under the Budget and Accounting Act, 1921."

Sec. 6. Section 7 of such Act of September 7, 1957, is amended by striking out "Board" in subsections (b) and (c) and inserting in lieu thereof in each of such subsections "Department of Commerce".

Sec. 7. Section 8 of such Act of September 7, 1957, is amended by striking out "five" and inserting in lieu thereof "ten".

Sec. 8. Section 410 of the Federal Aviation Act of 1958 (49 U.S.C. 1380), is amended by adding at the end thereof the following new sentence: "The provisions of this section shall not be applicable to the guaranty of loans by the Secretary of Commerce under the provisions of such Act of September 7, 1957, as amended, but the Secretary of Commerce shall consult with and consider the views and recommendations of the Board in making such guaranties."

Sec. 9. (a) All orders, determinations, rules, regulations, permissions, approvals, agreements, rulings, directives, and privileges which have been issued, made, or granted, or allowed to become effective, by the Civil Aeronautics Board, or any court of competent jurisdiction, under any provision of law amended by this Act, are vested in the Secretary of Commerce, and which are in effect on the date of enactment of this Act shall continue in effect according to their terms until modified, terminated, superseded, set aside, or repealed by the Secretary of Commerce or by any court of competent jurisdiction, or by operation of law.

(b) The provisions of this Act shall not affect any proceedings pending before the Civil Aeronautics Board on the date of enactment of this Act; but any such proceedings shall be continued before the Secretary of Commerce, orders issued therein, and payments made pursuant to such orders, as if this Act had not been enacted; and orders issued in any such proceedings shall continue in effect until modified, terminated, superseded, or repealed by the Secretary of Commerce, or by operation of law.

(c) The provisions of this Act shall not affect suits commenced prior to the date of its enactment; and all such suits shall be continued by the Secretary of Commerce, proceedings therein had appeals therein taken, and judgments therein rendered, in the same manner and with the same effect as if this Act had not been enacted. No suit, action, or other proceeding lawfully commenced by or against the Civil Aeronautics Board or officer of the United States, in relation to the discharge of official duties, shall abate by reason of any transfer of authority, power, or duties from the Board or officer to the Secretary of Commerce under the provisions of this Act, but the court upon a motion or a supplemental petition filed at any time within twelve months after such transfer. showing the necessity for a survival of such suit, action, or other proceeding to obtain a settlement of the questions in

volved, may allow the same to be maintained by or against the Secretary of Commerce.

Sec. 10. (a) The officers, employees, and property (including office equipment and official records) of the Civil Aeronautics Board which the Bureau of the Budget, after consultation with the Board, shall determine to have been employed by the Board in the exercise and performance of those powers and duties rested in and imposed upon it by the Act of September 7, 1957 (71 Stat. 629), as in effect on the day before the date of enactment of this Act, and which are vested by this Act in the Secretary of Commerce, shall be transferred to the Department of Commerce upon such date or dates as the Bureau of the Budget shall specify. The transfer of personnel under this section shall be without reduction in classification or compensation, except that this requirement shall not operate after the end of the fiscal year during which such transfer is made to prevent the adjustment of classification or compensation to conform to the duties to which such transferred personnel may be assigned.

(c) All records transferred to the Secretary of Commerce under this Act shall be available for use by him to the same extent as if such records were originally records of the Secretary.

And the Senate agree to the same.
MIKE MONRONEY,
GEO. A. SMATHERS,
STROM THURMOND,
NORRIS COTTON,
HUGH SCOTT,

Managers on the Part of the Senate.
OREN HARRIS,

JOHN BELL WILLIAMS,
SAMUEL N. FRIEDEL,
JOHN B. BENNETT,
W. L. SPRINGER,

Managers on the Part of the House. The Senate proceeded to consider the said report; and

to.

Resolved, That the Senate agree there

Ordered, That the Secretary notify the House of Representatives thereof.

FEDERAL-AID HIGHWAY ACT OF 1962 The Senate resumed the consideration of the bill (H.R. 12135) to authorize appropriations for the fiscal years 1964 and 1965 for the construction of certain highways in accordance with title 23 of the United States Code and for other purposes.

No further amendment being made, Ordered, That the amendments be engrossed and the bill read a third time. The said bill, as amended, was read the third time.

Resolved, That it pass.

On motion by Mr. MCNAMARA, Resolved, That the Senate insist upon its amendments to the said bill and ask a conference with the House of Repre

sentatives thereon.

Ordered. That the conferees on the part of the Senate be appointed by the Presiding Officer; and

The PRESIDING OFFICER (Mr. SMITH of Masachusetts in the chair) appointed Mr. Kerr, Mr. McNamara, Mr. RANDOLPH, Mr. COOPER, and Mr. FoNG.

On motion by Mr. McNamara, and by unanimous consent.

Ordered. That the bill be printed showing the Senate amendments. Ordered. That the Secretary notify the House of Representatives thereof.

CONFERENCE REPORT ON H.R. 7927 Mr. JOHNSTON submitted the following conference report:

The committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 7927) to adjust postal rates, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as follows:

In lieu of the matter proposed to be inserted by the Senate amendment insert the following: That this Act may be cited as the "Postal Service and Federal Employees Salary Act of 1962". PART-POSTAL SERVICE Title 1-Postal Rates

First-class mail

Sec. 101. Section 4253(a) of title 39, United States Code, is amended by striking out the words "four" and "three” wherever appearing in subsection (a) and inserting in lieu thereof the words "five" and "four", respectively.

Airmail

Sec. 102. (a) Section 4303 of title 39, United States Code, is amended—

(1) by striking out the word “seven” in subsection (a) and inserting in lieu thereof the word "eight":

(2) by striking out the word "five" in subsection (b) and inserting in lieu thereof the word "six":

(3) by increasing each of the rates under the heading "First pound over 8 ounces or fraction thereof in the table in subsection (d) (1) by 8 cents;

(4) by striking out paragraph (2) of subsection (d) and inserting in lieu thereof the following:

"(2) The rate of postage on air mail of the first class weighing in excess of eight ounces shall be the rate provided by subsection (a) for each ounce not in excess of eight ounces, plus 5 cents for each ounce or fraction thereof in excess of eight ounces, but in no case less than the rate under paragraph (1) for air parcels."

Second class within county of publication

Sec. 103. Subsections (a) and (b) of section 4358 of title 39, United States Code, are amended to read as follows:

"(a) Except as provided in subsection (b), the rate of postage on publications admitted as second-class mail when addressed for delivery within the county in

"(b) The rate of postage on the following publications admitted as second-class mail when mailed for delivery, within the county in which they are published and entered, by letter carrier at the office of mailing, shall be

"(1) publications issued more frequently than weekly, one cent a copy; "(2) publications issued less frequently than weekly

"(A) weighing two ounces or less, one cent a copy;

"(B) weighing more than two ounces, two cents a copy."

Second class beyond county of
publication

Sec. 104. (a) Section 4359 (b) of title 39, United States Code, is amended to read as follows:

"(b) (1) Except as provided by paragraphs (2), (3), and (4), the rates of postage on publications mailed in accordance with subsection (a) are as follows:

"(4) In lieu of the minimum charge per piece prescribed by paragraph (1), the minimum charge per piece to be paid by the following publications (other than publications to which paragraph (2) or paragraph (3) is applicable) shall be as follows

"(A) publications mailing fewer than 5,000 copies per issue outside the county of publication-one-half cent per piece;

"(B) any issue of a publication the advertising portion of which does not exceed 5 per centum of the entire issue .55 of a cent per piece when mailed after January 6, 1963, and prior to January 1, 1964, .65 of a cent per piece when mailed during calendar year 1964, and .75 of a cent per piece when mailed after December 31, 1964. (b) Section 4359 (e) (2) of title 39, United States Code, is amended by striking out "and fraternal," and inserting in lieu thereof the following: "fraternal, and associations of rural electric cooperatives, and not to exceed one publication published by the official highway agency of a State which meets all of the requirements of section 4354 and which contains no advertising".

(c) Section 4360 of title 39, United States Code, is repealed.

Second-class transient mail

Sec. 105. Section 4362 of title 39, United States Code, is amended by striking out "two cents" and inserting in lieu thereof "four cents".

Controlled circulation publications

Sec. 106. Section 4422 of title 39, United States Code, is amended by striking out "12 cents a pound or fraction thereof" and inserting in lieu thereof the following: "122 cents a pound or fraction thereof when mailed after January 6, 1963, and prior to January 1, 1964, a pound or fraction thereof when mailed during calendar year 1964, and 132 cents a pound or fraction thereof when mailed after December 31, 1964".

"(b) Matter mailed in bulk under subsection (e) of this section is subject to a minimum charge for each piece of 25% cents when mailed subsequent to January 6, 1963, and prior to January 1, 1964, 2% cents when mailed during calendar year 1964, and 2% cents when mailed after December 31, 1964, except that the minimum charge per piece on such matter mailed by qualified nonprofit organizations is 14 cents.

"(c) The pound rates on matter mailed in bulk under subsection (e) by qualified nonprofit organizations are 50 per centum of the pound rates provided by subsection (a)."

(2) by striking out "subsections (a) and (b) of" wherever it appears in subsection (d).

(3) by striking out out "$20" and "twenty pounds" in subsection (e) and inserting in lieu thereof "$30" and "fifty pounds", respectively, effective January 1, 1963.

Fourth-class mail

Sec. 108. Section 4552(b) (5) of title 39, United States Code, relating to size and weight limitations on fourth-class matter mailed to or from certain areas, is amended by striking out the words "Territory of Hawaii" and inserting in lieu thereof the words "States of Alaska and Hawaii,".

Sec. 109. Section 4554 of title 39, United States Code (relating to books, films, and similar educational materials), is amended by striking out that part of subsection (a) which precedes paragraph (1) and inserting in lieu thereof the following:

"(a) Except as provided in subsection (b) of this section, the postage rate is 92 cents a pound for the first pound or fraction thereof and 5 cents for each additional pound or fraction thereof when mailed after January 6, 1963 and prior to January 1, 1964, and 10 cents for the first pound or fraction thereof and 5 cents for each additional pound or fraction thereof when mailed after December 31, 1963, except that the rate now or hereafter prescribed for third- or four-class matter shall apply in every case where such rate is lower than the rate prescribed in this subsection on-".

Fees for second-class entry and registration Sec. 110. Section 4357 of title 39, United States Code, is amended

(1) by striking out "$25" in subsection (a) (1) and inserting in lieu thereof "$30";

(2) by striking out "$50" in subsection (a) (2) and inserting in lieu thereof "$60";

(3) by striking out "$100" in subsection (a) (3) and inserting in lieu thereof "$120";

(4) by striking out "$10” in the first sentence of subsection (b) and inserting in lieu thereof "$15";

(5) by striking out the second sentence of subsection (b) and inserting in lieu thereof the following: "The fee for each additional entry is $15, except that if the additional entry is made within zones 3 to 8, inclusive (deter

mined from the office of publication and entry), of the zones established for purposes of fourth-class mail, such fee shall be $50.”;

(6) by striking out "$20" in subsection (c) and inserting in lieu thereof “$25"; and

(7) by striking out the last sentence in subsection (d).

Permit fees for mailing without stamps

Sec. 111. Section 4052(b) of title 39, United States Code, is amended by striking out "$10" and inserting in lieu thereof "$15".

Fizing of fees by Postmaster General

Sec. 112. Section 507 of title 39, United States Code, is amended by adding at the end thereof the following: “(12) the issuance of a permit for prepayment postage without stamps.

of

“(13) the entry, re-entry, or additional entry of a periodical publication as second-class mail.

“(14) the registry of a news agent. Fees prescribed by the Postmaster General under paragraphs (12) to (14), inclusive, shall be collected in lieu of the corresponding fees established under section 4052(b) or 4357.”

Keys and other small articles Sec. 113. Section 4651(b) of title 39. United States Code, is amended by striking out “5 cents” and inserting in lieu thereof "6 cents".

Method of determining gross receipts

Sec. 114. Section 711(c) of title 39, United States Code, is amended by striking out "Public Law 85-426" and inserting in lieu thereof “any Act of Congress enacted on or after May 27, 1958".

Standards for determination of qualifications of applicants for positions of postmaster

Sec. 115. In evaluating the qualifications of applicants for positions of postmaster, the United States Civil Service Commission shall give, with respect to each applicant, all due and appropriate consideration to experience in the postal field service, including seniority, length of service, level of difficulty and responsibility of work, attendance, awards and commendations, and performance rat

ing.

Title II-Postal Policy

Sec. 201. (a) Section 2302(c) (4) of title 39, United States Code, is amended by striking out “deemed to be attributable to the performance of public services under section 2303(b) of this title" and inserting in lieu thereof "determined under section 2303 of this title to be attributable to the performance of public services".

(b) Section 2303(a) of title 39, United States Code, is amended—

(1) by amending the headings so as to read

Ҥ 2303. Identification of public services and costs thereof";

(2) by striking out paragraph 1(A) and inserting in lieu thereof the following:

"(A) reduced rates for certain publications as provided by section 4359 of this title:";

(3) by striking out paragraph 1(C) and inserting in lieu thereof the following:

"(C) second class mailings at postage rates as provided by section 4358 of this title;"; and

(4) by striking out paragraph (2) and inserting in lieu thereof the following:

“(2) 10 per centum of the gross cost of the operation of third-class post offices and the star route system, and 20 per centum of the gross cost of the operation of fourth-class post offices and rural routes."

(5) by adding at the end thereof the following new sentence: "The terms 'total loss' and 'loss' as used in this section mean the amounts by which the total allocated costs incurred by the postal establishment in the performance of the public services enumerated in this subsection exceed the total revenues received by the postal establishment for the performance of such public services.”

(c) Section 2303 (b) of title 39, United States Code, is amended to read as follows:

"(b) The Postmaster General shall report to the Congress, on or before February 1 of each year beginning with the year 1963, the estimated amount of the losses or costs (or percentage of costs) specified in subsection (a) incurred by the postal establishment in the then current fiscal year in the performance of the public services enumerated in such subsection. The aggregate amount of the losses or costs (or percentage of costs) specified in subsection (a), incurred by the postal establishment in any fiscal year in the performance of such public services, shall be excluded from the total cost of operating the postal establishment for purposes of adjustment of postal rates and fees, including any adjustment pursuant to the provisions of section 207 (b) of the Act of February 28, 1925, relating to reformation of classification (39 U.S.C., 1958 ed. 247)."

(d) The table of contents of chapter 27 of title 39, United States Code, is amended by striking out

“2303. Identification of and appropriations for public services." and inserting in lieu thereof:

(3) by adding at the end thereof the following new subparagraph (10):

“(10) published by any public or nonprofit private elementary or secondary institution of learning or its administrative or governing body.”. Educational materials

Sec. 302. Section 4554 of title 39, United States Code, is amended—

(1) by striking out paragraph (5) of subsection (a) and inserting in lieu thereof the following:

“(5) sound recordings, including incidental announcements of recordings and guides or scripts prepared solely for use with such recordings;":

(2) by striking out the period at the end of paragraph (6) of subsection (a) and inserting in lieu thereof semicolon;

(3) by adding at the end of subsection (a) the following:

"(7) printed educational reference charts, permanently processed for preservation; and

"(8) looseleaf pages, and binders therefor, consisting of medical infor mation for distribution to doctors, hospitals, medical schools, and medical students."

(4) by striking out the word “students'" immediately preceding the word "notations" in paragraph (1) of subsection (a) and in paragraph (2) of subsection (b);

(5) by inserting after the words "loaned or exchanged" in paragraph (1) of subsection (b) the following: "(including cooperative processing by libraries)":

(6) by striking out:

"(D) bound volumes of periodicals; "(E) phonograph recordings; and” in paragraph (2) of subsection (b) and inserting in lieu thereof:

"(D) periodicals, whether bound or unbound:

"(E) sound recordings; and"; and (7) by striking out "and catalog of those items" in subsection (c) and inserting in lieu thereof "scientific or mathematical kits, instruments, or other devices and catalogs of those items, and guides or scripts prepared solely for use with such materials”. Reading and other materials for blind persons

Sec. 303. Sections 4653 and 4654 of title 39, United States Code, are amended to read as follows:

Title III-Miscellaneous Eligibility of certain organizations for second-class entry

Sec. 301. Section 4355(a) of title 39. United States Code is amended

(1) by inserting after the words "State board of health" in subparagraph (3) a comma and the words "or a State industrial development agency".

(2) by striking out the period at the end of subparagraph (9) and inserting in lieu of such period a semicolon and the word "or"; and

"(a) The following matter may be mailed free of postage

“(1) books, pamphlets, and other reading matter, including pages thereof:

“(A) published (whether prepared by hand, or printed) either in raised characters or in sightsaving-size type, or in the form of sound recordings, for use of blind persons;

"(B) in packages not exceeding the weight prescribed by the Postmaster General;

"(C) containing no advertising or other matter whatsoever;

"(D) unsealed; "(E) sent

or

"(i) by an institution, agency, publisher, organization, or association (including a library school and including organizations or associations of or for blind people), not conducted for private profit, as a loan to blind readers, or when returned by the blind reader to the lender; or

"(ii) to a blind person without cost to the blind person; or

"(iii) to an institution, agency, publisher, organization, or association (including a library or school and including organizations or associations of or for blind people), not conducted for private profit, to be furnished to a blind person without cost to such blind person.

"(2) magazines, periodicals, and other regularly issued publications: "(A) published (whether prepared by hand, or printed) either in raised characters or in sightsaving type, or in the form of sound recordings, for use of blind persons;

"(B) containing no advertising; "(C) for which no subscription fee is charged.

"(b) There may be mailed at the rate of postage of 1 cent for each pound or fraction thereof

"(1) books, pamphlets, and other reading matter including pages thereof:

"(A) published (whether prepared by hand, or printed) either in raised characters or in sightsaving-size type, or in the form of sound recordings, for use of blind persons;

"(B) in packages not exceeding the weight prescribed by the Postmaster General;

"(C) containing no advertising or other matter whatsoever;

"(D) unsealed; "(E) sent

"(i) by an institution, agency, publisher, organization, or association (including a library or school and including organizations or associations of or for blind people), not conducted for private profit, on a rental basis to blind readers, or when returned by the blind reader to such organizations, at a price not greater than the cost price thereof; or

"(ii) to a blind person at a price not greater than the cost price thereof; or

"(iii) to an institution, agency, publisher, organization, or association (including a library or school and including organizations or associations of or for blind people), not conducted for private profit, to be furnished to a blind person at a price not greater than the cost price thereof.

“(2) magazines, periodicals, and other regularly issued publications:

"(A) published (whether prepared by hand, or printed) either in

raised characters or in sightsavingsize type, or in the form of sound recordings, for use of blind persons;

"(B) containing no advertising; "(C) when furnished by an institution, agency, publisher, organization, or association (including a library or school and including organizations or associations of or for blind people), not conducted for private profit, to a blind person, at a price not greater than the cost price thereof. "S 4654. Reproducers, sound recordings, and other materials and appliances for the preparation of reading matter for blind per

sons

"(a) Reproducers, or parts thereof, for sound recordings for blind persons which are the property of the United States Government may be mailed free of postage when sent for repair, or returned after repair

"(1) by an organization, institution, public library, or association for blind persons, not conducted for private profit;

"(2) by a blind person to such an agency not conducted for private profit;

"(3) from such an agency to an organization, institution, public library, or association for blind persons not conducted for private profit; or

"(4) to a blind person.

"(b) The Postmaster General may extend the free mailing privilege provided by subsection (a) of this section to reproducers or parts thereof for sound recordings for blind persons, braille writers and other appliances for blind persons or parts thereof, that are the property of

"(1) State governments or subdivisions thereof;

"(2) public libraries;

"(3) private agencies for the blind not conducted for private profit; or "(4) blind individuals.

"(c) The Postmaster General may also permit the mailing free of postage of paper, records, tapes, and other materials for use by the recipients for the production (whether by hand or printed) of reading matter either in raised characters or sightsaving-size type, or in the form of sound recordings, for use of blind persons, where such materials are the property of

"(1) State governments or subdivisions thereof;

"(2) public libraries;

"(3) private agencies for the blind not conducted for private profit; or "(4) blind individuals." Repeals and technical amendments Sec. 304. (a) The following provisions of law are repealed:

(1) The third proviso in section 3 of the Act of October 30, 1951, as amended by the Act of June 23, 1959 (73 Stat. 89; Public Law 86-56);

(2) Sections 204 (d), 204(e) (1), and

204 (e) (2) of the Postal Rate Revision and Federal Employees Salary Act of 1948, as amended by the Act of July 14, 1960 (74 Stat. 479; Public Law 86644);

(3) Sections 4361 and 4652 of title 39, United States Code.

(b) Section 4359 (a) of title 39, United States Code, is amended by striking out "4358, 4361, and 4362" and inserting in lieu thereof "4358 and 4362".

(c) Section 4451(d) of title 39, United States Code, is amended by striking out "(a) (2)" and inserting in lieu thereof "(a) (3)".

Communist political propaganda

Sec. 305. (a) Chapter 51 of title 39, United States Code, is amended by adding at the end thereof the following new section:

"§ 4008. Communist political propaganda

"(a) Mail matter, except sealed letters, which originates or which is printed or otherwise prepared in a foreign country and which is determined by the Secretary of the Treasury pursuant to rules and regulations to be promulgated by him to be 'communist political propaganda', shall be detained by the Postmaster General upon its arrival for delivery in the United States, or upon its subsequent deposit in the United States domestic mails, and the addressee shall be notified that such matter has been received and will be delivered only upon the addressee's request, except that such detention shall not be required in the case of any matter which is furnished pursuant to subscription or which is otherwise ascertained by the Postmaster General to be desired by the addressee. If no request for delivery is made by the addressee within a reasonable time, which shall not exceed sixty days, the matter detained shall be disposed of as the Postmaster General directs.

"(b) For the purposes of this section, the term 'communist political propaganda' means political propaganda, as defined in section 1(j) of the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611(j)), issued by or on behalf of any country with respect to which there is in effect a suspension or withdrawal of tariff concessions pursuant to section 5 of the Trade Agreements Extension Act of 1951 or section 231 of the Trade Expansion Act of 1962, or any country from which any type of foreign assistance is withheld pursuant to section 620 (f) of the Foreign Assistance Act of 1961, as amended.

"(c) The provisions of this section shall not be applicable with respect to (1) matter addressed to any United States Government agency, or any public library, or to any college, university, graduate school, or scientific or professional institution for advanced studies, or any official thereof, or (2) material whether or not 'communist political propaganda' addressed for delivery in the United States pursuant to a reciprocal cultural international agreement under which the United States Govern

ment mails an equal amount of material for delivery in any country described in subsection (b)."

(b) The table of contents of chapter 51 of title 39, United States Code, is amended by adding at the end thereof the following: "4008. Communist political propaganda." Effective date

Sec. 306. Except as otherwise provided, the foregoing provisions of this part shall become effective on January 7, 1963. Notice with respect to obscene matter distributed by mail and detention thereof

Sec. 307. In order to alert the recipients of mail and the general public to the fact that large quantities of obscene, lewd, lascivious, and indecent matter are being introduced into this country from abroad and disseminated in the United States by means of the United States mails, the Postmaster General shall publicize such fact (1) by appropriate notices posted in post offices, and (2) by notifying recipients of mail, whenever he deems it appropriate in order to carry out the purposes of this section, that the United States mails may contain such obscene, lewd, lascivious, or indecent matter. Any person may file a written request with his local post office to detain obscene, lewd, lascivious, or indecent matter addressed to him, and the Postmaster General shall detain and dispose of such matter for such period as the request is in effect. The Postmaster General shall permit the return of mail containing obscene, lewd, lascivious, or indecent matter, to local post offices, without cost to the recipient thereof. Nothing in this section shall be deemed to authorize the Postmaster General to open, inspect, or censor any mail except on specific request by the addressee thereof. The Postmaster General is authorized to prescribe such regulations as he may deem appropriate to carry out the purposes of this section.

PART II—FEDERAL SALARY REFORM

Title I-General Policy
Short title

Sec 501. This part may be cited as the "Federal Salary Reform Act of 1962".

Declaration of policy

Sec. 502. The Congress hereby declares that, whereas the functions of a Federal salary system are to fix salary rates for the services rendered by Federal employees so as to make possible the employment of persons well qualified to conduct the Government's programs and to control expenditures of public funds for personal services with equity to the employee and to the taxpayer, and whereas fulfillment of these functions is essential to the development and maintainance of maximum proficiency in the civilian services of Government, then,

accordingly, Federal salary fixing shall be based upon the principles that

(a) There shall be equal pay for substantially equal work, and pay distinctions shall be maintained in keeping with work and performance distinctions; and

(b) Federal salary rates shall be comparable with private enterprise salary rates for the same level of work. Salary levels for the several Federal statutory salary systems shall be interrelated, and salary levels shall be set and henceforth adjusted in accordance with the above principles.

Implementation of policy

Sec. 503. In order to give effect to the policy stated in section 502, the President: (1) shall direct such agency or agencies, as he deems appropriate, to prepare and submit to him annually a report which compares the rates of salary fired by statute for Federal employees with the rates of salary paid for the same levels of work in private enterprise as determined on the basis of appropirate annual surveys conducted by the Bureau of Labor Statistics, and, after seeking the views of such employee organizations as he deems appropriate and in such manner as he may provide, (2) shall report annually to the Congress (a) this camparison of Federal and private enterprise salary rates and (b) such recommendations for revision of statutory salary schedules, salary structures, and compensation policy, as he deems advis

able.

Sec. 504. (a) Whenever the President shall find that the salary rates in private enterprise for one or more occupations in one or more areas or locations are so substantially above the salary rates of statutory pay schedules as to handicap significantly the Government's recruitment or retention of well-qualified persons in positions compensated under (1) section 603 b) of the Classification Act of 1949. as amended (5 U.S.C. 1113(b)), (2) the provisions of part III of title 39, United States Code, relating to personnel in the postal field service, (3) the pay scales for physicians, dentists, and nurses in the Department of Medicine and Surgery of the Veterans' Administration under chapter 73 of title 38, United States Code, or (4) sections 412 and 415 of the Foreign Service Act of 1946, as amended (22 U.S.C. 867 and 870), he may establish for such areas or locations higher minimum rates of basic compensation for one or more grades or levels, occupational groups, series, classes, or subdivisions thereof, and may make corresponding increases in all step rates of the salary range for each such grade or level: Provided, That in no case shall any minimum salary rate so established exceed the seventh salary rate prescribed by law for the grade or level. The President may authorize the exercise of the authority conferred upon him by this section by the Civil Service Commission or, in the case

of employees not subject to the civil service laws and regulations, by such other agency or agencies as he may designate.

(b) Within the limitations specified in subsection (a), rates of basic compensation established under such subsection may be revised from time to time by the President or by such agency or agencies as he may designate. Such actions or revisions shall have the force and effect of law.

(c) Any increase in rate of basic compensation established under this section shall not be regarded as an “equivalent increase" in compensation within the meaning of section 701(a) of the Classification Act of 1949, as amended, and section 3552 of title 39 of the United States Code.

Sec. 505. The functions, duties, and regulations of the departments and the Civil Service Commission with respect to this title, the Classification Act of 1949, as amended, the provisions of part III of title 39, United States Code, relating to personnel in the postal field service, the Foreign Service Act of 1946, as amended, and the provisions of chapter 73 of title 38 of the United States Code relating to personnel of the Department of Medicine and Surgery in the Veterans' Administration, shall be subject to such policies and rules as the President may issue. Among other things, the President's policies and rules may provide for

(1) preparing and reporting to him the annual comparison of Federal salary rates with private enterprise rates,

(2) obtaining and reporting to him the views of employee organizations on such annual comparison, and on other salary matters,

(3) reviewing and reporting to him on the adequacy of the Federal statutory salary structures for the Federal programs to which they apply.

(4) reviewing the relationship of Federal statutory salary rates and private enterprise salary rates in specific occupation and local areas, and

(5) providing step-increases in recognition of high quality performance and providing for properly relating supervisory salary rates paid under one system of those of subordinates paid under another system.

Title II-Pay System of the Classification Act of 1949

Short title Sec. 601. This title may be cited as the “Classification Act Amendments of 1962".

Basic Compensation Schedules Sec. 602. (a) Section 603(b) of the Classification Act of 1949, as amended (74 Stat. 298; 5 U.S.C. 1113(b)), is amended to read as follows:

"(b) The compensation schedules for the General Schedule shall be as follows: