IB 
Union Calendar No. 131
108TH CONGRESS 
1ST SESSION H. R. 1836
[Report No. 108–116, Part I] 
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 
MAY 19, 2003
Reported from the Committee on Government Reform with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
MAY 19, 2003
Referral to the Committee on Armed Services extended for a period ending 
not later than May 20, 2003
MAY 19, 2003
Referral to the Committee on Science extended for a period ending not later 
than July 25, 2003
MAY 20, 2003
Referral to the Committee on Armed Services extended for a period ending 
not later than July 25, 2003
JUNE 3, 2003
Referred to the Committee on Ways and Means for a period ending not later 
than July 25, 2003 for consideration of such provisions of the bill and
amendment as fall within the jurisdiction of that committee pursuant to 
clause 1(s), rule X 
JULY 25, 2003
Committees on Armed Services, Science, Ways and Means discharged; com-
mitted to the Committee of the Whole House on the State of the Union, 
and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on April 29, 2003] 
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 biweekly 
basis. 
Sec. 207. Additional classes of individuals eligible to participate in the Federal 
long-term care insurance program. 
Sec. 208. Clarification to Hatch Act; limitation on disclosure of certain records. 
Sec. 209. Senior Executive Service and performance. 
Sec. 210. Design elements of pay-for-performance systems in demonstration 
projects. 
Sec. 211. Federal flexible benefits plan administrative costs. 
Sec. 212. Nonreduction in pay while Federal employee is serving on active duty 
in a reserve component of the uniformed services. 
Sec. 213. Employee surveys. 
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. 
TITLE IV—HUMAN CAPITAL PERFORMANCE FUND 
Sec. 401. Human Capital Performance Fund. 
TITLE V—MISCELLANEOUS 
Sec. 501. Prohibition on use of quotas.
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.—Notwithstanding any other provi-
sion of this part, the Secretary may, in regulations pre-
scribed jointly with the Director, establish, and from time 
to time adjust, a human resources management system for 
some or all of the organizational or functional units of the 
Department of Defense. If the Secretary certifies that 
issuance or adjustment of a regulation, or the inclusion, ex-
clusion, or modification of a particular provision therein, 
is essential to the national security, the Secretary may, sub-
ject to the decision of the President, waive the requirement 
in the preceding sentence that the regulation or adjustment 
be issued jointly with the Director.
‘‘(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, relating 
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 cov-
erage or limitation on negotiability established pursu-
ant to law; 
‘‘(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; and 
‘‘(6) include a performance management system 
that incorporates the following elements: 
‘‘(A) Adherence to merit principles set forth 
in section 2301. 
‘‘(B) A fair, credible, and transparent em-
ployee performance appraisal system.
‘‘(C) A link between the performance man-
agement system and the agency’s strategic plan. 
‘‘(D) A means for ensuring employee in-
volvement in the design and implementation of 
the system. 
‘‘(E) Adequate training and retraining for 
supervisors, managers, and employees in the im-
plementation and operation of the performance 
management system. 
‘‘(F) A process for ensuring ongoing per-
formance feedback and dialogue between super-
visors, managers, and employees throughout the 
appraisal period, and setting timetables for re-
view; 
‘‘(G) Effective safeguards to ensure that the 
management of the system is fair and equitable 
and based on employee performance. 
‘‘(H) A means for ensuring that adequate 
agency resources are allocated for the design, im-
plementation, and administration of the per-
formance management system. 
‘‘(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, B, E, G, and H of this part; 
and 
‘‘(2) chapters 41, 45, 47, 55 (except subchapter 
V thereof), 57, 59, 72, 73, and 79, and this chapter. 
‘‘(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 position 
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, differentials, bo-
nuses, 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 com-
parable pay authority established for payment of Depart-
ment of Defense senior executive or equivalent employees 
may not exceed the total annual compensation payable to 
the Vice President under section 104 of title 3. 
‘‘(3) To the maximum extent practicable, the rates of 
compensation for civilian employees at the Department of 
Defense shall be adjusted at the same rate, and in the same 
proportion, as are rates of compensation for members of the 
uniformed services. 
‘‘(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 representatives 
representing any employees who might be af-
fected a written description of the proposed sys-
tem 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 respect 
to a proposal described in subparagraph (A), the Sec-
retary and the Director shall accept such modifica-
tions to the proposal in response to the recommenda-
tions as they determine advisable and shall, with re-
spect 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 representatives, 
in order to attempt to reach agreement on wheth-
er or how to proceed with those parts of the pro-
posal; and
‘‘(iii) at the Secretary’s option, or if re-
quested by a majority of the employee represent-
atives participating, use the services of the Fed-
eral 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 im-
mediately.
‘‘(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, consulta-
tion, and mediation procedures set forth in subpara-
graph (B), if the Secretary, in his discretion, deter-
mines that further consultation and mediation is un-
likely to produce agreement, the Secretary may imple-
ment any or all of such parts (including any modi-
fications made in response to the recommendations as 
the Secretary determines advisable), but only after 30 
days have elapsed after notifying Congress of the deci-
sion to implement the part or parts involved (as so 
modified, if applicable). 
‘‘(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 imple-
mentation is appropriate under this subparagraph. 
‘‘(D) If a proposal described in subparagraph 
(A) is implemented, the Secretary and the Director 
shall—
‘‘(i) develop a method for the employee rep-
resentatives to participate in any further plan-
ning or development which might become nec-
essary; and 
‘‘(ii) give the employee representatives ade-
quate access to information to make that partici-
pation productive. 
‘‘(2) The Secretary may, at the Secretary’s discretion, 
engage in any and all collaboration activities described 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 Director 
may develop procedures for representation by any appro-
priate organization which represents a substantial percent-
age of those employees or, if none, in such other manner 
as may be appropriate, consistent with the purposes of this 
subsection. 
‘‘(f) PROVISIONS REGARDING NATIONAL LEVEL BAR-
GAINING.—(1) Any human resources management system 
implemented or modified under this chapter may include 
employees of the Department of Defense from any bar-
gaining unit with respect to which a labor organization has
been accorded exclusive recognition under chapter 71 of this 
title. 
‘‘(2) For any bargaining unit so included under para-
graph (1), the Secretary may bargain at an organizational 
level above the level of exclusive recognition. Any such bar-
gaining shall—
‘‘(A) be binding on all subordinate bargaining 
units at the level of recognition and their exclusive 
representatives, and the Department of Defense and 
its subcomponents, without regard to levels of recogni-
tion; 
‘‘(B) supersede all other collective bargaining 
agreements, including collective bargaining agree-
ments negotiated with an exclusive representative at 
the level of recognition, except as otherwise deter-
mined by the Secretary; 
‘‘(C) not be subject to further negotiations for 
any purpose, including bargaining at the level of rec-
ognition, except as provided for by the Secretary; and 
‘‘(D) except as otherwise specified in this chap-
ter, not be subject to review or to statutory third-
party dispute resolution procedures outside the De-
partment of Defense.
‘‘(3) The National Guard Bureau and the Army and 
Air Force National Guard are excluded from coverage under 
this subsection. 
‘‘(4) Any bargaining completed pursuant to this sub-
section with a labor organization not otherwise having na-
tional consultation rights with the Department of Defense 
or its subcomponents shall not create any obligation on the 
Department of Defense or its subcomponents to confer na-
tional consultation rights on such a labor organization. 
‘‘(g) PROVISIONS RELATING TO APPELLATE PROCE-
DURES.—(1) The Secretary shall—
‘‘(A) establish an appeals process that provides 
that employees of the Department of Defense are enti-
tled to fair treatment in any appeals that they bring 
in decisions relating to their employment; and 
‘‘(B) in prescribing regulations for any such ap-
peals process—
‘‘(i) ensure that employees of the Depart-
ment of Defense are afforded the protections of 
due process; and 
‘‘(ii) toward that end, be required to consult 
with the Merit Systems Protection Board before 
issuing any such regulations.
‘‘(2) Any regulations establishing the appeals process 
required by paragraph (1) that relate to any matters within 
the purview of chapter 77 shall—
‘‘(A) provide for an independent review panel, 
appointed by the President, which shall not include 
the Secretary or the Deputy Secretary of Defense or 
any of their subordinates; 
‘‘(B) be issued only after—
‘‘(i) notification to the appropriate commit-
tees of Congress; and 
‘‘(ii) consultation with the Merit Systems 
Protection Board and the Equal Employment 
Opportunity Commission; 
‘‘(C) ensure the availability of procedures that—
‘‘(i) are consistent with requirements of due 
process; and
‘‘(ii) provide, to the maximum extent prac-
ticable, for the expeditious handling of any mat-
ters involving the Department of Defense; and 
‘‘(D) modify procedures under chapter 77 only 
insofar as such modifications are designed to further 
the fair, efficient, and expeditious resolution of mat-
ters involving the employees of the Department of De-
fense.
‘‘(h) PROVISIONS RELATED TO SEPARATION AND RE-
TIREMENT INCENTIVES.—(1) The Secretary may establish 
a program within the Department of Defense under which 
employees may be eligible for early retirement, offered sepa-
ration incentive pay to separate from service voluntarily, 
or both. This authority may be used to reduce the number 
of personnel employed by the Department of Defense or to 
restructure the workforce to meet mission objectives without 
reducing the overall number of personnel. This authority 
is in addition to, and notwithstanding, any other authori-
ties established by law or regulation for such programs. 
‘‘(2) For purposes of this section, the term ‘employee’ 
means an employee of the Department of Defense, serving 
under an appointment without time limitation, except that 
such term does not include—
‘‘(A) a reemployed annuitant under subchapter 
III of chapter 83 or chapter 84 of this title, or an-
other retirement system for employees of the Federal 
Government; 
‘‘(B) an employee having a disability on the 
basis of which such employee is or would be eligible 
for disability retirement under any of the retirement 
systems referred to in paragraph (1); or 
‘‘(C) for purposes of eligibility for separation in-
centives under this section, an employee who is in re-
ceipt 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 Department of 
Defense and receive benefits in accordance with chapter 83 
or 84 if the employee has been employed continuously with-
in the Department of Defense for more than 30 days before 
the date on which the determination to conduct a reduction 
or restructuring within 1 or more Department of Defense 
components is approved pursuant to the program estab-
lished 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 para-
graph (5). 
‘‘(5)(A) An employee who receives separation pay 
under such program may not be reemployed by the Depart-
ment of Defense for a 12-month period beginning on the 
effective date of the employee’s separation, unless this prohi-
bition 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 Re-
structuring 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 separa-
tion pay is based, shall be required to repay the entire 
amount of the separation pay to the Department 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 request of the head of that
agency, 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 within the 
Department of Defense, the Secretary may waive the repay-
ment if the individual involved is the only qualified appli-
cant 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 possesses 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 avail-
able for the position. 
‘‘(6) Under this program, early retirement and separa-
tion pay may be offered only pursuant to regulations estab-
lished by the Secretary, subject to such limitations or condi-
tions as the Secretary may require. 
‘‘(i) PROVISIONS RELATING TO REEMPLOYMENT.—If 
annuitant receiving an annuity from the Civil Service Re-
tirement and Disability Fund becomes employed in a posi-
tion within the Department of Defense, his annuity shall 
continue. An annuitant so reemployed shall not be consid-
ered an employee for purposes of chapter 83 or 84.
‘‘(j) PROVISIONS RELATING
TO HIRING.—Notwith-
standing subsection (c), the Secretary may exercise any hir-
ing flexibilities that would otherwise be available to the Sec-
retary under section 4703. 
‘‘§ 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 Secretary 
may—
‘‘(1) appoint personnel from outside the civil 
service and uniformed services (as such terms are de-
fined in section 2101 of this title) to positions in the 
Department of Defense without regard to any provi-
sion of this title governing the appointment of em-
ployees to positions in the Department of Defense;
‘‘(2) prescribe the rates of basic pay for positions 
to which employees are appointed under paragraph 
(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 locality-
based comparability payments under section 5304 of 
this title, notwithstanding any provision of this title
governing the rates of pay or classification of employ-
ees 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 subsection 
(d). 
‘‘(c) LIMITATION ON TERM OF APPOINTMENT.—(1) Ex-
cept as provided in paragraph (2), the service of an em-
ployee under an appointment made pursuant to this section 
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 1 percentage 
point less than the percentage by which the Employ-
ment Cost Index, published quarterly by the Bureau 
of Labor Statistics, for the base quarter of the year
before the preceding calendar year exceeds the Em-
ployment Cost Index for the base quarter of the second 
year before the preceding calendar year. 
‘‘(B) The amount equal to 50 percent of the em-
ployee’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 an-
nual compensation payable at the salary set in accordance 
with section 104 of title 3. 
‘‘(e) SAVINGS PROVISIONS.—In the event that the Sec-
retary terminates this program, in the case of an employee 
who, on the day before the termination of the program, is 
serving in a position pursuant to an appointment under 
this section—
‘‘(1) the termination of the program does not ter-
minate the employee’s employment in that position 
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 posi-
tion under this section may not be reduced as long as 
the employee continues to serve in the position with-
out a break in service. 
‘‘§ 9904. Employment of older Americans 
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion 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 employment 
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 BENEFITS.—
Notwithstanding any other provision of law, an individual 
appointed pursuant to subsection (a) who otherwise is re-
ceiving an annuity, pension, social security payment, re-
tired 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 employment. 
‘‘(c) EXTENSION OF APPOINTMENT.—Notwithstanding 
subsection (a), the Secretary may extend an appointment 
made pursuant to this section for up to an additional 2 
years if the individual employee possesses unique knowledge 
or abilities that are not otherwise available to the Depart-
ment 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 activities 
outside the United States as determined by the Secretary 
to be in support of Department of Defense activities abroad 
hazardous to life or health or so specialized because of secu-
rity requirements as to be clearly distinguishable from nor-
mal 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 chapter 
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 subsection. 
(2) No other provision of this Act or of any amendment 
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. 
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 before, 
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 enactment 
of this paragraph.’’. 
SEC. 203. MILITARY LEAVE FOR MOBILIZED FEDERAL CIVIL-
IAN 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 sub-
section (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 be-
fore 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 permissible exposure 
limit promulgated by the Secretary of Labor under the Oc-
cupational Safety and Health Act of 1970’’.
(b) GENERAL
SCHEDULE
PAY
RATES.—Section 
5545(d) of such title is amended by inserting before the pe-
riod at the end of the first sentence the following: ‘‘, and 
for any hardship or hazard related to asbestos, such dif-
ferentials shall be determined by applying occupational 
safety and health standards consistent with the permissible 
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 concerning 
backpay for a differential established under section 
5343(c)(4) or 5545(d) of such title shall be based on occupa-
tional safety and health standards described in the amend-
ments 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 subsection 
(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: 
‘‘(1) The term ‘employee’ means—
‘‘(A) an employee in or under an Executive 
agency; 
‘‘(B) an employee in or under the Office of 
the Architect of the Capitol, the Botanic Garden, 
and the Library of Congress, for whom a basic 
administrative workweek is established under 
section 6101(a)(5) of this title; and 
‘‘(C) an individual employed by the govern-
ment of the District of Columbia. 
‘‘(2) The term ‘employee’ does not include—
‘‘(A) an employee on the Isthmus of Pan-
ama in the service of the Panama Canal Com-
mission; or 
‘‘(B) an employee or individual excluded 
from the definition of employee in section 
5541(2) of this title other than an employee or
individual excluded by clauses (ii), (iii), and 
(xiv) through (xvii) of such section. 
‘‘(3) Notwithstanding paragraph (2), an indi-
vidual who otherwise would be excluded from the defi-
nition of employee shall be deemed to be an employee 
for purposes of this section if the individual’s employ-
ing agency so elects, under guidelines in regulations 
promulgated by the Office of Personnel Management 
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 para-
graph: 
‘‘(2) The Office of Personnel Management shall provide 
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 requirements 
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 RE-
SERVE WHO ARE UNDER AGE 60.—Section 9001(4) of title 
5, United States Code, is amended by striking ‘‘including’’ 
and all that follows through ‘‘who has’’ and inserting ‘‘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’’. 
SEC. 208. CLARIFICATION TO HATCH ACT; LIMITATION ON 
DISCLOSURE OF CERTAIN RECORDS. 
(a) CLARIFICATION TO HATCH ACT.—No Federal em-
ployee or individual who voluntarily separates from the 
civil service (including by transferring to an international 
organization in the circumstances described in section 
3582(a) of title 5, United States Code) shall be subject to 
enforcement of the provisions of section 7326 of such title 
(including any loss of rights under subchapter IV of chapter 
35 of such title resulting from any proceeding under such 
section 7326), except that this subsection shall not apply 
in the event that such employee or individual subsequently 
becomes reemployed in the civil service. The preceding sen-
tence shall apply to any complaint which is filed with or 
pending before the Merit Systems Protection Board after 
the date of the enactment of this Act. 
(b) 
LIMITATION
ON
DISCLOSURE
OF
CERTAIN 
RECORDS.—Notwithstanding any other provision of law, 
rule, or regulation, nothing described in paragraph (2) or 
(3) of use ‘‘q’’ of the proposed revisions published in the 
Federal Register on July 12, 2001 (66 Fed. Reg. 36613) 
shall be considered to constitute a routine use of records 
maintained by the Office of Special Counsel.
(c) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘Federal employee or individual’’ 
means any employee or individual, as referred to in 
section 7326 of title 5, United States Code; 
(2) the term ‘‘civil service’’ has the meaning 
given such term by section 2101 of title 5, United 
States Code; 
(3) the term ‘‘international organization’’ has 
the meaning given such term by section 3581 of title 
5, United States Code; and 
(4) the terms ‘‘routine use’’ and ‘‘record’’ have 
the respective meanings given such terms under sec-
tion 552a(a) of title 5, United States Code. 
SEC. 209. SENIOR EXECUTIVE SERVICE AND PERFORMANCE. 
(a) SENIOR EXECUTIVE PAY.—Chapter 53 of title 5, 
United States Code, is amended—
(1) in section 5304—
(A) in subsection (g)(2)—
(i) in subparagraph (A) by striking 
‘‘subparagraphs (A)–(E)’’ and inserting 
‘‘subparagraphs (A)–(D)’’; and 
(ii) in subparagraph (B) by striking 
‘‘subsection (h)(1)(F)’’ and inserting ‘‘sub-
section (h)(1)(D)’’; 
(B) in subsection (h)(1)—
(i) by striking subparagraphs (B) and 
(C); 
(ii) by redesignating subparagraphs 
(D), (E), and (F) as subparagraphs (B), 
(C), and (D), respectively; 
(iii) in clause (ii) by striking ‘‘or’’ at 
the end; 
(iv) in clause (iii) by striking the pe-
riod and inserting a semicolon; and 
(v) by adding at the end the following 
new clauses: 
‘‘(iv) a Senior Executive Service position under 
section 3132; 
‘‘(v) a position in the Federal Bureau of Inves-
tigation and Drug Enforcement Administration Sen-
ior Executive Service under section 3151; or 
‘‘(vi) a position in a system equivalent to the 
system in clause (iv), as determined by the Presi-
dent’s Pay Agent designated under subsection (d).’’; 
and 
(C) in subsection (h)(2)(B)—
(i) in clause (i)—
(I) by striking ‘‘subparagraphs 
(A) through (E)’’ and inserting ‘‘sub-
paragraphs (A) through (C)’’; and
(II) by striking ‘‘clause (i) or 
(ii)’’ and inserting ‘‘clause (i), (ii), 
(iii), (iv), (v), or (vii)’’; and 
(ii) in clause (ii)—
(I) 
by 
striking 
‘‘paragraph 
(1)(F)’’ 
and 
inserting 
‘‘paragraph 
(1)(D)’’; and 
(II) by striking ‘‘clause (i) or 
(ii)’’ and inserting ‘‘clause (i), (ii), 
(iii), (iv), (v), or (vi)’’; 
(2) by amending section 5382 to read as follows: 
‘‘§ 5382. Establishment of rates of pay for the Senior 
Executive Service 
‘‘(a) Subject to regulations prescribed by the Office of 
Personnel Management, there shall be established a range 
of rates of basic pay for the Senior Executive Service, and 
each senior executive shall be paid at one of the rates within 
the range, based on individual performance, contribution 
to the agency’s performance, or both, as determined under 
a rigorous performance management system. The lowest 
rate of the range shall not be less than the minimum rate 
of basic pay payable under section 5376, and the highest 
rate, for any position under this system or an equivalent 
system as determined by the President’s Pay Agent des-
ignated under section 5304(d), shall not exceed the rate for
level III of the Executive Schedule. The payment of the rates 
shall not be subject to the pay limitation of section 5306(e) 
or 5373. 
‘‘(b) Notwithstanding the provisions of subsection (a), 
the applicable maximum shall be level II of the Executive 
Schedule for any agency that is certified under section 5307 
as having a performance appraisal system which, as de-
signed and applied, makes meaningful distinctions based 
on relative performance. 
‘‘(c) No employee may suffer a reduction in pay by 
reason of transfer from an agency with an applicable max-
imum rate of pay prescribed under subsection (b) to an 
agency with an applicable maximum rate of pay prescribed 
under subsection (a).’’; and 
(3) in section 5383—
(A) in subsection (a) by striking ‘‘which of 
the rates established under section 5382 of this 
title’’ and inserting ‘‘which of the rates within a 
range established under section 5382’’; and 
(B) in subsection (c) by striking ‘‘for any 
pay adjustment under section 5382 of this title’’ 
and inserting ‘‘as provided in regulations pre-
scribed by the Office under section 5385’’.
(b) POST-EMPLOYMENT RESTRICTIONS.—(1) Clause 
(ii) of section 207(c)(2)(A) of title 18, United States Code 
is amended to read as follows: 
‘‘(ii) employed in a position which is not 
referred to in clause (i) and for which that per-
son is paid at a rate of basic pay which is equal 
to or greater than 96 percent of the rate of basic 
pay for level II of the Executive Schedule, or, for 
a period of 2 years following the enactment of 
the Federal Employees Pay for Performance Act 
of 2003, a person who, on the day prior to the 
enactment of that Act, was employed in a posi-
tion which is not referred to in clause (i) and for 
which the rate of basic pay, exclusive of any lo-
cality-based pay adjustment under section 5304 
or section 5304a of title 5, was equal to or great-
er than the rate of basic pay payable for level 5 
of the Senior Executive Service on the day prior 
to the enactment of that Act,’’. 
(2) Subchapter I of chapter 73 of title 5, United States 
Code, is amended by inserting at the end the following new 
section: 
‘‘§ 7302. Post-employment notification 
‘‘(a) Not later than the effective date of the amend-
ments made by sections 3 and 4 of the Federal Employees
Pay for Performance Act of 2003, or 180 days after the 
date of enactment of that Act, whichever is later, the Office 
of Personnel Management shall, in consultation with the At-
torney General and the Office of Government Ethics, pro-
mulgate regulations requiring that each Executive branch 
agency notify any employee of that agency who is subject 
to the provisions of section 207(c)(1) of title 18, as a result 
of the amendment to section 207(c)(2)(A)(ii) of that title 
by that Act. 
‘‘(b) The regulations shall require that notice be given 
before, or as part of, the action that affects the employee’s 
coverage under section 207(c)(1) of title 18, by virtue of the 
provisions of section 207(c)(2)(A)(ii) of that title, and 
again when employment or service in the covered position 
is terminated.’’. 
(c) CLERICAL AMENDMENTS.—(1) The table of sections 
for chapter 53 of title 5, United States Code, is amended 
by striking the item relating to section 5382 and inserting 
the following:
‘‘5382. Establishment of rates of pay for the Senior Executive Service.’’.
(2) The table of sections for chapter 73 of title 5, 
United States Code, is amended by adding after the item 
relating to section 7301 the following:
‘‘7302. Post-employment notification.’’.
(d) EFFECTIVE DATE AND APPLICABILITY.—(1) The 
amendments made by this section shall take effect on the
first day of the first pay period beginning on or after the 
first January 1 following the date of enactment of this sec-
tion. 
(2) The amendments made by subsection (a) may not 
result in a reduction in the rate of basic pay for any senior 
executive during the first year after the effective date of 
those amendments. 
(3) For the purposes of paragraph (2), the rate of basic 
pay for a senior executive shall be deemed to be the rate 
of basic pay set for the senior executive under section 5383 
of title 5, United States Code, plus applicable locality pay 
paid to that senior executive, as of the date of enactment 
of this Act. 
SEC. 210. DESIGN ELEMENTS OF PAY-FOR-PERFORMANCE 
SYSTEMS IN DEMONSTRATION PROJECTS. 
A pay-for-performance system may not be initiated 
under chapter 47 of title 5, United States Code, after the 
date of enactment of this Act, unless it incorporates the fol-
lowing elements:
(1) adherence to merit principles set forth in sec-
tion 2301 of such title; 
(2) a fair, credible, and transparent employee 
performance appraisal system;
(3) a link between elements of the pay-for-per-
formance system, the employee performance appraisal 
system, and the agency’s strategic plan; 
(4) a means for ensuring employee involvement 
in the design and implementation of the system; 
(5) adequate training and retraining for super-
visors, managers, and employees in the implementa-
tion and operation of the pay-for-performance system; 
(6) a process for ensuring ongoing performance 
feedback and dialogue between supervisors, managers, 
and employees throughout the appraisal period, and 
setting timetables for review; 
(7) effective safeguards to ensure that the man-
agement of the system is fair and equitable and based 
on employee performance; and 
(8) a means for ensuring that adequate agency 
resources are allocated for the design, implementation, 
and administration of the pay-for-performance sys-
tem. 
SEC. 211. FEDERAL FLEXIBLE BENEFITS PLAN ADMINISTRA-
TIVE COSTS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, an agency or other employing entity of the Gov-
ernment which provides or plans to provide a flexible spend-
ing account option for its employees shall not impose any
fee with respect to any of its employees in order to defray 
the administrative costs associated therewith. 
(b) OFFSET OF ADMINISTRATIVE COSTS.—Each such 
agency or employing entity that offers a flexible spending 
account option under a program established or adminis-
tered by the Office of Personnel Management shall periodi-
cally forward to such Office, or entity designated by such 
Office, the amount necessary to offset the administrative 
costs of such program which are attributable to such agency. 
(c) REPORTS.—(1) The Office shall submit a report 
to the Committee on Government Reform of the House of 
Representatives and the Committee on Governmental Af-
fairs of the Senate no later than March 31, 2004, specifying 
the administrative costs associated with the Government-
wide program (referred to in subsection (b)) for fiscal year 
2003, as well as the projected administrative costs of such 
program for each of the 5 fiscal years thereafter. 
(2) At the end of each of the first 3 calendar years 
in which an agency or other employing entity offers a flexi-
ble spending account option under this section, such agency 
or entity shall submit a report to the Office of Management 
and Budget showing the amount of its employment tax sav-
ings in such year which are attributable to such option, 
net of administrative fees paid under section (b).
SEC. 212. NONREDUCTION IN PAY WHILE FEDERAL EM-
PLOYEE IS SERVING ON ACTIVE DUTY IN A 
RESERVE COMPONENT OF THE UNIFORMED 
SERVICES. 
(a) IN GENERAL.—Subchapter IV of chapter 55 of title 
5, United States Code, is amended by adding at the end 
the following new section: 
‘‘§ 5538. Nonreduction in pay while serving on active 
duty in a reserve component 
‘‘(a) An employee who is also a member of a reserve 
component and is absent from a position of employment 
with the Federal Government under a call or order to serve 
on active duty for a period of more than 30 days shall be 
entitled to receive, for each pay period described in sub-
section (b), an amount equal to the difference (if any) be-
tween—
‘‘(1) the amount of civilian basic pay that would 
otherwise have been payable to the employee for such 
pay period if the employee’s civilian employment 
with the Government had not been interrupted by the 
service on active duty; and 
‘‘(2) the amount of military compensation that 
is payable to the employee for the service on active 
duty and is allocable to such pay period. 
‘‘(b)(1) Amounts under this section shall be payable 
with respect to each pay period (which would otherwise
apply if the employee’s civilian employment had not been 
interrupted) that occurs—
‘‘(A) while the employee serves on active duty for 
a period of more than 30 days; 
‘‘(B) while the employee is hospitalized for, or 
convalescing from, an illness or injury incurred in, or 
aggravated during, the performance of such active 
duty; or 
‘‘(C) during the 14-day period beginning at the 
end of such active duty or the end of the period re-
ferred to in subparagraph (B). 
‘‘(2) Paragraph (1) shall not apply with respect to a 
pay period for which the employee receives civilian basic 
pay (including by taking any annual, military, or other 
paid leave) to which the employee is entitled by virtue of 
the employee’s civilian employment with the Government. 
‘‘(c) Any amount payable under this section to an em-
ployee shall be paid—
‘‘(1) by employing agency of the employee; 
‘‘(2) from the appropriations or fund that would 
be used to pay the employee if the employee were in 
a pay status; and 
‘‘(3) to the extent practicable, at the same time 
and in the same manner as would civilian basic pay
if the employee’s civilian employment had not been 
interrupted. 
‘‘(d) In consultation with the Secretary of Defense, the 
Office of Personnel Management shall prescribe such regula-
tions as may be necessary to carry out this section. 
‘‘(e) In consultation with the Office of Personnel Man-
agement, the head of each employing agency shall prescribe 
procedures to ensure that the rights under this section apply 
to the employees of such agency. 
‘‘(f) In this section: 
‘‘(1) The terms ‘active duty for a period of more 
than 30 days’, ‘member’, and ‘reserve component’ 
have the meanings given such terms in section 101 of 
title 37. 
‘‘(2) The term ‘civilian basic pay’ includes any 
amount payable under section 5304 of this title. 
‘‘(3) The term ‘employing agency’, as used with 
respect to an employee entitled to any payments 
under this section, means the agency with respect to 
which the employee has reemployment rights under
chapter 43 of title 38. The term ‘agency’ has the 
meaning given such term in subparagraph (C) of sec-
tion 2302(a)(2) of this title, except that the term in-
cludes Government corporations and agencies ex-
cluded by clause (i) or (ii) of such subparagraph.
‘‘(4) The term ‘military compensation’ has the 
meaning given the term ‘pay’ in section 101(21) of 
title 37, except that the term includes allowances pro-
vided under chapter 7 of such title.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
chapter 55 of title 5, United States Code, is amended by 
inserting after the item relating to section 5537 the fol-
lowing:
‘‘5538. Nonreduction in pay while serving on active duty in a reserve compo-
nent.’’.
(c) APPLICATION OF AMENDMENT.—Section 5538 of 
title 5, United States Code, as added by subsection (a), shall 
apply with respect to pay periods (as described in sub-
section (b) of such section) beginning on or after the date 
of the enactment of this Act. 
SEC. 213. EMPLOYEE SURVEYS. 
(a) IN GENERAL.—Each agency shall conduct an an-
nual survey of its employees (including survey questions 
unique to the agency and questions prescribed under sub-
section (b)) to assess—
(1) leadership and management practices that 
contribute to agency performance; and 
(2) employee satisfaction with—
(A) leadership policies and practices; 
(B) work environment;
(C) rewards and recognition for professional 
accomplishment and personal contributions to 
achieving organizational mission; 
(D) opportunity for professional develop-
ment and growth; and 
(E) opportunity to contribute to achieving 
organizational mission. 
(b) REGULATIONS.—The Office of Personnel Manage-
ment shall issue regulations prescribing survey questions 
that should appear on all agency surveys under subsection 
(a) in order to allow a comparison across agencies. 
(c) AVAILABILITY OF RESULTS.—The results of the 
agency surveys under subsection (a) shall be made available 
to the public and posted on the website of the agency in-
volved, unless the head of such agency determines that doing 
so would jeopardize or negatively impact national security. 
(d) AGENCY DEFINED.—For purposes of this section, 
the term ‘‘agency’’ means an Executive agency (as defined 
by section 105 of title 5, United States Code).
TITLE III—PROVISIONS RELAT-
ING TO THE SECURITIES AND 
EXCHANGE COMMISSION AND 
THE NATIONAL AERONAUTICS 
AND SPACE ADMINISTRATION 
Subtitle A—Securities and 
Exchange Commission 
SEC. 301. SECURITIES AND EXCHANGE COMMISSION. 
(a) IN GENERAL.—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 Governmental Af-
fairs and the Committee on Banking, Housing, and Urban 
Affairs of the Senate. Such reports shall describe the changes 
in the hiring process authorized by such subsection, includ-
ing relevant information related to—
‘‘(1) the quality of candidates; 
‘‘(2) the procedures used by the Commission to 
select candidates through the streamlined hiring proc-
ess;
‘‘(3) the numbers, types, and grades of employees 
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. 
‘‘(d) COMMISSION DEFINED.—For purposes of this sec-
tion, the term ‘Commission’ means the Security and Ex-
change Commission.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
chapter 31 of title 5, United States Code, is amended by 
inserting after the item relating to section 3113 the fol-
lowing:
‘‘3114. Appointment of accountants, economists, and examiners by the Securities 
and Exchange Commission.’’.
Subtitle B—National Aeronautics 
and Space Administration 
SEC. 311. WORKFORCE AUTHORITIES AND PERSONNEL PRO-
VISIONS. 
(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 Security
Act of 2002 (Public Law 107–296; 116 Stat. 2229), the fol-
lowing:
‘‘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. 
‘‘9810. Voluntary separation incentive payments. 
‘‘9811. Limitations relating to bonuses. 
‘‘SUBCHAPTER II—PERSONNEL PROVISIONS 
‘‘9831. Definitions. 
‘‘9832. NASA-Industry exchange program. 
‘‘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 Admin-
istrator of the National Aeronautics and Space Ad-
ministration; 
‘‘(3) the term ‘critical need’ means a specific and 
important requirement of the Administration’s mis-
sion that the Administration is unable to fulfill be-
cause the Administration lacks the appropriate em-
ployees because— 
‘‘(A) of the inability to fill positions; or 
‘‘(B) employees do not possess the requisite 
skills; 
‘‘(4) the term ‘employee’ means an individual 
employed in or under the Administration; 
‘‘(5) the term ‘workforce plan’ means the plan re-
quired under section 9802(a); 
‘‘(6) the term ‘appropriate committees of Con-
gress’ means— 
‘‘(A) the Committees on Government Re-
form, Science, and Appropriations of the House 
of Representatives; and 
‘‘(B) the Committees on Governmental Af-
fairs, Commerce, Science, and Transportation, 
and Appropriations of the Senate; and 
‘‘(7) the term ‘redesignation bonus’ means a 
bonus under section 9804 paid to an individual de-
scribed in subsection (a)(2) thereof. 
‘‘§ 9802. Planning, notification, and reporting require-
ments 
‘‘(a) Not later than 90 days before exercising any of 
the workforce authorities under this subchapter, the Admin-
istrator shall submit a written plan to the appropriate com-
mittees of Congress. A plan under this subchapter may not 
be implemented without the approval of the Office of Per-
sonnel 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 employees 
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 this subchapter; 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 de-
scribed under sections 9804, 9805 (including the cri-
teria for granting bonuses in the absence of a critical 
need), and 9810, 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 this subchapter have 
successfully addressed each critical need identified 
under paragraph (1); and 
‘‘(8)(A) the recruitment methods used by the Ad-
ministration 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 sub-
chapter, the Administrator shall provide to all employees 
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 and to the appropriate committees of Congress. 
‘‘(2) Any reference in this subchapter or any other pro-
vision of law to the workforce plan shall be considered to 
include any modification made in accordance with this sub-
section. 
‘‘(e) Before submitting any written plan under sub-
section (a) (or modification under subsection (d)) to the Of-
fice of Personnel Management, the Administrator shall—
‘‘(1) provide to each employee representative rep-
resenting any employees who might be affected by 
such plan (or modification) a copy of the proposed 
plan (or modification);
‘‘(2) give each representative 30 calendar days 
(unless extraordinary circumstances require earlier 
action) to review and make recommendations with re-
spect to the proposed plan (or modification); and 
‘‘(3) give any recommendations received from 
any such representatives under paragraph (2) full 
and fair consideration in deciding whether or how to 
proceed with respect to the proposed plan (or modi-
fication). 
‘‘(f) None of the workforce authorities made available 
under this subchapter may be exercised in a manner incon-
sistent with the workforce plan. 
‘‘(g) Whenever the Administration submits its perform-
ance plan under section 1115 of title 31 to the Office of 
Management and Budget for any year, the Administration 
shall at the same time submit a copy of such plan to the 
appropriate committees of Congress. 
‘‘(h) Not later than 6 years after date of enactment 
of this subchapter, the Administrator shall submit to the 
appropriate committees of Congress an evaluation and 
analysis of the actions taken by the Administration under 
this subchapter, including—
‘‘(1) an evaluation, using the methods described 
in subsection (b)(7), of whether the authorities exer-
cised under this subchapter successfully addressed 
each critical need identified under subsection (b)(1); 
‘‘(2) to the extent that they did not, an expla-
nation of the reasons why any critical need (apart 
from the ones under subsection (b)(3)) was not suc-
cessfully addressed; and 
‘‘(3) recommendations for how the Administra-
tion could address any remaining critical need and 
could prevent those that have been addressed from re-
curring. 
‘‘§ 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.
‘‘(6) The authority to apply subchapter II of 
chapter 35 in accordance with section 9810. 
‘‘(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 Senate. 
‘‘(c) Unless specifically stated otherwise, all authorities 
provided under this subchapter are subject to section 5307.
‘‘§ 9804. Recruitment, redesignation, and relocation 
bonuses 
‘‘(a) Notwithstanding section 5753, the Administrator 
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 critical 
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 speci-
fied 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 speci-
fied 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 pe-
riod has been completed, and the effect of the termi-
nation. 
‘‘(2) For purposes of determinations under subsections 
(b)(1) and (c)(1), the employee’s service period shall be ex-
pressed 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 considered 
to be part of the basic pay of an employee. 
‘‘(e) Before paying a bonus under this section, the Ad-
ministration shall establish a plan for paying recruitment, 
redesignation, and relocation bonuses, subject to approval 
by the Office of Personnel Management. 
‘‘(f) The Administrator shall submit to the appropriate 
committees of Congress, not later than February 28 of each 
of the next 10 years beginning after the date of enactment 
of this subchapter, a summary of all bonuses paid under 
subsections (b) and (c) during the preceding year. Such 
summary shall include the number of bonuses paid, the 
total amount of bonuses paid, and the average percentage 
used in calculating the total average bonus amount, under 
each such subsection. 
‘‘§ 9805. Retention bonuses 
‘‘(a) Notwithstanding section 5754, the Administrator 
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 critical 
need in the workforce plan under section 9802(b)(2)(A), the 
amount of a bonus may not exceed 50 percent of the employ-
ee’s annual rate of basic pay (including comparability pay-
ments 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 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 the amount; and
‘‘(iv) the conditions under which the agreement 
may be terminated before the agreed-upon service pe-
riod has been completed, and the effect of the termi-
nation. 
‘‘(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 near-
est 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 reten-
tion bonus through the end of the pay period in which such 
written notice is provided. 
‘‘(e) A bonus under this section may not be considered 
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 section 
9804.
‘‘(g) The Administrator shall submit to the appro-
priate committees of Congress, not later than February 28 
of each of the next 10 years beginning after the date of en-
actment of this subchapter, a summary of all bonuses paid 
under subsections (b) and (c) during the preceding year. 
Such summary shall include the number of bonuses paid, 
the total amount of bonuses paid, and the average percent-
age used in calculating the total average bonus amount, 
under each such subsection. 
‘‘§ 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 com-
petitive service within the Administration without further 
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 appointment 
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 appoint-
ment in the competitive service; 
‘‘(4) the employee’s performance under such term 
appointment was at least fully successful or equiva-
lent; and 
‘‘(5) the position to which such employee is being 
converted under this section is in the same occupa-
tional series, is in the same geographic location, and 
provides no greater promotion potential than the term 
position for which the competitive examination 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 com-
petitive service within the Administration through internal 
competitive promotion procedures if the conditions under 
paragraphs (1) through (4) of subsection (b) are met.
‘‘(d) An employee converted under this section becomes 
a career-conditional employee, unless the employee has oth-
erwise completed the service requirements for career tenure. 
‘‘(e) An employee converted to career or career-condi-
tional employment under this section acquires competitive 
status upon conversion. 
‘‘(f) The Administrator shall submit to the appropriate 
committees of Congress, not later than February 28 of each 
of the next 10 years beginning after the date of enactment 
of this subchapter—
‘‘(1) the total number of term appointments con-
verted during the previous calendar year; and 
‘‘(2) of that total number, the number of conver-
sions that were made to address a critical need de-
scribed in the Workforce Plan pursuant to section 
9802(b)(2). 
‘‘§ 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 agen-
cy 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 payable
for the position involved if this section had never been en-
acted. 
‘‘(2) The annual rate of basic pay fixed under this sec-
tion may not exceed the per annum rate of salary payable 
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 employee 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. 
‘‘(e) The Administrator shall submit to the appro-
priate committees of Congress, not later than February 28 
of each of the next 10 years beginning after the date of en-
actment of this subchapter—
‘‘(1) the number of positions for which the rate 
of basic pay was fixed under this section during the 
preceding year; and
‘‘(2) the number of positions for which a rate of 
basic pay under this section was terminated during 
the preceding year. 
‘‘§ 9808. Assignments of intergovernmental personnel 
‘‘For purposes of applying the third sentence of section 
3372(a) (relating to the authority of the head of a Federal 
agency to extend the period of an employee’s assignment 
to or from a State or local government, institution of higher 
education, or other organization), the Administrator 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 sub-
stituting ‘such numbers of individuals as determined by the 
Administrator’ for ‘not more than 5,000 individuals’. 
‘‘§ 9810. Voluntary separation incentive payments 
‘‘(a) In applying subchapter II of chapter 35, the Ad-
ministrator may provide for voluntary separation incentive 
payments in excess of the dollar-amount limitation that 
would otherwise apply under section 3523(b)(3)(B), subject 
to subsection (b).
‘‘(b) Voluntary separation incentive payments de-
scribed in subsection (a)—
‘‘(1) may not exceed 50 percent of the annual 
rate of basic pay of the employee receiving such pay-
ments (computed disregarding any comparability 
payments under sections 5304–5304a); 
‘‘(2) may not, in any calendar year, be made to 
more than—
‘‘(A) 10 employees; or 
‘‘(B) such greater number of employees as 
the Administrator may, with the approval of the 
Office of Management and Budget, establish in 
lieu of the number specified in subparagraph (A) 
following notification to the appropriate commit-
tees of Congress; 
‘‘(3) may not be made to an employee if the em-
ployee has within the last 12 months received, or if 
the employee is then receiving, a bonus or allowance 
under section 5753 or 5754 or under section 9804 or 
9805; and 
‘‘(4) may be made only if the position in which 
the employee is serving addresses a critical need iden-
tified in the workforce plan pursuant to section 
9802(b)(2).
‘‘(c)(1) The proposed use of workforce authorities in 
this section shall be included in the plan required by section 
3522. 
‘‘(2) Whenever the Office of Personnel Management ap-
proves the Administration’s plan required in such section 
3522, the Administration shall submit a copy of the ap-
proved plan to the appropriate committees of Congress 
within 15 days after the date on which it is so approved. 
‘‘§ 9811. Limitations relating to bonuses 
‘‘(a) Of the total amount in bonuses awarded under 
sections 9804 and 9805, respectively, in any year, not to 
exceed 15 percent of any such total amount may be awarded 
to supervisors (within the meaning of section 7103(a)(10)). 
‘‘(b) A separate appropriations account shall be main-
tained for such bonuses. 
‘‘SUBCHAPTER II—PERSONNEL PROVISIONS 
‘‘§ 9831. Definitions 
‘‘For purposes of this subchapter, the terms ‘Adminis-
tration’ and ‘Administrator’ have the meanings set forth 
in section 9801. 
‘‘§ 9832. NASA-Industry exchange program 
‘‘(a) For purposes of this section, the term ‘detail’ 
means—
‘‘(1) the assignment or loan of an employee of 
the Administration to a private sector organization
without a change of position from the Administra-
tion, or 
‘‘(2) the assignment or loan of an employee of a 
private sector organization to the Administration 
without a change of position from the private sector 
organization that employs the individual, 
whichever is appropriate in the context in which such term 
is used. 
‘‘(b)(1) On request from or with the agreement of a 
private sector organization, and with the consent of the em-
ployee concerned, the Administrator may arrange for the 
assignment of an employee of the Administration to a pri-
vate sector organization or an employee of a private sector 
organization to the Administration. An employee of the Ad-
ministration shall be eligible to participate in this program 
only if the employee is employed at the GS–11 level or above 
(or equivalent) and is serving under a career or career-con-
ditional appointment or an appointment of equivalent ten-
ure in the excepted service. 
‘‘(2) The Administrator shall provide for a written 
agreement between the Administration and the employee 
concerned regarding the terms and conditions of the em-
ployee’s assignment. The agreement shall—
‘‘(A) require the employee to serve in the Admin-
istration, upon completion of the assignment, for a 
period equal to the length of the assignment; and 
‘‘(B) provide that, in the event the employee fails 
to carry out the agreement (except for good and suffi-
cient reason, as determined by the Administrator), the 
employee shall be liable to the United States for pay-
ment of all expenses of the assignment. 
An amount under subparagraph (B) shall be treated as a 
debt due the United States. 
‘‘(3) Assignments may be terminated by the Adminis-
tration or the private sector organization concerned for any 
reason at any time. 
‘‘(4) Assignments under this section shall be for a pe-
riod of between 6 months and 1 year, and may be extended 
in 3-month increments for a total of not more than 1 addi-
tional year, except that no assignment under this section 
may commence after the end of the 5-year period beginning 
on the date of the enactment of this section. 
‘‘(c)(1) An employee of the Administration who is as-
signed to a private sector organization under this section 
is deemed, during the period of the assignment, to be on 
detail to a regular work assignment in the Administration. 
‘‘(2) Notwithstanding any other provision of law, an 
employee of the Administration who is assigned to a private
sector organization under this section is entitled to retain 
coverage, rights, and benefits under subchapter I of chapter 
81, and employment during the assignment is deemed em-
ployment by the United States, except that, if the employee 
or the employee’s dependents receive from the private sector 
organization any payment under an insurance policy for 
which the premium is wholly paid by the private sector or-
ganization, or other benefit of any kind on account of the 
same injury or death, then, the amount of such payment 
or benefit shall be credited against any compensation other-
wise payable under subchapter I of chapter 81. 
‘‘(3) The assignment of an employee to a private sector 
organization under this section may be made with or with-
out reimbursement by the private sector organization for 
the travel and transportation expenses to or from the place 
of assignment, subject to the same terms and conditions as 
apply with respect to an employee of a Federal agency or 
a State or local government under section 3375, and for 
the pay, or a part thereof, of the employee during assign-
ment. Any reimbursements shall be credited to the appro-
priation of the Administration used for paying the travel 
and transportation expenses or pay. 
‘‘(4) The Federal Tort Claims Act and any other Fed-
eral tort liability statute apply to an employee of the Ad-
ministration assigned to a private sector organization
under this section. The supervision of the duties of an em-
ployee of the Administration who is so assigned to a private 
sector organization may be governed by an agreement be-
tween the Administration and the organization. 
‘‘(d)(1) An employee of a private sector organization 
assigned to the Administration under this section is deemed, 
during the period of the assignment, to be on detail to the 
Administration. 
‘‘(2) An employee of a private sector organization as-
signed to the Administration under this section—
‘‘(A) may continue to receive pay and benefits 
from the private sector organization from which he is 
assigned; 
‘‘(B) is deemed, notwithstanding paragraph (1), 
to be an employee of the Administration for the pur-
poses of—
‘‘(i) chapter 73; 
‘‘(ii) sections 201, 203, 205, 207, 208, 209, 
603, 606, 607, 643, 654, 1905, and 1913 of title 
18; 
‘‘(iii) sections 1343, 1344, and 1349(b) of 
title 31; 
‘‘(iv) the Federal Tort Claims Act and any 
other Federal tort liability statute;
‘‘(v) the Ethics in Government Act of 1978; 
and 
‘‘(vi) section 1043 of the Internal Revenue 
Code of 1986; 
‘‘(C) may not have access to any trade secrets or 
to any other nonpublic information which is of com-
mercial value to the private sector organization from 
which he is assigned; and 
‘‘(D) is subject to such regulations as the Presi-
dent may prescribe. 
The supervision of an employee of a private sector organiza-
tion assigned to the Administration under this section may 
be governed by agreement between the Administration and 
the private sector organization concerned. Such an assign-
ment may be made with or without reimbursement by the 
Administration for the pay, or a part thereof, of the em-
ployee during the period of assignment, or for any contribu-
tion of the private sector organization to employee benefit 
systems. 
‘‘(3) An employee of a private sector organization as-
signed to the Administration under this section who suffers 
disability or dies as a result of personal injury sustained 
while performing duties during the assignment shall be 
treated, for the purpose of subchapter I of chapter 81, as 
an employee as defined by section 8101 who had sustained
the injury in the performance of duty, except that, if the 
employee or the employee’s dependents receive from the pri-
vate sector organization any payment under an insurance 
policy for which the premium is wholly paid by the private 
sector organization, or other benefit of any kind on account 
of the same injury or death, then, the amount of such pay-
ment or benefit shall be credited against any compensation 
otherwise payable under subchapter I of chapter 81. 
‘‘(4) A private sector organization may not charge the 
Federal Government, as direct or indirect costs under a 
Federal contract, the costs of pay or benefits paid by the 
organization to an employee assigned to the Administration 
under this section for the period of the assignment. 
‘‘(e)(1) The Administration shall, not later than Feb-
ruary 28 of each year, prepare and submit to the appro-
priate committees of Congress a report summarizing the op-
eration of this section during the preceding year. 
‘‘(2) Each report shall include, with respect to the pe-
riod to which such report relates—
‘‘(A) the total number of individuals assigned to, 
and the total number of individuals assigned from, 
the Administration during such period; 
‘‘(B) a brief description of each assignment in-
cluded under subparagraph (A), including—
‘‘(i) the name of the assigned individual, as 
well as the private sector organization, to or 
from which such individual was assigned; 
‘‘(ii) the respective positions to and from 
which the individual was assigned, including the 
duties and responsibilities and the pay grade or 
level associated with each; and 
‘‘(iii) the duration and objectives of the in-
dividual’s assignment; and 
‘‘(C) such other information as the Administra-
tion considers appropriate. 
‘‘(3) A copy of each report submitted under paragraph 
(1)—
‘‘(A) shall be published in the Federal Register; 
and 
‘‘(B) shall be made publicly available on the 
Internet. 
‘‘(f) The Administrator, in consultation with the Di-
rector of the Office of Personnel Management, shall prescribe 
regulations for the administration of this section. 
‘‘(g) Not later than 4 years after the date of the enact-
ment of this section, the General Accounting Office shall 
prepare and submit to the appropriate committees of Con-
gress a report on the operation of this section. Such report 
shall include—
‘‘(1) an evaluation of the effectiveness of the pro-
gram established by this section; and 
‘‘(2) a recommendation as to whether such pro-
gram should be continued (with or without modifica-
tion) or allowed to lapse. 
‘‘§ 9833. Science and technology scholarship program 
‘‘(a)(1) The Administrator shall establish a National 
Aeronautics and Space Administration Science and Tech-
nology Scholarship Program to award scholarships to indi-
viduals that is designed to recruit and prepare students for 
careers in the Administration. 
‘‘(2) Individuals shall be selected to receive scholar-
ships under this section through a competitive process pri-
marily on the basis of academic merit, with consideration 
given to financial need and the goal of promoting the par-
ticipation of individuals identified in section 33 or 34 of 
the Science and Engineering Equal Opportunities Act. 
‘‘(3) To carry out the Program the Administrator shall 
enter into contractual agreements with individuals selected 
under paragraph (2) under which the individuals agree to 
serve as full-time employees of the Administration, for the 
period described in subsection (f)(1), in positions needed by 
the Administration and for which the individuals are quali-
fied, in exchange for receiving a scholarship.
‘‘(b) In order to be eligible to participate in the Pro-
gram, an individual must—
‘‘(1) be enrolled or accepted for enrollment as a 
full-time student at an institution of higher education 
in an academic field or discipline described in the list 
made available under subsection (d); 
‘‘(2) be a United States citizen; and 
‘‘(3) at the time of the initial scholarship award, 
not be an employee (as defined in section 2105). 
‘‘(c) An individual seeking a scholarship under this 
section shall submit an application to the Administrator 
at such time, in such manner, and containing such infor-
mation, agreements, or assurances as the Administrator 
may require. 
‘‘(d) The Administrator shall make publicly available 
a list of academic programs and fields of study for which 
scholarships under the Program may be utilized and shall 
update the list as necessary. 
‘‘(e)(1) The Administrator may provide a scholarship 
under the Program for an academic year if the individual 
applying for the scholarship has submitted to the Adminis-
trator, as part of the application required under subsection 
(c), a proposed academic program leading to a degree in 
a program or field of study on the list made available under 
subsection (d).
‘‘(2) An individual may not receive a scholarship 
under this section for more than 4 academic years, unless 
the Administrator grants a waiver. 
‘‘(3) The dollar amount of a scholarship under this sec-
tion for an academic year shall be determined under regula-
tions issued by the Administrator, but shall in no case ex-
ceed the cost of attendance. 
‘‘(4) A scholarship provided under this section may be 
expended for tuition, fees, and other authorized expenses as 
established by the Administrator by regulation. 
‘‘(5) The Administrator may enter into a contractual 
agreement with an institution of higher education under 
which the amounts provided for a scholarship under this 
section for tuition, fees, and other authorized expenses are 
paid directly to the institution with respect to which the 
scholarship is provided. 
‘‘(f)(1) The period of service for which an individual 
shall be obligated to serve as an employee of the Administra-
tion is, except as provided in subsection (h)(2), 24 months 
for each academic year for which a scholarship under this 
section is provided. 
‘‘(2)(A) Except as provided in subparagraph (B), obli-
gated service under paragraph (1) shall begin not later than 
60 days after the individual obtains the educational degree 
for which the scholarship was provided.
‘‘(B) The Administrator may defer the obligation of 
an individual to provide a period of service under para-
graph (1) if the Administrator determines that such a defer-
ral is appropriate. The Administrator shall prescribe the 
terms and conditions under which a service obligation may 
be deferred through regulation. 
‘‘(g)(1) Scholarship recipients who fail to maintain a 
high level of academic standing, as defined by the Adminis-
trator by regulation, who are dismissed from their edu-
cational institutions for disciplinary reasons, or who volun-
tarily terminate academic training before graduation from 
the educational program for which the scholarship was 
awarded, shall be in breach of their contractual agreement 
and, in lieu of any service obligation arising under such 
agreement, shall be liable to the United States for repay-
ment within 1 year after the date of default of all scholar-
ship funds paid to them and to the institution of higher 
education on their behalf under the agreement, except as 
provided in subsection (h)(2). The repayment period may 
be extended by the Administrator when determined to be 
necessary, as established by regulation. 
‘‘(2) Scholarship recipients who, for any reason, fail 
to begin or complete their service obligation after comple-
tion of academic training, or fail to comply with the terms 
and conditions of deferment established by the Adminis-
trator pursuant to subsection (f)(2)(B), shall be in breach 
of their contractual agreement. When recipients breach their 
agreements for the reasons stated in the preceding sentence, 
the recipient shall be liable to the United States for an 
amount equal to—
‘‘(A) the total amount of scholarships received by 
such individual under this section; plus 
‘‘(B) the interest on the amounts of such awards 
which would be payable if at the time the awards 
were received they were loans bearing interest at the 
maximum legal prevailing rate, as determined by the 
Treasurer of the United States, 
multiplied by 3. 
‘‘(h)(1) Any obligation of an individual incurred 
under the Program (or a contractual agreement thereunder) 
for service or payment shall 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 obligation 
of service or payment incurred by an individual under the 
Program (or a contractual agreement thereunder) whenever 
compliance by the individual is impossible or would involve 
extreme hardship to the individual, or if enforcement of 
such obligation with respect to the individual would be con-
trary to the best interests of the Government.
‘‘(i) For purposes of this section—
‘‘(1) the term ‘cost of attendance’ has the mean-
ing given that term in section 472 of the Higher Edu-
cation Act of 1965; 
‘‘(2) the term ‘institution of higher education’ 
has the meaning given that term in section 101(a) of 
the Higher Education Act of 1965; and 
‘‘(3) the term ‘Program’ means the National Aer-
onautics and Space Administration Science and 
Technology Scholarship Program established under 
this section. 
‘‘(j)(1) There is authorized to be appropriated to the 
Administration for the Program $10,000,000 for each fiscal 
year. 
‘‘(2) Amounts appropriated under this section shall re-
main available for 2 fiscal years. 
‘‘§ 9834. Distinguished scholar appointment authority 
‘‘(a) In this section—
‘‘(1) the term ‘professional position’ means a po-
sition that is classified to an occupational series iden-
tified by the Office of Personnel Management as a po-
sition 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 na-
ture, 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 posi-
tions 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 qualification 
standards as prescribed by the Office of Per-
sonnel 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 pos-
session of that degree meets the qualification 
standards at this grade level 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 3.5 or higher on a 4.0 scale in graduate 
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 pos-
session of that degree meets the qualification
standards at this grade level 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 3.5 or higher on a 4.0 scale in graduate 
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 pos-
session of that degree meets the qualification 
standards at this grade level 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 3.5 or higher on a 4.0 scale in graduate 
coursework in the field of study required for the 
position. 
‘‘(c) Veterans’ preference procedures shall apply when 
selecting candidates under this section. Preference eligibles 
who meet the criteria for distinguished scholar appoint-
ments shall be considered ahead of nonpreference eligibles.
‘‘(d) An appointment made under this authority shall 
be a career-conditional appointment in the competitive civil 
service. 
‘‘§ 9835. Travel and transportation expenses of certain 
new appointees 
‘‘(a) In this section, the term ‘new appointee’ means—
‘‘(1) a person newly appointed or reinstated to 
Federal service to the Administration to—
‘‘(A) a career or career-conditional appoint-
ment; 
‘‘(B) a term appointment; 
‘‘(C) an excepted service appointment that 
provides for noncompetitive conversion to a ca-
reer or career-conditional appointment; 
‘‘(D) a career or limited term Senior Execu-
tive Service appointment; 
‘‘(E) an appointment made under section 
203(c)(2)(A) of the National Aeronautics and 
Space Act of 1958 (42 U.S.C. 2473(c)(2)(A)); 
‘‘(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 transferred 
in the interests of the United States Government. 
‘‘(c) The Administrator shall submit to the appro-
priate committees of Congress, not later than February 28 
of each of the next 10 years beginning after the date of en-
actment of this subchapter—
‘‘(1) the average payment for travel and trans-
portation expenses of certain new appointees provided 
under this section during the preceding year; and 
‘‘(2) the highest payment for travel and trans-
portation expenses to an individual appointee pro-
vided under this section during the preceding year. 
‘‘§ 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 Govern-
ment following a break in service of at least 90 
days after that individual’s last period of Fed-
eral 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 in-
dividual will fill as a newly appointed employee; 
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 sub-
paragraph (A) shall continue to apply to the employee dur-
ing—
‘‘(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 sec-
tion 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 Service 
position in the Administration to meet a bona fide 
temporary need, as determined by the Administrator. 
‘‘(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 duties 
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 
‘‘(B) paragraph (1)(B) for a period not to 
exceed 1 year. 
‘‘(d) A limited term appointee who has been appointed 
in the Administration from a career or career-conditional 
appointment outside the Senior Executive Service shall 
have reemployment rights in the agency from which ap-
pointed, or in another agency, under requirements and con-
ditions established by the Office of Personnel Management. 
The Office shall have the authority to direct such placement 
in any agency. 
‘‘(e) Notwithstanding section 3394(b) and section 
3395—
‘‘(1) a limited term appointee serving under a 
term prescribed under this section may be reassigned 
to another Senior Executive Service position in the 
Administration, the duties of which will expire at the 
end of a term of 4 years or less; and 
‘‘(2) a limited term appointee serving under a 
term prescribed under this section may be reassigned 
to another continuing Senior Executive Service posi-
tion in the Administration, except that the appointee 
may not serve in 1 or more positions in the Adminis-
tration under such appointment in excess of 1 year,
except that in rare circumstances, the 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 ap-
pointments. 
‘‘(g) Notwithstanding section 5384, the Administrator 
may authorize performance awards to limited term ap-
pointees 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 Administrator 
may set the pay of an employee paid under the General 
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 section 
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 re-
quired under subsection (g). 
‘‘(g) Before setting any employee’s pay under this sec-
tion, the Administrator shall submit a plan to the Office 
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 in-
centives; and 
‘‘(5) a process to evaluate the effectiveness of this 
section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) TABLE OF CHAPTERS.—The table of chapters 
for subchapter I of part III of title 5, United States 
Code, is amended by adding after the item relating to 
chapter 97 the following:
‘‘98. National Aeronautics and Space Administration .........................
9801’’.
(2) COMPENSATION
FOR
CERTAIN
EXCEPTED 
PERSONNEL.—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 Schedule 
of the Classification Act of 1949, as amended,’’ and 
inserting ‘‘the rate of basic pay payable for level III 
of the Executive Schedule,’’. 
(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) This section does not prohibit an employee of a 
private sector organization, while assigned to the National 
Aeronautics and Space Administration under section 9832 
of title 5, from continuing to receive pay and benefits from 
that organization in accordance with section 9832 of that 
title.’’. 
(4) 
CONTINUED
TSP
ELIGIBILITY.—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-Gov-
ernment 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’’. 
(5) ETHICS PROVISIONS.—
(A) ONE-YEAR
RESTRICTION
ON
CERTAIN 
COMMUNICATIONS.—Section 207(c)(2)(A)(v) of 
title 18, United States Code, is amended by in-
serting ‘‘or section 9832’’ after ‘‘chapter 37’’. 
(B) DISCLOSURE OF CONFIDENTIAL INFOR-
MATION.—Section 1905 of title 18, United States 
Code, is amended by inserting ‘‘or section 9832’’ 
after ‘‘chapter 37’’. 
(6) CONTRACT ADVICE.—Section 207(l) of title 
18, United States Code, is amended by inserting ‘‘or 
section 9832’’ after ‘‘chapter 37’’.
(7) AMENDMENTS TO TITLE 5, UNITED STATES 
CODE.—Title 5, United States Code, is amended—
(A) in section 3111(d), by inserting ‘‘or sec-
tion 9832’’ after ‘‘chapter 37’’; and 
(B) in section 7353(b)(4), by inserting ‘‘or 
section 9832’’ after ‘‘chapter 37’’. 
TITLE IV—HUMAN CAPITAL 
PERFORMANCE FUND 
SEC. 401. HUMAN CAPITAL PERFORMANCE FUND. 
(a) IN GENERAL.—Subpart D of part III of title 5, 
United States Code, is amended by inserting after chapter 
53 the following:
‘‘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, great-
er 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
100
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 Account-
ing 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;
101
‘‘(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 Man-
agement. 
‘‘§ 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 described 
in section 5406 to be eligible for consideration by the Office 
for an allocation under this section. An allocation 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 ap-
propriated to the Fund may be allocated by the Office to 
the agencies. Of the amount to be allocated, an agency’s pro
102
rata distribution may not exceed its pro rata share of Exec-
utive 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 ad-
dition 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 achievement 
of the agency mission.
103
‘‘(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 average 
total civilian full- and part-time permanent employment 
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 payments, 
and human capital performance pay, as defined by regula-
tion, may not exceed the rate of basic pay for Executive 
Level IV in any year. 
‘‘(3) Any human capital performance payment pro-
vided to an employee from the Fund is in addition to any 
annual pay adjustment (under section 5303 or any similar 
provision of law) and any locality-based comparability 
payment that may apply. 
‘‘(c) No monies from the Human Capital Performance 
Fund may be used to pay for a new position, for other per-
formance-related payments, or for recruitment or retention 
incentives paid under sections 5753 and 5754.
104
‘‘(d)(1) An agency may finance initial human capital 
performance payments using monies from the Human Cap-
ital 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 chapter, 
including the administration of the Fund. The Office’s regu-
lations 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
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‘‘(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 
‘‘(a) To be eligible for consideration by the Office for 
an allocation under this section, an agency shall—
‘‘(1) develop a plan that incorporates the fol-
lowing elements: 
‘‘(A) adherence to merit principles set forth 
in section 2301; 
‘‘(B) a fair, credible, and transparent em-
ployee performance appraisal system; 
‘‘(C) a link between the pay-for-performance 
system, the employee performance appraisal sys-
tem, and the agency’s strategic plan; 
‘‘(D) a means for ensuring employee in-
volvement in the design and implementation of 
the system; 
‘‘(E) adequate training and retraining for 
supervisors, managers, and employees in the im-
plementation and operation of the pay-for-per-
formance system; 
‘‘(F) a process for ensuring ongoing per-
formance feedback and dialogue between super-
visors, managers, and employees throughout the
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appraisal period, and setting timetables for re-
view; 
‘‘(G) effective safeguards to ensure that the 
management of the system is fair and equitable 
and based on employee performance; and 
‘‘(H) a means for ensuring that adequate 
agency resources are allocated for the design, im-
plementation, and administration of the pay-for-
performance system; 
‘‘(2) upon approval, receive an allocation of 
funding from the Office; 
‘‘(3) make payments to individual employees in 
accordance with the agency’s approved plan; and 
‘‘(4) provide such information to the Office re-
garding payments made and use of funds received 
under this section as the Office may specify. 
‘‘(b) The Office, in consultation with the Chief Human 
Capital Officers Council, shall review and approve an agen-
cy’s plan before the agency is eligible to receive an alloca-
tion of funding from the Office. 
‘‘(c) The Chief Human Capital Officers Council shall 
include in its annual report to Congress under section 
1303(d) of the Homeland Security Act of 2002 an evalua-
tion of the formulation and implementation of agency per-
formance management systems.