not less than 1 year and not 
more than 6 years. 
‘‘(b) Notwithstanding chapter 33 or any other provi-
sion of law relating to the examination, certification, and 
appointment of individuals in the competitive service, the 
Administrator may convert an employee serving under a 
term appointment to a permanent appointment in the 
competitive service within the Administration without fur-
ther competition if—
‘‘(1) such individual was appointed under open, 
competitive examination under subchapter I of chap-
ter 33 to the term position; 
‘‘(2) the announcement for the term appoint-
ment from which the conversion is made stated that 
there was potential for subsequent conversion to a 
career-conditional or career appointment;
‘‘(3) the employee has completed at least 2 
years of current continuous service under a term ap-
pointment in the competitive service; 
‘‘(4) the employee’s performance under such 
term appointment was at least fully successful or 
equivalent; and 
‘‘(5) the position to which such employee is 
being converted under this section is in the same oc-
cupational series, is in the same geographic location, 
and provides no greater promotion potential than 
the term position for which the competitive examina-
tion was conducted. 
‘‘(c) Notwithstanding chapter 33 or any other provi-
sion of law relating to the examination, certification, and 
appointment of individuals in the competitive service, the 
Administrator may convert an employee serving under a 
term appointment to a permanent appointment in the 
competitive service within the Administration through in-
ternal competitive promotion procedures if the conditions 
under paragraphs (1) through (4) of subsection (b) are 
met. 
‘‘(d) An employee converted under this section be-
comes a career-conditional employee, unless the employee 
has otherwise completed the service requirements for ca-
reer tenure.
‘‘(e) An employee converted to career or career-condi-
tional employment under this section acquires competitive 
status upon conversion. 
‘‘§ 9807. Pay authority for critical positions 
‘‘(a) In this section, the term ‘position’ means—
‘‘(1) a position to which chapter 51 applies, in-
cluding a position in the Senior Executive Service; 
‘‘(2) a position under the Executive Schedule 
under sections 5312 through 5317; 
‘‘(3) a position established under section 3104; 
or 
‘‘(4) a senior-level position to which section 
5376(a)(1) applies. 
‘‘(b) Authority under this section—
‘‘(1) may be exercised only with respect to a po-
sition that— 
‘‘(A) is described as addressing a critical 
need in the workforce plan under section 
9802(b)(2)(A); and 
‘‘(B) requires expertise of an extremely 
high level in a scientific, technical, professional, 
or administrative field; 
‘‘(2) may be exercised only to the extent nec-
essary to recruit or retain an individual exceptionally 
well qualified for the position; and
‘‘(3) may be exercised only in retaining employ-
ees of the Administration or in appointing individ-
uals who were not employees of another Federal 
agency as defined under section 5102(a)(1). 
‘‘(c)(1) Notwithstanding section 5377, the Adminis-
trator may fix the rate of basic pay for a position in the 
Administration in accordance with this section. The Ad-
ministrator may not delegate this authority. 
‘‘(2) The number of positions with pay fixed under 
this section may not exceed 10 at any time. 
‘‘(d)(1) The rate of basic pay fixed under this section 
may not be less than the rate of basic pay (including any 
comparability payments) which would otherwise be pay-
able for the position involved if this section had never been 
enacted. 
‘‘(2) The annual rate of basic pay fixed under this 
section may not exceed the per annum rate of salary pay-
able under section 104 of title 3. 
‘‘(3) Notwithstanding any provision of section 5307, 
in the case of an employee who, during any calendar year, 
is receiving pay at a rate fixed under this section, no allow-
ance, differential, bonus, award, or similar cash payment 
may be paid to such employee if, or to the extent that, 
when added to basic pay paid or payable to such employee 
(for service performed in such calendar year as an em-
ployee in the executive branch or as an employee outside 
the executive branch to whom chapter 51 applies), such 
payment would cause the total to exceed the per annum 
rate of salary which, as of the end of such calendar year, 
is payable under section 104 of title 3. 
‘‘§ 9808. Assignments of intergovernmental personnel 
‘‘For purposes of applying the third sentence of sec-
tion 3372(a) (relating to the authority of the head of a 
Federal agency to extend the period of an employee’s as-
signment to or from a State or local government, institu-
tion of higher education, or other organization), the Ad-
ministrator may, with the concurrence of the employee and 
the government or organization concerned, take any action 
which would be allowable if such sentence had been 
amended by striking ‘two’ and inserting ‘four’.
‘‘§ 9809. Enhanced demonstration project authority 
‘‘When conducting a demonstration project at the Ad-
ministration, section 4703(d)(1)(A) may be applied by 
substituting ‘such numbers of individuals as determined 
by the Administrator’ for ‘not more than 5,000 individ-
uals’. 
‘‘SUBCHAPTER II—PERSONNEL PROVISIONS 
‘‘§ 9831. Definitions 
‘‘For purposes of this subchapter—
‘‘(1) the term ‘Administration’ means the Na-
tional Aeronautics and Space Administration; and 
‘‘(2) the term ‘Administrator’ means the Ad-
ministrator of the National Aeronautics and Space 
Administration. 
‘‘§ 9832. Administration and private sector exchange 
assignments 
‘‘(a) For purposes of this section—
‘‘(1) the term ‘private sector employee’ means 
an employee of a private sector entity; and 
‘‘(2) the term ‘private sector entity’ means an 
organization, company, corporation, or other busi-
ness concern, or a foreign government or agency of 
a foreign government, that is not a State, local gov-
ernment, Federal agency, or other organization as 
defined under section 3371 (1), (2), (3), and (4), re-
spectively. 
‘‘(b)(1) On request from or with the concurrence of 
a private sector entity, and with the consent of the em-
ployee concerned, the Administrator may arrange for the 
assignment of—
‘‘(A) an employee of the Administration serving 
under a career or career-conditional appointment, a 
career appointee in the Senior Executive Service, or 
an individual under an appointment of equivalent
tenure in an excepted service position, but excluding 
employees in positions which have been excepted 
from the competitive service by reasons of their con-
fidential, policy-determining, policymaking, or policy-
advocating character, to a private sector entity; and 
‘‘(B) an employee of a private sector entity to 
the Administration, 
for work of mutual concern to the Administration and the 
private sector entity that the Administrator determines 
will be beneficial to both. 
‘‘(2) The period of an assignment under this section 
may not exceed 2 years. However, the Administrator may 
extend the period of assignment for not more than 2 addi-
tional years. 
‘‘(3) An employee of the Administration may be as-
signed under this section only if the employee agrees, as 
a condition of accepting an assignment, to serve in the 
Administration upon the completion of the assignment for 
a period equal to the length of the assignment. The Ad-
ministrator may waive the requirement under this para-
graph, with the approval of the Office of Management and 
Budget, with respect to any employee if the Administrator 
determines it to be in the best interests of the United 
States to do so.
‘‘(4) Each agreement required under paragraph (3) 
shall provide that if the employee fails to carry out the 
agreement (except in the case of a waiver made under 
paragraph (3)), the employee shall be liable to the United 
States for payment of all expenses (excluding salary) of 
the assignment. The amount due shall be treated as a debt 
due the United States. 
‘‘(c)(1) An Administration employee assigned to a 
private sector entity under this section is deemed, during 
the assignment, to be on detail to a work assignment (as 
a detailee to the entity). 
‘‘(2) An Administration employee assigned under this 
section on detail remains an employee of the Administra-
tion. Chapter 171 of title 28 and any other Federal tort 
liability statute apply to the Administration employee so 
assigned, and all defenses available to the United States 
under these laws or applicable provisions of State law shall 
remain in effect. The supervision of the duties of an Ad-
ministration employee assigned to the private sector entity 
through detail may be governed by agreement between the 
Administration and the private sector entity concerned. 
‘‘(3) The assignment of an Administration employee 
on detail to a private sector entity under this section may 
be made with or without reimbursement by the private sec-
tor entity for the travel and transportation expenses to
or from the place of assignment, for the pay, or supple-
mental pay, or a part thereof, of the employee, or for the 
contribution of the Administration to the employee’s ben-
efit systems during the assignment. Any reimbursements 
shall be credited to the appropriation of the Administra-
tion used for paying the travel and transportation ex-
penses, pay, or benefits, and not paid to the employee. 
‘‘(d)(1) An employee of a private sector entity who 
is assigned to the Administration under an arrangement 
under this section shall be deemed on detail to the Admin-
istration. 
‘‘(2) During the period of assignment, a private sec-
tor employee on detail to the Administration—
‘‘(A) is not entitled to pay from the Administra-
tion, except to the extent that the pay received from 
the private sector entity is less than the appropriate 
rate of pay which the duties would warrant under 
the pay provisions of this title or other applicable 
authority; 
‘‘(B) is deemed an employee of the Administra-
tion for the purpose of chapter 73 of this title, the 
Ethics in Government Act of 1978, section 27 of the 
Office of Federal Procurement Policy Act, sections 
201, 203, 205, 207, 208, 209, 602, 603, 606, 607, 
610, 643, 654, 1905, and 1913 of title 18, sections
1343, 1344, and 1349(b) of title 31, chapter 171 of 
title 28, and any other Federal tort liability statute, 
and any other provision of Federal criminal law, un-
less otherwise specifically exempted; 
‘‘(C) notwithstanding subparagraph (B), is also 
deemed to be an employee of his or her private sec-
tor employer for purposes of section 208 of title 18; 
and 
‘‘(D) is subject to such regulations as the Ad-
ministrator may prescribe. 
‘‘(3) The supervision of the duties of an employee as-
signed under this subsection may be governed by agree-
ment between the Administration and the private sector 
entity. 
‘‘(4) A detail of a private sector employee to the Ad-
ministration may be made with or without reimbursement 
by the Administration for the pay, or a part thereof, of 
the employee during the period of assignment, or for the 
contribution of the private sector entity, or a part thereof, 
to employee benefit systems. 
‘‘(5)(A) A private sector employee on detail to the 
Administration under this section who suffers disability or 
dies as a result of personal injury sustained while in the 
performance of duties during the assignment shall be 
treated, for the purpose of subchapter I of chapter 81,
as an employee as defined under section 8101 who had 
sustained the injury in the performance of duties. 
‘‘(B) When an employee (or the employee’s depend-
ents in case of death) entitled by reason of injury or death 
to benefits under subchapter I of chapter 81 is also enti-
tled to benefits from the employee’s private sector em-
ployer for the same injury or death, the employee (or the 
employee’s dependents in case of death) shall elect which 
benefits the employee will receive. The election shall be 
made within 1 year after the injury or death, or such fur-
ther time as the Secretary of Labor may allow for reason-
able cause shown. When made, the election is irrevocable. 
‘‘(C) Except as provided in subparagraphs (A) and 
(B), and notwithstanding any other law, the United 
States, any instrumentality of the United States, or an 
employee, agent, or assign of the United States shall not 
be liable to—
‘‘(i) a private sector employee assigned to the 
Administration under this section; 
‘‘(ii) such employee’s legal representative, 
spouse, dependents, survivors, or next of kin; or 
‘‘(iii) any other person, including any third 
party as to whom such employee, or that employee’s 
legal representative, spouse, dependents, survivors, 
or next of kin, has a cause of action arising out of
an injury or death sustained in the performance of 
duty pursuant to an assignment under this section, 
otherwise entitled to recover damages from the 
United States, any instrumentality of the United 
States, or any employee, agency, or assign of the 
United States, 
with respect to any injury or death suffered by a private 
sector employee sustained in the performance of duties 
pursuant to an assignment under this section. 
‘‘(e)(1) Appropriations of the Administration are 
available to pay, or reimburse, an Administration or pri-
vate sector employee in accordance with—
‘‘(A) subchapter I of chapter 57 for the ex-
penses of—
‘‘(i) travel, including a per diem allowance, 
to and from the assignment location; 
‘‘(ii) a per diem allowance at the assign-
ment location during the period of the assign-
ment; and 
‘‘(iii) travel, including a per diem allow-
ance, while traveling on official business away 
from the employee’s designated post of duty 
during the assignment when the Administrator 
considers the travel to be in the interest of the 
United States;
‘‘(B) section 5724 for the expenses of transpor-
tation of the employee’s immediate family, household 
goods, and personal effects to and from the assign-
ment location; 
‘‘(C) section 5724a(a) for the expenses of per 
diem allowances for the immediate family of the em-
ployee to and from the assignment location; 
‘‘(D) section 5724a(c) for subsistence expenses 
of the employee and immediate family while occu-
pying temporary quarters at the assignment location 
and on return to the employee’s former post of duty; 
‘‘(E) section 5724a(g) to be used by the em-
ployee for miscellaneous expenses related to change 
of station where movement or storage of household 
goods is involved; and 
‘‘(F) section 5726(c) for the expenses of non-
temporary storage of household goods and personal 
effects in connection with assignment at an isolated 
location. 
‘‘(2) Expenses specified in paragraph (1), other than 
those in paragraph (1)(A)(iii), may not be allowed in con-
nection with the assignment of an Administration or pri-
vate sector employee under this section, unless and until 
the employee agrees in writing to complete the entire pe-
riod of his assignment or 1 year, whichever is shorter, un-
less separated or reassigned for reasons beyond his control 
that are acceptable to the Administrator. If the employee 
violates the agreement, the money spent by the United 
States for these expenses is recoverable from the employee 
as a debt due the United States. The Administrator may 
waive in whole or in part a right of recovery under this 
paragraph with respect to a private sector employee on 
assignment with the Administration or an Administration 
employee on assignment with a private sector entity. 
‘‘(3) Appropriations of the Administration are avail-
able to pay expenses under section 5742 with respect to 
an Administration or private sector employee assigned 
under this authority. 
‘‘(f) A private sector entity may not charge the Fed-
eral Government, as direct or indirect costs under a Fed-
eral contract, the costs of pay or benefits paid by the enti-
ty to an employee assigned to the Administration under 
this section for the period of the assignment. 
‘‘§ 9833. Science and technology scholarship program 
‘‘(a)(1) The Administrator may carry out a program 
of entering into contractual agreements with individuals 
described under paragraph (2) under which—
‘‘(A) the Administrator agrees to provide to the 
individuals scholarships for pursuing, at accredited 
institutions of higher education, academic programs
appropriate for careers in professions needed by the 
Administration; and 
‘‘(B) the individuals agree to serve as employees 
of the Administration, for the period described under 
subsection (b), in positions needed by the Adminis-
tration and for which the individuals are qualified. 
‘‘(2) The individuals referred to under paragraph (1) 
are individuals who—
‘‘(A) are enrolled or accepted for enrollment as 
full-time students at accredited institutions of higher 
education in an academic field or discipline pre-
scribed by the Administration; 
‘‘(B) are United States citizens; and 
‘‘(C) at the time of the initial scholarship 
award, are not Federal employees as defined under 
section 2105. 
‘‘(b)(1) For purposes of subsection (a)(1)(B), the pe-
riod of service for which an individual is obligated to serve 
as an employee of the Administration is, subject to sub-
paragraph (A) of paragraph (2), 12 months for each aca-
demic year for which the scholarship under such sub-
section is provided. 
‘‘(2)(A) Subject to subparagraph (B), the Adminis-
trator may provide a scholarship under this section if the 
individual applying for the scholarship agrees that, not
later than 60 days after obtaining the educational degree 
involved, the individual will begin serving full-time as an 
employee in satisfaction of the period of service that the 
individual is obligated to provide. 
‘‘(B) The Administrator may defer the obligation of 
an individual to provide a period of service under this sub-
section, if the Administrator determines that such a defer-
ral is appropriate. 
‘‘(c)(1) The Administrator may provide a scholarship 
under subsection (a) for an academic year if— 
‘‘(A) the individual applying for the scholarship 
has submitted to the Administrator a proposed aca-
demic program leading to a degree in an academic 
field or discipline approved by the Administration; or 
‘‘(B) the individual agrees that the program will 
not be altered without the approval of the Adminis-
trator. 
‘‘(2) The Administrator may provide a scholarship 
under this section for an academic year if the individual 
applying for the scholarship agrees to maintain a high 
level of academic standing as defined by regulation. 
‘‘(3) The dollar amount of a scholarship for an aca-
demic year shall not exceed— 
‘‘(A) the limits established by regulation under 
paragraph (4); or
‘‘(B) the total costs incurred in attending the 
institution involved. 
‘‘(4) A scholarship may be expended for tuition, fees, 
and other authorized expenses as established by regula-
tion. 
‘‘(5) The Administrator may enter into a contractual 
agreement with an institution of higher education under 
which the amounts provided in the scholarship for tuition, 
fees, and other authorized expenses are paid directly to 
the institution with respect to which a scholarship is pro-
vided. 
‘‘(6) An individual may not receive a scholarship for 
longer than 4 academic years, unless an extension is 
granted by the Administrator. 
‘‘(d)(1)(A) Any scholarship recipient who fails to 
maintain a high level of academic standing, who is dis-
missed from an educational institution for disciplinary 
reasons, or who voluntarily terminates academic training 
before graduation from the educational program for which 
the scholarship was awarded, shall— 
‘‘(i) be in breach of the contractual agreement; 
and 
‘‘(ii) in lieu of any service obligation arising 
under such agreement, be liable to the United States 
for repayment of all scholarship funds paid to that
recipient and to the educational institution on their 
behalf under the agreement within 1 year after the 
date of default. 
‘‘(B) The repayment period may be extended by the 
Administrator when determined to be necessary, as estab-
lished by regulation. A penalty for failure to complete the 
academic program for which the scholarship was awarded 
may be assessed at the discretion of the Administrator, 
in addition to the repayment with interest as provided 
under paragraph (3). 
‘‘(2)(A) A scholarship recipient who, for any reason, 
fails to begin or complete that recipient’s service obligation 
after completion of academic training, or fails to comply 
with the terms and conditions of deferment established by 
the Administrator, shall be in breach of the contractual 
agreement. 
‘‘(B)(i) In this subparagraph—
‘‘(I) the term ‘A’ means the amount the United 
States is entitled to recover; 
‘‘(II) the term ‘F’ means the sum of the 
amounts paid to or on behalf of the participant; 
‘‘(III) the term ‘t’ means the total number of 
months of the period of obligated service the partici-
pant is required to serve; and
‘‘(IV) the term ‘s’ means the number of months 
of the period of obligated service served by the par-
ticipant. 
‘‘(ii) When a recipient breaches the agreement as pro-
vided under subparagraph (A), the United States shall be 
entitled to recover damages equal to 3 times the scholar-
ship award, in accordance with the following formula: 
‘‘A=(3F)[(t-s)/t] 
‘‘(C) The damages that the United States is entitled 
to recover shall be paid within 1 year after the date of 
default. 
‘‘(3) Beginning 90 days after default, interest shall 
accrue on the payments required to be made under this 
subsection, at a rate to be determined by regulation estab-
lished by the Administrator. 
‘‘(e)(1) Any obligation of an individual incurred 
under this section for service or payment of damages may 
be canceled upon the death of the individual. 
‘‘(2) The Administrator shall by regulation provide 
for the partial or total waiver or suspension of any obliga-
tion of service or payment incurred by an individual under 
this section if—
‘‘(A) the compliance by the individual is impos-
sible or would involve extreme hardship to the indi-
vidual; or
‘‘(B) enforcement of such obligation with re-
spect to any individual would be contrary to the best 
interests of the Government. 
‘‘(f) The Administrator may provide a scholarship 
under this section if an application for the scholarship is 
submitted to the Administrator and the application is in 
such form, is made in such manner, and contains such 
agreements, assurance, and information as the Adminis-
trator determines to be necessary to carry out this section. 
‘‘(g)(1) There are authorized to be appropriated to 
the Administration to carry out this section $10,000,000 
for fiscal year 2004 and $10,000,000 for each succeeding 
fiscal year. 
‘‘(2) Amounts appropriated for a fiscal year for schol-
arships under this section shall remain available for 2 fis-
cal years. 
‘‘§ 9834. Distinguished scholar appointment authority 
‘‘(a) In this section—
‘‘(1) the term ‘professional position’ means a 
position that is classified to an occupational series 
identified by the Office of Personnel Management as 
a position that—
‘‘(A) requires education and training in the 
principles, concepts, and theories of the occupa-
tion that typically can be gained only through
completion of a specified curriculum at a recog-
nized college or university; and 
‘‘(B) is covered by the Group Coverage 
Qualification Standard for Professional and Sci-
entific Positions; and 
‘‘(2) the term ‘research position’ means a posi-
tion in a professional series that primarily involves 
scientific inquiry or investigation, or research-type 
exploratory development of a creative or scientific 
nature, where the knowledge required to perform the 
work successfully is acquired typically and primarily 
through graduate study. 
‘‘(b) The Administration may appoint, without regard 
to the provisions of sections 3304(b) and 3309 through 
3318, candidates directly to General Schedule professional 
positions in the Administration for which public notice has 
been given, if—
‘‘(1) with respect to a position at the GS–7 
level, the individual—
‘‘(A) received, from an accredited institu-
tion authorized to grant baccalaureate degrees, 
a baccalaureate degree in a field of study for 
which possession of that degree in conjunction 
with academic achievements meets the qualifica-
tion standards as prescribed by the Office of
Personnel Management for the position to 
which the individual is being appointed; and 
‘‘(B) achieved a cumulative grade point av-
erage of 3.0 or higher on a 4.0 scale and a 
grade point average of 3.5 or higher for courses 
in the field of study required to qualify for the 
position; 
‘‘(2) with respect to a position at the GS–9 
level, the individual—
‘‘(A) received, from an accredited institu-
tion authorized to grant graduate degrees, a 
graduate degree in a field of study for which 
possession of that degree meets the qualifica-
tion standards at this grade level as prescribed 
by the Office of Personnel Management for the 
position to which the individual is being ap-
pointed; and 
‘‘(B) achieved a cumulative grade point av-
erage of 3.5 or higher on a 4.0 scale in grad-
uate coursework in the field of study required 
for the position; 
‘‘(3) with respect to a position at the GS–11 
level, the individual—
‘‘(A) received, from an accredited institu-
tion authorized to grant graduate degrees, a
graduate degree in a field of study for which 
possession of that degree meets the qualifica-
tion standards at this grade level as prescribed 
by the Office of Personnel Management for the 
position to which the individual is being ap-
pointed; and 
‘‘(B) achieved a cumulative grade point av-
erage of 3.5 or higher on a 4.0 scale in grad-
uate coursework in the field of study required 
for the position; or 
‘‘(4) with respect to a research position at the 
GS–12 level, the individual—
‘‘(A) received, from an accredited institu-
tion authorized to grant graduate degrees, a 
graduate degree in a field of study for which 
possession of that degree meets the qualifica-
tion standards at this grade level as prescribed 
by the Office of Personnel Management for the 
position to which the individual is being ap-
pointed; and 
‘‘(B) achieved a cumulative grade point av-
erage of 3.5 or higher on a 4.0 scale in grad-
uate coursework in the field of study required 
for the position.
‘‘(F) an appointment to a position estab-
lished under section 3104; or 
‘‘(G) an appointment to a position estab-
lished under section 5108; or 
‘‘(2) a student trainee who, upon completion of 
academic work, is converted to an appointment in 
the Administration that is identified in paragraph 
(1) in accordance with an appropriate authority. 
‘‘(b) The Administrator may pay the travel, transpor-
tation, and relocation expenses of a new appointee to the 
same extent, in the same manner, and subject to the same 
conditions as the payment of such expenses under sections 
5724, 5724a, 5724b, and 5724c to an employee trans-
ferred in the interests of the United States Government. 
‘‘§ 9836. Annual leave enhancements 
‘‘(a)(1) In this subsection—
‘‘(A) the term ‘newly appointed employee’ 
means an individual who is first appointed—
‘‘(i) regardless of tenure, as an employee of 
the Federal Government; or 
‘‘(ii) as an employee of the Federal Gov-
ernment following a break in service of at least 
90 days after that individual’s last period of 
Federal employment, other than—
‘‘(I) employment under the Student 
Educational Employment Program admin-
istered by the Office of Personnel Manage-
ment; 
‘‘(II) employment as a law clerk train-
ee; 
‘‘(III) employment under a short-term 
temporary appointing authority while a 
student during periods of vacation from 
the educational institution at which the 
student is enrolled; 
‘‘(IV) employment under a provisional 
appointment if the new appointment is per-
manent and immediately follows the provi-
sional appointment; or 
‘‘(V) employment under a temporary 
appointment that is neither full-time nor 
the principal employment of the individual; 
‘‘(B) the term ‘period of qualified non-Federal 
service’ means any period of service performed by an 
individual that—
‘‘(i) was performed in a position the duties 
of which were directly related to the duties of 
the position in the Administration to which that
individual will fill as a newly appointed em-
ployee; and 
‘‘(ii) except for this section would not oth-
erwise be service performed by an employee for 
purposes of section 6303; and 
‘‘(C) the term ‘directly related to the duties of 
the position’ means duties and responsibilities in the 
same line of work which require similar qualifica-
tions. 
‘‘(2)(A) For purposes of section 6303, the Adminis-
trator may deem a period of qualified non-Federal service 
performed by a newly appointed employee to be a period 
of service of equal length performed as an employee. 
‘‘(B) A period deemed by the Administrator under 
subparagraph (A) shall continue to apply to the employee 
during—
‘‘(i) the period of Federal service in which the 
deeming is made; and 
‘‘(ii) any subsequent period of Federal service. 
‘‘(3)(A) Notwithstanding section 6303(a), the annual 
leave accrual rate for an employee of the Administration 
in a position paid under section 5376 or 5383, or for an 
employee in an equivalent category whose rate of basic pay 
is greater than the rate payable at GS–15, step 10, shall 
be 1 day for each full biweekly pay period.
‘‘(B) The accrual rate established under this para-
graph shall continue to apply to the employee during—
‘‘(i) the period of Federal service in which such 
accrual rate first applies; and 
‘‘(ii) any subsequent period of Federal service. 
‘‘§ 9837. Limited appointments to Senior Executive 
Service positions 
‘‘(a) In this section—
‘‘(1) the term ‘career reserved position’ means 
a position in the Administration designated under 
section 3132(b) which may be filled only by—
‘‘(A) a career appointee; or 
‘‘(B) a limited emergency appointee or a 
limited term appointee—
‘‘(i) who, immediately before entering 
the career reserved position, was serving 
under a career or career-conditional ap-
pointment outside the Senior Executive 
Service; or 
‘‘(ii) whose limited emergency or lim-
ited term appointment is approved in ad-
vance by the Office of Personnel Manage-
ment; 
‘‘(2) the term ‘limited emergency appointee’ has 
the meaning given under section 3132; and
‘‘(3) the term ‘limited term appointee’ means 
an individual appointed to a Senior Executive Serv-
ice position in the Administration to meet a bona 
fide temporary need, as determined by the Adminis-
trator. 
‘‘(b) The number of career reserved positions which 
are filled by an appointee as described under subsection 
(a)(1)(B) may not exceed 10 percent of the total number 
of Senior Executive Service positions allocated to the Ad-
ministration. 
‘‘(c) Notwithstanding sections 3132 and 3394(b)—
‘‘(1) the Administrator may appoint an indi-
vidual to any Senior Executive Service position in 
the Administration as a limited term appointee 
under this section for a period of—
‘‘(A) 4 years or less to a position the du-
ties of which will expire at the end of such 
term; or 
‘‘(B) 1 year or less to a position the duties 
of which are continuing; and 
‘‘(2) in rare circumstances, the Administrator 
may authorize an extension of a limited appointment 
under—
‘‘(A) paragraph (1)(A) for a period not to 
exceed 2 years; and
Administrator may approve an extension up to an 
additional 1 year. 
‘‘(f) A limited term appointee may not serve more 
than 7 consecutive years under any combination of limited 
appointments. 
‘‘(g) Notwithstanding section 5384, the Adminis-
trator may authorize performance awards to limited term 
appointees in the Administration in the same amounts and 
in the same manner as career appointees. 
‘‘§ 9838. Superior qualifications pay 
‘‘(a) In this section the term ‘employee’ means an em-
ployee as defined under section 2105 who is employed by 
the Administration. 
‘‘(b) Notwithstanding section 5334, the Adminis-
trator may set the pay of an employee paid under the Gen-
eral Schedule at any step within the pay range for the 
grade of the position, based on the superior qualifications 
of the employee, or the special need of the Administration. 
‘‘(c) If an exercise of the authority under this section 
relates to a current employee selected for another position 
within the Administration, a determination shall be made 
that the employee’s contribution in the new position will 
exceed that in the former position, before setting pay 
under this section.
‘‘(d) Pay as set under this section is basic pay for 
such purposes as pay set under section 5334. 
‘‘(e) If the employee serves for at least 1 year in the 
position for which the pay determination under this sec-
tion was made, or a successor position, the pay earned 
under such position may be used in succeeding actions to 
set pay under chapter 53. 
‘‘(f) The Administrator may waive the restrictions in 
subsection (e), based on criteria established in the plan 
required under subsection (g). 
‘‘(g) Before setting any employee’s pay under this 
section, the Administrator shall submit a plan to the Of-
fice of Personnel Management, that includes—
‘‘(1) criteria for approval of actions to set pay 
under this section; 
‘‘(2) the level of approval required to set pay 
under this section; 
‘‘(3) all types of actions and positions to be cov-
ered; 
‘‘(4) the relationship between the exercise of au-
thority under this section and the use of other pay 
incentives; and 
‘‘(5) a process to evaluate the effectiveness of 
this section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.—
(1) TABLE OF CHAPTERS.—The table of chap-
ters for part III of title 5, United States Code, is 
amended by adding at the end the following:
‘‘98. National Aeronautics and Space Administration ........ 9801’’.
(2) COMPENSATION
FOR
CERTAIN
EXCEPTED 
PERSONNEL.—
(A) IN
GENERAL.—Subparagraph (A) of 
section 203(c)(2) of the National Aeronautics 
and 
Space 
Act 
of 
1958 
(42 
U.S.C. 
2473(c)(2)(A)) is amended by striking ‘‘the 
highest rate of grade 18 of the General Sched-
ule of the Classification Act of 1949, as amend-
ed,’’ and inserting ‘‘the rate of basic pay pay-
able for level III of the Executive Schedule,’’. 
(B) EFFECTIVE
DATE.—Notwithstanding 
section 313, the amendment made by this para-
graph shall take effect on the first day of the 
first pay period beginning on or after the effec-
tive date of this Act. 
(3) COMPENSATION
CLARIFICATION.—Section 
209 of title 18, United States Code, as amended by 
section 209(g)(2) of the E-Government Act of 2002 
(Public Law 107–347; 116 Stat. 2932), is amended 
by adding at the end the following:
‘‘(h)(1) In this subsection, the term ‘private sector 
entity’ has the meaning given under section 9832(a) of 
title 5. 
‘‘(2) This section does not prohibit an employee of 
a private sector entity, while assigned to the National Aer-
onautics and Space Administration under section 9832 of 
title 5, from continuing to receive pay and benefits from 
that entity in accordance with section 9832 of that title.’’. 
(4) OTHER AMENDMENTS.—Section 125(c)(1) 
of Public Law 100–238 (5 U.S.C. 8432 note), as 
amended by section 209(g)(3) of the E-Government 
Act of 2002 (Public Law 107–347; 116 Stat. 2932), 
is amended—
(A) in subparagraph (C), by striking ‘‘or’’ 
at the end; 
(B) in subparagraph (D), by striking 
‘‘and’’ at the end and inserting ‘‘or’’; and 
(C) by adding at the end the following: 
‘‘(E) an individual assigned from the Na-
tional Aeronautics and Space Administration to 
a private sector organization under section 
9832 of title 5, United States Code; and’’. 
SEC. 312. EFFECTIVE DATE. 
This subtitle shall take effect 180 days after the date 
of enactment of this Act.
TITLE IV—HUMAN CAPITAL 
PERFORMANCE FUND 
SEC. 401. HUMAN CAPITAL PERFORMANCE FUND. 
(a) Subpart D of part III of title 5, United States 
Code, is amended by inserting after chapter 53 the fol-
lowing:
‘‘CHAPTER 54—HUMAN CAPITAL PERFORMANCE FUND 
‘‘Sec. 
‘‘5401. Purpose. 
‘‘5402. Definitions. 
‘‘5403. Human Capital Performance Fund. 
‘‘5404. Human capital performance payments. 
‘‘5405. Regulations. 
‘‘5406. Agency plan. 
‘‘5407. Nature of payment. 
‘‘5408. Appropriations.
‘‘§ 5401. Purpose 
‘‘The purpose of this chapter is to promote, through 
the creation of a Human Capital Performance Fund, 
greater performance in the Federal Government. Monies 
from the Fund will be used to reward agencies’ highest 
performing and most valuable employees. This Fund will 
offer Federal managers a new tool to recognize employee 
performance that is critical to the achievement of agency 
missions. 
‘‘§ 5402. Definitions 
‘‘For the purpose of this chapter—
‘‘(1) ‘agency’ means an Executive agency under 
section 105, but does not include the General Ac-
counting Office;
‘‘(2) ‘employee’ includes—
‘‘(A) an individual paid under a statutory 
pay system defined in section 5302(1); 
‘‘(B) a prevailing rate employee, as defined 
in section 5342(a)(2); and 
‘‘(C) a category of employees included by 
the Office of Personnel Management following 
the review of an agency plan under section 
5403(b)(1); 
but does not include—
‘‘(i) an individual paid at an annual rate of 
basic pay for a level of the Executive Schedule, 
under subchapter II of chapter 53, or at a rate 
provided for one of those levels under another 
provision of law; 
‘‘(ii) a member of the Senior Executive 
Service paid under subchapter VIII of chapter 
53, or an equivalent system; 
‘‘(iii) an administrative law judge paid 
under section 5372; 
‘‘(iv) a contract appeals board member 
paid under section 5372a; 
‘‘(v) an administrative appeals judge paid 
under section 5372b; and
‘‘(vi) an individual in a position which is 
excepted from the competitive service because of 
its confidential, policy-determining, policy-mak-
ing, or policy-advocating character; and 
‘‘(3) ‘Office’ means the Office of Personnel 
Management. 
‘‘§ 5403. Human Capital Performance Fund 
‘‘(a) There is hereby established the Human Capital 
Performance Fund, to be administered by the Office for 
the purpose of this chapter. 
‘‘(b)(1)(A) An agency shall submit a plan as de-
scribed in section 5406 to be eligible for consideration by 
the Office for an allocation under this section. An alloca-
tion shall be made only upon approval by the Office of 
an agency’s plan. 
‘‘(B)(i) After the reduction for training required 
under section 5408, ninety percent of the remaining 
amount appropriated to the Fund may be allocated by the 
Office to the agencies. Of the amount to be allocated, an 
agency’s pro rata distribution may not exceed its pro rata 
share of Executive branch payroll. 
‘‘(ii) If the Office does not allocate an agency’s full 
pro rata share, the undistributed amount remaining from 
that share will become available for distribution to other 
agencies, as provided in subparagraph (C).
‘‘(C)(i) After the reduction for training under section 
5408, ten percent of the remaining amount appropriated 
to the Fund, as well as the amount of the pro rata share 
not distributed because of an agency’s failure to submit 
a satisfactory plan, shall be allocated among agencies with 
exceptionally high-quality plans. 
‘‘(ii) An agency with an exceptionally high-quality 
plan is eligible to receive an additional distribution in addi-
tion to its full pro rata distribution. 
‘‘(2) Each agency is required to provide to the Office 
such payroll information as the Office specifies necessary 
to determine the Executive branch payroll. 
‘‘§ 5404. Human capital performance payments 
‘‘(a)(1) Notwithstanding any other provision of law, 
the Office may authorize an agency to provide human cap-
ital performance payments to individual employees based 
on exceptional performance contributing to the achieve-
ment of the agency mission. 
‘‘(2) The number of employees in an agency receiving 
payments from the Fund, in any year, shall not be more 
than the number equal to 15 percent of the agency’s aver-
age total civilian full- and part-time permanent employ-
ment for the previous fiscal year. 
‘‘(b)(1) A human capital performance payment pro-
vided to an individual employee from the Fund, in any
year, shall not exceed 10 percent of the employee’s rate 
of basic pay. 
‘‘(2) The aggregate of an employee’s rate of basic 
pay, adjusted by any locality-based comparability pay-
ments, and human capital performance pay, as defined by 
regulation, may not exceed the rate of basic pay for Execu-
tive Level IV in any year. 
‘‘(c) No monies from the Human Capital Perform-
ance Fund may be used to pay for a new position, for 
other performance-related payments, or for recruitment or 
retention incentives paid under sections 5753 and 5754. 
‘‘(d)(1) An agency may finance initial human capital 
performance payments using monies from the Human 
Capital Performance Fund, as available. 
‘‘(2) In subsequent years, continuation of previously 
awarded human capital performance payments shall be fi-
nanced from other agency funds available for salaries and 
expenses. 
‘‘§ 5405. Regulations 
‘‘The Office shall issue such regulations as it deter-
mines to be necessary for the administration of this chap-
ter, including the administration of the Fund. The Office’s 
regulations shall include criteria governing—
‘‘(1) an agency plan under section 5406;
‘‘(2) the allocation of monies from the Fund to 
agencies; 
‘‘(3) the nature, extent, duration, and adjust-
ment of, and approval processes for, payments to in-
dividual employees under this chapter; 
‘‘(4) the relationship to this chapter of agency 
performance management systems; 
‘‘(5) training of supervisors, managers, and 
other individuals involved in the process of making 
performance distinctions; and 
‘‘(6) the circumstances under which funds may 
be allocated by the Office to an agency in amounts 
below or in excess of the agency’s pro rata share. 
‘‘§ 5406. Agency plan 
‘‘To be eligible for consideration by the Office for an 
allocation under this section, an agency shall—
‘‘(1) submit a plan, subject to review and ap-
proval by the Office; 
‘‘(2) demonstrate that its performance manage-
ment system supports agency strategic performance 
goals and objectives, and is used to make meaningful 
distinctions based on relative performance; 
‘‘(3) provide sufficient training to supervisors, 
managers, and other individuals involved in the proc-
ess of making performance distinctions;
‘‘(4) upon approval, receive an allocation of 
funding from the Office; 
‘‘(5) make payments to individual employees in 
accordance with the agency’s approved plan; and 
‘‘(6) provide such information to the Office re-
garding payments made and use of funds received 
under this section as the Office may specify. 
‘‘§ 5407. Nature of payment 
‘‘Any payment to an employee under this section shall 
be part of the employee’s basic pay for the purposes of 
subchapter III of chapter 83, and chapters 84 and 87, 
and for such other purposes (other than chapter 75) as 
the Office shall determine by regulation. 
‘‘§ 5408. Appropriations 
‘‘There is authorized to be appropriated $500 million 
for fiscal year 2004, and, for each subsequent fiscal year, 
such sums as may be necessary to carry out the provisions 
of this chapter. In the first year of implementation, up 
to 10 percent of the amount appropriated to the Fund 
shall be available to participating agencies to train super-
visors, managers, and other individuals involved in the ap-
praisal process on using performance management sys-
tems to make meaningful distinctions in employee per-
formance and on the use of the Fund.’’.
(b) The table of chapters for part III of title 5, 
United States Code, is amended by inserting after the 
item relating to chapter 53 the following:
‘‘54. Human Capital Performance Fund ................................... 5401’’.
Æ