[Federal Register Volume 73, Number 165 (Monday, August 25, 2008)]
[Proposed Rules]
[Pages 50173-50175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19592]



[[Page 50173]]

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Part IV





Office of Personnel Management





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5 CFR Part 591



Nonforeign Area Cost-of-Living Allowances; 2007 Interim Adjustments: 
Alaska and Puerto Rico; Proposed Rule and Notice

Federal Register / Vol. 73, No. 165 / Monday, August 25, 2008 / 
Proposed Rules

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 591

RIN 3206-AL65


Nonforeign Area Cost-of-Living Allowances; 2007 Interim 
Adjustments: Alaska and Puerto Rico

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The 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, and in Puerto Rico. The proposed rate 
changes are the result of interim adjustments OPM calculated based on 
relative Consumer Price Index differences between the COLA areas and 
the Washington, DC, area. The proposed regulations would reduce the 
COLA rates for Anchorage, Fairbanks, and Juneau by 1 percentage point 
and would increase the rate for Puerto Rico by 1 percentage point.

DATES: We will consider comments received on or before October 24, 
2008.

ADDRESSES: Send or deliver comments to Charles D. Grimes III, Deputy 
Associate Director for Performance and Pay Systems, Strategic Human 
Resources Policy Division, 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 (USVI). Executive Order 10000, as amended, 
delegates to the 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. We set 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, we conduct COLA surveys once every 3 years on a rotating 
basis. For areas not surveyed during a particular year, we adjust 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.) We 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.
    We computed interim adjustments based on the relative change in the 
CPI for the Alaska and Caribbean COLA areas. A separate notice on the 
calculation of these interim adjustments accompanies this proposed 
rule. The interim adjustments indicate that the Anchorage, Fairbanks, 
and Juneau, Alaska, COLA rates should be reduced by 1 percentage point 
in each area.
    We published a proposed rule on January 3, 2008, that would, when 
implemented, reduce the COLA rates in Anchorage, Fairbanks, and Juneau 
from 24 percent to 23 percent based on the results of the 2006 COLA 
survey in Alaska. The 1 percentage point reduction proposed in this 
rule would further reduce the rates in these areas to 22 percent. 
However, 5 CFR 591.228(c) limits COLA rate decreases to 1 percentage 
point in a 12-month period. Therefore, we will not implement COLA rate 
reductions under this proposed rule until 12 months have elapsed since 
the effective date of the proposed reductions based on the 2006 survey 
results. For example, if the proposed reductions based on the 2006 
survey results become effective in mid-October of this year, the 
reductions proposed under this rule would not be implemented before 
mid-October of 2009.
    The 2007 interim adjustments would also increase the COLA rate for 
Puerto Rico by 1 percentage point. We published a final rule on May 29, 
2008, at 73 FR 30727, that increased the Puerto Rico COLA rate to 13 
percent. The 2007 interim adjustment would further raise the COLA rate 
for Puerto Rico to 14 percent when published as final. We plan to 
implement this increase separately from the Alaska reductions to avoid 
the 12-month delay imposed by 5 CFR 591.228(c).

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
Michael W. Hager,
Acting 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. 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.

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                                                          Allowance rate
                   Geographic coverage                       (percent)
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State of Alaska:
    City of Anchorage and 80-kilometer (50-mile) radius               22
     by road............................................
    City of Fairbanks and 80-kilometer (50-mile) radius               22
     by road............................................
    City of Juneau and 80-kilometer (50-mile) radius by               22
     road...............................................

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    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.............................              14
U.S. Virgin Islands.....................................              25
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[FR Doc. E8-19592 Filed 8-22-08; 8:45 am]
BILLING CODE 6325-39-P