Federal Travel Regulation; Home Marketing Incentive Payments

GENERAL SERVICES ADMINISTRATION

41 CFR Part 302-14

[FTR Amendment 61]

RIN 3090-AG22

Federal Travel Regulation; Home Marketing Incentive Payments

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 a home marketing incentive to a transferred

employee who uses the agency s homesale program provided by a

relocation services company under contract with the Government and who

independently and aggressively markets, and finds a bona fide buyer

for, his/her residence resulting in significantly lower fee/expense

payments the agency must make to the relocation services company. This

amendment will save the Government money through reduced payments to

relocation services companies and will increase employee satisfaction

with the relocation process.

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. No. 104-201), which included 8 legislative changes

recommended by the JFMIP to improve travel and the delivery of

relocation services.

This amendment implements section 1717 of the Act which provides

the General Services Administration (GSA) authority to issue

regulations which authorize agencies to pay a home marketing incentive

to a transferred employee to facilitate sale of the employee s

residence at the old official station at lower overall cost to the

Government when the employee uses the agency s homesale program

provided by a relocation services company under contract with the

Government. 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 is a ``homesale program''?

A program under which a relocation services company, under contract

with the agency, purchases a transferred employee s residence at fair

market (appraised) value and then independently markets and sells the

residence.

What is the ``home marketing incentive payment''?

This is a payment an agency makes to its transferred employee to

encourage the employee to independently and aggressively market his/her

residence and find a bona fide buyer, thereby reducing the fee/expenses

the agency must pay the relocation services company. The amount of the

incentive payment may not exceed five percent of the price the

relocation services company paid the employee for his/her residence, or

the savings the agency realized from the reduced fee/expenses it paid.

Why would an agency want to institute a home marketing incentive

payment program?

With this type of program, the sum of the incentive payment and the

reduced payment to the relocation services company is less than the

fee/expenses the agency must pay the relocation services company when

the company has to find a buyer for the residence.

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 302-14

Government employees, Travel and transportation expenses.

For the reasons set out in the preamble, 41 CFR part 302-14 is

added to read as follows:

PART 302-14--HOME MARKETING INCENTIVE PAYMENTS

Subpart A--Payment of Incentive to the Employee

Sec.

302-14.1 What is a ``homesale program''?

302-14.2 What is the purpose of a home marketing incentive payment?

302-14.3 Am I eligible to receive a home marketing incentive

payment?

[[Page 13764]]

302-14.4 Must my agency pay me a home marketing incentive?

302-14.5 Under what circumstances will I receive a home marketing

incentive payment?

302-14.6 How much may my agency pay me for a home marketing

incentive?

302-14.7 Are there tax consequences when I receive a home marketing

incentive payment?

Subpart B--Agency Responsibilities

302-14.100 How should we administer our home marketing incentive

payment program?

302-14.101 What policies must we establish to govern our home

marketing incentive payment program?

302-14.102 What factors should we consider in determining whether

to establish a home marketing incentive payment program?

302-14.103 What factors should we consider in determining the

amount of a home marketing incentive payment?

Authority: 5 U.S.C. 5756.

Subpart A--Payment of Incentive to the Employee

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

throughout this subpart refers to the employee.

Sec. 302-14.1 What is a ``homesale program''?

It is a program offered by an agency through a contractual

arrangement with a relocation services company. The relocation services

company purchases a transferred employee s residence at fair market

(appraised) value and then independently markets and sells the

residence.

Sec. 302-14.2 What is the purpose of a home marketing incentive

payment?

To reduce the Government s relocation costs by encouraging

transferred employees who participate in their employing agency s

homesale program to independently and aggressively market, and find a

bona fide buyer for, their residence. This significantly reduces the

fees/expenses their agencies must pay to relocation services companies

and effectively lowers the cost of such programs.

Sec. 302-14.3 Am I eligible to receive a home marketing incentive

payment?

Yes, if you are an employee who is authorized to transfer and you

otherwise meet requirements for sale of your residence at Government

expense.

Sec. 302-14.4 Must my agency pay me a home marketing incentive?

No. Your agency determines when it is in the Government s interest

to offer you a home marketing incentive.

Sec. 302-14.5 Under what circumstances will I receive a home marketing

incentive payment?

You will receive a home marketing incentive payment when:

(a) You enter your residence in your agency s homesale program;

(b) You independently and aggressively market your residence;

(c) You find a bona fide buyer for your residence as a result of

your independent marketing efforts;

(d) You transfer the residence to the relocation services company;

(e) Your agency pays a reduced fee/expenses to the relocation

services company as a result of your independent marketing efforts; and

(f) You meet any additional conditions your agency has established,

including but not limited to, mandatory marketing periods, list price

guidelines, closing requirements, and residence value caps.

Sec. 302-14.6 How much may my agency pay me for a home marketing

incentive?

Your agency determines the amount of your home marketing incentive

payment. The incentive payment, however, may not exceed the lesser of:

(a) Five percent of the price the relocation services company paid

when it purchased the residence from you; or

(b) The savings your agency realized from the reduced fee/expenses

it paid as a result of your finding a bona fide buyer.

Sec. 302-14.7 Are there tax consequences when I receive a home

marketing incentive payment?

Yes, the home marketing incentive payment is considered income.

Consequently, you will be taxed, and your agency will withhold income

and employment taxes, on the home marketing incentive payment. You will

not, however, receive a withholding tax allowance (WTA) to offset the

withholding on your home marketing incentive payment, nor will you

receive a relocation income tax (RIT) allowance payment for

substantially all of your Federal, state and local income taxes on the

incentive payment.

Subpart B--Agency Responsibilities

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

throughout this subpart refers to the agency.

Sec. 302-14.100 How should we administer our home marketing incentive

payment program?

Your goal in using an incentive payment program is to reduce your

overall relocation costs. You must not make a home marketing incentive

payment that exceeds the savings you realize from the reduced fees/

expenses you pay the relocation services company.

Sec. 302-14.101 What policies must we establish to govern our home

marketing incentive payment program?

You must establish policies to govern:

(a) The conditions under which you will authorize a home marketing

incentive payment for an employee;

(b) The amount of the home marketing incentive payment(s) you will

offer (or the method you will use to compute your home marketing

incentive payments); and

(c) Who will determine in each case whether a home marketing

incentive payment is authorized.

Sec. 302-14.102 What factors should we consider in determining whether

to establish a home marketing incentive payment program?

You should consider:

(a) Whether the program will increase the percentage of residences

sold for which employees find a bona fide buyer. You should establish a

benchmark for the percentage of residences for which you expect

employees to find a bona fide buyer resulting in lower homesale costs

to you. If your historical percentage of employee-generated sales is

below your benchmark, a home marketing incentive payment program may

benefit you.

(b) The expected net savings from a home marketing incentive

payment program.

Sec. 302-14.103 What factors should we consider in determining the

amount of a home marketing incentive payment?

You should consider:

(a) Amount of savings from reduced fee/expenses paid to the

relocation services company. The home marketing incentive payment

program is intended to reduce your relocation costs. The amount of each

home marketing incentive payment you make, therefore, must not exceed

the savings you realize from the reduced fee you pay to the relocation

services company.

(b) Employee's efforts in marketing the residence. The purpose of a

home marketing incentive payment program is to encourage a transferred

employee who participates in a homesale program to independently and

aggressively market his/her residence and find a bona fide buyer.

Dated: March 17, 1997.

Thurman M. Davis, Sr.,

Acting Administrator of General Services.

[FR Doc. 97-7185 Filed 3-20-97; 8:45 am]

BILLING CODE 6820-34-P