Cost-of-Living Allowances (Nonforeign Areas); Guam and the Commonwealth of the Northern Mariana Islands

AGENCY:

Office of Personnel Management.

ACTION:

Interim rule with request for comments.

SUMMARY:

The Office of Personnel Management (OPM) is publishing an interim regulation to increase the cost-of-living allowance (COLA) rate paid to certain Federal employees in Guam and the Commonwealth of the Northern Mariana Islands (CNMI). This regulation increases the local retail COLA rate for the Guam/CNMI allowance area from 22.5 percent to 25 percent. This increase is a result of cost-of-living surveys conducted in October and November 1998 using our current methodology for calculating COLA rates. A settlement agreement that is currently awaiting court approval calls for OPM to use a new methodology in conducting future surveys and in calculating future COLA rates. Therefore, the survey results reflected in this rule are not an indication of what survey results or COLA rates would be under the new methodology.

DATES:

Effective date: July 17, 2000. Implementation date: First day of the first pay period beginning on or after July 17, 2000. Comment date: Submit comments on or before October 16, 2000.

ADDRESSES:

Send or deliver comments to Donald J. Winstead, Assistant Director for Compensation Administration, Workforce Compensation and Performance Service, Office of Personnel Management, Room 7H31, 1900 E Street NW., Washington, DC 20415-8200; fax: (202) 606-4264; or email: COLA@opm.gov.

FOR FURTHER INFORMATION CONTACT:

Donald L. Paquin, (202) 606-2838; fax: (202) 606-4264; or email: COLA@opm.gov.

SUPPLEMENTARY INFORMATION:

The Federal Government pays cost-of-living allowances (COLAs) to General Schedule, U.S. Postal Service, and certain other Federal employees in Alaska, Hawaii, Guam and the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. The Office of Personnel Management (OPM) conducts cost-of-living surveys in each allowance area to determine whether, and to what degree, local living costs are higher than those in the Washington, DC, area. OPM sets the COLA rate for each area based on the results of these surveys.

In October and November 1998, we conducted cost-of-living surveys in Alaska, Hawaii, Guam, Puerto Rico, the U.S. Virgin Islands, and the Washington, DC, area. We compared the results of the Washington, DC, area survey with the results of the other surveys to derive an index for each of the areas. We provide the details of this process in a separate report in this issue of the Federal Register.

The 1998 surveys indicate that the local retail COLA rate for the Guam/CNMI allowance area should be increased to 25 percent, as shown in the following table. Under the Treasury, Postal Service, and General Government Appropriations Act, 1992 (Pub. L. 102-141), as amended, no COLA rates may decrease until after December 31, 2000.

Appendix text changes

We inadvertently omitted the introductory text to appendix A of subpart B in the interim rule published with our 1997 survey report. (See 63 FR 56430, October 21, 1998.) We are reinstating the text with this rule. We have also rewritten a portion of the introductory text and other text in appendix A to improve clarity. These changes are not substantive.

Rulemaking waivers

Under 5 U.S.C. 553 (b)(3)(B) and (d)(3), OPM finds that good cause exists to waive the publication of proposed rulemaking and the 30-day delay in the effective date of this regulation. Because of unexpected delays in completing these surveys and calculating the living-cost indexes, we believe it is in the public interest to implement the COLA rate increase immediately. In the future, as we have done in the past, we plan to announce COLA rate adjustments in a proposed rule for public notice and comment.

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

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. 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 approved for a cost-of-living allowance and shows the allowance rate and 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.

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:

The appropriate military department determines eligibility for access to military commissary and exchange facilities. If an employee is furnished with 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.