[Federal Register Volume 61, Number 156 (Monday, August 12, 1996)]
[Proposed Rules]
[Pages 41746-41748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20445]


      
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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 61, No. 156 / Monday, August 12, 1996 / 
Proposed Rules  

[[Page 41746]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 591

RIN 3206-AH56


Cost-of-Living Allowances (Nonforeign Areas); Partnership Pilot 
Project

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is proposing a pilot 
project to establish a partnership with agencies and employees in 
administering the nonforeign area cost-of-living allowance (COLA) 
program. Under the project, COLA partnership committees would be 
established in Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin 
Islands to assist OPM in reviewing and improving the COLA program. 
Involvement in the committees should help OPM, affected agencies, and 
their employees better understand issues relating to the compensation 
of Federal employees in these areas. The proposed regulations would 
also make a technical amendment to clarify the term `'agency'' as it 
applies to the COLA program.

DATES: Comments must be received on or before September 11, 1996.

ADDRESSES: Send or deliver comments to Donald J. Winstead, Assistant 
Director for Compensation Policy, Human Resources Systems Service, 
Office of Personnel Management, Room 6H31, 1900 E Street NW., 
Washington, DC 20415, or FAX to (202) 606-4264.

FOR FURTHER INFORMATION CONTACT:
Donald L. Paquin, (202) 606-2838.

SUPPLEMENTARY INFORMATION: Under section 5941 of title 5, United States 
Code, and Executive Order 10,000, as amended, certain Federal employees 
in nonforeign areas outside the 48 contiguous States are eligible for 
cost-of-living allowances when local living costs are substantially 
higher than those in the Washington, DC, area. Nonforeign area COLA's 
are paid in Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and 
Guam and the Commonwealth of the Northern Mariana Islands.
    OPM conducts living-cost surveys in these areas annually and 
compares the results with surveys conducted in the Washington, DC, 
area, as required by 5 U.S.C. 5941 and E.O. 10000. A cost-of-living 
allowance rate is then derived for each allowance area, which by law 
cannot exceed 25 percent of the rate of basic pay for eligible 
employees.
    OPM publishes the results of these surveys in the Federal Register. 
(The most recent survey, for Alaska areas only, was published on 
February 2, 1996 (61 FR 4070).) Because of the interest in employee 
involvement shown in comments on the surveys, OPM believes increasing 
agency and employee participation in the survey process could greatly 
enhance the COLA program. This coincides with OPM's own desire to 
introduce partnership into the allowance-setting process in the COLA 
areas and is responsive to National Performance Review objectives on 
forming management/employee partnerships.

COLA Partnership Pilot Project

    OPM proposes to initiate a COLA Partnership Pilot Project that 
would provide for greater agency and employee involvement in the 
nonforeign area cost-of-living allowance program. Under this proposal, 
OPM would establish COLA partnership committees, composed of 
representatives of OPM, other agencies, and labor organizations in 
Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands. The 
committees would--
    (1) Advise and assist OPM in planning COLA surveys;
    (2) Observe data collection during the surveys;
    (3) Advise and assist OPM in the review of survey data;
    (4) Advise OPM on the COLA program and other compensation issues 
relating to the allowance areas; and
    (5) Assist OPM in the dissemination of information to affected 
employees about the COLA surveys and the COLA program.

Committee Membership

    Under the proposed pilot project, OPM would invite the largest 
Federal agencies and labor organizations in each of the areas to 
participate on the COLA partnership committees. There may also be 
subcommittees, particularly in Alaska and Hawaii, where it might be 
advantageous to involve employees from each of the allowance areas. All 
committee and subcommittee members would be current full-time Federal 
employees performing official business of the Federal Government. 
Therefore, the Federal Advisory Committee Act is inapplicable.
    Committees would be composed of up to five agency representatives 
and five labor organization representatives from the local area, as 
well as one or more OPM representatives. The agency and employee 
representatives would be invited from the four agencies and four labor 
organizations with the largest number of COLA recipients in each area, 
as determined by OPM. OPM would further invite one additional agency 
selected from among the other agencies in each area to designate a 
representative to serve on the committee on a 1-year rotating basis. 
Similarly, one additional labor organization would be asked to nominate 
a representative to serve on a 1-year rotating basis. Alternatively, 
affected agencies and labor organizations may agree to select committee 
members using other means.
    Each participating agency shall provide the necessary support 
(including staff time and travel expenses, if needed) for its committee 
member(s). OPM anticipates that all agency and employee representatives 
would reside in the immediate area, so non-local travel expenses and 
per diem should not be necessary. Agencies may have to reimburse 
employees for local travel. OPM would provide appropriate 
administrative support and coordination among the committees.

Committee Activities

    The partnership committees would be involved in survey design and 
preparation and in survey operation and review. Approximately 3 months 
prior to the survey, the committees would be asked to review the survey 
specifications that OPM would provide and assist OPM in planning for 
the survey. Survey specifications would include the items and outlets 
to be surveyed and the communities in which data are to be collected. 
Planning would include deciding when and how to contact outlets to 
obtain permission to collect prices and who should accompany OPM during 
data collection activities.

[[Page 41747]]

    At the time of the survey, the committees would convene to help 
coordinate survey activities, observe data collection and/or discuss 
data collection with the observers, and assist OPM in reviewing the 
survey data. To avoid the appearance of a conflict of interest, OPM 
staff from outside the area would collect the data. After the survey, 
the committees may meet again to assess the data collection effort, 
plan for providing information on the survey to affected employees, and 
formulate a preliminary schedule of committee activities for the next 
survey.
    The committees would most likely meet at least three times a year. 
OPM anticipates that, from time to time, the committees would also 
consider broader issues relating to the COLA surveys and methodology 
and other issues relating to the compensation of Federal employees in 
the allowance areas. Some meetings may be via telephone conference or 
other means, rather than face-to-face. There would be no required 
committee reports, but the committees may, at their discretion, provide 
written recommendations to OPM's Assistant Director for Compensation 
Policy.

Project Commencement

    OPM plans to have the COLA partnership committees in operation no 
later than November 1, 1996, in order to prepare for the COLA surveys 
to be conducted in January through March 1997. Many of the affected 
agencies and labor organizations have attended preliminary briefings 
held by OPM on the pilot project. The proposed regulations reflect 
several of the comments OPM has received. OPM will continue to 
coordinate with agencies and labor organizations in the allowance areas 
to prepare for the project.

Definition of ``Agency''

    The proposed regulations would also make a technical amendment to 
define ``agency'' under the definitions section of 5 CFR part 591, 
subpart B, and remove a corresponding reference in Sec. 591.203 to 
agencies covered by the subpart.

Regulatory Flexibility Act

    I certify that this regulation would not have a significant 
economic impact on a substantial number of small entities because it 
would affect only Federal agencies and employees.

List of Subjects in 5 CFR Part 591

    Government employees, Travel and transportation expenses, Wages.

U.S. Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM proposes to amend 5 CFR part 591 as follows:

PART 591--ALLOWANCES AND DIFFERENTIALS

Subpart B--Cost-of-Living Allowance and Post Differential--
Nonforeign Areas

    1. The authority citation for subpart B of part 591 continues to 
read as follows:

    Authority: 5 U.S.C. 5941; E.O. 10000, 3 CFR, 1943-1948 Comp., p. 
792; E.O. 12510, 3 CFR, 1985 Comp., p. 338.

    2. Section 591.201 is amended by adding a definition of ``agency'' 
in alphabetical order to read as follows:


Sec. 591.201  Definitions.

* * * * *
    Agency means an Executive agency as defined in section 105 of title 
5, United States Code, but does not include Government-controlled 
corporations. For the purposes of Sec. 591.212, ``agency'' also 
includes the United States Postal Service.
* * * * *
    3. Section 591.203 is amended by revising the section heading and 
the introductory text to paragraph (a) to read as follows:


Sec. 591.203  Employees covered.

    (a) This subpart applies to civilian employees whose rates of basic 
pay are fixed by statute and who are employed by an agency. The 
following pay plans are covered by this subpart:
* * * * *
    4. Section 591.212 is added to read as follows:


Sec. 591.212  COLA Partnership Pilot Project.

    (a) Purpose and duration of COLA Partnership Pilot Project. The 
COLA Partnership Pilot Project is designed to assess the efficacy of a 
plan to increase agency and employee involvement in the allowance 
program. The pilot project shall be in effect for a period not to 
exceed 2 years from [the effective date of the final rule.]
    (b) Purpose and establishment of committees. To assist OPM in 
reviewing and improving the allowance program and to help OPM, affected 
agencies, and their employees better understand issues relating to the 
compensation of Federal employees in the allowance areas, OPM may 
establish one or more COLA partnership committees. Committees 
established under this section function at the discretion of OPM and 
may be disestablished at any time. A committee may represent agencies 
and employees in more than one allowance area and will meet from time 
to time as requested by OPM.
    (c) Composition of committees. Each committee shall be composed of 
one or more representatives of Federal agencies and labor 
organizations. All committee members shall be current full-time Federal 
employees performing official business of the Federal Government and 
will serve at their agencies' and OPM's discretion. All committee 
members, except the OPM members, shall be from the area represented by 
the committee. The representatives shall be selected as follows:
    (1) Agency representatives. (i) OPM will identify the largest 
agencies (in terms of allowance recipients) in the area represented by 
the committee. OPM will invite up to four agencies each to designate a 
representative to serve on the committee. OPM will further invite one 
additional agency selected from among the other agencies in each 
committee area to designate a representative to serve on the committee 
on a 1-year rotational basis. To select this agency, OPM will use 
sampling with probability proportional to the size of the agency. If 
mutually agreeable among the agencies, they may select representatives 
using other means and may rotate committee positions among agencies on 
other than a 1-year rotational basis.
    (ii) OPM will appoint one or more of its employees to serve on each 
COLA partnership committee.
    (2) Employee representatives. OPM will identify the largest labor 
organizations (in terms of allowance recipients) in the area 
represented by the committee. OPM will invite up to four labor 
organizations each to nominate a representative to serve on the 
committee. OPM will further invite one additional labor organization 
selected from among the other labor organizations in each committee 
area to nominate a representative to serve on the committee on a 1-year 
rotational basis. To select this labor organization, OPM will use 
sampling with probability proportional to the size of the labor 
organization. If mutually agreeable among the labor organizations, they 
may select representatives using other means and may rotate committee 
positions among labor organizations on other than a 1-year rotational 
basis. OPM will select committee members from among the nominations in 
consultation with the nominees' employing agencies. However, no 
committee shall have more than one employee representative from United 
States Postal Service labor organizations.

[[Page 41748]]

    (3) Other members. In consultation with the committee members, OPM 
may invite other current full-time Federal employees to serve on the 
committee. OPM will coordinate such invitations with the employing 
agencies.
    (d) Functions of committees. COLA partnership committees may--
    (1) Advise and assist OPM in planning living-cost surveys;
    (2) Provide or arrange for observers for data collection during 
living-cost surveys;
    (3) Advise and assist OPM in the review of survey data;
    (4) Advise OPM on its administration of the COLA program, including 
survey methodology and other issues relating to the compensation of 
Federal employees in the allowance areas; and
    (5) Assist OPM in the dissemination of information to affected 
employees about the living-cost surveys and the COLA program.
    (e) Data collection observers. In consultation with the committees, 
OPM will determine the number of observers required to accompany OPM 
officials during the collection of living-cost data. All observers 
shall be from the local area and shall be full-time Federal employees 
performing official business of the Federal Government. The committees 
will nominate observers, and OPM will select from among these 
nominations in consultation with the nominees' employing agencies.
    (f) Subcommittees. In consultation with the committees, OPM may 
establish one or more subcommittees to advise the committee on issues 
relating to the allowance areas and survey areas within the geographic 
area represented by the committee. If such subcommittees are 
established, they shall be composed of up to two agency representatives 
and two employee representatives from the local area, as well as one or 
more OPM representatives. OPM may, in consultation with the committee 
and subcommittee, invite additional Federal employees to serve on the 
subcommittee. Subcommittee agency and employee representatives shall be 
nominated and appointed in the same manner as committee members. All 
subcommittee members shall be current full-time Federal employees 
performing official business of the Federal Government.

[FR Doc. 96-20445 Filed 8-9-96; 8:45 am]
BILLING CODE 6325-01-M