Nonforeign Area Cost-of-Living Allowance Rates; Alaska

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 591

RIN 3206-AL37

Nonforeign Area Cost-of-Living Allowance Rates; Alaska

AGENCY:

U.S. Office of Personnel Management.

ACTION:

Proposed rule.

SUMMARY:

The U.S. 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. The proposed rate changes are the result of living-cost surveys conducted by OPM in 2006 and interim adjustments OPM calculated based on relative Consumer Price Index differences between the cost-of-living allowance areas and the Washington, DC, area. The proposed rate changes would reduce the COLA rates in Anchorage, Fairbanks, and Juneau from 24 percent to 23 percent. OPM is also proposing a minor clarification to the Alaska COLA area boundaries to make clear the 50-mile radius is by the shortest route using paved roads.

DATES:

We will consider comments received on or before March 3, 2008.

ADDRESSES:

Send or deliver comments to Charles D. Grimes III, Deputy Associate Director for Performance Management and Pay Systems, Strategic Human Resources Policy Division, U.S. Office of Personnel Management, Room 7300B, 1900 E Street, NW., Washington, DC 20415-8200; fax: (202) 606-4264; or e-mail:

COLA@opm.gov

.

FOR FURTHER INFORMATION CONTACT:

J. Stanley Austin, (202) 606-2838; fax: (202) 606-4264; or e-mail:

COLA@opm.gov

.

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. Executive Order 10000, as amended, delegates to the U.S. 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, OPM adjusts 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 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.

2006 Alaska Survey

OPM conducted living-cost surveys in Anchorage, Fairbanks, Juneau, and the Washington, DC, area in the spring of 2006. We are publishing the results of these surveys in the

2006 Nonforeign Area Cost-of-Living Allowance Survey Report: Alaska and Washington, DC, Areas,

which accompanies this proposed rule.

As described in the 2006 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 Alaska COLA areas. Table 1 shows the final 2006 Alaska survey living-cost indexes. These indexes indicate reductions in the COLA rates for Anchorage, Fairbanks, and Juneau. OPM's regulations at 5 CFR 591.228(c) limit COLA rate reductions to 1 percentage point in a 12-month period; therefore, OPM is proposing to reduce the COLA rates in Anchorage, Fairbanks, and Juneau from 24 percent to 23 percent.

Table 1.—2006 Alaska Survey Indexes

Allowance area

Index

Anchorage

109.81

Fairbanks

118.90

Juneau

120.08

Rest of the State of Alaska

132.82

2005 Interim Adjustments

On October 27, 2006, OPM published a notice on the 2005 interim adjustments for the Alaska and Pacific COLA areas in the

Federal Register

at 71 FR 63178. OPM also published a proposed rule at 71 FR 63176 to reduce the COLA rates for Anchorage, Fairbanks, and Juneau based on the interim adjustments. In the notice, the adjustment for Alaska used CPI changes for a 30-month period and the adjustment for the Pacific used CPI changes for an 18-month period. As specified at 5 CFR 591.224(a), the adjustment for the Alaska areas should have been based on a 24-month period and the adjustment for the Pacific areas should have been based on a 12-month period. Tables 2 and 3 show corrected CPI changes for Anchorage and Honolulu.

Table 2.—Change in Anchorage and in the Washington-Baltimore CPI-Us 2003 to 2005

Survey area

CPI-U

Anchorage 2003 CPI-U first half

161.1

Anchorage 2005 CPI-U first half

169.6

Anchorage change in percent

5.2762

DC-Baltimore 2003 CPI-U first half

115.6

DC-Baltimore 2005 CPI-U first half

122.8

DC-Baltimore change in percent

6.2284

Table 3.—Change in Honolulu and in the Washington-Baltimore CPI-Us 2004 to 2005

Survey area

CPI-U

Honolulu 2004 CPI-U first half

189.2

Honolulu 2005 CPI-U first half

195.0

Honolulu change in percent

3.0655

DC-Baltimore 2004 CPI-U first half

118.3

DC-Baltimore 2005 CPI-U first half

122.8

DC-Baltimore change in percent

3.8039

Correcting the adjustments for the appropriate period changed the indexes for the Alaska and Pacific areas as shown in Tables 4 and 5. Because the corrected Alaska area indexes are now superseded by the 2006 Alaska survey indexes and the corrected Pacific indexes have been superseded by 2006 interim adjustment indexes, OPM plans no further action based on the 2005 interim adjustments.

Table 4.—Alaska 2005 CPI-U Price Index Adjustments

Anchorage

Fairbanks

Juneau

Kodiak

2003 COLA Survey Indexes

111.40

115.62

118.09

135.84

Adjustment Factors

7

9

9

9

2003 COLA Survey Price Indexes

104.40

106.62

109.09

126.84

2005 CPI Adjusted Price Indexes

103.46

105.66

108.11

125.70

2005 COLA Indexes with Adj. Factors

110.46

114.66

117.11

134.70

Table 5.—Pacific 2005 CPI-U Price Index Adjustments

Honolulu

Hawaii Co

Kauai

Maui

Guam

2004 COLA Survey Indexes

125.80

117.25

127.63

131.50

127.40

Adjustment Factors

5

7

7

7

9

2004 COLA Survey Price Indexes

120.80

110.25

120.63

124.50

118.40

2005 CPI Adjusted Price Indexes

119.94

109.47

119.77

123.61

117.56

2005 COLA Indexes with Adj. Factors

124.94

116.47

126.99

130.61

125.56

Area Boundary Clarification

OPM is also proposing a clarification to the Alaska COLA area boundaries in 5 CFR 591.207 to make clear the 80-kilometer (50-mile) radius is by the shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station. OPM believes the current regulations should not be interpreted differently, but proposes this clarification to assist agencies when alternate interpretations are presented.

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, 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. In § 591.207, revise paragraphs (a), (b), and (c) to read as follows:

§ 591.207

Which areas are COLA areas?

(a) City of Anchorage, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;

(b) City of Fairbanks, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;

(c) City of Juneau, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;

3. 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.

Geographic coverage

Allowance rate

(percent)

State of Alaska:

City of Anchorage and 80-kilometer (50-mile) radius by road

23

City of Fairbanks and 80-kilometer (50-mile) radius by road

23

City of Juneau and 80-kilometer (50-mile) radius by road

23

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 Mariana Islands

25

Commonwealth of Puerto Rico

13

U.S. Virgin Islands

25

[FR Doc. E7-25302 Filed 1-2-08; 8:45 am]

BILLING CODE 6325-39-P