II
104TH CONGRESS
2D SESSION
H. R. 3841
IN THE SENATE OF THE UNITED STATES
SEPTEMBER 28, 1996
Received
AN ACT
To amend the civil service laws of the United States, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Omnibus Civil Service Reform Act of 1996’’.
HR 3841 RDS
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—DEMONSTRATION PROJECTS
Sec. 101. Demonstration projects.
TITLE II—PERFORMANCE MANAGEMENT ENHANCEMENT
Sec. 201. No appeal of denial of periodic step-increases.
Sec. 202. Performance appraisals.
Sec. 203. Amendments to incentive awards authority.
Sec. 204. Due process rights of managers under negotiated grievance proce-
dures.
Sec. 205. Collection and reporting of training information.
TITLE III—ENHANCEMENT OF THRIFT SAVINGS PLAN AND
CERTAIN OTHER BENEFITS
Sec. 301. Loans under the Thrift Savings Plan for furloughed employees.
Sec. 302. Domestic relations orders.
Sec. 303. Unreduced additional optional life insurance.
TITLE IV—REORGANIZATION FLEXIBILITY
Sec. 401. Voluntary reductions in force.
Sec. 402. Nonreimbursable details to Federal agencies before a reduction in
force.
TITLE V—SOFT-LANDING PROVISIONS
Sec. 501. Temporary continuation of Federal employees’ life insurance.
Sec. 502. Continued eligibility for health insurance.
Sec. 503. Job placement and counseling services.
Sec. 504. Education and retraining incentives.
TITLE VI—MISCELLANEOUS
Sec. 601. Reimbursements relating to professional liability insurance.
Sec. 602. Employment rights following conversion to contract.
Sec. 603. Debarment of health care providers found to have engaged in fraudu-
lent practices.
Sec. 604. Consistent coverage for individuals enrolled in a health plan adminis-
tered by the Federal banking agencies.
Sec. 605. Amendment to Public Law 104–134.
Sec. 606. Miscellaneous amendments relating to the health benefits program for
Federal employees.
Sec. 607. Pay for certain positions formerly classified at GS–18.
Sec. 608. Repeal of section 1307 of title 5 of the United States Code.
Sec. 609. Extension of certain procedural and appeal rights to certain person-
nel of the Federal Bureau of Investigation.
HR 3841 RDS
TITLE I—DEMONSTRATION
PROJECTS
SEC. 101. DEMONSTRATION PROJECTS.
(a) DEFINITIONS.—Paragraph (1) of section 4701(a)
of title 5, United States Code, is amended by striking sub-
paragraph (A) and by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B), respectively.
(b) 
PRE-IMPLEMENTATION
PROCEDURES.—Sub-
section (b) of section 4703 of title 5, United States Code,
is amended to read as follows:
‘‘(b) Before an agency or the Office may conduct or
enter into any agreement or contract to conduct a dem-
onstration project, the Office—
‘‘(1) shall develop or approve a plan for such
project which identifies—
‘‘(A) the purposes of the project;
‘‘(B) the methodology;
‘‘(C) the duration; and
‘‘(D) the methodology and criteria for eval-
uation;
‘‘(2) shall publish the plan in the Federal Reg-
ister;
‘‘(3) may solicit comments from the public and
interested parties in such manner as the Office con-
siders appropriate;
HR 3841 RDS
‘‘(4) shall obtain approval from each agency in-
volved of the final version of the plan; and
‘‘(5) shall provide notification of the proposed
project, at least 30 days in advance of the date any
project proposed under this section is to take ef-
fect—
‘‘(A) to employees who are likely to be af-
fected by the project; and
‘‘(B) to each House of the Congress.’’.
(c) NONWAIVABLE PROVISIONS.—Section 4703(c) of
title 5, United States Code, is amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(1) any provision of subchapter V of chapter
63 or subpart G of part III of this title;’’; and
(2) by striking paragraph (3) and inserting the
following:
‘‘(3) any provision of chapter 15 or subchapter
II or III of chapter 73 of this title;’’.
(d) LIMITATIONS.—Subsection (d) of section 4703 of
title 5, United States Code, is amended to read as follows:
‘‘(d)(1) Each demonstration project shall terminate
before the end of the 5-year period beginning on the date
on which the project takes effect, except that the project
may continue for a maximum of 2 years beyond the date
HR 3841 RDS
to the extent necessary to validate the results of the
project.
‘‘(2)(A) Not more than 15 active demonstration
projects may be in effect at any time, and of the projects
in effect at any time, not more than 5 may involve 5,000
or more individuals each.
‘‘(B) Individuals in a control group necessary to vali-
date the results of a project shall not, for purposes of any
determination under subparagraph (A), be considered to
be involved in such project.’’.
(e) EVALUATIONS.—Subsection (h) of section 4703
of title 5, United States Code, is amended by adding at
the end the following: ‘‘The Office may, with respect to
a demonstration project conducted by another agency, re-
quire that the preceding sentence be carried out by such
other agency.’’.
(f) PROVISIONS FOR TERMINATION OF PROJECT OR
MAKING IT PERMANENT.—Section 4703 of title 5, United
States Code, is amended—
(1) in subsection (i) by inserting ‘‘by the Of-
fice’’ after ‘‘undertaken’’; and
(2) by adding at the end the following:
‘‘(j)(1) If the Office determines that termination of
a demonstration project (whether under subsection (e) or
otherwise) would result in the inequitable treatment of em-
HR 3841 RDS
ployees who participated in the project, the Office shall
take such corrective action as is within its authority. If
the Office determines that legislation is necessary to cor-
rect an inequity, it shall submit an appropriate legislative
proposal to both Houses of Congress.
‘‘(2) If the Office determines that a demonstration
project should be made permanent, it shall submit an ap-
propriate legislative proposal to both Houses of Con-
gress.’’.
TITLE II—PERFORMANCE
MANAGEMENT ENHANCEMENT
SEC. 201. NO APPEAL OF DENIAL OF PERIODIC STEP-IN-
CREASES.
(a) IN GENERAL.—Section 5335(c) of title 5, United
States Code, is amended—
(1) by striking the second sentence;
(2) in the third sentence by striking ‘‘or ap-
peal’’; and
(3) in the last sentence by striking ‘‘and the en-
titlement of the employee to appeal to the Board do
not apply’’ and inserting ‘‘does not apply’’.
(b) PERFORMANCE RATINGS.—Section 5335 of title
5, United States Code, as amended by subsection (a), is
further amended—
HR 3841 RDS
(1) in subsection (a)(B) by striking ‘‘work of
the employee is of an acceptable level of com-
petence’’ and inserting ‘‘performance of the em-
ployee is at least fully successful’’;
(2) in subsection (c)—
(A) in the first sentence by striking ‘‘work
of an employee is not of an acceptable level of
competence,’’ and inserting ‘‘performance of an
employee is not at least fully successful,’’; and
(B) in the last sentence by striking ‘‘ac-
ceptable level of competence’’ and inserting
‘‘fully successful work performance’’; and
(3) by adding at the end the following:
‘‘(g) For purposes of this section, the term ‘fully suc-
cessful’ denotes work performance that satisfies the re-
quirements of section 351.504(d)(3)(D) of title 5 of the
Code of Federal Regulations (as deemed to be amended
by section 3502(g)(2)(B)).’’.
SEC. 202. PERFORMANCE APPRAISALS.
(a) IN GENERAL.—Section 4302 of title 5, United
States Code, is amended—
(1) in subsection (b) by striking paragraphs (5)
and (6) and inserting the following:
HR 3841 RDS
‘‘(5) assisting employees in improving unaccept-
able performance, except in circumstances described
in subsection (c); and
‘‘(6) reassigning, reducing in grade, removing,
or taking other appropriate action against employees
whose performance is unacceptable.’’; and
(2) by adding at the end the following:
‘‘(c) Upon notification of unacceptable performance,
an employee shall be afforded an opportunity to dem-
onstrate acceptable performance before a reduction in
grade or removal may be proposed under section 4303
based on such performance, except that an employee so
afforded such an opportunity shall not be afforded any
further opportunity to demonstrate acceptable perform-
ance if the employee’s performance again is determined
to be at an unacceptable level.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Subject to paragraph (2),
this section and the amendments made by this sec-
tion shall take effect 180 days after the date of the
enactment of this Act.
(2) EXCEPTION.—The amendments made by
this section shall not apply in the case of any pro-
posed action as to which the employee receives ad-
vance written notice, in accordance with section
HR 3841 RDS
4303(b)(1)(A) of title 5, United States Code, before
the effective date of this section.
SEC. 203. AMENDMENTS TO INCENTIVE AWARDS AUTHOR-
ITY.
Chapter 45 of title 5, United States Code, is amend-
ed—
(1) by amending section 4501 to read as fol-
lows:
‘‘§ 4501. Definitions
‘‘For the purpose of this subchapter—
‘‘(1) the term ‘agency’ means—
‘‘(A) an Executive agency;
‘‘(B) the Library of Congress;
‘‘(C) the Office of the Architect of the
Capitol;
‘‘(D) the Botanic Garden;
‘‘(E) the Government Printing Office; and
‘‘(F) the United States Sentencing Com-
mission;
but does not include—
‘‘(i) the Tennessee Valley Authority; or
‘‘(ii) the Central Bank for Cooperatives;
‘‘(2) the term ‘employee’ means an employee as
defined by section 2105; and
HR 3841 RDS
‘‘(3) the term ‘Government’ means the Govern-
ment of the United States.’’;
(2) by amending section 4503 to read as fol-
lows:
‘‘§ 4503. Agency awards
‘‘(a) The head of an agency may pay a cash award
to, and incur necessary expense for the honorary recogni-
tion of, an employee who—
‘‘(1) by his suggestion, invention, superior ac-
complishment, or other personal effort, contributes
to the efficiency, economy, or other improvement of
Government operations or achieves a significant re-
duction in paperwork; or
‘‘(2) performs a special act or service in the
public interest in connection with or related to his
official employment.
‘‘(b)(1) If the criteria under paragraph (1) or (2) of
subsection (a) are met on the basis of the suggestion, in-
vention, superior accomplishment, act, service, or other
meritorious effort of a group of employees collectively, and
if the circumstances so warrant (such as by reason of the
infeasibility of determining the relative role or contribution
assignable to each employee separately), authority under
subsection (a) may be exercised—
HR 3841 RDS
‘‘(A) based on the collective efforts of the
group; and
‘‘(B) with respect to each member of such
group.
‘‘(2) The amount awarded to each member of a group
under this subsection—
‘‘(A) shall be the same for all members of such
group, except that such amount may be prorated to
reflect differences in the period of time during which
an individual was a member of the group; and
‘‘(B) may not exceed the maximum cash award
allowable under subsection (a) or (b) of section
4502, as applicable.’’; and
(3) in subsection (a)(1) of section 4505a by
striking ‘‘at the fully successful level or higher’’ and
inserting ‘‘higher than the fully successful level’’.
SEC. 204. DUE PROCESS RIGHTS OF MANAGERS UNDER NE-
GOTIATED GRIEVANCE PROCEDURES.
(a) IN GENERAL.—Paragraph (2) of section 7121(b)
of title 5, United States Code, is amended to read as fol-
lows:
‘‘(2) The provisions of a negotiated grievance proce-
dure providing for binding arbitration in accordance with
paragraph (1)(C)(iii) shall, if or to the extent that an al-
leged prohibited personnel practice is involved, allow the
HR 3841 RDS
arbitrator to order a stay of any personnel action in a
manner similar to the manner described in section 1221(c)
with respect to the Merit Systems Protection Board.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a)—
(1) shall take effect on the date of the enact-
ment of this Act; and
(2) shall apply with respect to orders issued on
or after the date of the enactment of this Act, not-
withstanding the provisions of any collective bargain-
ing agreement.
SEC. 205. COLLECTION AND REPORTING OF TRAINING IN-
FORMATION.
(a) TRAINING WITHIN GOVERNMENT.—The Office of
Personnel Management shall collect information concern-
ing training programs, plans, and methods utilized by
agencies of the Government and submit a report to the
Congress on this activity on an annual basis.
(b) TRAINING OUTSIDE OF GOVERNMENT.—The Of-
fice of Personnel Management, to the extent it considers
appropriate in the public interest, may collect information
concerning training programs, plans, and methods utilized
outside the Government. The Office, on request, may
make such information available to an agency and to Con-
gress.
HR 3841 RDS
TITLE 
III—ENHANCEMENT 
OF
THRIFT SAVINGS PLAN AND
CERTAIN OTHER BENEFITS
SEC. 301. LOANS UNDER THE THRIFT SAVINGS PLAN FOR
FURLOUGHED EMPLOYEES.
Section 8433(g) of title 5, United States Code, is
amended by adding at the end the following:
‘‘(6) An employee who has been furloughed due to
a lapse in appropriations may not be denied a loan under
this subsection solely because such employee is not in a
pay status.’’.
SEC. 302. DOMESTIC RELATIONS ORDERS.
(a) IN GENERAL.—Section 8705 of title 5, United
States Code, is amended—
(1) in subsection (a) by striking ‘‘(a) The’’ and
inserting ‘‘(a) Except as provided in subsection (e),
the’’; and
(2) by adding at the end the following:
‘‘(e)(1) Any amount which would otherwise be paid
to a person determined under the order of precedence
named by subsection (a) shall be paid (in whole or in part)
by the Office to another person if and to the extent ex-
pressly provided for in the terms of any court decree of
divorce, annulment, or legal separation, or the terms of
any court order or court-approved property settlement
HR 3841 RDS
agreement incident to any court decree of divorce, annul-
ment, or legal separation.
‘‘(2) For purposes of this subsection, a decree, order,
or agreement referred to in paragraph (1) shall not be
effective unless it is received, before the date of the cov-
ered employee’s death, by the employing agency or, if the
employee has separated from service, by the Office.
‘‘(3) A designation under this subsection with respect
to any person may not be changed except—
‘‘(A) with the written consent of such person, if
received as described in paragraph (2); or
‘‘(B) by modification of the decree, order, or
agreement, as the case may be, if received as de-
scribed in paragraph (2).
‘‘(4) The Office shall prescribe any regulations nec-
essary to carry out this subsection, including regulations
for the application of this subsection in the event that 2
or more decrees, orders, or agreements, are received with
respect to the same amount.’’.
(b) DIRECTED ASSIGNMENT.—Section 8706(e) of
title 5, United States Code, is amended—
(1) by striking ‘‘(e)’’ and inserting ‘‘(e)(1)’’;
and
(2) by adding at the end the following:
HR 3841 RDS
‘‘(2) A court decree of divorce, annulment, or legal
separation, or the terms of a court-approved property set-
tlement agreement incidental to any court decree of di-
vorce, annulment, or legal separation, may direct that an
insured employee or former employee make an irrevocable
assignment of the employee’s or former employee’s inci-
dents of ownership in insurance under this chapter (if
there is no previous assignment) to the person specified
in the court order or court-approved property settlement
agreement.’’.
SEC. 303. UNREDUCED ADDITIONAL OPTIONAL LIFE INSUR-
ANCE.
(a) IN GENERAL.—Section 8714b of title 5, United
States Code, is amended—
(1) in subsection (c)—
(A) by striking the last 2 sentences of
paragraph (2); and
(B) by adding at the end the following:
‘‘(3) The amount of additional optional insurance
continued under paragraph (2) shall be continued, with
or without reduction, in accordance with the employee’s
written election at the time eligibility to continue insur-
ance during retirement or receipt of compensation arises,
as follows:
HR 3841 RDS
‘‘(A) 
The 
employee 
may 
elect 
to 
have
withholdings cease in accordance with subsection
(d), in which case—
‘‘(i) the amount of additional optional in-
surance continued under paragraph (2) shall be
reduced each month by 2 percent effective at
the beginning of the second calendar month
after the date the employee becomes 65 years of
age and is retired or is in receipt of compensa-
tion; and
‘‘(ii) the reduction under clause (i) shall
continue for 50 months at which time the insur-
ance shall stop.
‘‘(B) The employee may, instead of the option
under subparagraph (A), elect to have the full cost
of additional optional insurance continue to be with-
held from such employee’s annuity or compensation
on and after the date such withholdings would other-
wise cease pursuant to an election under subpara-
graph (A), in which case the amount of additional
optional insurance continued under paragraph (2)
shall not be reduced, subject to paragraph (4).
‘‘(C) An employee who does not make any elec-
tion under the preceding provisions of this para-
HR 3841 RDS
graph shall be treated as if such employee had made
an election under subparagraph (A).
‘‘(4) If an employee makes an election under para-
graph (3)(B), that individual may subsequently cancel
such election, in which case additional optional insurance
shall be determined as if the individual had originally
made an election under paragraph (3)(A).’’; and
(2) in the second sentence of subsection (d)(1)
by inserting ‘‘if insurance is continued as provided
in subparagraph (A) of paragraph (3),’’ after ‘‘ex-
cept that,’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the 120th day after the
date of the enactment of this Act and shall apply to em-
ployees who become eligible, on or after such 120th day,
to continue additional optional insurance during retire-
ment or receipt of compensation.
TITLE IV—REORGANIZATION
FLEXIBILITY
SEC. 401. VOLUNTARY REDUCTIONS IN FORCE.
Section 3502(f) of title 5, United States Code, is
amended to read as follows:
‘‘(f)(1) The head of an Executive agency or military
department may, in accordance with regulations pre-
scribed by the Office of Personnel Management—
HR 3841 RDS
SEC. 402. NONREIMBURSABLE DETAILS TO FEDERAL AGEN-
CIES BEFORE A REDUCTION IN FORCE.
(a) IN GENERAL.—Section 3341 of title 5, United
States Code, is amended to read as follows:
‘‘§ 3341. Details; within Executive agencies and mili-
tary departments; employees affected by
reduction in force
‘‘(a) The head of an Executive agency or military de-
partment may detail employees, except those required by
law to be engaged exclusively in some specific work, among
the bureaus and offices of the agency or department.
‘‘(b) The head of an Executive agency or military de-
partment may detail to duties in the same or another
agency or department, on a nonreimbursable basis, an em-
ployee who has been identified by the employing agency
as likely to be separated from the Federal service by re-
duction in force or who has received a specific notice of
separation by reduction in force.
‘‘(c)(1) Details under subsection (a)—
‘‘(A) may not be for periods exceeding 120
days; and
‘‘(B) may be renewed (1 or more times) by
written order of the head of the agency or depart-
ment, in each particular case, for periods not exceed-
ing 120 days each.
‘‘(2) Details under subsection (b)—
HR 3841 RDS
‘‘(A) may not be for periods exceeding 90 days;
and
‘‘(B) may not be renewed.
‘‘(d) The 120-day limitation under subsection (c)(1)
for details and renewals of details does not apply to the
Department of Defense in the case of a detail—
‘‘(1) made in connection with the closure or re-
alignment of a military installation pursuant to a
base closure law or an organizational restructuring
of the Department as part of a reduction in the size
of the armed forces or the civilian workforce of the
Department; and
‘‘(2) in which the position to which the em-
ployee is detailed is eliminated on or before the date
of the closure, realignment, or restructuring.
‘‘(e) For purposes of this section—
‘‘(1) the term ‘base closure law’ means—
‘‘(A) section 2687 of title 10;
‘‘(B) title II of the Defense Authorization
Amendments and Base Closure and Realign-
ment Act; and
‘‘(C) the Defense Base Closure and Re-
alignment Act of 1990; and
‘‘(2) the term ‘military installation’—
HR 3841 RDS
‘‘(A) in the case of an installation covered
by section 2687 of title 10, has the meaning
given such term in subsection (e)(1) of such
section;
‘‘(B) in the case of an installation covered
by the Act referred to in subparagraph (B) of
paragraph (1), has the meaning given such
term in section 209(6) of such Act; and
‘‘(C) in the case of an installation covered
by the Act referred to in subparagraph (C) of
paragraph (1), has the meaning given such
term in section 2910(4) of such Act.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 33 of title 5, United States Code, is amended
by striking the item relating to section 3341 and inserting
the following:
‘‘3341. Details; within Executive agencies and military departments; employees
affected by reduction in force.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect 30 days after the date of the
enactment of this Act.
HR 3841 RDS
TITLE V—SOFT-LANDING
PROVISIONS
SEC. 501. TEMPORARY CONTINUATION OF FEDERAL EM-
PLOYEES’ LIFE INSURANCE.
Section 8706 of title 5, United States Code, is
amended by adding at the end the following:
‘‘(g)(1) Notwithstanding subsections (a) and (b) of
this section, an employee whose coverage under this chap-
ter would otherwise terminate due to a separation de-
scribed in paragraph (3) shall be eligible to continue basic
insurance coverage described in section 8704 in accord-
ance with this subsection and regulations the Office may
prescribe, if the employee arranges to pay currently into
the Employees Life Insurance Fund, through the former
employing agency or, if an annuitant, through the respon-
sible retirement system, an amount equal to the sum of—
‘‘(A) both employee and agency contributions
which would be payable if separation had not oc-
curred; plus
‘‘(B) an amount, determined under regulations
prescribed by the Office, to cover necessary adminis-
trative expenses, but not to exceed 2 percent of the
total amount under subparagraph (A).
‘‘(2) Continued coverage under this subsection may
not extend beyond the date which is 18 months after the
HR 3841 RDS
effective date of the separation which entitles a former em-
ployee to coverage under this subsection. Termination of
continued coverage under this subsection shall be subject
to provision for temporary extension of life insurance cov-
erage and for conversion to an individual policy of life in-
surance as provided by subsection (a). If an eligible em-
ployee does not make an election for purposes of this sub-
section, the employee’s insurance will terminate as pro-
vided by subsection (a).
‘‘(3)(A) This subsection shall apply to an employee
who, on or after the date of enactment of this subsection
and before the applicable date under subparagraph (B)—
‘‘(i) is involuntarily separated from a position
due to a reduction in force, or separates voluntarily
from a position the employing agency determines is
a 
‘surplus 
position’ 
as 
defined 
by 
section
8905(d)(4)(C); and
‘‘(ii) is insured for basic insurance under this
chapter on the date of separation.
‘‘(B) The applicable date under this subparagraph is
October 1, 2001, except that, for purposes of any involun-
tary separation referred to in subparagraph (A) with re-
spect to which appropriate specific notice is afforded to
the affected employee before October 1, 2001, the applica-
ble date under this subparagraph is February 1, 2002.’’.