[House Report 113-156]
[From the U.S. Government Printing Office]


113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-156

======================================================================



 
  ALCOHOL AND TOBACCO TAX AND TRADE BUREAU PERSONNEL FLEXIBILITIES ACT

                                _______
                                

 July 16, 2013.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Issa, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2067]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 2067) to amend title 5, United 
States Code, to make permanent the authority of the Secretary 
of the Treasury to establish a separate compensation and 
performance management system with respect to persons holding 
critical scientific, technical, or professional positions 
within the Alcohol and Tobacco Tax and Trade Bureau, Department 
of the Treasury, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     2
Section-by-Section...............................................     2
Explanation of Amendments........................................     3
Committee Consideration..........................................     3
Application of Law to the Legislative Branch.....................     3
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     4
Statement of General Performance Goals and Objectives............     4
Duplication of Federal Programs..................................     4
Disclosure of Directed Rule Makings..............................     4
Federal Advisory Committee Act...................................     4
Unfunded Mandate Statement.......................................     4
Earmark Identification...........................................     4
Committee Estimate...............................................     4
Budget Authority and Congressional Budget Office Cost Estimate...     5
Changes in Existing Law Made by the Bill, as Reported............     6

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    In 1998, Congress granted the Treasury Department the 
authority to establish a three-year personnel management 
demonstration project in the FY1999 Omnibus Appropriations Act.
    The demonstration project's authority expired on October 
20, 2012. Until President Obama's FY 2014 budget request, the 
Alcohol and Tobacco Tax and Trade Bureau (TTB) of the 
Department of the Treasury had asked for the continuation of 
this authority in its own budget justification. The President's 
FY 14 budget did not support extending the demonstration 
project. Instead, the budget states the Administration would 
``allow'' TTB to petition the Office of Personnel Management 
(OPM) for authorization of a new demonstration project.
    Moving legislation to grant TTB permanent authority for the 
demonstration project is consistent with the Committee's effort 
to strengthen the link between federal worker pay and 
performance.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 2067, the Alcohol and Tobacco Tax and Trade Bureau 
Personnel Flexibilities Act, would make permanent a 
performance-based compensation system for the scientific and 
technical employees of the Alcohol and Tobacco Tax and Trade 
Bureau (TTB) of the Department of the Treasury.

                          LEGISLATIVE HISTORY

    In 1998, Congress granted the Treasury Department the 
authority to establish a three-year personnel management 
demonstration project in the FY1999 Omnibus Appropriations Act 
(P.L. 105-119).
    In 2002, authority for the demonstration project was split 
between the new Alcohol and Tobacco Tax and Trade Bureau (TTB) 
and the Bureau of Alcohol, Tobacco, Firearms, and Explosives 
(ATF) by direction of the Homeland Security Act. TTB has 
received authorization to extend its pilot annually since 
FY2004 through the appropriations process because of the 
program's success and employee satisfaction. The program's 
authority expired in October 2012 when the current continuing 
resolution failed to include language extending it.

                           Section-by-Section


Section 1. Short title

    This Act may be cited as the ``Alcohol and Tobacco Tax and 
Trade Bureau Personnel Flexibilities Act.''

Section 2. Alcohol and Tobacco Tax and Trade Bureau

    This section adds a new chapter to Title 5, U.S.C: 
``Chapter 96--Alcohol and Tobacco Tax and Trade Bureau''.
    It establishes a compensation and performance management 
system using criteria the Secretary of the Treasury deems 
appropriate for employees holding critical scientific, 
technical, or professional positions within the Alcohol and 
Tobacco Tax and Trade Bureau (TTB).
    The total number of covered positions under this 
compensation and performance management system may not exceed 
the number equal to 50 percent of the total full time employees 
within TTB.
    The Secretary of the Treasury is required to consult with 
the Director of the Office of Personnel Management (OPM) in 
using the authority to establish this system. It does not 
require agreement; it merely means TTB should share its plans 
for continuing the demo with OPM as it moves forward, allowing 
OPM the opportunity to comment as appropriate.
    Nothing in this Act may provide for a waiver of employees' 
rights as it relates to merit system principles. The system 
established under this Act shall be consistent with collective 
bargaining agreements and rights.
    The Act also limits the level of compensation to ensure it 
does not exceed level III of the Executive Schedule.
    It requires managers have at least three levels of 
performance review for employees.
    Finally, it ensures that nothing in the Act would preclude 
the Bureau from using an existing system that has already been 
in effect so long as it complies with the requirements of this 
Act.
    The compensation and performance management system excludes 
senior executives or an employee in the Senior Executive 
Service.

Section 3. Study

    This section requires the Government Accountability Office 
to issue a report to Congress on the operation of the system 
established in this Act, as well as the operation of ongoing 
demonstration projects relating to a performance-based 
compensation system no later than one year from enactment.

                       Explanation of Amendments

    No amendments to H.R. 2067 were offered.

                        Committee Consideration

    On May 22, 2013, the Committee met in open session and 
ordered reported favorably the bill, H.R. 2067, by voice vote, 
a quorum being present.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill establishes a compensation and performance management 
system using criteria the Secretary of the Treasury deems 
appropriate for employees holding critical scientific, 
technical, or professional positions within the Alcohol and 
Tobacco Tax and Trade Bureau (TTB). Legislative branch 
employees and their families, to the extent that they are 
otherwise eligible for the benefits provided by this 
legislation, have equal access to its benefits.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

                    Duplication of Federal Programs

    No provision of H.R. 2067 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 2067 does not 
direct the completion of any specific rule makings within the 
meaning of 5 U.S.C. 551.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement as to 
whether the provisions of the report include unfunded mandates. 
In compliance with this requirement the Committee has received 
a letter from the Congressional Budget Office included herein.

                         Earmark Identification

    H.R. 2067 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of Rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2067. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 2067 from the Director of 
Congressional Budget Office:

                                                      July 9, 2013.
Hon. Darrell Issa,
Chairman, Committee on Oversight and Government Affairs and Government 
        Reform, House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2067, the Alcohol 
and Tobacco Tax and Trade Bureau Personnel Flexibilities Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Santiago 
Vallinas.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 2067--Alcohol and Tobacco Tax and Trade Bureau Personnel 
        Flexibilities Act

    Summary: H.R. 2067 would permanently authorize the 
Secretary of the Treasury to establish a separate compensation 
and performance management system for certain employees in 
scientific, technical, or professional positions within the 
Alcohol and Tobacco Tax and Trade Bureau (TBB). It also would 
require the Government Accountability Office (GAO) to submit a 
report to the Congress analyzing the effectiveness of the 
system. CBO estimates that implementing this bill would cost 
about $5 million over the 2014-2018 period, assuming 
appropriations of the necessary amounts. Pay-as-you-go 
procedures do not apply to this legislation because it would 
not affect direct spending or revenues.
    H.R. 2067 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2067 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2014     2015     2016     2017     2018   2014-2018
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...........................        1        1        1        1        1         5
Estimated Outlays.......................................        1        1        1        1        1         5
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2067 will be enacted late in 2013, and that appropriations will 
be provided as estimated.
    Currently, 123 employees at the TBB are under an 
alternative pay system in which their yearly pay raises are 
tied to their performance ratings. Those participants, who are 
mostly chemists and auditors, are eligible to receive both 
merit increases (until they reach the top of their pay band) 
and bonuses. Authority for those employees to participate in 
the performance-based system expires at the end of fiscal year 
2013.
    Based on information from the TBB, CBO anticipates that the 
bureau would implement H.R. 2067 by making this existing system 
permanent (rather than by creating a new performance-based pay 
system). We also expect that the number of eligible employees 
would remain roughly the same. Under the current performance-
based system, compensation would probably increase more quickly 
than it would under the General Schedule, and many employees 
could be paid bonuses in excess of what they would otherwise be 
eligible to receive. As a result, based on information provided 
by the TBB about the salaries of employees currently in the 
performance-based system, CBO estimates that implementing H.R. 
2067 would cost $5 million over the 2014-2018 period, assuming 
appropriation of the necessary amounts.
    The bill also would require GAO to submit a report, within 
one year of the establishment of TBB's permanent compensation 
system, that evaluates the system and other demonstration 
projects. CBO estimates that that reporting requirement would 
cost less than $500,000 in 2015.
    Pay-As-You-Go considerations: None.
    Intergovernmental and private-sector impact: H.R. 2067 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Santiago Vallinas; 
Impact on state, local, and tribal governments: Elizabeth Cove 
Delisle; Impact on the private sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *



                          PART III--EMPLOYEES

Chap.                                                               Sec.
     * * * * * * *

                        Subpart I--Miscellaneous

      Personnel flexibilities relating to the Internal Revenue Servi9501
9601Alcohol and Tobacco Tax and Trade Bureau..........................

           *       *       *       *       *       *       *


SUBPART I--MISCELLANEOUS

           *       *       *       *       *       *       *


          CHAPTER 96--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

9601. Definitions; applicability.
9602. Compensation and performance management system.

Sec. 9601. Definitions; applicability

  (a) Definitions.--For purposes of this chapter--
          (1) the term ``Secretary'' means the Secretary of the 
        Treasury;
          (2) the term ``Bureau'' means the Alcohol and Tobacco 
        Tax and Trade Bureau, Department of the Treasury; and
          (3) the terms ``senior executive'' and ``Senior 
        Executive Service position'' have the respective 
        meanings given them in section 3132(a).
  (b) Applicability.--A compensation and performance management 
system established under section 9602 shall not cover, and 
nothing in any such system shall be considered to apply with 
respect to, a senior executive or a Senior Executive Service 
position.

Sec. 9602. Compensation and performance management system

  (a) Establishment.--
          (1) In general.--The Secretary shall establish a 
        system, applying such criteria and procedures as the 
        Secretary considers appropriate, which shall govern the 
        compensation and performance management of any number 
        of employees holding critical scientific, technical, or 
        professional positions in the Bureau.
          (2) Authority.--Subject to the provisions of this 
        chapter--
                  (A) the establishment of a compensation and 
                performance management system under this 
                section shall not be limited by any lack of 
                specific authority under this title to take the 
                action contemplated, or by any provision of 
                this title or any rule or regulation prescribed 
                under this title which is inconsistent with the 
                action; and
                  (B) the total number of positions covered by 
                the system or systems established under 
                authority of this section (determined on a 
                full-time equivalent basis) may not at any time 
                exceed the number equal to 50 percent of the 
                total number of positions within the Bureau (so 
                determined).
          (3) Consultation.--The Secretary shall consult with 
        the Director of the Office of Personnel Management in 
        the exercise of any authority under this section.
  (b) Nonwaivable Provisions; Collaboration.--A compensation 
and performance management system established under this 
section--
          (1) may not provide for a waiver of any provision of 
        law, rule, or regulation identified in section 4703(c); 
        and
          (2) shall be established and implemented in a manner 
        consistent with subsections (f) and (g) of section 
        4703.
  (c) Limitations on Compensation.--Except as otherwise 
provided by law--
          (1) no employee compensated under a system 
        established under this section may be paid at a rate of 
        basic pay in excess of the rate payable for level III 
        of the Executive Schedule under section 5314; and
          (2) total payments made to employees under a system 
        so established shall be subject to any limitation on 
        payments under section 5307, to the same extent and in 
        the same manner as would apply in the case of employees 
        paid under section 5376.
  (d) Levels of Performance.--A system established under this 
section shall have not less than 2 levels of performance above 
a retention standard.
  (e) Disclosure of Information.--The Secretary of the 
Treasury, on request of the Director of the Office of Personnel 
Management, shall furnish information relating to the operation 
of any compensation and performance management system 
established under this section.