within the area involved who have income levels com-
parable to those of eligible employees within the 
same area (taking into account, with respect to eligi-
ble employees, only amounts payable to such employ-
ees under title 5, United States Code). 
(4) DEFINITION OF AN AREA.—For purposes of 
this section, the term ‘‘area’’ means a metropolitan 
statistical area within the continental United States. 
(d) BASIC HOUSING ALLOWANCE.— 
(1) IN
GENERAL.—The Office of Personnel 
Management shall prescribe the basic housing allow-
ance payable to eligible employees within each area 
that has been identified under subsection (c) as a 
high-cost area for purposes of the fiscal year in-
volved. 
(2) AMOUNT.—The amount of the basic hous-
ing allowance for each high-cost area shall be equal 
to such amount as the Office of Personnel Manage-
ment shall determine, except that— 
(A) determinations under this paragraph 
shall be made in a manner based on section 
403(b) of title 37, United States Code (relating 
to basic allowance for housing for members of 
the uniformed services); and
(B) in no event may any such amount be 
less than the housing cost differential deter-
mined under subsection (c) for the area and fis-
cal year involved. 
(3) MANNER OF PAYMENT.—A basic housing 
allowance shall be payable at the same time and in 
the same manner as basic pay. 
(4) NONREDUCTION
RULE.—Notwithstanding 
any other provision of this Act, the basic housing al-
lowance payable to an individual who continuously 
remains an eligible employee within the same high- 
cost area may not be reduced by reason of any fluc-
tuations in housing costs. 
(5) RULE OF CONSTRUCTION.—Nothing in this 
Act shall be considered to permit or require any re-
duction in basic pay by reason of an individual’s eli-
gibility for or receipt of a basic housing allowance. 
(e) APPLICABILITY
OF
PROVISIONS
GOVERNING 
DEMONSTRATION
PROJECTS
GENERALLY.—The dem-
onstration project shall be conducted in accordance with 
section 4703 of title 5, United States Code, except that 
such project shall not be subject to the provisions of sub-
section (d)(1) thereof and shall not be taken into account 
for purposes of applying the numerical limitation under 
subsection (d)(2) thereof.
(f) DURATION.—The demonstration project— 
(1) shall be conducted over the 5-year period 
beginning on the first day of the first fiscal year be-
ginning at least 30 days after the date of enactment 
of this Act; and 
(2) may, subject to the availability of appropria-
tions, be extended for one or more additional 12- 
month periods after the end of the 5-year period re-
ferred to in paragraph (1). 
(g) REPORTING REQUIREMENT.—Not later than 90 
days after the date on which the demonstration project 
terminates, the Office of Personnel Management shall sub-
mit to Congress a report on such project, together with 
recommendations for any legislation that the Office con-
siders appropriate. Such report shall specifically address 
the effect of the housing allowance on employee retention, 
recruitment, and morale, and shall be based on appro-
priate data as well as comments received from manage-
ment officials, employees, and other interested persons (in-
cluding professional associations representing employees). 
(h) OTHER DEFINITIONS.—For purposes of this sec-
tion— 
(1) the term ‘‘employee’’ has the meaning given 
such term by section 2105 of title 5, United States 
Code;
(2) the term ‘‘management official’’ has the 
meaning given such term by section 7103 of such 
title 5; and 
(3) the term ‘‘continental United States’’ means 
the several States and the District of Columbia, but 
does not include Alaska or Hawaii. 
SEC. 4. EXCLUSION FROM LIMITATION ON PREMIUM PAY. 
Section 5547 of title 5, United States Code, is 
amended— 
(1) in subsection (a), by striking ‘‘5545a,’’; 
(2) in subsection (c), by striking ‘‘or 5545a,’’; 
and 
(3) in subsection (d), by striking the period and 
inserting ‘‘or a criminal investigator who is paid 
availability pay under section 5545a.’’. 
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