E7-16226. Nonforeign Area Cost-of-Living Allowance Rates; U.S. Virgin Islands

AGENCY:

Office of Personnel Management.

ACTION:

Final rule.

SUMMARY:

The Office of Personnel Management is publishing a final regulation to increase the cost-of-living allowance (COLA) rate received by certain white-collar Federal and U.S. Postal Service employees in the U.S. Virgin Islands (USVI). The increase is the result of living-cost surveys conducted by OPM in USVI, Puerto Rico, and the Washington, DC area in 2005. The final regulation increases the COLA rate for USVI from 23 percent to 25 percent.

DATES:

Effective date: September 17, 2007. Implementation date: First day of the first pay period beginning on or after September 17, 2007.

FOR FURTHER INFORMATION CONTACT:

J. Stanley Austin, [phone]; fax: [phone]; or e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Section 5941 of title 5, United States Code, authorizes Federal agencies to pay cost-of-living allowances 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 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, 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.) OPM adopted these regulations pursuant to the stipulation of 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.

OPM conducted living-cost surveys in Puerto Rico, the U.S. Virgin Islands, and the Washington, DC, area in the spring of 2005. We published the results of these surveys in the 2005 Nonforeign Area Cost-of-Living Allowance Survey Report: Caribbean and Washington, DC, Areas in the Federal Register on October 27, 2006, at 71 FR 63179.

As described in the 2005 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 COLA areas. The results of the living-cost surveys indicated an increase in the COLA rate for the U.S. Virgin Islands, from 23 percent to 25 percent, and a decrease in the COLA rate for Puerto Rico.

We also computed interim adjustments based on the relative change in the CPI for the Alaska, Hawaii, and Guam and the Northern Mariana Islands COLA areas. We published the calculation of these interim adjustments in a notice in the Federal Register on October 27, 2006, at 71 FR 63178. The interim adjustments indicated that the COLA rates for the Hawaii and Guam COLA areas were set at the appropriate level but that the Anchorage, Fairbanks, and Juneau, Alaska, COLA rates should be reduced.

We published a proposed rule to increase the USVI COLA rate and reduce the COLA rates in Puerto Rico and Anchorage, Fairbanks, and Juneau, Alaska, in the Federal Register on October 27, 2006, at 71 FR 63176. However, 5 CFR 591.228(c) limits COLA rate decreases to 1 percentage point in a 12-month period, and we implemented COLA rate decreases in Anchorage, Fairbanks, Juneau, and Puerto Rico effective on the first pay period beginning on or after September 1, 2006. Therefore, we are changing only the USVI rate at this time. We will address the rate reductions, and comments received on these reductions, in a future Federal Register publication. We did not receive comments regarding the USVI rate increase.

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, the Office of Personnel Management amends 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 to 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.

Geographic coverage	Allowance rate (percent)
State of Alaska:
City of Anchorage and 80-kilometer (50-mile) radius by road	24.0
City of Fairbanks and 80-kilometer (50-mile) radius by road	24.0
City of Juneau and 80-kilometer (50-mile) radius by road	24.0
Rest of the State	25.0
State of Hawaii:
City and County of Honolulu	25.0
Hawaii County, Hawaii	17.0
County of Kauai	25.0
County of Maui and County of Kalawao	25.0
Territory of Guam and Commonwealth of the Northern Mariana Islands	25.0
Commonwealth of Puerto Rico	10.5
U.S. Virgin Islands	25.0