PROVISIONS RELATED TO 
              FEDERAL AVIATION ADMINISTRATION PERSONNEL MANAGEMENT 
              SYSTEM.

    (a) In General.--Section 40122(a)(2) of title 49, United States 
Code, is amended to read as follows:
            ``(2) Dispute resolution.--
                    ``(A) Mediation.--If the Administrator does not 
                reach an agreement under paragraph (1) or subsection 
                (g)(2)(C) with the exclusive bargaining 
                representatives, the services of the Federal Mediation 
                and Conciliation Service shall be used to attempt to 
                reach such agreement in accordance with part 1425 of 
                title 29, Code of Federal Regulations. The 
                Administrator and bargaining representatives may by 
                mutual agreement adopt procedures for the resolution of 
                disputes or impasses arising in the negotiation of a 
                collective-bargaining agreement.
                    ``(B) Binding arbitration.--
                            ``(i) In general.--If the services of the 
                        Federal Mediation and Conciliation Service 
                        under subparagraph (A) do not lead to an 
                        agreement, the Administrator and the bargaining 
                        representatives shall submit their issues in 
                        controversy to the Federal Service Impasses 
                        Panel in accordance with section 7119 of title 
                        5.
                            ``(ii) Assistance by federal service 
                        impasses panel.--The Federal Service Impasses 
                        Panel shall assist the parties in resolving the 
                        impasse by asserting jurisdiction and ordering 
                        binding arbitration by a private arbitration 
                        board consisting of 3 members in accordance 
                        with section 2471.6(a)(2)(ii) of title 5, Code 
                        of Federal Regulations.
                            ``(iii) Selection of arbitrators.--The 
                        executive director of the Federal Service 
                        Impasses Panel shall request a list of not less 
                        than 15 names of arbitrators with Federal 
                        sector experience from the director of the 
                        Federal Mediation and Conciliation Service to 
                        be provided to the Administrator and the 
                        bargaining representatives. Not later than 10 
                        days after the executive director receives the 
                        list, each party shall each select an 
                        arbitrator. The 2 selected arbitrators shall 
                        then select a third arbitrator from the list 
                        within 7 days. If the 2 arbitrators are unable 
                        to agree on selection of the third arbitrator, 
                        the parties shall select the third arbitrator 
                        by alternately striking names from the list 
                        until only 1 name remains.
                            ``(iv) Framing the issues.--If the parties 
                        do not agree on how to frame the issues to be 
                        submitted for arbitration, the arbitration 
                        board shall frame the issues.
                            ``(v) Full and fair hearing.--The 
                        arbitration board shall give the parties a full 
                        and fair hearing, including an opportunity to 
                        present evidence in support of their claims, 
                        and an opportunity to present their case in 
                        person, by counsel, or by other representative 
                        as they may elect.
                            ``(vi) Conclusive and binding decisions.--A 
                        decision of the arbitration board shall be 
                        conclusive and binding upon the parties of the 
                        arbitration.
                            ``(vii) Timing of decision.--Not later than 
                        90 days after the date of the appointment of 
                        the arbitration board, the arbitration board 
                        shall render a decision.
                            ``(viii) Cost sharing.--The Administrator 
                        and the bargaining representative shall share 
                        the costs of the arbitration equally.
                            ``(ix) Considerations.--The arbitration 
                        board shall consider the effect of its 
                        arbitration decisions on--
                                    ``(I) the ability of the 
                                Administrator to attract and retain a 
                                qualified workforce; and
                                    ``(II) the budget of the Federal 
                                Aviation Administration.
                    ``(C) Effect.--Upon reaching a voluntary agreement 
                or at the conclusion of the binding arbitration under 
                subparagraph (B), the final agreement, except for those 
                matters decided by the arbitration board, shall be 
                subject to ratification by the exclusive 
                representative, if so requested by the exclusive 
                representative, and approval by the head of the agency 
                in accordance with subsection (g)(2)(C).
                    ``(D) Enforcement.--Enforcement of the provisions 
                of this paragraph, and any agreement hereunder, shall 
                be in the United States District Court for the District 
                of Columbia.''.
    (b) Effective Date.--Paragraph (2) of section 40122(a) of title 49, 
United States Code, as amended by subsection (a), shall apply to 
disputes described in section 40122 of such title arising on or after 
July 10, 2005.
Output: Provides that, with respect to disputes arising after July 10, 2005, between the Administrator of the Federal Aviation Administration (FAA) and its employees in attempting to reach an agreement concerning the implementation of proposed changes to the FAA personnel management system: (1) the services of the Federal Mediation and Conciliation Service (FMCS) shall be used; (2) the Administrator and employees may by mutual agreement adopt procedures for the resolution of disputes or impasses arising in the negotiation of a collective-bargaining agreement; and (3) if the services of the FMCS have led to an impasse between the FAA and its employees in reaching an agreement with respect to implementing the proposed changes, the FAA Administrator and employees shall submit their controversy to the Federal Service Impasses Panel for binding arbitration. (Under current law, the services of the FMCS shall be used and, if the services of the FMCS do not lead to an agreement, the Administrator's proposed change to the personnel management system shall not take effect until 60 days have elapsed after the Administrator has transmitted the proposed changes, along with the objections of the employees to the changes, and the reasons for such objections, to Congress.)