LIMITATION ON PAYMENT OF SEVERANCE PAY TO CERTAIN EMPLOYEES TRANSFERRING TO EMPLOYMENT POSITIONS IN NONAPPROPRIATED FUND INSTRUMENTALITIES.

SEC. 343. LIMITATION ON PAYMENT OF SEVERANCE PAY TO CERTAIN EMPLOYEES TRANSFERRING TO EMPLOYMENT POSITIONS IN NONAPPROPRIATED FUND INSTRUMENTALITIES. (a) In General.— Section 5595 of title 5, United States Code, is amended by adding at the end the following: “(h) (1) Severance pay under this section may not be paid to— “(A) a person described in paragraph (4)(A) during any period in which the person is employed in a defense nonappropriated fund instrumentality; or “(B) a person described in paragraph (4)(B) during any period in which the person is employed in a Coast Guard nonappropriated fund instrumentality. “(2) (A) Except as provided in subparagraph (B), payment of severance pay to a person referred to in paragraph (1) may be resumed upon any involuntary separation of the person from the position of employment in a nonappropriated fund instrumentality, not by removal for cause on charges of misconduct, delinquency, or inefficiency. “(B) Payment of severance pay may not be resumed under subparagraph (A) in the case of a person who, upon separation, 108 STAT. 2722is entitled to immediate payment of retired or retainer pay as a member or former member of the uniformed services or to an immediate annuity under— “(i) a retirement system for persons retiring from employment by a nonappropriated fund instrumentality; “(ii) subchapter III of chapter 83 of this title; “(iii) subchapter II of chapter 84 of this title; or “(iv) any other retirement system of the Federal Government for persons retiring from employment with the Federal Government. “(3) Upon resumption of payment of severance pay under paragraph (2)(A) in the case of a person separated as described in such paragraph, the amount of the severance pay so payable for a period shall be reduced (but not below zero) by the portion (if any) of the amount of any severance pay payable for such period to the person by the nonappropriated fund instrumentality that is attributable to credit for service taken into account under subsection (c) in the computation of the amount of the severance pay so resumed. “(4) Paragraph (1) applies to a person who, on or after January 1, 1987, moves without a break in service— “(A) from employment in the Department of Defense that is not employment in a defense nonappropriated fund instrumentality to employment in a defense nonappropriated fund instrumentality; or “(B) from employment in the Coast Guard that is not employment in a Coast Guard nonappropriated fund instrumentality to employment in a Coast Guard nonappropriated fund instrumentality. “(5) The Secretary of Defense, in consultation with the Secretary of Transportation, shall prescribe regulations to carry out this subsection. “(6) In this subsection: “(A) The term ‘defense nonappropriated fund instrumentality’ means a nonappropriated fund instrumentality of the Department of Defense. “(B) The term ‘Coast Guard nonappropriated fund instrumentality’ means a nonappropriated fund instrumentality of the Coast Guard. “(C) The term ‘nonappropriated fund instrumentality’ means a nonappropriated fund instrumentality described in section 2105(c) of this title.”. (b) Applicability.— Subsection (h) of section 5595 of title 5, United States Code, as added by subsection (a), shall apply with respect to pay periods that begin on or after the date of the enactment of this Act.