H. R. 3230—313
Sec. 1609. Modification of authority for civilian employees of Department of
Defense to participate voluntarily in reductions in force.
Sec. 1610. Wage-board compensatory time off.
Sec. 1611. Liquidation of restored annual leave that remains unused upon transfer
of employee from installation being closed or realigned.
Sec. 1612. Waiver of requirement for repayment of Voluntary Separation Incentive
pay by former Department of Defense employees reemployed by the
Government without pay.
Sec. 1613. Simplification of rules relating to the observance of certain holidays.
Sec. 1614. Revision of certain travel management authorities.
Sec. 1615. Failure to comply with veterans’ preference requirements to be treated
as a prohibited personnel practice.
Sec. 1616. Pilot programs for defense employees converted to contractor employees
due to privatization at closed military installations.
Subtitle B—Department of Defense Intelligence Personnel Policy
Sec. 1631. Short title.
Sec. 1632. Management of civilian intelligence personnel.
Sec. 1633. Repeal of superseded sections and clerical and conforming amendments.
Sec. 1634. Other personnel management authorities.
Sec. 1635. Effective date.
Subtitle A—Miscellaneous Matters Relat-
ing to Personnel Management, Pay, and
Allowances
SEC. 1601. MODIFICATION OF REQUIREMENT FOR CONVERSION OF
MILITARY POSITIONS TO CIVILIAN POSITIONS.
(a) ELIMINATION
OF REQUIREMENT
FOR FISCAL YEAR 1997
CONVERSIONS.—Paragraph (1) of section 1032(a) of the National
Defense Authorization Act for Fiscal Year 1996 (Public Law 104–
106; 110 Stat. 429; 10 U.S.C. 129a note) is amended—
(1) by striking out ‘‘September 30, 1997’’ and inserting
in lieu thereof ‘‘September 30, 1996’’; and
(2) by striking out ‘‘10,000’’ and inserting in lieu thereof
‘‘3,000’’.
(b) CONFORMING
AMENDMENTS.—Such section is further
amended—
(1) by striking out paragraph (2); and
(2) by redesignating paragraph (3) as paragraph (2).
(c) EFFECTIVE DATE.—(1) The amendments made by this section
shall take effect 30 days after the date on which the Secretary
of Defense submits to Congress a certification that at least 3,000
military positions have been converted to civilian positions during
fiscal year 1996 as required by section 1032(a) of the National
Defense Authorization Act for Fiscal Year 1996 (Public Law 104–
106; 110 Stat. 429).
(2) The Secretary shall publish in the Federal Register a notice
of the submission of any certification to Congress under paragraph
(1), including the date on which the certification was submitted
to Congress.
SEC. 1602. RETENTION OF CIVILIAN EMPLOYEE POSITIONS AT MILI-
TARY TRAINING BASES TRANSFERRED TO NATIONAL
GUARD.
(a) RETENTION OF EMPLOYEE POSITIONS.—In the case of a mili-
tary training installation described in subsection (b), the Secretary
of Defense shall retain civilian employee positions of the Depart-
ment of Defense at the installation after transfer to the National
H. R. 3230—314
Guard to facilitate active and reserve component training at the
installation. The Secretary shall determine the extent to which
positions at the installation are to be retained as positions of
the Department of Defense in consultation with the Adjutant
General of the National Guard of the State in which the installation
is located.
(b) MILITARY TRAINING INSTALLATIONS AFFECTED.—This section
applies with respect to each military training installation that—
(1) was approved for closure in 1995 under the Defense
Base Closure and Realignment Act of 1990 (part A of title
XXIX of Public Law 101–510; 10 U.S.C. 2687 note);
(2) is scheduled for transfer to National Guard operation
and control; and
(3) will continue to be used, after such transfer, to provide
training support to active and reserve components of the Armed
Forces.
(c) MAXIMUM POSITIONS RETAINED.—The number of civilian
employee positions retained at an installation under this section
may not exceed 20 percent of the Federal civilian workforce
employed at the installation as of September 8, 1995.
(d) REMOVAL OF POSITION.—The requirement to maintain a
civilian employee position at an installation under this section
terminates upon the later of the following:
(1) The date of the departure or retirement from that
position by the civilian employee initially employed or retained
in the position as a result of this section.
(2) The date on which the Secretary certifies to Congress
that the position is no longer required to ensure that effective
support is provided at the installation for active and reserve
component training.
SEC. 1603. CLARIFICATION OF APPLICABILITY OF CERTAIN MANAGE-
MENT CONSTRAINTS ON MAJOR RANGE AND TEST
FACILITY BASE STRUCTURE.
Section 129 of title 10, United States Code, is amended—
(1) in subsection (c)(1), by inserting ‘‘, the Major Range
and Test Facility Base,’’ after ‘‘industrial-type activities’’; and
(2) by adding at the end the following:
‘‘(e) Subsections (a), (b), and (c) apply to the Major Range
and Test Facility Base (MRTFB) at the installation level. With
respect to the MRTFB structure, the term ‘funds made available’
includes both direct appropriated funds and funds provided by
MRTFB customers.’’.
SEC. 1604. TRAVEL EXPENSES AND HEALTH CARE FOR CIVILIAN
EMPLOYEES OF THE DEPARTMENT OF DEFENSE ABROAD.
(a) IN GENERAL.—Chapter 81 of title 10, United States Code,
is amended by adding at the end the following new section:
‘‘§ 1599b. Employees abroad: travel expenses; health care
‘‘(a) IN GENERAL.—The Secretary of Defense may provide
civilian employees, and members of their families, abroad with
benefits that are comparable to certain benefits that are provided
by the Secretary of State to members of the Foreign Service and
their families abroad as described in subsections (b) and (c). The
Secretary may designate the employees and members of families
who are eligible to receive the benefits.
H. R. 3230—315
‘‘(b) TRAVEL AND RELATED EXPENSES.—The Secretary of Defense
may pay travel expenses and related expenses for purposes and
in amounts that are comparable to the purposes for which, and
the amounts in which, travel and related expenses are paid by
the Secretary of State under section 901 of the Foreign Service
Act of 1980 (22 U.S.C. 4081).
‘‘(c) HEALTH CARE PROGRAM.—The Secretary of Defense may
establish a health care program that is comparable to the health
care program established by the Secretary of State under section
904 of the Foreign Service Act of 1980 (22 U.S.C. 4084).
‘‘(d) ASSISTANCE.—The Secretary of Defense may enter into
agreements with the heads of other departments and agencies of
the Government in order to facilitate the payment of expenses
authorized by subsection (b) and to carry out a health care pro-
gram authorized by subsection (c).
‘‘(e) ABROAD DEFINED.—In this section, the term ‘abroad’ means
outside—
‘‘(1) the United States; and
‘‘(2) the territories and possessions of the United States.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of such chapter is amended by adding at the end the following
new item:
‘‘1599b. Employees abroad: travel expenses; health care.’’.
SEC. 1605. TRAVEL, TRANSPORTATION, AND RELOCATION ALLOW-
ANCES FOR CERTAIN FORMER NONAPPROPRIATED FUND
EMPLOYEES.
(a) IN GENERAL.—(1) Subchapter II of chapter 57 of title 5,
United States Code, is amended by adding at the end the following
new section:
‘‘§ 5736. Travel, transportation, and relocation expenses of
certain nonappropriated fund employees
‘‘An employee of a nonappropriated fund instrumentality of
the Department of Defense or the Coast Guard described in section
2105(c) of this title who moves, without a break in service of
more than 3 days, to a position in the Department of Defense
or the Coast Guard, respectively, may be authorized travel,
transportation, and relocation expenses and allowances under the
same conditions and to the same extent authorized by this sub-
chapter for transferred employees.’’.
(2) The table of sections at the beginning of chapter 57 of
such title is amended by inserting after the item relating to section
5735 the following new item:
‘‘5736. Travel, transportation, and relocation expenses of certain nonappropriated
fund employees.’’.
(b) APPLICABILITY.—Section 5736 of title 5, United States Code
(as added by subsection (a)(1)), shall apply to moves between posi-
tions as described in such section that are effective on or after
October 1, 1996.
SEC. 1606. EMPLOYMENT AND SALARY PRACTICES APPLICABLE TO
DEPARTMENT OF DEFENSE OVERSEAS TEACHERS.
(a) EXPANSION
OF SCOPE
OF EDUCATORS COVERED.—Section
2 of the Defense Department Overseas Teachers Pay and Personnel
Practices Act (20 U.S.C. 901) is amended—
H. R. 3230—316
(1) in subparagraph (A) of paragraph (1), by inserting ‘‘,
or are performed by an individual who carried out certain
teaching activities identified in regulations prescribed by the
Secretary of Defense’’ after ‘‘Defense,’’; and
(2) by striking out subparagraph (C) of paragraph (2) and
inserting in lieu thereof the following:
‘‘(C) who is employed in a teaching position described
in paragraph (1).’’.
(b) TRANSFER OF RESPONSIBILITY FOR EMPLOYMENT AND SALARY
PRACTICES.—Section 5 of such Act (20 U.S.C. 903) is amended—
(1) in subsection (a)—
(A) by striking out ‘‘Secretary of each military depart-
ment in the Department of Defense’’ and inserting in lieu
thereof ‘‘Secretary of Defense’’; and
(B) by striking out ‘‘his military department’’ and
inserting in lieu thereof ‘‘the Department of Defense’’;
(2) in subsection (b)—
(A) in the matter preceding paragraph (1), by striking
out ‘‘secretary of each military department—’’ and inserting
in lieu thereof ‘‘Secretary of Defense—’’; and
(B) in paragraph (1), by striking out ‘‘his military
department,’’ and inserting in lieu thereof ‘‘the Department
of Defense’’;
(3) in subsection (c)—
(A) by striking out ‘‘Secretary of each military depart-
ment’’ and inserting in lieu thereof ‘‘Secretary of Defense’’;
and
(B) by striking out ‘‘his military department’’ and
inserting in lieu thereof ‘‘the Department of Defense’’; and
(4) in subsection (d), by striking out ‘‘Secretary of each
military department’’ and inserting in lieu thereof ‘‘Secretary
of Defense’’.
SEC. 1607. EMPLOYMENT AND COMPENSATION OF CIVILIAN FACULTY
MEMBERS 
AT 
CERTAIN 
DEPARTMENT 
OF 
DEFENSE
SCHOOLS.
(a) FACULTIES.—Subsection (c) of section 1595 of title 10, United
States Code, is amended by adding at the end the following new
paragraphs:
‘‘(4) The English Language Center of the Defense Language
Institute.
‘‘(5) The Asia-Pacific Center for Security Studies.’’.
(b) CERTAIN ADMINISTRATORS.—Such section is further amended
by adding at the end the following new subsection:
‘‘(f) APPLICATION TO DIRECTOR AND DEPUTY DIRECTOR AT ASIA-
PACIFIC CENTER FOR SECURITY STUDIES.—In the case of the Asia-
Pacific Center for Security Studies, this section also applies with
respect to the Director and the Deputy Director.’’.
SEC. 1608. REIMBURSEMENT OF DEPARTMENT OF DEFENSE DOMES-
TIC DEPENDENT SCHOOL BOARD MEMBERS FOR CERTAIN
EXPENSES.
Section 2164(d) of title 10, United States Code, is amended
by adding at the end the following new paragraph:
‘‘(7) The Secretary may provide for reimbursement of a school
board member for expenses incurred by the member for travel,
transportation, lodging, meals, program fees, activity fees, and other
appropriate expenses that the Secretary determines are reasonable
H. R. 3230—317
and necessary for the performance of school board duties by the
member.’’.
SEC. 1609. MODIFICATION OF AUTHORITY FOR CIVILIAN EMPLOYEES
OF DEPARTMENT OF DEFENSE TO PARTICIPATE VOLUN-
TARILY IN REDUCTIONS IN FORCE.
Subsection (f) of section 3502 of title 5, United States Code,
is amended to read as follows:
‘‘(f)(1) The Secretary of Defense or the Secretary of a military
department may—
‘‘(A) separate from service any employee who volunteers
to be separated under this subparagraph even though the
employee is not otherwise subject to separation due to a reduc-
tion in force; and
‘‘(B) for each employee voluntarily separated under
subparagraph (A), retain an employee in a similar position
who would otherwise be separated due to a reduction in force.
‘‘(2) The separation of an employee under paragraph (1)(A)
shall be treated as an involuntary separation due to a reduction
in force.
‘‘(3) An employee with critical knowledge and skills (as defined
by the Secretary concerned) may not participate in a voluntary
separation under paragraph (1)(A) if the Secretary concerned deter-
mines that such participation would impair the performance of
the mission of the Department of Defense or the military depart-
ment concerned.
‘‘(4) The regulations prescribed under this section shall incor-
porate the authority provided in this subsection.
‘‘(5) No authority under paragraph (1) may be exercised after
September 30, 2001.’’.
SEC. 1610. WAGE-BOARD COMPENSATORY TIME OFF.
(a) IN GENERAL.—Section 5543 of title 5, United States Code,
is amended—
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new sub-
section (b):
‘‘(b) The head of an agency may, on request of an employee,
grant the employee compensatory time off from the employee’s
scheduled tour of duty instead of payment under section 5544
or section 7 of the Fair Labor Standards Act of 1938 for an equal
amount of time spent in irregular or occasional overtime work.
An agency head may not require an employee to be compensated
for overtime work with an equivalent amount of compensatory
time-off from the employee’s tour of duty.’’.
(b) CONFORMING
AMENDMENT.—Section 5544(c) of title 5,
United States Code, is amended by inserting ‘‘and the provisions
of section 5543(b)’’ after ‘‘the last two sentences of subsection (a)’’.
SEC. 1611. LIQUIDATION 
OF 
RESTORED 
ANNUAL 
LEAVE 
THAT
REMAINS UNUSED UPON TRANSFER OF EMPLOYEE FROM
INSTALLATION BEING CLOSED OR REALIGNED.
(a) LUMP-SUM PAYMENT REQUIRED.—Section 5551 of title 5,
United States Code, is amended by adding at the end the following:
‘‘(c)(1) Annual leave that is restored to an employee of the
Department of Defense under section 6304(d) of this title by reason
of the operation of paragraph (3) of such section and remains
unused upon the transfer of the employee to a position described
H. R. 3230—318
in paragraph (2) shall be liquidated by payment of a lump-sum
for such leave to the employee upon the transfer.
‘‘(2) A position referred to in paragraph (1) is a position in
a department or agency of the Federal Government outside the
Department of Defense or a Department of Defense position that
is not located at a Department of Defense installation being closed
or realigned as described in section 6304(d)(3) of this title.’’.
(b) APPLICABILITY.—Subsection (c) of section 5551 of title 5,
United States Code (as added by subsection (a)), shall apply with
respect to transfers described in such subsection (c) that take effect
on or after the date of the enactment of this Act.
SEC. 1612. WAIVER OF REQUIREMENT FOR REPAYMENT OF VOL-
UNTARY 
SEPARATION 
INCENTIVE 
PAY 
BY 
FORMER
DEPARTMENT OF DEFENSE EMPLOYEES REEMPLOYED BY
THE GOVERNMENT WITHOUT PAY.
(a) IN GENERAL.—Section 5597(g) of title 5, United States Code,
is amended by adding at the end the following new paragraph:
‘‘(5) If the employment is without compensation, the appointing
official may waive the repayment.’’.
(b) APPLICABILITY.—The amendment made by subsection (a)
shall apply with respect to employment accepted on or after the
date of the enactment of this Act.
SEC. 1613. SIMPLIFICATION OF RULES RELATING TO THE OBSERV-
ANCE OF CERTAIN HOLIDAYS.
Section 6103 of title 5, United States Code, is amended by
adding at the end the following new subsection:
‘‘(d)(1) For purposes of this subsection—
‘‘(A) the term ‘compressed schedule’ has the meaning given
such term by section 6121(5); and
‘‘(B) the term ‘adverse agency impact’ has the meaning
given such term by section 6131(b).
‘‘(2) An agency may prescribe rules under which employees
on a compressed schedule may, in the case of a holiday that occurs
on a regularly scheduled non-workday for such employees, and
notwithstanding any other provision of law or the terms of any
collective bargaining agreement, be required to observe such holiday
on a workday other than as provided by subsection (b), if the
agency head determines that it is necessary to do so in order
to prevent an adverse agency impact.’’.
SEC. 1614. REVISION 
OF 
CERTAIN 
TRAVEL 
MANAGEMENT
AUTHORITIES.
(a) REPEAL OF REQUIREMENTS RELATING TO FIRE-SAFE ACCOM-
MODATIONS.—(1) Section 5707 of title 5, United States Code, is
amended by striking out subsection (d).
(2) Subsection (b) of section 5 of the Hotel and Motel Fire
Safety Act of 1990 (Public Law 101–391; 104 Stat. 751; 5 U.S.C.
5707 note) is repealed.
(b) REPEAL OF PROHIBITION ON PAYMENT OF LODGING EXPENSES
OF DEPARTMENT OF DEFENSE EMPLOYEES AND OTHER CIVILIANS
WHEN ADEQUATE GOVERNMENT QUARTERS ARE AVAILABLE.—(1) Sec-
tion 1589 of title 10, United States Code, is repealed.
(2) The table of sections at the beginning of chapter 81 of
such title is amended by striking out the item relating to such
section.
H. R. 3230—319
SEC. 1615. FAILURE TO COMPLY WITH VETERANS’ PREFERENCE
REQUIREMENTS TO BE TREATED AS A PROHIBITED
PERSONNEL PRACTICE.
(a) IN GENERAL.—(1) Chapter 81 of title 10, United States
Code, as amended by section 1604, is further amended by adding
at the end the following new section:
‘‘§ 1599c. Veterans’ preference requirements: Department of
Defense failure to comply treated as a prohibited
personnel practice
‘‘(a) PROHIBITED PERSONNEL PRACTICE.—It is a prohibited
personnel practice for a person referred to in subsection (b) who
has authority described in that subsection—
‘‘(1) knowingly to take, recommend, or approve any person-
nel action with respect to such authority if the taking of such
action violates a veterans’ preference; or
‘‘(2) knowingly to fail to take, recommend, or approve any
personnel action with respect to such authority, if the failure
to take such action violates a veterans’ preference.
‘‘(b) 
PERSONS
COVERED.—Subsection 
(a) 
applies 
with
respect to—
‘‘(1) an officer or employee of the Department of Defense
who has authority to take, direct others to take, recommend,
or approve a personnel action with respect to an employee
of the Department of Defense; and
‘‘(2) a member of the armed forces who has such authority.
‘‘(c) VETERANS’ PREFERENCE DEFINED.—(1) In this section, the
term ‘veterans’ preference’ means any of the following provisions
of law:
‘‘(A) Sections 2108, 3305(b), 3309, 3310, 3311, 3312, 3313,
3314, 3315, 3316, 3317(b), 3318, 3320, 3351, 3352, 3363, 3501,
3502(b), 3504, and 4303(e) of title 5 and (with respect to a
preference eligible referred to in section 7511(a)(1)(B) of such
title) subchapter II of chapter 75 and section 7701 of such
title.
‘‘(B) Sections 943(c)(2) and 1784(c) of this title.
‘‘(C) Section 1308(b) of the Alaska National Interest Lands
Conservation Act (16 U.S.C. 3198(b)).
‘‘(D) Section 301(c) of the Foreign Service Act of 1980
(22 U.S.C. 3941(c)).
‘‘(E) Section 3(a)(11) of the Administrative Office of the
United States Courts Personnel Act of 1990 (28 U.S.C. 602
note).
‘‘(F) Sections 106(f), 7281(e), and 7802(5) of title 38.
‘‘(G) Section 1005(a) of title 39.
‘‘(H) Any other provision of law that the Director of the
Office of Personnel Management designates in regulations as
being a veterans’ preference for the purposes of this section.
‘‘(2) For the purposes of this section, such term includes
any regulation prescribed under subsection (b) or (c) of section
1302 of title 5 and any other regulation that implements a provision
of law referred to in paragraph (1).
‘‘(d) PERSONNEL ACTION DEFINED.—In this section, the term
‘personnel action’ has the meaning given that term in section 2302
of title 5.’’.
H. R. 3230—320
(2) The table of sections at the beginning of such chapter
is amended by adding at the end the following new item:
‘‘1599c. Veterans’ preference requirements: Department of Defense failure to comply
treated as a prohibited personnel practice.’’.
(b) APPLICABILITY OF TITLE 5 PROCEDURES AND SANCTIONS.—
Paragraph (1) of section 2302(a) of title 5, United States Code,
is amended to read as follows:
‘‘(1) For purposes of this title, ‘prohibited personnel practice’
means the following:
‘‘(A) Any action described in subsection (b) of this section.
‘‘(B) Any action or failure to act that is designated as
a prohibited personnel action under section 1599c(a) of title
10.’’.
(c) REPORTING REQUIREMENT.—Not later than six months after
the date of the enactment of this Act, the Secretary of Defense
shall submit to Congress a written report on—
(1) the implementation of—
(A) section 1599c of title 10, United States Code, as
added by subsection (a); and
(B) subparagraph (B) of section 2302(a)(1) of title 5,
United States Code, as added by subsection (b); and
(2) the administration of veterans’ preference requirements
by the Department of Defense generally.
SEC. 1616. PILOT PROGRAMS FOR DEFENSE EMPLOYEES CONVERTED
TO CONTRACTOR EMPLOYEES DUE TO PRIVATIZATION AT
CLOSED MILITARY INSTALLATIONS.
(a) PILOT
PROGRAMS
AUTHORIZED.—(1) The Secretary of
Defense, after consultation with the Director of the Office of Person-
nel Management, may establish one or more pilot programs under
which Federal retirement benefits are provided in accordance with
this section to persons who convert from Federal employment to
employment by a Department of Defense contractor in connection
with the privatization of the performance of functions at selected
military installations being closed under the base closure and
realignment process.
(2) The Secretary of Defense shall select the military installa-
tions to be covered by a pilot program under this section.
(b) ELIGIBLE CONVERTED EMPLOYEES.—(1) A person is a con-
verted employee eligible for Federal retirement benefits under this
section if the person is a former employee of the Department of
Defense (other than a temporary employee) who—
(A) while employed by the Department of Defense at a
military installation selected to participate in a pilot program,
performed a function that was recommended, in a report of
the Defense Base Closure and Realignment Commission
submitted to the President under the Defense Base Closure
and Realignment Act of 1990 (title XXIX of Public Law 101–
510; 10 U.S.C. 2687 note), to be privatized for performance
by a defense contractor at the same installation or in the
vicinity of the installation;
(B) while so employed, separated from Federal service after
being notified that the employee would be separated in a reduc-
tion in force resulting from such privatization;
(C) at the time separated from Federal service, was covered
under the Civil Service Retirement System, but was not eligible
H. R. 3230—321
for an immediate annuity under the Civil Service Retirement
System;
(D) does not withdraw retirement contributions under sec-
tion 8342 of title 5, United States Code;
(E) within 60 days following such separation, is employed
by the defense contractor selected to privatize the function
to perform substantially the same function performed by the
person before the separation; and
(F) remains employed by the defense contractor (or a
successor defense contractor) or subcontractor of the defense
contractor (or successor defense contractor) until attaining early
deferred retirement age (unless the employment is sooner invol-
untarily terminated for reasons other than performance or con-
duct of the employee).
(2) A person who, under paragraph (1), would otherwise be
eligible for an early deferred annuity under this section shall not
be eligible for such benefits if the person received separation pay
or severance pay due to a separation described in subparagraph
(B) of that paragraph unless the person repays the full amount
of such pay with interest (computed at a rate determined appro-
priate by the Director of the Office of Personnel Management)
to the Department of Defense before attaining early deferred retire-
ment age.
(c) RETIREMENT BENEFITS OF CONVERTED EMPLOYEES.—In the
case of a converted employee covered by a pilot program, payment
of a deferred annuity for which the converted employee is eligible
under section 8338(a) of title 5, United States Code, shall commence
on the first day of the first month that begins after the date
on which the converted employee attains early deferred retirement
age, notwithstanding the age requirement under that section. If
the employment of a converted employee is involuntarily terminated
by the defense contractor or subcontractor as described in subsection
(b)(1)(F) and the converted employee resumes Federal service before
the converted employee attains early deferred retirement age, the
converted employee shall once again be covered under the Civil
Service Retirement System instead of the pilot program.
(d) COMPUTATION
OF AVERAGE PAY.—(1)(A) This paragraph
applies to a converted employee who was employed in a position
classified under the General Schedule immediately before the
employee’s covered separation from Federal service.
(B) Subject to subparagraph (C), for purposes of computing
the deferred annuity for a converted employee referred to in
subparagraph (A), the average pay of the converted employee, com-
puted under section 8331(4) of title 5, United States Code, as
of the date of the employee’s covered separation from Federal serv-
ice, shall be adjusted at the same time and by the same percentage
that rates of basic pay are increased under section 5303 of such
title during the period beginning on that date and ending on the
date on which the converted employee attains early deferred retire-
ment age.
(C) The average pay of a converted employee, as adjusted
under subparagraph (B), may not exceed the amount to which
an annuity of the converted employee could be increased under
section 8340 of title 5, United States Code, in accordance with
the limitation in subsection (g)(1) of such section (relating to maxi-
mum pay, final pay, or average pay).