Federal Travel Regulation; Property Management Services

GENERAL SERVICES ADMINISTRATION

41 CFR Part 302-15

[FTR Amendment 60]

RIN 3090-AG21

Federal Travel Regulation; Property Management Services

AGENCY: Office of Governmentwide Policy, GSA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Federal Travel Regulation (FTR) to

allow an agency to pay for property management services when an

employee transfers in the interest of the Government. This amendment

will save the Government money when property management services are

substituted for the sale, at Government expense, of an employee's

residence.

DATES: This final rule is effective March 22, 1997, and applies to an

employee whose effective date of transfer (date the employee reports

for duty at the new official station) is on or after March 22, 1997.

FOR FURTHER INFORMATION CONTACT: Robert A. Clauson, Travel and

Transportation Management Policy Division (MTT), Washington, DC 20405,

telephone 202-501-0299.

SUPPLEMENTARY INFORMATION: A multi-agency travel reinvention task force

was organized in August 1994 under the auspices of the Joint Financial

Management Improvement Program (JFMIP) to reengineer Federal travel

rules and procedures. The task force developed 25 recommended travel

management improvements published in a JFMIP report entitled Improving

Travel Management Governmentwide, dated December 1995. On September 23,

1996, the President signed into law the Federal Employee Travel Reform

Act of 1996 (Pub. L. 104-201), which included 8 legislative changes

recommended by the JFMIP to improve travel and the delivery of

relocation services.

This amendment implements section 1714 of the Act which provides

the General Services Administration (GSA) authority to issue

regulations which authorize agencies to pay for property management

services. This amendment is written in the ``plain English'' style of

regulation writing as a continuation of GSA's effort to make the FTR

easier to understand and to use.

What are ``property management services''?

``Property management services'' are services, offered by a

company, which assist a transferee in retaining and renting, rather

than selling, his/her residence at the old official station.

How may property management services be obtained?

The employee may obtain the services directly and be reimbursed, or

the agency may contract with a relocation services company to provide

these services.

Must an agency authorize payment for property management services?

No. The agency has the option of offering this, as one way of

managing the sale of a residence in connection with a relocation; it is

intended to provide flexibility for agencies and transferees.

Under what circumstances may an agency pay for property management

services?

An agency may pay for property management services when an employee

transfers to a foreign area. An agency also may pay for property

management services instead of the sale of an employee's residence at

Government expense when an employee assigned to a foreign post of duty

is transferred back to a different

[[Page 13761]]

nonforeign area official station than the one he/she left when

transferred to a foreign area.

What is the ``plain English'' style of regulation writing?

The ``plain English'' style of regulation writing is a new, simpler

to read and understand, question and answer regulatory format.

Questions are in the first person, and answers are in the second

person. GSA uses a ``we'' question when referring to an agency, and an

``I'' question when referring to the employee.

How does the plain English style of regulation writing affect

employees?

A question and its answer combine to establish a rule. The employee

and the agency must follow the language contained in both the question

and its answer.

GSA has determined that this rule is not a significant regulatory

action for the purposes of Executive Order 12866 of September 30, 1993.

This final rule is not required to be published in the Federal Register

for notice and comment. Therefore, the Regulatory Flexibility Act does

not apply. This rule also is exempt from Congressional review

prescribed under 5 U.S.C. 801 since it relates solely to agency

management and personnel.

List of Subjects in 41 CFR Part 302-15

Government employees, travel and transportation expenses.

For the reasons set out in the preamble, 41 CFR part 302-15 is

added to read as follows:

PART 302-15--ALLOWANCE FOR PROPERTY MANAGEMENT SERVICES

Subpart A--General Rules for the Employee

Sec.

302-15.1 What are ``property management services''?

302-15.2 What is a ``nonforeign area''?

302-15.3 What is a ``foreign area''?

302-15.4 What are the purposes of the allowance for property

management services?

302-15.5 In what situations may my agency authorize payment for

property management services?

302-15.6 Must my agency authorize payment for property management

services?

302-15.7 What are the income tax consequences when my agency pays

for my property management services?

302-15.8 Who is not eligible for payment for property management

services?

Subpart B--Payment for Property Management Services for Employees

Transferred to a Foreign Area Post of Duty

302-15.100 Am I eligible for payment for property management

services under this subpart?

302-15.101 Will my agency pay for property management services when

I transfer to a foreign area post of duty?

302-15.102 For what property may my agency authorize payment under

this subpart?

302-15.103 How long may my agency pay under this subpart?

302-15.104 If my agency is paying for property management services

under this subpart and my service agreement expires, what must I do

to ensure that payment for property management services continues?

302-15.105 Must I repay property management expenses my agency paid

under this subpart if I elect to sell my nonforeign area residence

at Government expense when I am transferred from my current foreign

area post of duty to a different nonforeign area official station

than the one I left?

Subpart C--Payment for Property Management Services for Employees

Transferred to a Nonforeign Area From a Foreign Area

302-15.200 Am I eligible for payment for property management

services under this subpart?

302-15.201 Under what circumstances will my agency authorize

payment under this subpart?

302-15.202 When my agency authorizes payment for me under this

subpart, am I obligated to use such services, or may I elect instead

to sell my residence at Government expense?

302-15.203 For what property may my agency authorize payment under

this subpart?

302-15.204 How long may my agency pay under this subpart?

302-15.205 If my agency authorized, and I elected to receive,

payment under this subpart, may I later elect to sell my residence

at Government expense?

Subpart D--Agency Responsibilities

302-15.300 What governing policies must we establish for the

allowance for property management services?

Authority: 5 U.S.C. 5738; 20 U.S.C. 905(a); E.O. 11609, 36 FR

13474, 3 CFR, 1971-1975 Comp., p. 586.

Subpart A--General Rules for the Employee

Note to subpart A: Use of the pronouns ``I'' and ``you''

throughout this subpart refers to the employee.

Sec. 302-15.1 What are ``property management services''?

``Property management services'' are programs provided by private

companies for a fee, which help an employee to manage his/her residence

at the old official station as a rental property. These services

typically include, but are not limited to, obtaining a tenant,

negotiating the lease, inspecting the property regularly, managing

repairs and maintenance, enforcing lease terms, collecting the rent,

paying the mortgage and other carrying expenses from rental proceeds

and/or funds of the employee, and accounting for the transactions and

providing periodic reports to the employee.

Sec. 302-15.2 What is a ``nonforeign area''?

A ``nonforeign area'' is the United States, its territories or

possessions, the Commonwealths of Puerto Rico or the Northern Mariana

Islands, or the former Canal Zone area (i.e., areas and installations

in the Republic of Panama made available to the United States pursuant

to the Panama Canal Treaty of 1977 and related agreements (as described

in 22 U.S.C. 3602(a))).

Sec. 302-15.3 What is a ``foreign area''?

A ``foreign area'' means any area that is not a ``nonforeign

area'', as defined in Sec. 302-15.2.

Sec. 302-15.4 What are the purposes of the allowance for property

management services?

The purpose is to reduce overall Government relocation costs when

used instead of sale of the employee's residence at Government expense.

When authorized in connection with an employee's transfer to a foreign

area post of duty, the purpose is to relieve the employee of the costs

of maintaining a home in a nonforeign area while stationed at a foreign

area post of duty.

Sec. 302-15.5 In what situations may my agency authorize payment for

property management services?

Your agency may authorize payment when:

(a) You transfer in the interest of the Government to a foreign

area post of duty; or

(b) You are transferred back to a different nonforeign area

official station than the one you left when you were transferred to a

foreign area, and you are otherwise eligible for the sale of your

residence at Government expense.

Sec. 302-15.6 Must my agency authorize payment for property management

services?

No, your agency determines when it is in the Government's interest

to authorize payment for these services and what procedures you must

follow when it authorizes such payment.

[[Page 13762]]

Sec. 302-15.7 What are the income tax consequences when my agency pays

for my property management services?

You will be taxed on the amount of expenses your agency pays for

property management services whether it reimburses you directly or

whether it pays a relocation services company to manage your residence.

Your agency must pay you a relocation income tax (RIT) allowance for

the additional Federal, State and local income taxes you incur on

property management expenses it reimburses you or pays on your behalf.

You may wish to consult with a tax advisor to determine whether you

will incur any additional tax liability, unrelated to your agency's

payment of your property management expenses, as a result of

maintaining your residence as a rental property.

Sec. 302-15.8 Who is not eligible for payment for property management

services?

New appointees, employees assigned under the Government Employees

Training Act (5 U.S.C. 4109), and employees transferring wholly within

a nonforeign area.

Subpart B--Payment for Property Management Services for Employees

Transferred to a Foreign Area Post of Duty

Note to subpart B: Use of the pronouns ``I'' and ``you''

throughout this subpart refers to the employee.

Sec. 302-15.100 Am I eligible for payment for property management

services under this subpart?

Yes, when your transfer to a foreign area post of duty is in the

interest of the Government and you and/or a member(s) of your immediate

family hold title to a residence which you would be eligible to sell at

Government expense under part 302-6 or 302-12 of this chapter if you

were transferred to or within a nonforeign area.

Sec. 302-15.101 Will my agency pay for property management services

when I transfer to a foreign area post of duty?

Yes, when:

(a) Your agency authorizes payment for your property management

services;

(b) You have signed a service agreement; and

(c) You meet any additional conditions that your agency has

established.

Sec. 302-15.102 For what property may my agency authorize payment

under this subpart?

Payment may be authorized only on your residence at the last

nonforeign area official station from which you transferred to a

foreign area post of duty.

Sec. 302-15.103 How long may my agency pay under this subpart?

Your agency may pay from the time you transfer to a foreign area

post of duty until one of the following occurs:

(a) You transfer back to an official station in a nonforeign area;

(b) You complete a service agreement at your post of duty and

remain there, but do not sign a new service agreement; or

(c) You separate from Government service.

Sec. 302-15.104 If my agency is paying for property management

services under this subpart and my service agreement expires, what must

I do to ensure that payment for property management services continues?

You must sign a new service agreement.

Sec. 302-15.105 Must I repay property management expenses my agency

paid under this subpart if I elect to sell my nonforeign area residence

at Government expense when I am transferred from my current foreign

area post of duty to a different nonforeign area official station than

the one I left?

No. The authority for your agency to pay for property management

services under this subpart when you are transferred to a foreign area

is separate from, and in addition to, the authority to sell your

residence at Government expense under part 302-6 or 302-12 of this

chapter, or to pay property management services under subpart C of this

part.

Subpart C--Payment for Property Management Services for Employees

Transferred to a Nonforeign Area From a Foreign Area to Subpart C

Note: Use of the pronouns ``I'' and ``you'' throughout this

subpart refers to the employee.

Sec. 302-15.200 Am I eligible for payment for property management

services under this subpart?

Yes, when:

(a) You transfer in the interest of the Government back to a

different nonforeign area official station than the one you left when

you transferred to a foreign area; and

(b) You and/or a member(s) of your immediate family hold title to a

residence which you are eligible to sell at Government expense under

part 302-6 or 302-12 of this chapter.

Sec. 302-15.201 Under what circumstances will my agency authorize

payment under this subpart?

Your agency will authorize payment under this subpart when:

(a) Your agency has determined that payment for property management

services is more advantageous and cost effective for the Government

than sale of your residence;

(b) You have signed a service agreement incident to your transfer

back to a nonforeign area; and

(c) You meet any additional conditions that your agency has

established.

Sec. 302-15.202 When my agency authorizes payment for me under this

subpart, am I obligated to use such services, or may I elect instead to

sell my residence at Government expense?

You are not obligated to use your authorized property management

services allowance. You have the option of choosing to sell your

residence at Government expense or to use the property management

services allowance.

Sec. 302-15.203 For what property may my agency authorize payment

under this subpart?

Your agency may authorize payment only on your residence at the old

nonforeign area official station.

Sec. 302-15.204 How long may my agency pay under this subpart?

Your agency may pay for a period not to exceed two years from your

effective date of transfer.

Sec. 302-15.205 If my agency authorized, and I elected to receive,

payment under this subpart, may I later elect to sell my residence at

Government expense?

Yes, provided:

(a) Your agency allows you to change your election of payment for

property management expenses to an election of sale of your residence

at Government expense; and

(b) Payment for the sale of your residence at Government expense is

offset in accordance with your agency's policy established under

Sec. 302-15.300(d).

Subpart D--Agency Responsibilities

Note to subpart D: Use of the pronouns ``we'' and ``you''

throughout this subpart refers to the agency.

Sec. 302-15.300 What governing policies must we establish for the

allowance for property management services?

You must establish policies and procedures governing:

(a) When you will authorize payment for property management

services for an employee who transfers to a foreign area post of duty;

(b) Who will determine whether payment for property management

services is appropriate when an employee transfers to a foreign area

post of duty;

[[Page 13763]]

(c) The circumstances under which you will authorize an employee

who is eligible under this part for property management services to

elect the use of property management services instead of the sale of

his/her residence at Government expense under part 302-6 or 302-12 of

this chapter;

(d) Who will determine whether payment for property management

services is more advantageous and cost effective than sale of an

employee's residence at Government expense;

(e) If and when you will allow an employee who was offered and

accepted payment for property management services under subpart C of

this part to change his/her mind and elect instead to sell his/her

residence at Government expense, and who will make that determination;

and

(f) How you will offset expenses you have paid for property

management services against payable expenses for sale of the employee's

residence when an eligible employee who elected payment for property

management services later changes his/her mind and elects instead to

sell his/her residence at Government expense.

Dated: March 17, 1997.

Thurman M. Davis, Sr.,

Acting Administrator of General Services.

[FR Doc. 97-7184 Filed 3-20-97; 8:45 am]

BILLING CODE 6820-34-P