[Federal Register Volume 59, Number 206 (Wednesday, October 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26556]
Federal Register / Vol. 59, No. 206 / Wednesday, October 26, 1994 /
[[Page Unknown]]
[Federal Register: October 26, 1994]
VOL. 59, NO. 206
Wednesday, October 26, 1994
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 591
RIN 3206-AF88
Cost-of-Living Allowances (Nonforeign Areas)
AGENCY: Office of Personnel Management.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is issuing final
regulations to increase certain cost-of-living allowance (COLA) rates
paid to General Schedule, U.S. Postal Service, and certain other
Federal employees in Kauai County, Hawaii; Guam and the Commonwealth of
the Northern Mariana Islands; and the U.S. Virgin Islands. The final
regulations also consolidate the two nonforeign COLA areas in the U.S.
Virgin Islands into a single allowance area, delete obsolete
Commissary/Exchange COLA categories in four areas, clarify definitions
shown in one of the appendices, and remove from regulations three
locations listed as places where nonforeign post differentials are
paid. These three locations are no longer territories or possessions of
the United States and, therefore, are not covered by the nonforeign
area post differential program.
DATES: Effective Date: These regulations are effective October 26,
1994. Applicability Date: These regulations are applicable on the 1st
day of the 1st pay period beginning on or after October 26, 1994.
FOR FURTHER INFORMATION CONTACT: Allan G. Hearne, Methodology
Development Branch, Office of Compensation Policy, Personnel Systems
and Oversight Group, Office of Personnel Management, Room 6H31, 1900 E
Street NW., Washington, DC 20415, (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 when local
living costs are substantially higher than those in the Washington, DC,
area. Nonforeign area COLA's are currently paid in Alaska, Hawaii,
Puerto Rico, the U.S. Virgin Islands, Guam, and the Commonwealth of the
Northern Mariana Islands.
OPM contracted with Runzheimer International to conduct living-cost
surveys during the summer of 1993 in Hawaii, Guam, Puerto Rico, and the
U.S. Virgin Islands. At that time, Runzheimer also surveyed the
Washington, DC, area, which is the base or reference area for living-
cost comparisons.
According to these surveys, the COLA rates should be increased in
three areas and reduced in three other areas. However, a provision in
the Treasury, Postal Service, and General Government Appropriations
Act, 1992 (Public Law 102-141 as amended), bars OPM from reducing any
COLA rate through December 31, 1996. Therefore, only the COLA rate
increases are being implemented.
The increases in COLA rates are summarized in the following table:
COLA Rate Increases
------------------------------------------------------------------------
Old rate(s) New rate
Allowance area/category (percent) (percent)
------------------------------------------------------------------------
County of Kauai, Hawaii All Employees........... 17.5 20.0
Territory of Guam and Commonwealth of the
Northern Mariana Islands Commissary/Exchange... 17.5 20.0
U.S. Virgin Islands All Employees............... \1\12.5/17.
5 17.5
------------------------------------------------------------------------
\1\Old rates for St. Croix and St. Thomas/St. John, respectively.
In computing the new COLA rate, OPM made two changes relative to
the indices published with the proposed rule. The changes were made to
correct an error in one survey and to incorporate a methodological
change recommended by one of the commenters on the proposed rule.
Neither of these changes affected the COLA rates proposed in the
Federal Register on May 26, 1994 (at 59 FR 27314).
The error OPM corrected was the failure to price a homeowner
insurance policy in Maui, Hawaii, that included coverage of damage
caused by high winds. Correcting this raised the Maui index slightly.
The methodological change made by OPM was to use the Goods and
Services Component index as the cash contributions item index in the
Miscellaneous Component. The effect of this change was a slight
increase in the living-cost indices in all areas except Puerto Rico.
The chart below compares the indices shown in the notice that
accompanied the proposed rule and those used in this final rule. As
noted above, none of these convert to a different COLA rate under the
procedures prescribed in 5 CFR 591.206(b).
Previous and Final Living-Cost Indices
------------------------------------------------------------------------
Previous Final
Allowance area/category index index
------------------------------------------------------------------------
City and County of Honolulu, Hawaii:
All Employees..................................... 122.90 123.32
Hawaii County, Hawaii:
All Employees..................................... 109.63 109.82
Kauai County, Hawaii:
All Employees..................................... 119.27 119.69
Maui and Kalawao Counties, Hawaii:
All Employees..................................... 119.32 120.29
Territory of Guam and Commonwealth of the Northern
Mariana Islands:
Local Retail 122.25 122.67
Commissary/Exchange............................... 120.81 121.14
Puerto Rico:
All Employees..................................... 103.00 102.96
U.S. Virgin Islands:
All Employees..................................... 117.81 118.01
------------------------------------------------------------------------
In this final rule, OPM is also consolidating the two allowance
areas in the U.S. Virgin Islands into a single allowance area. The two
allowance areas were (1) the island of St. Croix and (2) the islands of
St. Thomas and St. John. The new allowance area is titled ``The U.S.
Virgin Islands.'' In future surveys, OPM will continue to survey living
costs on both St. Croix and St. Thomas, but the data will be
consolidated to represent the Virgin Islands as a whole.
OPM is eliminating Commissary/Exchange COLA rates in Anchorage,
Alaska; Fairbanks, Alaska; Honolulu, Hawaii; and Puerto Rico. OPM is
not eliminating the Commissary/Exchange COLA rate in the Guam/
Commonwealth of the Northern Mariana Islands (CNMI) allowance area.
According to the Department of Defense, Defense Commissary Agency
(DeCA), Federal civilian employees in the Anchorage, Fairbanks,
Honolulu, and Puerto Rico allowance areas do not have access to
commissaries by virtue of their Federal civilian employment.
Commissary/Exchange COLA rates are payable only to Federal white-collar
employees who, by virtue of their Federal civilian employment, have
unlimited access to commissaries and exchanges in the allowance areas.
Since Federal civilian employees in these four areas do not have access
to commissaries, the Commissary/Exchange COLA rates are not payable in
these areas. Accordingly, OPM is eliminating the Commissary/Exchange
COLA rates in these areas.
In Guam/CNMI, on the other hand, DeCA says some Federal civilian
employees have access to commissaries by virtue of their Federal
civilian employment. OPM believes these employees also have access to
exchange facilities. Therefore, OPM is not eliminating the Commissary/
Exchange COLA rate in Guam/CNMI.
The elimination of the Commissary/Exchange rates in the four areas
should have no effect on the COLA paid to any employee. Federal white-
collar employees in these areas should be receiving the higher Local
Retail COLA rate. Similarly, although OPM does not control access to
commissaries and exchanges, OPM believes its action should not affect
the commissary or exchange privileges that employees might otherwise
enjoy. Therefore, if an employee in one of the four areas finds that
his or her COLA rate or access to commissaries or exchanges is
adversely affected by the elimination of the Commissary/Exchange COLA
rate, the employee should contact his or her agency immediately, and
the agency should bring the issue to OPM's attention as quickly as
possible.
Consistent with the terminology used in other areas where only one
COLA rate is payable, OPM is retitling the ``Local Retail'' COLA rate
as the ``All Employees'' COLA rate in the four areas affected. The
retitling will not affect the COLA rates.
OPM is also clarifying the definitions used in appendix A to
subpart B of title 5, Code of Federal Regulations, because the previous
definitions were subject to misinterpretation. The new definitions
address this problem. The changes do not affect COLA rates or
eligibility.
Lastly, OPM is also removing from the regulations three locations
listed as places where nonforeign post differentials are paid. The
three locations are the Canton, Enderbury, and Christmas Islands. These
islands are no longer territories or possessions of the United States
and, therefore, are not covered by the nonforeign area post
differential program.
Summary and Analysis of Comments
OPM received 127 comments on the proposed regulations and notice it
published in the Federal Register on May 26, 1994. Nearly all of these
were from employees on St. Croix who endorsed the consolidation of the
Virgin Islands allowance areas.
OPM received one comment opposing the consolidation. The commenter
believed the economies of St. Thomas and St. Croix were significantly
different and that living costs are higher on St. Thomas than on St.
Croix. The commenter also suggested that OPM survey St. Thomas twice a
year, once in the ``tourist season'' and once in the ``off-season'' and
average the results.
Although there may be differences between St. Thomas and St. Croix,
OPM believes consolidation will improve the survey and the
administration of the program. Living costs vary among and within many
COLA areas, including the Virgin Islands. The issue is whether it is
practical to differentiate among the living costs of certain places.
Generally, the smaller the area surveyed, the more difficult it is to
measure relative differences in living costs. By consolidating areas
where appropriate, OPM can improve the surveys and reduce unwarranted
fluctuations in COLA's that otherwise might occur. This is the purpose
of the consolidation of the Virgin Islands allowance areas. OPM does
not believe semi-annual surveys of St. Thomas are necessary. OPM plans,
however, to review survey timing in all allowance areas.
One commenter requested that St. Croix employees receive their
increase retroactively to the date of the increase in the St. Thomas
COLA rate. OPM finds no basis for a retroactive adjustment. The
previous St. Croix living-cost surveys were conducted according to
regulation and provided adequate measures of local living costs.
Therefore, the St. Croix COLA rates set pursuant to previous surveys
are appropriate.
Two commenters suggested that OPM review community selection in the
City and County of Honolulu, Hawaii, allowance area. The commenters
believed some of the communities surveyed were not typical of places
where Federal employees live. OPM is reviewing community selections in
all of the COLA survey areas in light of the results of the Federal
Employee Housing and Living Patterns Survey. OPM revised community
selections in several areas prior to the summer 1994 surveys. One of
these allowance areas was the City and County of Honolulu.
One commenter believed OPM had not complied with provisions of the
Treasury, Postal Service, and General Government Appropriations Act,
1992 (Pub. L. 102-141, as amended by Pub. L. 103-329), as these
provisions apply to the COLA program. The law requires OPM to study
living-cost issues and submit to Congress a report on possible changes
in the COLA methodology. The report is due March 1, 1996. The commenter
thought the law directed OPM to make changes in the COLA model before
the report due date.
As we stated in our response to comments received on an earlier
proposed rule (at 59 FR 13844), OPM carefully reviewed Pub. L. 102-141
and the related Senate Appropriations Committee report. OPM determined
that the law has two requirements: (1) COLA rates may not be reduced
through December 31, 1995, and (2) OPM must submit a report to Congress
on possible changes in the COLA methodology. The law does not direct
OPM to implement methodological changes at this time.
The Senate Committee, however, asked OPM to research specific
methodological issues. OPM is doing this and plans to include the
results of its research in its report to Congress. Although the law
does not require OPM to implement changes, OPM will continue to make
improvements in the COLA program, as appropriate. We are implementing
some of these changes with this final rule.
The commenter said OPM regulations should describe the COLA model
and survey in greater detail. OPM believes the COLA regulations are
adequately detailed and that subjecting the survey process to a set of
overly detailed and inflexible rules would impair, rather than improve,
the COLA program. The flexibility results in a more accurate COLA model
because improvements can be made from one year to the next. Such
changes are made public because, before COLA rates are adjusted, OPM
publishes in the Federal Register a detailed report on the survey
methodology and results. Employees have the opportunity to comment on
any changes, and OPM takes these comments into careful consideration.
The commenter believed OPM violated the Administrative Procedure
Act (APA) by publishing details after the survey. He said OPM could not
``go back and replicate the data if it is subsequently determined that
the changes were 'inappropriate.''' The APA does not require OPM to
make a change for each comment received. Instead, the APA requires OPM
to inform the public of certain proposals and actions, allow the public
to comment on these, and take these comments into consideration. This
we do.
As evidenced in this final rule, OPM implements recommended changes
as appropriate. With this rule, OPM is correcting an error made in the
calculation of the Maui index, implementing a new methodology for
calculating the Miscellaneous Component index, and eliminating
Commissary/Exchange COLA rates in areas where they are no longer
payable. OPM also adopted, based in part on comments it received,
community changes for the summer 1994 COLA surveys. Therefore, OPM is
in compliance with both the letter and spirit of the APA.
The commenter said there was no basis in law for the pledge of
confidentiality that is provided on the Background Survey information
collection materials, which was part of Appendix 5 of the report. The
Freedom of Information Act (FOIA), as codified at 5 U.S.C. 552, allows
the Government to withhold information from public release if the
information contains trade secrets or commercial or financial
information that is privileged or confidential. Generally, the
information collected in Background Surveys is privileged commercial
information. Background Surveys are used to identify items that will be
priced and outlets at which the prices will be collected. To identify
commonly purchased items and popular outlets, information on such
things as sales volume and market penetration are collected. This
information is protected from disclosure under FOIA.
The commenter believed the COLA model was unnecessarily complex and
suggested that it be simplified to use only one income level. The
commenter said this would reduce survey costs and the number of
subjective assumptions required. As we noted in our response to similar
comments received on an earlier proposed rule (at 59 FR 13845), OPM's
regulations require the measurement of living costs at multiple income
levels. This approach recognizes that relative living costs may vary by
income level and that the distribution of employees by income level may
vary among areas. The multiple income approach, therefore, yields a
more accurate measure of overall living-cost differences than a single
income approach. Nevertheless, to the extent that multiple income
levels require additional subjective assumptions, we agree that the
overall integrity of the model might not be impaired by using a single
income level. OPM is examining this issue and plans to address it in
its report to Congress.
The commenter also objected to Runzheimer's recommendation that OPM
include income taxes in the COLA model. He believed this would unduly
complicate the model. As stated in previous Federal Register notices,
OPM is studying issues relating to Federal, State, and local income
taxes and plans to include the results of this study in its report to
Congress.
The commenter wanted the COLA model to take into account the
``objectively determinable'' costs of remoteness, isolation, and
special needs. He cited increased home maintenance, out-of-area college
and university costs, and medical expenses as examples of these extra
costs. In comments on previous Federal Register notices, many employees
identified special ``needs'' they believed were unique to their area.
OPM has and is continuing to research many of these issues, including
home maintenance, college and university costs, and medical expenses.
We plan to include the results of this research in our report to
Congress. At present, however, OPM believes the COLA model reasonably
and adequately measures cost differences for the vast majority of
expenses that Federal employees typically incur.
Noting the difficulty of comparing colleges and universities of
equal quality, the commenter further proposed that OPM measure the cost
of higher education solely in the DC area. He said allowance area costs
could be computed by adding to the DC costs the extra expense of out-
of-state tuition, room and board, and round-trip air travel between the
allowance areas and Washington, DC. Although this approach would
address the problem of comparing the cost of an education of like
quality, we believe measuring costs in this manner would vastly
overstate the costs incurred by most Federal employees in the allowance
areas. Measuring costs in this manner could also significantly
understate the average cost of college and university education
incurred by Federal employees in the DC area.
The commenter said items needed only in allowance areas should be
priced in the allowance area, but not in DC. OPM is researching the
issue of special needs. While there may be consumer requirements unique
to living in the allowance areas, there also are consumer requirements
unique to living in the Washington, DC, area. For the summer surveys,
the model does not address these issues because they are highly
subjective, difficult to measure, and vary widely among areas. Instead,
the model compares the cost of an item in an allowance area with the
cost for the same item in the DC area. OPM believes this is consistent
with the settlement of Hector Arana, et al. v. United States, in which
the plaintiffs asked OPM to adopt a methodology that compared specified
brands, models, and sizes whenever possible.
We note, however, that the Senate Appropriations Committee asked
OPM to research the issue of items required in the allowance area but
not in the Washington, DC, area and include this research in its report
to Congress. This OPM is doing.
The commenter recommended that OPM add 5 percentage points to all
COLA rates to take into account costs that exist but are not
objectively determinable. OPM believes intangible factors, such as
difficult living conditions, should not be part of the COLA program.
There are other programs, such as the post differential program, that
compensate Federal employees in such circumstances. OPM believes COLA
should compensate employees for measurable differences in living costs.
Even if we agreed conceptually with such changes, significant
changes in the law, Executive Order, and regulations would be required
to allow the adjustment of COLA for these intangible factors. The
Senate Appropriations Committee specifically asked OPM to study factors
relating to remoteness and isolation and to report to Congress on
legislative recommendations on how to calculate COLA's. Therefore,
final resolution of these issues must await OPM's report to Congress
and subsequent congressional action.
The commenter believed employees in the allowance areas saved at a
higher rate to afford the down payment for a house or a car or to pay
for college/university education. He said OPM should take this into
consideration and adjust savings and investments by the overall index
for the area. The COLA model uses the same approach to savings and
investments as the Bureau of Labor Statistics uses in the Consumer
Expenditure Survey (CES). That approach accounts for savings and
investments made for the purpose of future purchases in the category or
component associated with the item to be purchased. For example,
savings made for the down payment or purchase of an automobile are
accounted for in the private transportation category. Therefore, if
automobiles cost more in an allowance area and the purchaser must save
more to afford the car, the COLA model already takes this additional
savings requirement into account. No additional adjustments are
required.
On the other hand, the savings and investment category in the
Miscellaneous Component covers long-term savings and investments, such
as those made for retirement purposes. The category also includes life
insurance. For Federal employees, the cost of life insurance and
required contributions to a Federal retirement system do not vary by
geographic area. Any additional insurance or contributions to the
retirement systems are a matter of personal preference. Therefore, it
is appropriate to hold the index constant for these items.
The commenter objected to trimming high and low values in the
housing component and use of trend analyses. The commenter believed
housing market price anomalies should be tolerated or that only
``obvious errors or anomalies'' should be eliminated. The purpose of
trimming and trend analyses is to stabilize the housing price data from
one year to the next. As OPM stated in its response to comments
received on an earlier proposed rule (at 59 FR 13846), trimming is
essentially a nonparametric technique similar to using the median
rather than the average. OPM and Runzheimer considered using the median
but rejected it because the limited number of observations obtained in
some smaller allowance areas could cause the median to be erratic from
one year to the next. Trimming provides stability; and because equal
numbers of high and low values are trimmed, no bias is introduced.
Eliminating ``obvious anomalies'' would be a more subjective process
with a potential for bias.
The commenter thought the age of the home should be included in
home sales analyses. He recommended comparing prices of homes of a
similar age, size, and room count. Numerous factors influence home sale
prices, but data on many of these factors are not readily available.
Runzheimer uses home size and room count as the major criteria in
housing comparisons because data on these factors are usually available
in all areas and because these factors typically have a significant
influence on home prices. Age is not used because data on it frequently
are not available and because OPM's initial research indicates that its
use may be problematic. Moreover, as noted in the report, the number of
home sales observations is limited in many areas. Stratifying these
small quantities into age groups for purposes of comparison would
complicate the model--something the commenter wished to avoid. It would
also probably introduce unwarranted fluctuations in the housing index
from one year to the next--something OPM wants to avoid.
The commenter said the survey failed to take into consideration the
use of solar water heaters in Hawaii and Guam. The commenter believed
the model did not account for the capital cost of such heaters or the
possible reduction in overall utility consumption.
As OPM stated in its response to comments received on an earlier
proposed rule (at 59 FR 13847), significant home features and
improvements generally are reflected in the selling price of the home.
Therefore, living-cost surveys reflect the cost of solar water heaters
to the extent that such items influence home market values and are
commonly found in homes in any area, including Hawaii and Guam. If
solar water heaters are so common that their use generally reduces the
consumption of utilities, the survey results will reflect lower utility
costs. This is as it should be. The COLA model compares overall living
costs in the allowance area with overall living costs in the DC area.
If housing is more expensive and utility costs are lower because solar
heaters are common, the final comparison of overall housing costs will
be equitable. No special consideration of capital improvement costs or
reduced utility consumption is appropriate.
The commenter said employees in the allowance areas face extreme
weather disturbances, particularly typhoons or hurricanes. He believed
these weather disturbances and other climatic conditions result in
higher costs, particularly home insurance and maintenance costs.
The cost of homeowner's insurance is part of the COLA model. The
policies priced include coverage of damage caused by high winds (e.g.,
hurricane winds). As shown in Appendix 7 of the report, these policies
are relatively expensive in areas where severe weather is a problem.
Other costs, such as the cost of repairing storm damage, are more
difficult to address in the surveys. Although it may be possible to
price the cost of repairing or replacing an item such as a window or a
roof, it is difficult to know how often this must be done in each
allowance area compared with the Washington, DC, area. The same is true
with other types of maintenance, such as painting. It is difficult to
know what tasks, if any, must be performed more often in the allowance
areas than in the Washington, DC, area. OPM is researching these issues
and plans to discuss them in its report to Congress.
The commenter objected to the selection of Los Angeles as the
common destination point for comparing airfares. He said the Los
Angeles routes were highly competitive and resulted in lower fares
compared with other destinations. The commenter suggested pricing
round-trip tickets from each area to Kansas City. As stated in the
report, Los Angeles was selected because it is a common point within
the continental United States that is roughly equidistant from each of
the allowance areas and the Washington, DC, area. The route may be
highly competitive, but that does not invalidate cost comparisons. OPM
is measuring the relative cost of air travel. If competition reduces
fares, the reductions will be reflected in the Washington, DC, to Los
Angeles fares as well as in the allowance area to Los Angeles fares.
Therefore, OPM believes the comparisons are appropriate.
The commenter also felt that the COLA model did not measure true
air transportation costs. He said inter-island travel and travel to the
contiguous 48 States required more frequent use of air transportation.
The COLA model does not account for regional differences in the
frequency of transportation. It assumes the typical Federal employee
uses air travel occasionally but mainly travels by private automobile,
putting 15,000 miles per year on a car. The model may underestimate the
cost of air travel for some allowance area residents, but it probably
overestimates private transportation costs for others because it is
unlikely that most island residents would put 15,000 miles per year on
their cars. Needless to say, OPM would prefer to employ better usage
estimates for both private and air transportation. To this end, OPM is
researching transportation issues and plans to include the results of
this research in its report to Congress.
The commenter believed the medical expense portion of the
Miscellaneous Component failed to reflect the higher out-of-pocket
expenses that some Federal employees in the allowance areas incur. The
commenter cited as examples the higher price of medical service, the
absence of Health Maintenance Organizations (HMO's), and the need to
travel outside the area to obtain some medical services. The COLA model
takes into consideration relative differences in medical costs. For
example, the report indicated that medical costs in Honolulu are
roughly 10 percent above those in the Washington, DC, area. OPM notes
that HMO's are very popular in Hawaii and Puerto Rico and that all of
the allowance areas have medical facilities that provide commonly
required medical services. Nevertheless, OPM is researching issues
relating to medical expenses. The results of that research will be
incorporated in our report to Congress.
The commenter criticized the methodology used for catalog pricing.
He assumed DC employees do not purchase by catalog but that allowance
areas employees do because certain items were not locally available.
Consequently, he recommended comparing allowance area catalog prices
with over-the-counter prices in the Washington, DC, area.
As stated in the report, catalogs are a popular form of retailing
in both the allowance areas and in the Washington, DC, area. The COLA
model includes catalog sales to reflect this common type of shopping
and to allow the comparison of the prices of certain items for which
the same brands, models, and sizes are difficult to find in the
allowance areas and in the Washington, DC, area. OPM does not agree
with the commenter's assumption that people only purchase from catalogs
when the item is not available locally. People make catalog purchases
for a variety of reasons, including price, convenience, and
availability. Numerous catalog merchandisers compete in the allowance
areas and in the Washington, DC, area. It would be inappropriate,
therefore, to compare allowance area catalog prices with over-the-
counter prices in the DC area. In the employee survey, OPM asked
employees about their purchasing patterns, including whether they
typically purchase various types of items by catalog. OPM plans to
include the results of this survey in its report to Congress.
The commenter criticized OPM for using old consumer expenditure
information to weight commissary and exchange prices. OPM acknowledges
it is using older information. As evidenced in this final rule,
however, OPM has been researching commissary and exchange usage to
discern which Federal employees have such access and in which areas.
OPM plans to continue and expand this research, as appropriate.
The commenter assumed that employees who are paid the commissary
and exchange COLA rate would have commissary and exchange access if
stationed in the Washington, DC, area. He recommended, therefore,
comparing commissary and exchange prices in the allowance areas with
commissary and exchange prices in the DC area.
Executive Order 10000 requires OPM to ``* * *make appropriate
deductions when * * * commissary or other purchasing privileges are
furnished as a result of Federal civilian employment at a cost
substantially lower than the prevailing costs in the allowance area
concerned.'' Commissary and exchange prices in Guam are significantly
lower than prevailing prices. Therefore, a reduction in the COLA rate
is warranted. The methodology used to calculate the Commissary and
Exchange COLA rate involves the comparison of a weighted average of
local retail prices and commissary and exchange prices in the allowance
area with local retail prices only in the Washington, DC, area. This
methodology was reviewed and upheld by the court in Joseph E. Curlott,
Jr., et al. v. Robert E. Hampton, et al. and Charles R. Kester, et al.
v. Alan K. Campbell.
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.
U.S. Office of Personnel Management.
James B. King,
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. 591.204, paragraph (b)(4) is revised to read as follows:
Sec. 591.204 Establishment of allowance areas.
* * * * *
(b)* * *
(4) The U.S. Virgin Islands.
* * * * *
3. In Sec. 591.208, paragraph (b) is revised to read as follows:
Sec. 591.208 Post differential.
* * * * *
(b) The places at which differentials are paid are--
(1) American Samoa (including the island of Tutuila, the Manua
Islands, and all other islands of the Samoa group east of longitude 171
degrees west of Greenwich, together with Swains Island);
(2) Guam;
(3) The Commonwealth of the Northern Mariana Islands;
(4) Johnston Island and Sand Island; and
(5) Midway Islands and Wake Island.
* * * * *
4. 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
This appendix lists the places where a cost-of-living allowance has
been approved and shows the allowance rate to be paid to employees
along with any special eligibility requirements for the allowance
payment. The allowance percentage rate shown is paid as a percentage of
an employee's rate of basic pay.
------------------------------------------------------------------------
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............................................. 22.5
County of Hawaii:
All Employees............................................. 15.0
County of Kauai:
All Employees............................................. 20.0
County of Maui and County of Kalawao:
All Employees............................................. 22.5
Territory of Guam and Commonwealth of the Northern Mariana
Islands
Local Retail................................................ 22.5
Commissary/Exchange......................................... 20.0
Commonwealth of Puerto Rico
All Employees............................................... 10.0
U.S. Virgin Islands
All Employees............................................... 17.5
------------------------------------------------------------------------
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 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.
5. Appendix B of subpart B is revised to read as follows:
Appendix B of Subpart B--Places and Rates At Which Differentials Shall
Be Paid
This appendix lists the places where a post differential has been
approved and shows the differential rate to be paid to eligible
employees. The differential percentage rate shown is paid as a
percentage of an employee's rate of basic pay.
------------------------------------------------------------------------
Percentage
Geographic coverage differential
rate
------------------------------------------------------------------------
American Samoa (including the island of Tutuila, the Manua
Islands, and all other islands of the Samoa group east of
longitude 171 deg. west of Greenwich, together with
Swains Island)........................................... 25.0
Johnston Island and Sand Island........................... 25.0
Midway Islands............................................ 25.0
Territory of Guam and Commonwealth of the Northern Mariana
Islands.................................................. 20.0
Wake Island............................................... 25.0
------------------------------------------------------------------------
[FR Doc. 94-26556 Filed 10-25-94; 8:45 am]
BILLING CODE 6325-01-P
