[Federal Register Volume 63, Number 203 (Wednesday, October 21, 1998)]
[Rules and Regulations]
[Pages 56430-56431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28054]


-----------------------------------------------------------------------

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 591

 RIN 3206--AI38


Cost-of-Living Allowances (Nonforeign Areas); Honolulu, HI

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY:  The Office of Personnel Management (OPM) is publishing an 
interim regulation to increase the cost-of-living allowance (COLA) rate 
paid to General Schedule, U.S. Postal Service, and certain other 
Federal employees in the City and County of Honolulu, Hawaii. This 
increase is a result of cost-of-living surveys conducted by OPM in 
Alaska, Hawaii, Guam, Puerto Rico, and the U.S. Virgin Islands. This 
regulation increases the Honolulu COLA rate from 22.5 percent to 25 
percent. Additionally, OPM is broadening the composition of the 
Miscellaneous Expense Category used in the COLA methodology. This 
change allows the addition of other types of expenses to that category, 
including the use of private education (K-12) data collected in the 
1997 surveys. This amendment will permit OPM additional flexibility in 
organizing survey data under the COLA model.

DATES:  Effective date: October 21, 1998.  Implementation date:  The 
rate increases authorized by these regulations are to be applied as of 
the first day of the first pay period beginning on or after October 21, 
1998.  Comment date:  Comments must be received on or before January 
19, 1999.

ADDRESSES:  Comments may be sent or delivered to Donald J. Winstead, 
Assistant Director for Compensation Administration, Workforce 
Compensation and Performance Service, Office of Personnel Management, 
Room 7H31, 1900 E Street NW., Washington, DC 20415-8200, FAX: (202) 
606-4264, or email at [email protected].

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

SUPPLEMENTARY INFORMATION: Under section 5941 of title 5, United States 
Code, certain Federal employees in nonforeign areas outside the 48 
contiguous States are eligible for cost-of-living allowances (COLAs) 
when local living costs are substantially higher than those in 
Washington, DC. Nonforeign area COLAs are currently paid in the 
following locations: Alaska, Hawaii, Guam and the Commonwealth of the 
Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
    During the summer of 1997, OPM surveyed Alaska, Hawaii, Guam, 
Puerto Rico, and the U.S. Virgin Islands. Data were collected by OPM in 
conjunction with COLA Partnership Committees and Subcommittees 
established under the COLA Partnership Pilot Project. This is a 2-year 
pilot project established to test and evaluate a new approach in the 
administration of the COLA program, including the conduct of living-
cost surveys. At approximately the same time data were collected in the 
allowance areas, OPM also surveyed the Washington, DC, area, which is 
the base or reference area for living-cost comparisons. OPM is 
publishing a separate Federal Register notice immediately following 
this rulemaking that provides the complete ``Report On 1997 Surveys 
Used to Determine Cost-of-Living Allowances in Nonforeign Areas.'' This 
report explains the methodology, procedures, and results of the 1997 
living-cost surveys.
    The COLA rate increase is summarized in the following table:

                          Increase in Cola Rate
------------------------------------------------------------------------
                                                         Current    New
                Allowance area/category                    rate    rate
------------------------------------------------------------------------
City and County of Honolulu, Hawaii
    All employees......................................     22.5    25.0
------------------------------------------------------------------------

    OPM is adjusting the only rate for which the 1997 surveys indicate 
an increase is warranted. Rates that would otherwise be reduced will 
remain unchanged, as required by a provision in the Treasury, Postal 
Service, and General Government Appropriations Act, 1992 (Pub. L. 102-
141), as amended.
     OPM is also broadening the composition of the Miscellaneous 
Expense Category, as described in section 591.205 (b)(4) of title 5, 
Code of Federal Regulations. (The Miscellaneous Expense Category is one 
of the four major expense categories used in the COLA methodology. 
Currently, the composition of the Miscellaneous Expense Category is 
defined to cover six types of expenses: health care, gifts, 
contributions, savings and investments, retirement, and life 
insurance.) This change allows the addition of other types of expenses 
to the miscellaneous

[[Page 56431]]

category, including the use of private education (K-12) data collected 
in the 1997 survey. These data could have been used under the 
Consumption Goods and Services Category, and mathematically, the result 
would have been the same. However, in terms of how data are organized 
and analyzed within the COLA model, OPM believes it is more appropriate 
to include the private education data within the Miscellaneous Expense 
Component.

Application of 5 U.S.C. 553

     Pursuant to paragraphs (b)(3)(B) and (d)(3) of Sec. 553 of title 5 
of the United States Code, OPM finds that good cause exists to waive 
the publication of proposed rulemaking and the 30-day delay in the 
effective date of this regulation. Because it has taken longer than 
expected to complete these surveys and calculate the living-cost 
indexes, OPM believes it is in the public interest to implement the 
COLA rate increase immediately. In the future, as in the past, OPM 
plans to announce COLA rate adjustments in a proposed rule for notice 
and comment.

Implementation of Rate Changes

     For administrative purposes, the rate increases authorized by 
these regulations will be applied as of the first day of the first pay 
period beginning on or after October 21, 1998.

 E.O. 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with E.O. 12866.

Regulatory Flexibility Act

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

 List of Subjects in 5 CFR Part 591

     Government employees, Travel and transportation expenses, Wages.

Office of Personnel Management.
Janice R. Lachance,
Director.

     Accordingly, OPM is amending 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. In Sec. 591.205, paragraph (b)(4) is revised to read as 
follows:


Sec. 591.205  Comparative cost index.

    * * * * *
     (b)* * *
     (4)  Miscellaneous expenses.  Miscellaneous expenses, including 
expenses for health care, gifts, contributions, savings and 
investments, retirement, and life insurance, are estimated from 
consumer expenditure surveys and other data appropriate for Federal 
employees for each income level.
    * * * * *
     3. Appendix A of subpart B is revised to read as follows:

 Appendix A of Subpart B--Places and Rates at Which Allowances Shall be 
Paid

------------------------------------------------------------------------
                                                              Authorized
                                                               allowance
           Geographic coverage/ allowance category               rate
                                                               (percent)
------------------------------------------------------------------------
State of Alaska
    City of Anchorage and 80-kilometer (50-mile) radius by
     road:
        All Employees.......................................      25.0
    City of Fairbanks and 80-kilometer (50-mile) radius by
     road:
        All Employees.......................................      25.0
    City of Juneau and 80-kilometer (50-mile) radius by
     road:
        All Employees.......................................      25.0
    Rest of the State:
        All Employees.......................................      25.0
State of Hawaii
    City and County of Honolulu:
        All Employees.......................................      25.0
    County of Hawaii:
        All Employees.......................................      15.0
    County of Kauai:
        All Employees.......................................      22.5
    County of Maui and County of Kalawao:
        All Employees.......................................      22.5
Territory of Guam and Commonwealth of the Northern Mariana
 Islands
    All Locations:
        Local Retail........................................      22.5
        Commissary/Exchange.................................      20.0
Commonwealth of Puerto Rico
        All Employees.......................................      10.0
U.S. Virgin Islands
        All Employees.......................................      20.0
------------------------------------------------------------------------

  Definitions of Allowance Categories 
     The following are definitions of the allowance categories used 
in the tables in this appendix.
      All Employees: This category covers all Federal employees 
eligible for an allowance under 5 U.S.C. 5941.
      Local Retail: This category covers all Federal employees 
eligible for an allowance who do not have unlimited access to 
commissary and exchange facilities by virtue of their Federal 
civilian employment.
    Commissary/Exchange: This category covers all Federal employees 
eligible for an allowance who have unlimited access to commissary 
and exchange facilities by virtue of their Federal civilian 
employment.
    Note: Eligibility for access to military commissary and exchange 
facilities is determined by the appropriate military department. If 
an employee is furnished with these privileges for reasons 
associated with his or her Federal civilian employment, he or she 
will receive an identification card that authorizes access to such 
facilities. Possession of such an identification card is sufficient 
evidence that the employee uses the facilities.
[FR Doc. 98-28054 Filed 10-20-98; 8:45 am]
BILLING CODE 6325-01-F