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Nonforeign Area Cost-of-Living Allowance Rates; 2007 Interim Adjustments: Puerto Rico

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U.S. Office of Personnel Management.


Final rule.


The U.S. Office of Personnel Management (OPM) is increasing the cost-of-living allowance (COLA) rate received by certain white-collar Federal and U.S. Postal Service employees in Puerto Rico. The increase is the result of interim adjustments OPM calculated based on relative Consumer Price Index differences between Puerto Rico and the Washington, DC, area. This increase raises the COLA rate for Puerto Rico from 13 percent to 14 percent.


Effective date: March 23, 2009. Implementation date: First day of the first pay period beginning on or after March 23, 2009.

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

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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, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands (USVI). Executive Order 10000, as amended, delegates to the U.S. Office of Personnel Management the authority to administer nonforeign area COLAs and prescribes certain operational features of the program.

We conduct 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. As required by section 591.223 of title 5, Code of Federal Regulations, we survey the Alaska, Pacific, and Caribbean COLA areas on a 3-year rotating basis, and the Washington, DC, area on an annual basis. We set COLA rates based on the results of these surveys. For areas not surveyed during a particular year, we compute interim adjustments to COLA rates based on 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.)

On August 25, 2008, at 73 FR 50174, we published a proposed rule for notice and comment in the Federal Register on our intention to increase the COLA rate for Puerto Rico and reduce the COLA rates for Anchorage, Fairbanks, and Juneau, Alaska, based on the 2007 interim adjustment calculations. Because 5 CFR 591.228(c) limits COLA rate reductions to 1 percentage point in a 12-month period, and we have a prior rate reduction scheduled for Anchorage, Fairbanks, and Juneau, we are implementing only the Puerto Rico rate increase at this time. We will address the Alaska area rate reductions, and comments received on these reductions, in a future Federal Register publication.

We received three comments in response to our proposed rule on the rate increase for Puerto Rico. Two of the commenters supported the rate increase. The third commenter wrote regarding locality pay for Puerto Rico. This issue is beyond the scope of these regulations.

Executive Order 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

Paperwork Reduction Act of 1995

This document does not provide for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

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.

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List of Subjects in 5 CFR Part 591

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Office of Personnel Management.

Kathie Ann Whipple,

Acting Director.

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Accordingly, OPM amends subpart B of

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Subpart B—Cost-of-Living Allowance and Post Differential—Nonforeign Areas

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1. The authority citation for subpart B of

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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.

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2. Revise appendix A of subpart B to read as follows:

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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 coverageAllowance rate (percent)
State of Alaska:
City of Anchorage and 80-kilometer (50-mile) radius by road23
City of Fairbanks and 80-kilometer (50-mile) radius by road23
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City of Juneau and 80-kilometer (50-mile) radius by road23
Rest of the State25
State of Hawaii:
City and County of Honolulu25
Hawaii County, Hawaii18
County of Kauai25
County of Maui and County of Kalawao25
Territory of Guam and Commonwealth of the Northern Mariana Islands25
Commonwealth of Puerto Rico14
U.S. Virgin Islands25
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[FR Doc. E9-3676 Filed 2-19-09; 8:45 am]