This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

59761

Vol. 69, No. 193

Wednesday, October 6, 2004

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 591 

RIN 3206–AK29 

Cost-of-Living Allowances (Nonforeign 

Areas); Methodology Changes

AGENCY: Office of Personnel 

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel 

Management (OPM) is making technical 

changes in the methodology used to 

determine nonforeign area cost-of-living 

allowances (COLAs). The changes 

correct minor drafting errors; provide 

consistent treatment of sale prices; 

allow the use of non-housing price data 

collected on St. John, U.S. Virgin 

Islands; correct and clarify the 

definition of survey areas; and allow a 

one-time prospective index adjustment 

for the Caribbean and Alaska areas 

concurrent with the effective date of any 

COLA rate changes resulting from the 

2004 Pacific COLA surveys. OPM is 

making these changes in large part as 

the result of experience gained in recent 

COLA surveys and upon the 

recommendation of several groups 

established to assist us in administering 

the COLA program.

DATES: Effective November 5, 2004.

FOR FURTHER INFORMATION CONTACT:

Donald L. Paquin, (202) 606–2838; fax: 

(202) 606–4264; or e-mail: 

COLA@opm.gov.

SUPPLEMENTARY INFORMATION: Section 

5941 of title 5, United States Code, 

authorizes the payment of cost-of-living 

allowances (COLAs) to employees of the 

Federal Government stationed in certain 

nonforeign areas outside the contiguous 

48 States whose rates of basic pay are 

fixed by statute. Executive Order 10000, 

as amended, delegates to the Office of 

Personnel Management (OPM) the 

authority to administer nonforeign area 

COLAs and prescribes certain 

operational features of the program. 

The Government pays nonforeign area 

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 (CNMI), Puerto Rico, 

and the U.S. Virgin Islands. OPM 

conducts COLA surveys in each 

allowance area to determine whether, 

and to what extent, 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. 

On February 9, 2004, OPM published 

proposed regulatory changes in the 

Federal Register (69 FR 6020) which 

would (1) correct minor drafting errors; 

(2) provide consistent treatment of sale 

prices; (3) allow the use of non-housing 

price data collected on St. John, U.S. 

Virgin Islands; (4) correct and clarify the 

definition of the survey areas; and (5) 

allow a one-time prospective index 

adjustment for the Caribbean and Alaska 

areas concurrent with the effective date 

of any COLA rate changes resulting from 

the 2004 Pacific COLA surveys. We 

received six comments on these 

proposed changes. 

One comment was from members of 

the Hilo COLA Advisory Committee 

(CAC). Prior to each survey, OPM 

establishes CACs in each survey area to 

advise OPM on the COLA surveys and 

other issues relating to the 

administration of the COLA program. 

The Hilo CAC noted that the definition 

of the Hilo, Hawaii, survey area (which 

was stated as the ‘‘City of Hilo’’) was 

incorrect because Hilo is not a 

municipality. Therefore, OPM is 

changing the survey area name to the 

‘‘Hilo area.’’ 

Another comment was from members 

of the Kailua Kona CAC who 

recommend that the Kailua Kona survey 

area be expanded to include Waimea 

and Waikoloa areas. OPM agreed to 

survey these areas on a test basis in the 

2004 survey to determine the feasibility 

of expanding the survey area. OPM 

found that it was feasible to do so and 

agrees with the recommendation to 

expand the survey area. To reflect this 

change, OPM is changing the name of 

the survey area to the ‘‘Kailua Kona/

Waimea area,’’ which includes 

Waikoloa. 

A third comment was from a member 

of the Survey Implementation 

Committee, established pursuant to the 

settlement in Caraballo, et al. v. United 

States, No. 1997–0027 (D.V.I.), August 

17, 2000. The commenter recommended 

that OPM no longer collect housing data 

in eastern Puerto Rico because of the 

closing of Roosevelt Roads Naval 

Station. The commenter suggested that 

OPM consider surveying other areas in 

Puerto Rico. We agree that OPM may 

need to revise the areas in which it 

collects housing data in Puerto Rico. 

Therefore, we have removed the 

reference to eastern Puerto Rico from 

the Survey Area table in 5 CFR 591.215, 

removed a similar reference from 

§ 591.219(b), and allowed for the 

collection of housing data in other areas 

in Puerto Rico with significant Federal 

employment. 

Another member of the Survey 

Implementation Committee 

recommended that we clarify the 

exception in § 591.219(b), which 

concerns the use of housing data 

collected in eastern Puerto Rico and in 

St. John. The commenter recommended 

that the exception state that OPM 

combines housing data collected for St. 

John with the data collected for St. 

Thomas to produce indexes for the St. 

Thomas/St. John survey area. We agree 

that the exception in § 591.219(b) may 

have been confusing and have 

concluded that it is no longer needed. 

OPM analyzes the data it collects in St. 

Thomas/St. John in the same manner as 

the data it collects in Fairbanks/North 

Pole, Kailua Kona/Waimea, and other 

survey areas with multiple locations. 

Therefore, there is no exception 

applicable to St. John. 

A fifth commenter requested that 

OPM revise the proposed change in the 

definition of ‘‘Washington, DC, area or 

DC area’’ in § 591.201 to state exactly 

the situations the change will affect or 

cite the parts or subparts to which the 

revised definition applies. OPM 

proposed changing the definition of 

several survey areas to address the need 

to survey certain items on an exception 

basis in locations beyond the local 

jurisdiction. With one exception, the 

proposed definitional changes were 

limited to § 591.215(a), which lists the 

survey areas. The exception is the 

Washington, DC, area, which is defined 

in § 591.201 and listed again with the 

other survey areas in § 591.215(a).

59762 Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 

Because the purpose of § 591.201 is to 

define terms that OPM uses throughout 

subpart B, we believe it would be 

impractical to cite within the definition 

of the ‘‘Washington, DC, area or DC 

area’’ each section where the term is 

used. OPM also believes it would be 

impractical to state exactly which 

situations (i.e., items and locations) the 

expanded definition addresses. Survey 

items change from one survey to the 

next, in large part based on CAC 

recommendations. From experience 

OPM has learned that it sometimes must 

survey items, such as golf, snow skiing, 

and air travel, in areas beyond the local 

jurisdictions listed in the table in 

§ 591.215(a). Therefore, OPM proposed 

expanding several of those areas on an 

exception basis. The proposed change 

lists golf, snow skiing, and air travel as 

examples because setting in regulation 

exactly which items OPM can survey 

outside a jurisdiction would be overly 

restrictive and would weaken OPM’s 

ability to accommodate CAC 

suggestions. Therefore, we are not 

adopting the commenter’s suggestion, 

but we are making additional changes in 

the title and column headings in the 

table in § 591.215(a) to further clarify 

survey area definitions. 

Before each survey, OPM consults 

with the local CACs concerning item 

selection, including any items we might 

survey outside local jurisdictions. We 

also include a list of the items surveyed 

in the survey reports we publish for 

comment in the Federal Register. The 

item descriptions identify which items 

OPM surveyed beyond local 

jurisdictions. 

The sixth commenter stated that 

Federal employees should not receive 

COLA increases. The commenter noted 

the high cost of living in the 

Washington, DC, area and stated that 

she did not believe Federal employees 

in other areas needed to receive more 

than employees in the DC area. OPM 

notes that section 5941 of title 5, United 

States Code, and Executive Order 10000 

require the Federal Government to pay 

COLAs to Federal employees in areas 

outside the contiguous 48 States where 

living costs are substantially higher than 

in Washington, DC. Under this 

authority, OPM sets COLA rates after 

surveying and comparing living costs in 

the COLA areas and the DC area. 

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 these regulations will not 

have a significant economic impact on 

a substantial number of small entities 

because they 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. 

Kay Coles James, 

Director.

■ Accordingly, the Office of Personnel 

Management amends 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 § 591.201, revise the definition of 

‘‘Washington, DC, area or DC area’’ to 

read as follows:

§ 591.201 Definitions.

* * * * *

Washington, DC, area or DC area

means the District of Columbia; 

Montgomery County, MD; Prince 

Georges County, MD; Arlington County, 

VA; Fairfax County, VA; Prince William 

County, VA; and the independent cities 

of Alexandria, Fairfax, Falls Church, 

Manassas, and Manassas Park, Virginia; 

and in the context of certain survey 

items, includes additional geographic 

locations beyond these jurisdictions.

■ 3. In § 591.213, revise paragraph (b)(1) 

to read as follows:

§ 591.213 What prices does OPM collect?

* * * * *

(b) * * * 

(1) OPM does not collect coupon 

prices, clearance prices, going-out-ofbusiness prices, or area-wide distress 

sale prices.

* * * * *

■ 4. In § 591.215, revise paragraph (a) to 

read as follows:

§ 591.215 Where does OPM collect prices 

in the COLA and DC areas? 

(a) Survey areas. Each COLA area has 

one survey area, except Hawaii County, 

HI, and the U.S. Virgin Islands COLA 

areas. Hawaii County has two survey 

areas: the Hilo area and the Kailua 

Kona/Waimea area. The U.S. Virgin 

Islands also has two survey areas: the 

Island of St. Croix and the Islands of St. 

Thomas and St. John. The Washington, 

DC, area has three survey areas: the 

District of Columbia, the Maryland 

suburbs of the District of Columbia, and 

the Virginia suburbs of the District of 

Columbia. OPM collects non-housing 

data throughout the survey area, and for 

selected items such as golf, snow skiing, 

and air travel, OPM collects nonhousing data in additional geographic 

locations. OPM may collect housing 

data throughout the survey area or in 

specific housing data collection areas. 

The following table shows the survey 

areas:

SURVEY AREAS

COLA and reference areas Survey areas and geographic coverage 

Anchorage ................................................................................................ City of Anchorage.1

Fairbanks .................................................................................................. Fairbanks/North Pole area.1

Juneau ...................................................................................................... Juneau/Mendenhall/Douglas area.1

Rest of Alaska .......................................................................................... See paragraph (c) of this section. 

Honolulu .................................................................................................... City and County of Honolulu. 

Hawaii County .......................................................................................... Hilo area.1

Kailua Kona/Waimea area. 

Kauai ......................................................................................................... Kauai Island. 

Maui .......................................................................................................... Maui Island. 

Guam & CNMI .......................................................................................... Guam. 

Puerto Rico ............................................................................................... San Juan/Caguas area.2

U.S. Virgin Islands .................................................................................... St. Croix. 

St. Thomas/St. John area.3

Washington, DC–DC ................................................................................ District of Columbia.1

Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 59763

SURVEY AREAS—Continued

COLA and reference areas Survey areas and geographic coverage 

Washington, DC–MD ................................................................................ Montgomery County and Prince Georges County.1

Washington, DC–VA ................................................................................. Arlington County, Fairfax County, Prince William County, City of Alexandria, City of Fairfax, City of Falls Church, City of Manassas, and 

City of Manassas Park.1

1For selected items, such as golf, snow skiing, and air travel, these survey areas may include additional geographic locations beyond these jurisdictions. 2OPM may collect housing data in other areas in Puerto Rico that have a significant concentration of Federal employees stationed in those 

areas. 3OPM collects housing data in St. John. OPM also may collect non-housing data from selected outlets in St. John. 

* * * * *

■ 5. In § 591.216, revise paragraph (b) to 

read as follows:

§ 591.216 How does OPM combine survey 

data for the DC area and for COLA areas 

with multiple survey areas?

* * * * *

(b) COLA areas with multiple survey 

areas. OPM computes weighted average 

indexes at the item, PEG, MEG, and/or 

overall level by using the corresponding 

indexes and Federal employment 

weights from each survey area within 

the COLA area.

■ 6. In § 591.219, revise paragraph (b) to 

read as follows:

§ 591.219 How does OPM compute shelter 

price indexes?

* * * * *

(b) OPM then uses these 

characteristics and rental prices and/or 

estimates in hedonic regressions (a type 

of multiple regression) to compute for 

each COLA survey area the price index 

for rental and/or rental equivalent units 

of comparable quality and size between 

the COLA survey area and the 

Washington, DC, area.

■ 7. In § 591.222, revise paragraph (c) to 

read as follows:

§ 591.222 How does OPM use the 

expenditure weights to combine price 

indexes?

* * * * *

(c) Step 3. OPM repeats the process 

described in Step 2 at each level of 

aggregation within the PEG to produce 

a price index for the PEG, at the PEG 

level to produce an index for the MEG, 

and at the MEG level to produce the 

overall price index for the COLA area.

■ 8. In § 591.224, revise paragraph (b) 

and add paragraph (c) to read as follows:

§ 591.224 How does OPM adjust price 

indexes between surveys?

* * * * *

(b) Paragraph (a) of this section 

applies beginning with the effective date 

of the results of the 2005 survey 

conducted in Puerto Rico and the U.S. 

Virgin Islands. 

(c) Based on additional housing data 

that may be collected before the 2005 

survey conducted in Puerto Rico and 

the U.S. Virgin Islands, OPM will adjust 

as warranted the price indexes and 

COLA rates for Puerto Rico, the U.S. 

Virgin Islands, and the COLA areas in 

the State of Alaska. OPM will 

implement any such adjustments on a 

one-time basis on the effective date of 

the results of the 2004 surveys 

conducted in Hawaii and Guam/CNMI, 

and subject to § 591.228. OPM will 

publish such adjustments as provided in 

§ 591.229.

[FR Doc. 04–22531 Filed 10–5–04; 8:45 am] 

BILLING CODE 6325–39–P

DEPARTMENT OF AGRICULTURE

Office of the Secretary 

7 CFR Part 6 

Dairy Tariff-Rate Import Quota 

Licensing; Final Rule

AGENCY: Office of the Secretary, USDA.

ACTION: Final rule; technical corrections.

SUMMARY: This document amends the 

Dairy Tariff-Rate Import Quota 

Licensing regulation to provide for 

applications to be submitted using the 

internet, while continuing to permit 

applicants to use the existing certified 

mail provision for applications. The 

requirement that applications be 

notarized is eliminated. Additionally, 

an incorrect section reference is 

corrected.

DATES: Effective on September 1, 2004.

FOR FURTHER INFORMATION CONTACT:

Bettyann Gonzales, Dairy Import 

Specialist, Import Policies and Programs 

Division, Foreign Agricultural Service, 

1400 Independence Avenue, SW, STOP 

1021, by e-mail at: 

gonzalesb@fas.usda.gov, telephone 202–

720–1344, or fax at 202–720–6556.

SUPPLEMENTARY INFORMATION: The Dairy 

Tariff-Rate Import Quota Licensing 

program regulation which is codified at 

7 CFR part 6, implements the licensing 

system for certain dairy products which 

are eligible for in-quota tariff rates 

proclaimed in the Harmonized Tariff 

Schedule of the United States. 

Currently, § 6.36(b) requires all 

submissions to be made by registered or 

certified mail, return receipt requested, 

with a postmarked receipt. The Dairy 

Import Licensing Authority will soon be 

implementing a software program to 

permit applications for dairy import 

licenses to be submitted electronically 

over the internet. Therefore, the 

regulation is amended in various 

sections to permit applications to be 

submitted over the Internet, or by mail. 

A final rule published on January 10, 

2000, (65 FR 1297–1298) redesignated 

§ 6.35 as § 6.36 and inserted a new 

§ 6.35, but did not change references to 

the original § 6.35 throughout the 

regulation. This rules corrects the 

references.

List of Subjects in 7 CFR Part 6 

Agricultural commodities, Cheese, 

Dairy Products, Imports, Reporting and 

record keeping requirements.

■ Accordingly, 7 CFR part 6 is amended 

as follows:

PART 6—IMPORT QUOTAS AND FEES

Subpart—Dairy Tariff-Rate Import 

Quota Licensing

■ 1. The authority citation for Part 6, 

Subpart—Dairy Tariff-Rate Import Quota 

Licensing continues to read as follows:

Authority: Additional U.S. Notes 6, 7, 8, 

12, 14, 16–23 and 25 to Chapter 4 and 

General Note 15 of the Harmonized Tariff 

Schedule of the United States (19 U.S.C. 

1202), Pub. L. 97–258, 96 Stat. 1051, as 

amended (31 U.S.C. 9701), and secs. 103 and 

404, Pub. L. 103–465, 108 Stat. 4819 (19 

U.S.C. 3513 and 3601).

■ 2. Amend § 6.24 by revising 

paragraphs (a) and (b)(1), and the 

introductory text of paragraph (c) to read 

as follows:

§ 6.24 Application for a license. 

(a) Application for license shall be 

made on either paper or electronic