I 
110TH CONGRESS 
2D SESSION 
H. R. 6516 
To provide for retirement equity for Federal employees in nonforeign areas 
outside the 48 contiguous States and the District of Columbia, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 16, 2008 
Mr. ABERCROMBIE (for himself, Mr. YOUNG of Alaska, and Ms. HIRONO) in-
troduced the following bill; which was referred to the Committee on Over-
sight and Government Reform, and in addition to the Committee on Vet-
erans’ Affairs, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To provide for retirement equity for Federal employees in 
nonforeign areas outside the 48 contiguous States and 
the District of Columbia, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Non-Foreign Area Re-
tirement Equity Assurance Act of 2008’’ or the ‘‘Non-For-
eign AREA Act of 2008’’. 
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SEC. 2. EXTENSION OF LOCALITY PAY. 
(a) LOCALITY-BASED COMPARABILITY PAYMENTS.— 
Section 5304(f)(1) of title 5, United States Code, is 
amended by striking subparagraph (A) and inserting the 
following: 
‘‘(A) each General Schedule position in the 
United 
States, 
as 
defined 
under 
section 
5921(4), and its territories and possessions, in-
cluding the Commonwealth of Puerto Rico and 
the Commonwealth of the Northern Mariana Is-
lands shall be included within a pay locality; 
and’’. 
(b) ALLOWANCES BASED
ON LIVING COSTS
AND 
CONDITIONS OF ENVIRONMENT.—Section 5941 of title 5, 
United States Code, is amended— 
(1) in subsection (a), by adding after the last 
sentence ‘‘Notwithstanding any preceding provision 
of this subsection, the cost-of-living allowance rate 
based on paragraph (1) of this subsection shall be 
the cost-of-living allowance rate in effect on Decem-
ber 31, 2008, except as adjusted under subsection 
(c).’’; 
(2) by redesignating subsection (b) as sub-
section (d); and 
(3) by inserting after subsection (a) the fol-
lowing: 
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‘‘(b) This section shall apply only to areas that are 
designated as cost-of-living allowance areas as in effect on 
December 31, 2008. 
‘‘(c)(1) The cost-of-living allowance rate payable 
under this section shall be adjusted on the first day of 
the first applicable pay period beginning on or after— 
‘‘(A) January 1, 2009; and 
‘‘(B) on January 1 of each calendar year in 
which a locality-based comparability adjustment 
takes effect under section 4 (2) and (3) of the Non- 
Foreign Area Retirement Equity Assurance Act of 
2008. 
‘‘(2)(A) In this paragraph, the term ‘applicable local-
ity-based comparability pay percentage’ means, with re-
spect to calendar year 2009 and each calendar year there-
after, the applicable percentage under section 4 (1), (2), 
or (3) of Non-Foreign Area Retirement Equity Assurance 
Act of 2008. 
‘‘(B) Each adjusted cost-of-living allowance rate 
under paragraph (1) shall be computed by— 
‘‘(i) subtracting 65 percent of the applicable lo-
cality-based comparability pay percentage from the 
cost-of-living allowance percentage rate in effect on 
December 31, 2008; and 
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‘‘(ii) dividing the resulting percentage deter-
mined under clause (i) by the sum of— 
‘‘(I) one; and 
‘‘(II) the applicable locality-based com-
parability payment percentage expressed as a 
numeral. 
‘‘(3) No allowance rate computed under paragraph 
(2) may be less than zero. 
‘‘(4) Each allowance rate computed under paragraph 
(2) shall be paid as a percentage of basic pay (including 
any applicable locality-based comparability payment under 
section 5304 or similar provision of law and any applicable 
special rate of pay under section 5305 or similar provision 
of law).’’. 
SEC. 3. ADJUSTMENT OF SPECIAL RATES. 
(a) IN GENERAL.—Each special rate of pay estab-
lished under section 5305 of title 5, United States Code, 
and payable in an area designated as a cost-of-living allow-
ance area under section 5941(a) of that title, shall be ad-
justed, on the dates prescribed by section 4 of this Act, 
in accordance with regulations prescribed by the Director 
of the Office of Personnel Management under section 9 
of this Act. 
(b) DEPARTMENT
OF VETERANS AFFAIRS.—Each 
special rate of pay established under section 7455 of title 
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38, United States Code, and payable in a location des-
ignated as a cost-of-living allowance area under section 
5941(a)(1) of title 5, United States Code, shall be ad-
justed in accordance with regulations prescribed by the 
Secretary of Veterans Affairs that are consistent with the 
regulations issued by the Director of the Office of Per-
sonnel Management under subsection (a). 
(c) TEMPORARY ADJUSTMENT.—Regulations issued 
under subsection (a) or (b) may provide that statutory 
limitations on the amount of such special rates may be 
temporarily raised to a higher level during the transition 
period described in section 4 ending on the first day of 
the first pay period beginning on or after January 1, 
2011, at which time any special rate of pay in excess of 
the applicable limitation shall be converted to a retained 
rate under section 5363 of title 5, United States Code. 
SEC. 4. TRANSITION SCHEDULE FOR LOCALITY-BASED 
COMPARABILITY PAYMENTS. 
Notwithstanding any other provision of this Act or 
section 5304 or 5304a of title 5, United States Code, in 
implementing the amendments made by this Act, for each 
non-foreign area determined under section 5941(b) of that 
title, the applicable rate for the locality-based com-
parability adjustment that is used in the computation re-
quired under section 5941(c) of that title shall be adjusted 
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effective on the first day of the first pay period beginning 
on or after January 1— 
(1) in calendar year 2009, by using 1⁄3 of the 
locality pay percentage for the rest of United States 
locality pay area; 
(2) in calendar year 2010, by using 2⁄3 of the 
otherwise applicable comparability payment approved 
by the President for each non-foreign area; and 
(3) in calendar year 2011 and each subsequent 
year, by using the full amount of the applicable com-
parability payment approved by the President for 
each non-foreign area. 
SEC. 5. SAVINGS PROVISION. 
(a) IN GENERAL.—The application of this Act to any 
employee may not result in the amount of the decrease 
in the amount of pay attributable to special rate pay and 
the cost-of-living allowance as in effect on the date of en-
actment of this Act exceeding the amount of the increase 
in the locality-based comparability payments paid to that 
employee. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that the application of this Act to any employee 
should not result in a decrease in the take home pay of 
that employee. 
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SEC. 6. APPLICATION TO OTHER ELIGIBLE EMPLOYEES. 
(a) IN GENERAL.— 
(1) DEFINITION.—In this subsection, the term 
‘‘covered employee’’ means— 
(A) any employee who— 
(i) on— 
(I) the day before the date of en-
actment of this Act— 
(aa) was eligible to be paid a 
cost-of-living 
allowance 
under 
5941 of title 5, United States 
Code; and 
(bb) was not eligible to be 
paid locality-based comparability 
payments under 5304 or 5304a 
of that title; or 
(II) or after the date of enact-
ment of this Act becomes eligible to 
be paid a cost-of-living allowance 
under 5941 of title 5, United States 
Code; and 
(ii) except as provided under para-
graph (2), is not covered under— 
(I) section 5941 of title 5, United 
States Code (as amended by section 2 
of this Act); and 
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(II) section 4 of this Act; or 
(B) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
(I) was eligible to be paid an al-
lowance under section 1603(b) of title 
10, United States Code; 
(II) was eligible to be paid an al-
lowance under section 1005(b) of title 
39, United States Code; or 
(III) was employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and was eligible to be paid an allow-
ance based on section 5941 of title 5, 
United States Code; or 
(ii) on or after the date of enactment 
of this Act— 
(I) becomes eligible to be paid an 
allowance under section 1603(b) of 
title 10, United States Code; 
(II) becomes eligible to be paid 
an allowance under section 1005(b) of 
title 39, United States Code; or 
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(III) is employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and becomes eligible to be paid an al-
lowance based on section 5941 of title 
5, United States Code. 
(2) APPLICATION TO COVERED EMPLOYEES.— 
(A) IN
GENERAL.—Notwithstanding any 
provision of title 5, United States Code, for 
purposes of this Act (including the amendments 
made by this Act) any covered employee shall 
be treated as an employee to whom section 
5941 of title 5, United States Code (as amend-
ed by section 2 of this Act), and section 4 of 
this Act apply. 
(B) PAY FIXED BY STATUTE.—Pay to cov-
ered employees under section 5304 or 5304a of 
title 5, United States Code, as a result of the 
application of this Act shall be considered to be 
fixed by statute. 
(C) PERFORMANCE APPRAISAL SYSTEM.— 
With respect to a covered employee who is sub-
ject to a performance appraisal system no part 
of pay attributable to locality-based com-
parability payments as a result of the applica-
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tion of this Act including section 5941 of title 
5, United States Code (as amended by section 
2 of this Act), may be reduced on the basis of 
the performance of that employee. 
(b) POSTAL SERVICE EMPLOYEES IN NONFOREIGN 
AREAS.—Section 1005(b) of title 39, United States Code, 
is amended by inserting ‘‘and the Non-Foreign Area Re-
tirement Equity Assurance Act of 2008’’ after ‘‘Section 
5941 of title 5’’. 
SEC. 7. ELECTION OF ADDITIONAL BASIC PAY FOR ANNU-
ITY COMPUTATION BY EMPLOYEES. 
(a) DEFINITION.—In this section the term ‘‘covered 
employee’’ means any employee— 
(1) to whom section 4 applies; 
(2) who is separated from service by reason of 
retirement under chapter 83 or 84 of title 5, United 
States Code, during the period of January 1, 2009, 
through December 31, 2011; and 
(3) who files and election with the Office of 
Personnel Management under subsection (b). 
(b) ELECTION.— 
(1) IN
GENERAL.—An employee described 
under subsection (a) (1) and (2) may file an election 
with the Office of Personnel Management to be cov-
ered under this section. 
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(2) DEADLINE.—An election under this sub-
section may be filed not later than December 31, 
2011. 
(c) COMPUTATION OF ANNUITY.—For purposes of 
the computation of an annuity of a covered employee any 
cost-of-living allowance under section 5941 of title 5, 
United States Code, paid to that employee during the first 
applicable pay period beginning on or after January 1, 
2009 through the first applicable pay period ending on 
or after December 31, 2011, shall be considered basic pay 
as defined under section 8331(3) or 8401(4) of that title. 
(d) CIVIL SERVICE RETIREMENT AND DISABILITY 
RETIREMENT FUND.— 
(1) EMPLOYEE
CONTRIBUTIONS.—A covered 
employee shall pay into the Civil Service Retirement 
and Disability Retirement Fund— 
(A) an amount equal to the difference be-
tween— 
(i) employee contributions that would 
have been deducted and withheld from pay 
under section 8334 or 8422 of title 5, 
United States Code, during the period de-
scribed under subsection (c) of this section 
if that subsection had been in effect during 
that period; and 
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(ii) employee contributions that were 
actually deducted and withheld from pay 
under section 8334 or 8422 of title 5, 
United States Code, during that period; 
and 
(B) interest as prescribed under section 
8334(e) of title 5, United States Code, based on 
the amount determined under subparagraph 
(A). 
(2) AGENCY CONTRIBUTIONS.— 
(A) IN GENERAL.—The employing agency 
of a covered employee shall pay into the Civil 
Service Retirement and Disability Retirement 
Fund an amount for applicable agency con-
tributions based on payments made under para-
graph (1). 
(B) SOURCE.—Amounts paid under this 
paragraph shall be contributed from the appro-
priation or fund used to pay the employee. 
(3) REGULATIONS.—The Office of Personnel 
Management may prescribe regulations to carry out 
this section. 
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SEC. 8. ELECTION OF COVERAGE BY EMPLOYEES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of this Act, an employee may make an irrevocable 
election in accordance with this section, if— 
(1) that employee is paid an allowance under 
section 5491 of title 5, United States Code, during 
a pay period in which the date of the enactment of 
this Act occurs; or 
(2) that employee— 
(A) is a covered employee as defined under 
section 6(a)(1); and 
(B) during a pay period in which the date 
of the enactment of this Act occurs is paid an 
allowance— 
(i) under section 1603(b) of title 10, 
United States Code; 
(ii) under section 1005(b) of title 39, 
United States Code; or 
(iii) based on section 5941 of title 5, 
United States Code. 
(b) FILING ELECTION.—Not later than 60 days after 
the date of enactment of this Act, an employee described 
under subsection (a) may file an election with the Office 
of Personnel Management to be treated for all purposes— 
(1) in accordance with the provisions of this Act 
(including the amendments made by this Act); or 
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(2) as if the provisions of this Act (including 
the amendments made by this Act) had not been en-
acted, except that the cost-of-living allowance rate 
paid to that employee shall be the cost-of-living al-
lowance rate in effect on December 31, 2008, for 
that employee without any adjustment after that 
date. 
(c) FAILURE TO FILE.—Failure to make a timely 
election under this section shall be treated in the same 
manner as an election made under subsection (b)(1) on 
the last day authorized under that subsection. 
(d) NOTICE.—To the greatest extent practicable, the 
Office of Personnel Management shall provide timely no-
tice of the election which may be filed under this section 
to employees described under subsection (a). 
SEC. 9. REGULATIONS. 
(a) IN GENERAL.—The Director of the Office of Per-
sonnel Management shall prescribe regulations to carry 
out this Act, including— 
(1) rules for special rate employees described 
under section 3; 
(2) rules for adjusting rates of basic pay for 
employees in pay systems administered by the Office 
of Personnel Management when such employees are 
not entitled to locality-based comparability payments 
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under section 5304 of title 5, United States Code, 
without regard to otherwise applicable statutory pay 
limitations during the transition period described in 
section 4 ending on the first day of the first pay pe-
riod beginning on or after January 1, 2011; and 
(3) rules governing establishment and adjust-
ment of saved or retained rates for any employee 
whose rate of pay exceeds applicable pay limitations 
on the first day of the first pay period beginning on 
or after January 1, 2011. 
(b) OTHER PAY SYSTEMS.—With the concurrence of 
the Director of the Office of Personnel Management, the 
administrator of a pay system not administered by the Of-
fice of Personnel Management shall prescribe regulations 
to carry out this Act with respect to employees in such 
pay system, consistent with the regulations issued by the 
Office under subsection (a). 
SEC. 10. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as provided by subsection 
(b), this Act (including the amendments made by this Act) 
shall take effect on the date of enactment of this Act. 
(b) LOCALITY PAY AND SCHEDULE.—The amend-
ments made by section 2 and the provisions of section 4 
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shall take effect on the first day of the first applicable 
pay period beginning on or after January 1, 2009. 
Æ 
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