[Federal Register Volume 60, Number 174 (Friday, September 8, 1995)]
[Rules and Regulations]
[Pages 46749-46750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22316]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 60, No. 174 / Friday, September 8, 1995 /
Rules and Regulations
[[Page 46749]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 591
RIN 3206-AG73
Cost-of-Living Allowances (Nonforeign Areas)
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing two
regulatory changes in the nonforeign area cost-of-living allowance
(COLA) program. One change will clarify a reference in the regulations
to examples of criteria we use for comparing housing between the
allowance areas and Washington, DC. The second change will allow the
payment of foreign area post differentials without any corresponding
offset from the nonforeign area COLA. OPM is also changing the timing
of living-cost surveys conducted in Hawaii, Guam, Puerto Rico, and the
U.S. Virgin Islands. These changes will improve administration of the
nonforeign area COLA program.
DATES: These regulations are effective October 10, 1995. These
regulations are applicable on the first day of the first pay period
beginning on or after October 10, 1995.
FOR FURTHER INFORMATION CONTACT:
Allan G. Hearne, (202) 606-2838.
SUPPLEMENTARY INFORMATION: Under section 5941 of title 5, United States
Code, and Executive Order 10000, as amended, certain Federal employees
in nonforeign areas outside the 48 contiguous States are eligible for
cost-of-living allowances (COLA's) when local living costs are
substantially higher than those in the Washington, DC, area. Nonforeign
area COLA's are paid in Alaska, Hawaii, Puerto Rico, the U.S. Virgin
Islands, and Guam and the Commonwealth of the Northern Mariana Islands.
OPM published proposed rules on May 11, 1995 (60 FR 25150), to
improve administration of the program by--
(1) Permitting the survey and analysis of living costs at fewer
income levels than the three levels currently used;
(2) Clarifying the types of housing units to be surveyed; and
(3) Allowing the payment of foreign area post differentials without
any corresponding offset from the nonforeign area COLA.
OPM also announced for comment its intention to change the timing
of living-cost surveys conducted in Hawaii, Guam, Puerto Rico, and the
U.S. Virgin Islands, although this change did not require a change in
regulation.
There were five respondents to the proposed regulations. In the
discussion that follows, we address the comments that we received on
each issue and provide our response.
Number of Income Levels Surveyed
We received four comments on the proposal to use only one income
level in the surveying of living costs. Each of the four commenters
expressed concerns about the impact of the proposed change on COLA
rates. One of the commenters favored continued use of the current
three-level surveying methodology because of the possibility that the
proposed change would not accurately reflect the actual costs of COLA
area employees. The other three commenters presented arguments in favor
of further study of the issue.
In light of these comments, we have decided not to make the change
at this time. OPM will review the issue further in preparation for its
report to Congress under the Treasury, Postal Service and General
Government Appropriations Act, 1992 (Pub. L. 102-141), as amended. The
comments received in response to the proposed regulation will be
considered by OPM in its review.
Types of Housing Units Surveyed
We proposed to clarify a parenthetical phrase in current
regulations concerning the types of housing units surveyed. We received
four comments on this issue. Three commenters agreed with the change,
although one said that if the cost index for any COLA area were
unintentionally lowered, the change should be revoked. One commenter
objected to the change, stating that new homes with their modern
architectural preferences, greater amenities, and lower maintenance
needs are more valuable than old homes. The commenter added that a
comparison of new homes in Washington, DC, with old homes in COLA areas
would not be fair and reasonable.
The parenthetical phrase ``(type, size, age)'' in 5 CFR
Sec. 591.205(b)(3) was intended to list examples of the standard
shelter specifications that could be used for comparing housing in the
COLA areas with the Washington, DC, area. Because we were not always
able to obtain age data on the housing units surveyed, we proposed to
remove ``age'' from the listing so as not to give the impression that
age was in fact being used in the calculations.
In response to the comments, we are instead prefacing ``type, size,
age'' with ``e.g.,'' to make clear that these are examples of the
specifications that could be used. We will continue to attempt to
obtain age data and may apply age criteria for comparison of housing.
If this proves feasible, we will provide a description of the exact
procedures in a later Federal Register notice.
Nonforeign Area COLA and Foreign Post Differentials
We further proposed to eliminate the requirement in Sec. 591.210(d)
that an employee's nonforeign area COLA be reduced if the employee also
receives a foreign area post differential and the two payments combined
would otherwise exceed 25 percent of basic pay. This created a
disincentive for employees in nonforeign allowance areas to accept
long-term temporary assignments in foreign areas. The four comments we
received on this proposal all agreed with the change.
Survey Timing
We also announced our intention to change the timing of the summer
COLA surveys to correspond with the winter COLA surveys. This does not
involve a regulatory change.
We received three comments on this proposal, all of which supported
the change, although one respondent reserved full comment pending an
opportunity to review the information upon which we based our decision.
Therefore, in view of the potential benefit to the public and the
[[Page 46750]]
Government of this change and in anticipation of its minimal impact on
COLA rates, OPM plans to conduct its living-cost surveys in Hawaii,
Guam, Puerto Rico, and the U.S. Virgin Islands in the first quarter of
the calendar year beginning with the next survey, which will be
conducted in the first quarter of calendar year 1996.
General Comments
One commenter expressed concern that OPM issued the proposed
regulations at a time when a broad examination of the COLA program is
scheduled. The commenter felt that some of the changes could have a
substantial impact on the program and that the 30-day comment period
was not enough time to fully analyze their effect.
Except for the proposed technical clarification relating to
standard shelter specifications, all of the changes we proposed were
based on comments and recommendations we received on previously
published living-cost survey reports. In fact, this particular
commenter had proposed, on several previous occasions, analyzing living
costs at only one income level, and we had addressed this issue
specifically in several previous Federal Register notices. Therefore,
because we were proposing to adopt recommendations that commenters had
previously provided on issues that were not new, we believed that 30
days was sufficient time to review and comment on our proposals. In the
future, however, OPM will continue to provide, whenever practical, at
least 60 days for interested parties to review and comment on proposals
relating to the COLA program.
One commenter responded generally to the cost of housing and
grocery items in Alaska and expressed concern about any reduction in
COLA rates. These final regulations will have no effect on the COLA
rates payable in Alaska. Furthermore, Pub. L. 102-141, as amended,
prohibits any reductions in COLA rates through December 31, 1996.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it 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.
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. 591.205, the second sentence in paragraph (b)(3) is
revised to read as follows:
Sec. 591.205 Comparative cost index.
* * * * *
(b) * * *
(3) * * * Standard shelter specifications (e.g., type, size, age)
are selected for each income level. * * *
* * * * *
Sec. 591.210 [Amended]
3. In Sec. 591.210, paragraph (d) is removed and paragraphs (e),
(f), and (g) are redesignated as paragraphs (d), (e), and (f),
respectively.
[FR Doc. 95-22316 Filed 9-7-95; 8:45 am]
BILLING CODE 6325-01-M
