[Federal Register Volume 73, Number 2 (Thursday, January 3, 2008)]
[Proposed Rules]
[Pages 772-773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-25302]



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Part IV





Office of Personnel Management





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5 CFR Part 591



Nonforeign Area Cost-of-Living Allowance Rates; Alaska; Proposed Rule



2006 Nonforeign Area Cost-of-Living Allowance Survey Report: Alaska and 
Washington, DC, Area; Notice

  Federal Register / Vol. 73, No. 2 / Thursday, January 3, 2008 / 
Proposed Rules  

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 591

RIN 3206-AL37


Nonforeign Area Cost-of-Living Allowance Rates; Alaska

AGENCY: U.S. Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The U.S. Office of Personnel Management (OPM) is proposing to 
change the cost-of-living allowance (COLA) rates received by certain 
white-collar Federal and U.S. Postal Service employees in Anchorage, 
Fairbanks, and Juneau, Alaska. The proposed rate changes are the result 
of living-cost surveys conducted by OPM in 2006 and interim adjustments 
OPM calculated based on relative Consumer Price Index differences 
between the cost-of-living allowance areas and the Washington, DC, 
area. The proposed rate changes would reduce the COLA rates in 
Anchorage, Fairbanks, and Juneau from 24 percent to 23 percent. OPM is 
also proposing a minor clarification to the Alaska COLA area boundaries 
to make clear the 50-mile radius is by the shortest route using paved 
roads.

DATES: We will consider comments received on or before March 3, 2008.

ADDRESSES: Send or deliver comments to Charles D. Grimes III, Deputy 
Associate Director for Performance Management and Pay Systems, 
Strategic Human Resources Policy Division, U.S. Office of Personnel 
Management, Room 7300B, 1900 E Street, NW., Washington, DC 20415-8200; 
fax: (202) 606-4264; or e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: J. Stanley Austin, (202) 606-2838; 
fax: (202) 606-4264; or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: Section 5941 of title 5, United States Code, 
authorizes Federal agencies to pay cost-of-living allowances (COLAs) to 
white-collar Federal and U.S. Postal Service employees stationed in 
Alaska, Hawaii, Guam and the Northern Mariana Islands, Puerto Rico, and 
the U.S. Virgin Islands. Executive Order 10000, as amended, delegates 
to the U.S. Office of Personnel Management (OPM) the authority to 
administer nonforeign area COLAs and prescribes certain operational 
features of the program. OPM conducts living-cost surveys in each 
allowance area and in the Washington, DC, area to determine whether, 
and to what degree, COLA area living costs are higher than those in the 
DC area. OPM sets the COLA rate for each area based on the results of 
these surveys.
    As required by section 591.223 of title 5, Code of Federal 
Regulations, OPM conducts COLA surveys once every 3 years on a rotating 
basis. For areas not surveyed during a particular year, OPM adjusts 
COLA rates by the relative change in the Consumer Price Index (CPI) for 
the COLA area compared with the Washington, DC, area. (See 5 CFR 
591.224-226.) OPM adopted these regulations pursuant to the stipulation 
for settlement in Caraballo et al. v. United States, No. 1997-0027 
(D.V.I), August 17, 2000. Caraballo was a class-action lawsuit which 
resulted in many changes in the COLA methodology and regulations.

2006 Alaska Survey

    OPM conducted living-cost surveys in Anchorage, Fairbanks, Juneau, 
and the Washington, DC, area in the spring of 2006. We are publishing 
the results of these surveys in the 2006 Nonforeign Area Cost-of-Living 
Allowance Survey Report: Alaska and Washington, DC, Areas, which 
accompanies this proposed rule.
    As described in the 2006 survey report, we compared the results of 
the COLA area surveys with the results of the DC area survey to compute 
a living-cost index for each of the Alaska COLA areas. Table 1 shows 
the final 2006 Alaska survey living-cost indexes. These indexes 
indicate reductions in the COLA rates for Anchorage, Fairbanks, and 
Juneau. OPM's regulations at 5 CFR 591.228(c) limit COLA rate 
reductions to 1 percentage point in a 12-month period; therefore, OPM 
is proposing to reduce the COLA rates in Anchorage, Fairbanks, and 
Juneau from 24 percent to 23 percent.

                  Table 1.--2006 Alaska Survey Indexes
------------------------------------------------------------------------
                       Allowance area                           Index
------------------------------------------------------------------------
Anchorage..................................................       109.81
Fairbanks..................................................       118.90
Juneau.....................................................       120.08
Rest of the State of Alaska................................       132.82
------------------------------------------------------------------------

2005 Interim Adjustments

    On October 27, 2006, OPM published a notice on the 2005 interim 
adjustments for the Alaska and Pacific COLA areas in the Federal 
Register at 71 FR 63178. OPM also published a proposed rule at 71 FR 
63176 to reduce the COLA rates for Anchorage, Fairbanks, and Juneau 
based on the interim adjustments. In the notice, the adjustment for 
Alaska used CPI changes for a 30-month period and the adjustment for 
the Pacific used CPI changes for an 18-month period. As specified at 5 
CFR 591.224(a), the adjustment for the Alaska areas should have been 
based on a 24-month period and the adjustment for the Pacific areas 
should have been based on a 12-month period. Tables 2 and 3 show 
corrected CPI changes for Anchorage and Honolulu.

  Table 2.--Change in Anchorage and in the Washington-Baltimore CPI-Us
                              2003 to 2005
------------------------------------------------------------------------
                          Survey area                             CPI-U
------------------------------------------------------------------------
Anchorage 2003 CPI-U first half................................    161.1
Anchorage 2005 CPI-U first half................................    169.6
Anchorage change in percent....................................   5.2762
DC-Baltimore 2003 CPI-U first half.............................    115.6
DC-Baltimore 2005 CPI-U first half.............................    122.8
DC-Baltimore change in percent.................................   6.2284
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Table 3.--Change in Honolulu and in the Washington-Baltimore CPI-Us 2004
                                 to 2005
------------------------------------------------------------------------
                          Survey area                             CPI-U
------------------------------------------------------------------------
Honolulu 2004 CPI-U first half.................................    189.2
Honolulu 2005 CPI-U first half.................................    195.0
Honolulu change in percent.....................................   3.0655
DC-Baltimore 2004 CPI-U first half.............................    118.3
DC-Baltimore 2005 CPI-U first half.............................    122.8
DC-Baltimore change in percent.................................   3.8039
------------------------------------------------------------------------

    Correcting the adjustments for the appropriate period changed the 
indexes for the Alaska and Pacific areas as shown in Tables 4 and 5. 
Because the corrected Alaska area indexes are now superseded by the 
2006 Alaska survey indexes and the corrected Pacific indexes have been 
superseded by 2006 interim adjustment indexes, OPM plans no further 
action based on the 2005 interim adjustments.

                               Table 4.--Alaska 2005 CPI-U Price Index Adjustments
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                                                               Anchorage    Fairbanks      Juneau       Kodiak
----------------------------------------------------------------------------------------------------------------
2003 COLA Survey Indexes....................................       111.40       115.62       118.09       135.84

[[Page 773]]

 
Adjustment Factors..........................................            7            9            9            9
2003 COLA Survey Price Indexes..............................       104.40       106.62       109.09       126.84
2005 CPI Adjusted Price Indexes.............................       103.46       105.66       108.11       125.70
2005 COLA Indexes with Adj. Factors.........................       110.46       114.66       117.11       134.70
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                              Table 5.--Pacific 2005 CPI-U Price Index Adjustments
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                                                   Honolulu    Hawaii Co      Kauai         Maui         Guam
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2004 COLA Survey Indexes.......................       125.80       117.25       127.63       131.50       127.40
Adjustment Factors.............................            5            7            7            7            9
2004 COLA Survey Price Indexes.................       120.80       110.25       120.63       124.50       118.40
2005 CPI Adjusted Price Indexes................       119.94       109.47       119.77       123.61       117.56
2005 COLA Indexes with Adj. Factors............       124.94       116.47       126.99       130.61       125.56
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Area Boundary Clarification

    OPM is also proposing a clarification to the Alaska COLA area 
boundaries in 5 CFR 591.207 to make clear the 80-kilometer (50-mile) 
radius is by the shortest route using paved roads when available, as 
measured from the Federal courthouse to the official duty station. OPM 
believes the current regulations should not be interpreted differently, 
but proposes this clarification to assist agencies when alternate 
interpretations are presented.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 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.
Linda M. Springer,
Director.
    Accordingly, OPM proposes to amend subpart B of 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 5 CFR part 591 continues 
to read as follows:

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

    2. In Sec.  591.207, revise paragraphs (a), (b), and (c) to read as 
follows:


Sec.  591.207  Which areas are COLA areas?

* * * * *
    (a) City of Anchorage, AK, and 80-kilometer (50-mile) radius by 
shortest route using paved roads when available, as measured from the 
Federal courthouse to the official duty station;
    (b) City of Fairbanks, AK, and 80-kilometer (50-mile) radius by 
shortest route using paved roads when available, as measured from the 
Federal courthouse to the official duty station;
    (c) City of Juneau, AK, and 80-kilometer (50-mile) radius by 
shortest route using paved roads when available, as measured from the 
Federal courthouse to the official duty station;
* * * * *
    3. Revise appendix A of subpart B to read as follows:

Appendix A to Subpart B of Part 591--Places and Rates at Which 
Allowances Are Paid

    This appendix lists the places approved for a cost-of-living 
allowance and shows the authorized allowance rate for each area. The 
allowance rate shown is paid as a percentage of an employee's rate 
of basic pay. The rates are subject to change based on the results 
of future surveys.

------------------------------------------------------------------------
                                                         Allowance rate
                 Geographic coverage                       (percent)
------------------------------------------------------------------------
State of Alaska:
    City of Anchorage and 80-kilometer (50-mile)                      23
     radius by road..................................
    City of Fairbanks and 80-kilometer (50-mile)                      23
     radius by road..................................
    City of Juneau and 80-kilometer (50-mile) radius                  23
     by road.........................................
    Rest of the State................................                 25
State of Hawaii:
    City and County of Honolulu......................                 25
    Hawaii County, Hawaii............................                 18
    County of Kauai..................................                 25
    County of Maui and County of Kalawao.............                 25
Territory of Guam and Commonwealth of the Northern                    25
 Mariana Islands.....................................
Commonwealth of Puerto Rico..........................                 13
U.S. Virgin Islands..................................                 25
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[FR Doc. E7-25302 Filed 1-2-08; 8:45 am]
BILLING CODE 6325-39-P