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retired or retainer pay under chapter 65, 367, 571, or 867 
of this title, if the person— 
‘‘(A) satisfies the requirements specified in 
paragraphs (1) and (2) of such section for entitle-
ment to retired pay under this chapter; 
‘‘(B) served in an active status in the Selected 
Reserve of the Ready Reserve after becoming eligible 
for retirement under chapter 65, 367, 571, or 867 
of this title (without regard to whether the person 
actually retired or received retired or retainer pay 
under one of those chapters); and 
‘‘(C) completed not less than two years of satis-
factory service (as determined by the Secretary con-
cerned) in such active status (excluding any period 
of active service). 
‘‘(2) The Secretary concerned may reduce the min-
imum two-year service requirement specified in paragraph 
(1)(C) in the case of a person who— 
‘‘(A) completed at least 6 months of service in 
a position of adjutant general required under section 
314 of title 32 or in a position of assistant adjutant 
general subordinate to such a position of adjutant 
general; and 
‘‘(B) failed to complete the minimum years of 
service solely because the appointment of the person 
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to such position was terminated or vacated as de-
scribed in section 324(b) of title 32.’’. 
(b) ACTIONS
TO EFFECTUATE ELECTION.—Sub-
section (b) of such section is amended by striking para-
graph (1) and inserting the following new paragraph: 
‘‘(1) terminate the eligibility of the person to 
retire under chapter 65, 367, 571, or 867 of this 
title, if the person is not already retired under one 
of those chapters, and terminate entitlement of the 
person to retired or retainer pay under one of those 
chapters, if the person was already receiving retired 
or retainer pay under one of those chapters; and’’. 
(c) CONFORMING AMENDMENT TO REFLECT NEW 
VARIABLE AGE REQUIREMENT FOR RETIREMENT.—Sub-
section (d) of such section is amended— 
(1) in paragraph (1), by striking ‘‘attains 60 
years of age’’ and inserting ‘‘attains the eligibility 
age applicable to the person under section 12731(f) 
of this title’’; and 
(2) in paragraph (2)(A), by striking ‘‘attains 60 
years of age’’ and inserting ‘‘attains the eligibility 
age applicable to the person under such section’’. 
(d) CLERICAL AMENDMENTS.— 
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(1) SECTION HEADING.—The heading for sec-
tion 12741 of such title is amended to read as fol-
lows: 
‘‘§ 12741. Retirement for service in an active status 
performed in the Selected Reserve of the 
Ready Reserve after eligibility for reg-
ular retirement’’. 
(2) TABLE OF SECTIONS.—The table of sections 
at the beginning of chapter 1223 of such title is 
amended by striking the item relating to section 
12741 and inserting the following new item: 
‘‘12741. Retirement for service in an active status performed in the Selected Re-
serve of the Ready Reserve after eligibility for regular retire-
ment.’’. 
(e) RETROACTIVE
APPLICABILITY.—The amend-
ments made by this section shall take effect as of January 
1, 2008. 
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Subtitle C—Concurrent Receipt of 
Military Retired Pay and Vet-
erans’ Disability Compensation 
SEC. 121. ONE-YEAR EXPANSION OF ELIGIBILITY FOR CON-
CURRENT RECEIPT OF MILITARY RETIRED 
PAY AND VETERANS’ DISABILITY COMPENSA-
TION TO INCLUDE ALL CHAPTER 61 DIS-
ABILITY RETIREES REGARDLESS OF DIS-
ABILITY RATING PERCENTAGE OR YEARS OF 
SERVICE. 
(a) PHASED EXPANSION CONCURRENT RECEIPT.— 
Subsection (a) of section 1414 of title 10, United States 
Code, is amended to read as follows: 
‘‘(a) PAYMENT OF BOTH RETIRED PAY AND DIS-
ABILITY COMPENSATION.— 
‘‘(1) PAYMENT OF BOTH REQUIRED.— 
‘‘(A) IN GENERAL.—Subject to subsection 
(b), a member or former member of the uni-
formed services who is entitled for any month 
to retired pay and who is also entitled for that 
month to veterans’ disability compensation for a 
qualifying service-connected disability (in this 
section referred to as a ‘qualified retiree’) is en-
titled to be paid both for that month without 
regard to sections 5304 and 5305 of title 38. 
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‘‘(B) APPLICABILITY
OF
FULL
CONCUR-
RENT RECEIPT PHASE-IN REQUIREMENT.—Dur-
ing the period beginning on January 1, 2004, 
and ending on December 31, 2013, payment of 
retired pay to a qualified retiree is subject to 
subsection (c). 
‘‘(C) PHASE-IN EXCEPTION FOR 100 PER-
CENT DISABLED RETIREES.—The payment of 
retired pay is subject to subsection (c) only dur-
ing the period beginning on January 1, 2004, 
and ending on December 31, 2004, in the case 
of the following qualified retirees: 
‘‘(i) A qualified retiree receiving vet-
erans’ disability compensation for a dis-
ability rated as 100 percent. 
‘‘(ii) A qualified retiree receiving vet-
erans’ disability compensation at the rate 
payable for a 100 percent disability by rea-
son of a determination of individual 
unemployability. 
‘‘(D) TEMPORARY
PHASE-IN
EXCEPTION 
FOR CERTAIN CHAPTER 61 DISABILITY RETIR-
EES; TERMINATION.—Subject to subsection (b), 
during the period beginning on January 1, 
2010, and ending on September 30, 2010, sub-
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HR 2647 PCS 
section (c) shall not apply to a qualified retiree 
described in subparagraph (B) or (C) of para-
graph (2). 
‘‘(2) QUALIFYING
SERVICE-CONNECTED
DIS-
ABILITY DEFINED.—In this section, the term ‘quali-
fying service-connected disability’ means the fol-
lowing: 
‘‘(A) In the case of a member or former 
member receiving retired pay under any provi-
sion of law other than chapter 61 of this title, 
or under chapter 61 with 20 years or more of 
service otherwise creditable under section 1405 
or computed under section 12732 of this title, 
a service-connected disability or combination of 
service-connected disabilities that is rated as 
not less than 50 percent disabling by the Sec-
retary of Veterans Affairs. 
‘‘(B) In the case of a member or former 
member receiving retired pay under chapter 61 
of this title with less than 20 years of service 
otherwise creditable under section 1405 or com-
puted under section 12732 of this title, a serv-
ice-connected disability or combination of serv-
ice-connected disabilities that is rated by the 
Secretary of Veterans Affairs at the disabling 
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level specified in one of the following clauses 
(and, subject to paragraph (3), is effective on 
or after the date specified in the applicable 
clause): 
‘‘(i) January 1, 2010, rated 100 per-
cent, or a rate payable at 100 percent by 
reason of individual unemployability or 
rated 90 percent. 
‘‘(ii) January 1, 2011, rated 80 per-
cent or 70 percent. 
‘‘(iii) January 1, 2012, rated 60 per-
cent or 50 percent. 
‘‘(C) In the case of a member or former 
member receiving retired pay under chapter 61 
regardless of years of service, a service-con-
nected disability or combination of service-con-
nected disabilities that is rated by the Secretary 
of Veterans Affairs at the disabling level speci-
fied in one of the following clauses (and, subject 
to paragraph (3), is effective on or after the 
date specified in the applicable clause): 
‘‘(i) January 1, 2013, rated 40 per-
cent or 30 percent. 
‘‘(ii) January 1, 2014, any rating. 
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‘‘(3) 
LIMITED
DURATION.—Notwithstanding 
the effective date specified in each clause of subpara-
graphs (B) and (C) of paragraph (2), the clause 
shall apply only if the termination date specified in 
subparagraph (D) of paragraph (1) occurs during or 
after the calendar year specified in the clause, except 
that, eligibility may not extend beyond the termi-
nation date.’’. 
(b) CONFORMING AMENDMENT TO SPECIAL RULES 
FOR CHAPTER 61 DISABILITY RETIREES.—Subsection (b) 
of such section is amended to read as follows: 
‘‘(b) SPECIAL RULES FOR CHAPTER 61 DISABILITY 
RETIREES WHEN ELIGIBILITY HAS BEEN ESTABLISHED 
FOR SUCH RETIREES.— 
‘‘(1) GENERAL REDUCTION RULE.—The retired 
pay of a member retired under chapter 61 of this 
title is subject to reduction under sections 5304 and 
5305 of title 38, but only to the extent that the 
amount of the members retired pay under chapter 
61 of this title exceeds the amount of retired pay to 
which the member would have been entitled under 
any other provision of law based upon the member’s 
service in the uniformed services if the member had 
not been retired under chapter 61 of this title. 
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HR 2647 PCS 
‘‘(2) RETIREES WITH FEWER THAN 20 YEARS 
OF SERVICE.— 
‘‘(A) BEFORE TERMINATION DATE.—If a 
member with a qualifying service-connected dis-
ability (as defined in subsection (a)(2)) is re-
tired under chapter 61 of this title with fewer 
than 20 years of creditable service otherwise 
creditable under section 1405 or computed 
under section 12732 of this title, and the termi-
nation date specified in subsection (a)(1)(D) 
has not occurred, the retired pay of the member 
is subject to reduction under sections 5304 and 
5305 of title 38, but only to the extent that the 
amount of the member’s retired pay under 
chapter 61 of this title exceeds the amount 
equal to 21⁄2 percent of the member’s years of 
creditable service multiplied by the member’s 
retired pay base under section 1406(b)(1) or 
1407 of this title, whichever is applicable to the 
member. 
‘‘(B) AFTER
TERMINATION
DATE.—Sub-
section (a) does not apply to a member retired 
under chapter 61 of this title with less than 20 
years of service otherwise creditable under sec-
tion 1405 of this title, or with less than 20 
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HR 2647 PCS 
years of service computed under section 12732 
of this title, at the time of the retirement of the 
member if the termination date in paragraph 
(1)(D) of such subsection has occurred.’’. 
(c) CONFORMING AMENDMENT TO FULL CONCUR-
RENT RECEIPT PHASE-IN.—Subsection (c) of such section 
is amended by striking ‘‘the second sentence of’’. 
(d) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading of such 
section is amended to read as follows: 
‘‘§ 1414. Concurrent receipt of retired pay and vet-
erans’ disability compensation’’. 
(2) TABLE OF SECTIONS.—The table of sections 
at the beginning of chapter 71 of such title is 
amended by striking the item related to section 1414 
and inserting the following new item: 
‘‘1414. Concurrent receipt of retired pay and veterans’ disability compensa-
tion.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2010. 
TITLE II—FEDERAL EMPLOYEE 
BENEFITS 
Subtitle A—General Provisions 
SEC. 201. CREDIT FOR UNUSED SICK LEAVE. 
(a) IN GENERAL.—Section 8415 of title 5, United 
States Code, is amended— 
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(1) by redesignating the second subsection (k) 
and subsection (l) as subsections (l) and (m), respec-
tively; and 
(2) in subsection (l) (as so redesignated by 
paragraph (1))— 
(A) by striking ‘‘(l) In computing’’ and in-
serting ‘‘(l)(1) In computing’’; and 
(B) by adding at the end the following: 
‘‘(2) Except as provided in paragraph (1), in com-
puting an annuity under this subchapter, the total service 
of an employee who retires on an immediate annuity or 
who dies leaving a survivor or survivors entitled to annuity 
includes the days of unused sick leave to his credit under 
a formal leave system and for which days the employee 
has not received payment, except that these days will not 
be counted in determining average pay or annuity eligi-
bility under this subchapter. For purposes of this sub-
section, in the case of any such employee who is excepted 
from subchapter I of chapter 63 under section 6301(2)(x) 
through (xiii), the days of unused sick leave to his credit 
include any unused sick leave standing to his credit when 
he was excepted from such subchapter.’’. 
(b) EXCEPTION FROM DEPOSIT REQUIREMENT.— 
Section 8422(d)(2) of title 5, United States Code, is 
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HR 2647 PCS 
amended by striking ‘‘section 8415(k)’’ and inserting 
‘‘paragraph (1) or (2) of section 8415(l)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to annuities computed 
based on separations occurring on or after the date of en-
actment of this Act. 
SEC. 202. LIMITED EXPANSION OF THE CLASS OF INDIVID-
UALS ELIGIBLE TO RECEIVE AN ACTUARI-
ALLY REDUCED ANNUITY UNDER THE CIVIL 
SERVICE RETIREMENT SYSTEM. 
(a) IN GENERAL.—Section 8334(d)(2)(A)(i) of title 
5, United States Code, is amended by striking ‘‘October 
1, 1990’’ each place it appears and inserting ‘‘March 1, 
1991’’. 
(b) APPLICABILITY.—The amendment made by sub-
section (a) 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 enactment of this Act. 
SEC. 203. COMPUTATION OF CERTAIN ANNUITIES BASED 
ON PART-TIME SERVICE. 
(a) IN GENERAL.—Section 8339(p) of title 5, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘(3) In the administration of paragraph (1)— 
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‘‘(A) subparagraph (A) of such paragraph shall 
apply with respect to 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.’’. 
(b) APPLICABILITY.—The amendment made by sub-
section (a) 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 enactment of this Act. 
SEC. 204. AUTHORITY TO DEPOSIT REFUNDS UNDER FERS. 
(a) DEPOSIT AUTHORITY.—Section 8422 of title 5, 
United States Code, is amended by adding at the end the 
following: 
‘‘(i)(1) Each employee or Member who has received 
a refund of retirement deductions under this or any other 
retirement system established for employees of the Gov-
ernment covering service for which such employee or Mem-
ber may be allowed credit under this chapter may deposit 
the amount received, with interest. Credit may not be al-
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lowed for the service covered by the refund until the de-
posit is made. 
‘‘(2) Interest under this subsection shall be computed 
in accordance with paragraphs (2) and (3) of section 
8334(e) and regulations prescribed by the Office. The op-
tion under the third sentence of section 8334(e)(2) to 
make a deposit in one or more installments shall apply 
to deposits under this subsection. 
‘‘(3) For the purpose of survivor annuities, deposits 
authorized by this subsection may also be made by a sur-
vivor of an employee or Member.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) 
DEFINITIONAL
AMENDMENT.—Section 
8401(19)(C) of title 5, United States Code, is 
amended by striking ‘‘8411(f);’’ and inserting 
‘‘8411(f) or 8422(i);’’. 
(2) CREDITING OF DEPOSITS.—Section 8422(c) 
of title 5, United States Code, is amended by adding 
at the end the following: ‘‘Deposits made by an em-
ployee, Member, or survivor also shall be credited to 
the Fund.’’. 
(3) SECTION HEADING.—(A) The heading for 
section 8422 of title 5, United States Code, is 
amended to read as follows: 
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HR 2647 PCS 
‘‘§ 8422. Deductions from pay; contributions for other 
service; deposits’’. 
(B) The analysis for chapter 84 of title 5, 
United States Code, is amended by striking the item 
relating to section 8422 and inserting the following: 
‘‘8422. Deductions from pay; contributions for other service; deposits.’’. 
(4) RESTORATION OF ANNUITY RIGHTS.—The 
last sentence of section 8424(a) of title 5, United 
States Code, is amended by striking ‘‘based.’’ and 
inserting ‘‘based, until the employee or Member is 
reemployed in the service subject to this chapter.’’. 
SEC. 205. RETIREMENT CREDIT FOR SERVICE OF CERTAIN 
EMPLOYEES TRANSFERRED FROM DISTRICT 
OF COLUMBIA SERVICE TO FEDERAL SERV-
ICE. 
(a) RETIREMENT CREDIT.— 
(1) IN GENERAL.—Any individual who is treat-
ed as an employee of the Federal Government for 
purposes of chapter 83 or chapter 84 of title 5, 
United States Code, on or after the date of enact-
ment of this Act who performed qualifying District 
of Columbia service shall be entitled to have such 
service included in calculating the individual’s cred-
itable service under section 8332 or 8411 of title 5, 
United States Code, but only for purposes of the fol-
lowing provisions of such title: 
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HR 2647 PCS 
(A) Sections 8333 and 8410 (relating to 
eligibility for annuity). 
(B) Sections 8336 (other than subsections 
(d), (h), and (p) thereof) and 8412 (relating to 
immediate retirement). 
(C) Sections 8338 and 8413 (relating to 
deferred retirement). 
(D) Sections 8336(d), 8336(h), 8336(p), 
and 8414 (relating to early retirement). 
(E) Section 8341 and subchapter IV of 
chapter 84 (relating to survivor annuities). 
(F) Section 8337 and subchapter V of 
chapter 84 (relating to disability benefits). 
(2) TREATMENT OF DETENTION OFFICER SERV-
ICE AS LAW ENFORCEMENT OFFICER SERVICE.—Any 
portion of an individual’s qualifying District of Co-
lumbia service which consisted of service as a deten-
tion officer under section 2604(2) of the District of 
Columbia Government Comprehensive Merit Per-
sonnel Act of 1978 (sec. 1–626.04(2), D.C. Official 
Code) shall be treated as service as a law enforce-
ment officer under sections 8331(20) or 8401(17) of 
title 5, United States Code, for purposes of applying 
paragraph (1) with respect to the individual. 
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HR 2647 PCS 
(3) SERVICE
NOT
INCLUDED
IN
COMPUTING 
AMOUNT OF ANY ANNUITY.—Qualifying District of 
Columbia service shall not be taken into account for 
purposes of computing the amount of any benefit 
payable out of the Civil Service Retirement and Dis-
ability Fund. 
(b) QUALIFYING DISTRICT OF COLUMBIA SERVICE 
DEFINED.—In this section, ‘‘qualifying District of Colum-
bia service’’ means any of the following: 
(1) Service performed by an individual as a 
nonjudicial employee of the District of Columbia 
courts— 
(A) which was performed prior to the ef-
fective date of the amendments made by section 
11246(b) of the Balanced Budget Act of 1997; 
and 
(B) for which the individual did not ever 
receive credit under the provisions of sub-
chapter III of chapter 83 or chapter 84 of title 
5, United States Code (other than by virtue of 
section 8331(1)(iv) of such title). 
(2) Service performed by an individual as an 
employee of an entity of the District of Columbia 
government whose functions were transferred to the 
Pretrial Services, Parole, Adult Supervision, and Of-
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HR 2647 PCS 
fender Supervision Trustee under section 11232 of 
the Balanced Budget Act of 1997— 
(A) which was performed prior to the ef-
fective date of the individual’s coverage as an 
employee of the Federal Government under sec-
tion 11232(f) of such Act; and 
(B) for which the individual did not ever 
receive credit under the provisions of sub-
chapter III of chapter 83 or chapter 84 of title 
5, United States Code (other than by virtue of 
section 8331(1)(iv) of such title). 
(3) Service performed by an individual as an 
employee of the District of Columbia Public De-
fender Service— 
(A) which was performed prior to the ef-
fective date of the amendments made by section 
7(e) of the District of Columbia Courts and 
Justice Technical Corrections Act of 1998; and 
(B) for which the individual did not ever 
receive credit under the provisions of sub-
chapter III of chapter 83 or chapter 84 of title 
5, United States Code (other than by virtue of 
section 8331(1)(iv) of such title). 
(4) In the case of an individual who was an em-
ployee of the District of Columbia Department of 
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Corrections who was separated from service as a re-
sult of the closing of the Lorton Correctional Com-
plex and who was appointed to a position with the 
Bureau of Prisons, the District of Columbia courts, 
the Pretrial Services, Parole, Adult Supervision, and 
Offender Supervision Trustee, the United States Pa-
role Commission, or the District of Columbia Public 
Defender Service, service performed by the indi-
vidual as an employee of the District of Columbia 
Department of Corrections— 
(A) which was performed prior to the ef-
fective date of the individual’s coverage as an 
employee of the Federal Government; and 
(B) for which the individual did not ever 
receive credit under the provisions of sub-
chapter III of chapter 83 or chapter 84 of title 
5, United States Code (other than by virtue of 
section 8331(1)(iv) of such title). 
(c) CERTIFICATION OF SERVICE.—The Office of Per-
sonnel Management shall accept the certification of the 
appropriate personnel official of the government of the 
District of Columbia or other independent employing enti-
ty concerning whether an individual performed qualifying 
District of Columbia service and the length of the period 
of such service the individual performed. 
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Subtitle B—Non-Foreign Area 
Retirement Equity Assurance 
SEC. 211. SHORT TITLE. 
This subtitle may be cited as the ‘‘Non-Foreign Area 
Retirement Equity Assurance Act of 2009’’ or the ‘‘Non- 
Foreign AREA Act of 2009’’. 
SEC. 212. EXTENSION OF LOCALITY PAY. 
(a) LOCALITY-BASED COMPARABILITY PAYMENTS.— 
Section 5304 of title 5, United States Code, is amended— 
(1) in subsection (f)(1), by striking subpara-
graph (A) and inserting the following: 
‘‘(A) each General Schedule position in the 
United 
States, 
as 
defined 
under 
section 
5921(4), and its territories and possessions, in-
cluding the Commonwealth of Puerto Rico and 
the Commonwealth of the Northern Mariana Is-
lands, shall be included within a pay locality;’’; 
(2) in subsection (g)— 
(A) in paragraph (2)— 
(i) in subparagraph (A), by striking 
‘‘and’’ after the semicolon; 
(ii) in subparagraph (B) by striking 
the period and inserting ‘‘; and’’; and 
(iii) by adding after subparagraph (B) 
the following: 
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‘‘(C) positions under subsection (h)(1)(C) 
not covered by appraisal systems certified under 
section 5382; and’’; and 
(B) by adding at the end the following: 
‘‘(3) The applicable maximum under this sub-
section shall be level II of the Executive Schedule for 
positions under subsection (h)(1)(C) covered by ap-
praisal systems certified under section 5307(d).’’; 
and 
(3) in subsection (h)(1)— 
(A) in subparagraph (B) by striking ‘‘and’’ 
after the semicolon; 
(B) by redesignating subparagraph (C) as 
subparagraph (D); 
(C) by inserting after subparagraph (B) 
the following: 
‘‘(C) a Senior Executive Service position 
under section 3132 or 3151 or a senior level po-
sition under section 5376 stationed within the 
United States, but outside the 48 contiguous 
States and the District of Columbia in which 
the incumbent was an individual who on the 
day before the date of enactment of the Non- 
Foreign Area Retirement Equity Assurance Act 
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HR 2647 PCS 
of 2009 was eligible to receive a cost-of-living 
allowance under section 5941; and’’; 
(D) in clause (iv) in the matter following 
subparagraph (D), by inserting ‘‘, except for 
members covered by subparagraph (C)’’ before 
the semicolon; and 
(E) in clause (v) in the matter following 
subparagraph (D), by inserting ‘‘, except for 
members covered by subparagraph (C)’’ before 
the semicolon. 
(b) ALLOWANCES BASED
ON LIVING COSTS
AND 
CONDITIONS OF ENVIRONMENT.—Section 5941 of title 5, 
United States Code, is amended— 
(1) in subsection (a), by adding after the last 
sentence ‘‘Notwithstanding any preceding provision 
of this subsection, the cost-of-living allowance rate 
based on paragraph (1) shall be the cost-of-living al-
lowance rate in effect on the date of enactment of 
the Non-Foreign Area Retirement Equity Assurance 
Act of 2009, except as adjusted under subsection 
(c).’’; 
(2) by redesignating subsection (b) as sub-
section (d); and 
(3) by inserting after subsection (a) the fol-
lowing: 
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‘‘(b) This section shall apply only to areas that are 
designated as cost-of-living allowance areas as in effect on 
December 31, 2009. 
‘‘(c)(1) The cost-of-living allowance rate payable 
under this section shall be adjusted on the first day of 
the first applicable pay period beginning on or after— 
‘‘(A) January 1, 2010; and 
‘‘(B) January 1 of each calendar year in which 
a locality-based comparability adjustment takes ef-
fect under section 214 (2) and (3) of the Non-For-
eign Area Retirement Equity Assurance Act of 
2009. 
‘‘(2)(A) In this paragraph, the term ‘applicable local-
ity-based comparability pay percentage’ means, with re-
spect to calendar year 2010 and each calendar year there-
after, the applicable percentage under section 214 (1), (2), 
or (3) of Non-Foreign Area Retirement Equity Assurance 
Act of 2009. 
‘‘(B) Each adjusted cost-of-living allowance rate 
under paragraph (1) shall be computed by— 
‘‘(i) subtracting 65 percent of the applicable lo-
cality-based comparability pay percentage from the 
cost-of-living allowance percentage rate in effect on 
December 31, 2009; and 
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‘‘(ii) dividing the resulting percentage deter-
mined under clause (i) by the sum of— 
‘‘(I) one; and 
‘‘(II) the applicable locality-based com-
parability payment percentage expressed as a 
numeral. 
‘‘(3) No allowance rate computed under paragraph 
(2) may be less than zero. 
‘‘(4) Each allowance rate computed under paragraph 
(2) shall be paid as a percentage of basic pay (including 
any applicable locality-based comparability payment under 
section 5304 or similar provision of law and any applicable 
special rate of pay under section 5305 or similar provision 
of law).’’. 
SEC. 213. ADJUSTMENT OF SPECIAL RATES. 
(a) IN GENERAL.—Each special rate of pay estab-
lished under section 5305 of title 5, United States Code, 
and payable in an area designated as a cost-of-living allow-
ance area under section 5941(a) of that title, shall be ad-
justed, on the dates prescribed by section 214 of this sub-
title, in accordance with regulations prescribed by the Di-
rector of the Office of Personnel Management under sec-
tion 218 of this subtitle. 
(b) AGENCIES WITH STATUTORY AUTHORITY.— 
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HR 2647 PCS 
(1) IN GENERAL.—Each special rate of pay es-
tablished under an authority described under para-
graph (2) and payable in a location designated as a 
cost-of-living 
allowance 
area 
under 
section 
5941(a)(1) of title 5, United States Code, shall be 
adjusted in accordance with regulations prescribed 
by the applicable head of the agency that are con-
sistent with the regulations issued by the Director of 
the Office of Personnel Management under sub-
section (a). 
(2) STATUTORY AUTHORITY.—The authority re-
ferred to under paragraph (1), is any statutory au-
thority that— 
(A) is similar to the authority exercised 
under section 5305 of title 5, United States 
Code; 
(B) is exercised by the head of an agency 
when the head of the agency determines it to be 
necessary in order to obtain or retain the serv-
ices of persons specified by statute; and 
(C) authorizes the head of the agency to 
increase the minimum, intermediate, or max-
imum rates of basic pay authorized under appli-
cable statutes and regulations. 
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(c) TEMPORARY ADJUSTMENT.—Regulations issued 
under subsection (a) or (b) may provide that statutory 
limitations on the amount of such special rates may be 
temporarily raised to a higher level during the transition 
period described in section 214 ending on the first day 
of the first pay period beginning on or after January 1, 
2012, at which time any special rate of pay in excess of 
the applicable limitation shall be converted to a retained 
rate under section 5363 of title 5, United States Code. 
SEC. 214. TRANSITION SCHEDULE FOR LOCALITY-BASED 
COMPARABILITY PAYMENTS. 
Notwithstanding any other provision of this subtitle 
or section 5304 or 5304a of title 5, United States Code, 
in implementing the amendments made by this subtitle, 
for each non-foreign area determined under section 
5941(b) of that title, the applicable rate for the locality- 
based comparability adjustment that is used in the com-
putation required under section 5941(c) of that title shall 
be adjusted effective on the first day of the first pay period 
beginning on or after January 1— 
(1) in calendar year 2010, by using 1⁄3 of the 
locality pay percentage for the rest of United States 
locality pay area; 
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(2) in calendar year 2011, by using 2⁄3 of the 
otherwise applicable comparability payment approved 
by the President for each non-foreign area; and 
(3) in calendar year 2012 and each subsequent 
year, by using the full amount of the applicable com-
parability payment approved by the President for 
each non-foreign area. 
SEC. 215. SAVINGS PROVISION. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the application of this subtitle to any em-
ployee should not result in a decrease in the take 
home pay of that employee; 
(2) in calendar year 2012 and each subsequent 
year, no employee shall receive less than the Rest of 
the U.S. locality pay rate; 
(3) concurrent with the surveys next conducted 
under the provisions of section 5304(d)(1)(A) of title 
5, United States Code, beginning after the date of 
the enactment of this Act, the Bureau of Labor Sta-
tistics should conduct separate surveys to determine 
the extent of any pay disparity (as defined by sec-
tion 5302 of that title) that may exist with respect 
to positions located in the State of Alaska, the State 
of Hawaii, and the United States territories, includ-
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HR 2647 PCS 
ing American Samoa, Guam, Commonwealth of the 
Northern Mariana Islands, Commonwealth of Puerto 
Rico, and the United States Virgin Islands; 
(4) if the surveys under paragraph (3) indicate 
that the pay disparity determined for the State of 
Alaska, the State of Hawaii, or any 1 of the United 
States territories including American Samoa, Guam, 
Commonwealth of the Northern Mariana Islands, 
Commonwealth of Puerto Rico, and the United 
States Virgin Islands exceeds the pay disparity de-
termined for the locality which (for purposes of sec-
tion 5304 of that title) is commonly known as the 
‘‘Rest of the United States’’, the President’s Pay 
Agent should take appropriate measures to provide 
that each such surveyed area be treated as a sepa-
rate pay locality for purposes of that section; and 
(5) the President’s Pay Agent will establish 1 
locality area for the entire State of Hawaii and 1 lo-
cality area for the entire State of Alaska. 
(b) SAVINGS PROVISIONS.— 
(1) IN GENERAL.—During the period described 
under section 214 of this subtitle, an employee paid 
a special rate under 5305 of title 5, United States 
Code, who the day before the date of enactment of 
this Act was eligible to receive a cost-of-living allow-
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HR 2647 PCS 
ance under section 5941 of title 5, United States 
Code, and who continues to be officially stationed in 
an allowance area, shall receive an increase in the 
employee’s special rate consistent with increases in 
the applicable special rate schedule. For employees 
in allowance areas, the minimum step rate for any 
grade of a special rate schedule shall be increased at 
the time of an increase in the applicable locality rate 
percentage for the allowance area by not less than 
the dollar increase in the locality-based com-
parability payment for a non-special rate employee 
at the same minimum step provided under section 
214 of this subtitle, and corresponding increases 
shall be provided for all step rates of the given pay 
range. 
(2) CONTINUATION OF COST OF LIVING ALLOW-
ANCE RATE.—If an employee, who the day before 
the date of enactment of this Act was eligible to re-
ceive a cost-of-living allowance under section 5941 of 
title 5, United States Code, would receive a rate of 
basic pay and applicable locality-based comparability 
payment which is in excess of the maximum rate 
limitation set under section 5304(g) of title 5, 
United States Code, for his position (but for that 
maximum rate limitation) due to the operation of 
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HR 2647 PCS 
this subtitle, the employee shall continue to receive 
the cost-of-living allowance rate in effect on Decem-
ber 31, 2009 without adjustment until— 
(A) the employee leaves the allowance area 
or pay system; or 
(B) the employee is entitled to receive 
basic pay (including any applicable locality- 
based comparability payment or similar supple-
ment) at a higher rate, 
but, when any such position becomes vacant, the pay 
of any subsequent appointee thereto shall be fixed in 
the manner provided by applicable law and regula-
tion. 
(3) LOCALITY-BASED
COMPARABILITY
PAY-
MENTS.—Any employee covered under paragraph (2) 
shall receive any applicable locality-based com-
parability payment extended under section 214 of 
this subtitle which is not in excess of the maximum 
rate set under section 5304(g) of title 5, United 
States Code, for his position including any future in-
crease to statutory pay limitations under 5318 of 
title 5, United States Code. Notwithstanding para-
graph (2), to the extent that an employee covered 
under that paragraph receives any amount of local-
ity-based comparability payment, the cost-of-living 
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allowance rate under that paragraph shall be re-
duced accordingly, as provided under section 
5941(c)(2)(B) of title 5, United States Code. 
SEC. 216. APPLICATION TO OTHER ELIGIBLE EMPLOYEES. 
(a) IN GENERAL.— 
(1) DEFINITION.—In this subsection, the term 
‘‘covered employee’’ means— 
(A) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
(I) was eligible to be paid a cost- 
of-living allowance under 5941 of title 
5, United States Code; and 
(II) was not eligible to be paid lo-
cality-based comparability payments 
under 5304 or 5304a of that title; or 
(ii) on or after the date of enactment 
of this Act becomes eligible to be paid a 
cost-of-living allowance under 5941 of title 
5, United States Code; or 
(B) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
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HR 2647 PCS 
(I) was eligible to be paid an al-
lowance under section 1603(b) of title 
10, United States Code; 
(II) was eligible to be paid an al-
lowance under section 1005(b) of title 
39, United States Code; 
(III) was employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and was eligible to be paid an allow-
ance based on section 5941 of title 5, 
United States Code; or 
(IV) was eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
of-living allowance under section 5941 
of title 5, United States Code; or 
(ii) on or after the date of enactment 
of this Act— 
(I) becomes eligible to be paid an 
allowance under section 1603(b) of 
title 10, United States Code; 
(II) becomes eligible to be paid 
an allowance under section 1005(b) of 
title 39, United States Code; 
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HR 2647 PCS 
(III) is employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and becomes eligible to be paid an al-
lowance based on section 5941 of title 
5, United States Code; or 
(IV) is eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
of-living allowance under section 5941 
of title 5, United States Code. 
(2) APPLICATION TO COVERED EMPLOYEES.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of law, for purposes of this sub-
title (including the amendments made by this 
subtitle) any covered employee shall be treated 
as an employee to whom section 5941 of title 
5, United States Code (as amended by section 
212 of this subtitle), and section 214 of this 
subtitle apply. 
(B) PAY FIXED BY STATUTE.—Pay to cov-
ered employees under section 5304 or 5304a of 
title 5, United States Code, as a result of the 
application of this subtitle shall be considered 
to be fixed by statute. 
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HR 2647 PCS 
(C) PERFORMANCE APPRAISAL SYSTEM.— 
With respect to a covered employee who is sub-
ject to a performance appraisal system no part 
of pay attributable to locality-based com-
parability payments as a result of the applica-
tion of this subtitle including section 5941 of 
title 5, United States Code (as amended by sec-
tion 212 of this subtitle), may be reduced on 
the basis of the performance of that employee. 
(b) POSTAL EMPLOYEES IN NON-FOREIGN AREAS.— 
(1) IN GENERAL.—Section 1005(b) of title 39, 
United States Code, is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 
(B) by striking ‘‘Section 5941,’’ and in-
serting ‘‘Except as provided under paragraph 
(2), section 5941’’; 
(C) by striking ‘‘For purposes of such sec-
tion,’’ and inserting ‘‘Except as provided under 
paragraph (2), for purposes of section 5941 of 
that title,’’; and 
(D) by adding at the end the following: 
‘‘(2) On and after the date of enactment of the 
Non-Foreign Area Retirement Equity Assurance Act 
of 2009— 
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‘‘(A) the provisions of that Act and section 
5941 of title 5 shall apply to officers and em-
ployees covered by section 1003 (b) and (c) 
whose duty station is in a nonforeign area; and 
‘‘(B) with respect to officers and employees 
of the Postal Service (other than those officers 
and employees described under subparagraph 
(A)) of section 216(b)(2) of that Act shall 
apply.’’. 
(2) CONTINUATION OF COST OF LIVING ALLOW-
ANCE.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of this subtitle, any employee of 
the Postal Service (other than an employee cov-
ered by section 1003 (b) and (c) of title 39, 
United States Code, whose duty station is in a 
nonforeign area) who is paid an allowance 
under section 1005(b) of that title shall be 
treated for all purposes as if the provisions of 
this subtitle (including the amendments made 
by this subtitle) had not been enacted, except 
that the cost-of-living allowance rate paid to 
that employee— 
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HR 2647 PCS 
(i) may result in the allowance exceed-
ing 25 percent of the rate of basic pay of 
that employee; and 
(ii) shall be the greater of— 
(I) the cost-of-living allowance 
rate in effect on December 31, 2009 
for the applicable area; or 
(II) the applicable locality-based 
comparability pay percentage under 
section 214. 
(B) RULE OF CONSTRUCTION.—Nothing in 
this subtitle shall be construed to— 
(i) provide for an employee described 
under subparagraph (A) to be a covered 
employee as defined under subsection (a); 
or 
(ii) authorize an employee described 
under subparagraph (A) to file an election 
under section 217 of this subtitle. 
SEC. 217. ELECTION OF ADDITIONAL BASIC PAY FOR ANNU-
ITY COMPUTATION BY EMPLOYEES. 
(a) DEFINITION.—In this section the term ‘‘covered 
employee’’ means any employee— 
(1) to whom section 214 applies; 
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