Cost-of-Living Allowances (Nonforeign Areas)

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

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[FR Doc. 94-26556 Filed 10-25-94; 8:45 am]

BILLING CODE 6325-01-P