Federal Travel Regulation; Airline Contract City-Pair Fares, Property Management Services, and Technical Corrections

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

correct exceptions to the mandatory use requirement of a contract city-

pair fare, and to implement technical corrections made by the Travel

and Transportation Reform Act of 1998 to chapter 57 of title 5, United

States Code. This final rule amends, for purposes of relocation

allowances, the definition of ``United States'', adds a definition of

``Foreign Service of the United States'', allows for property

management services when an employee transfers within the continental

United States, and for househunting trip expenses to areas within the

United States, as amended. It also replaces ``United States'' with

``Government'' where the intent is to refer to the Government of the

United States. This change will avoid confusion between the phrases

``the Government of the United States'' and ``the United States'',

which is defined to mean the several States, the District of Columbia,

and certain territories.

DATES: Effective date: The provisions of this final rule are effective

May 28, 1999.

Applicability date: Additional contract exception included in the

provisions of this final rule relating to part 301-10 (General Services

Administration (GSA) airline contract city-pair fares) was effective as

a matter of contract on October 1, 1998, and, therefore, the revisions

to part 301-10 apply to travel performed on or after October 1, 1998.

FOR FURTHER INFORMATION CONTACT: Mr. Jim Harte, Travel and

Transportation Management Policy Division, at 202-501-1538.

SUPPLEMENTARY INFORMATION:

A. Background

The primary purpose of this amendment is to establish policy

consistent with technical corrections made by Pub. L. 105-264, Travel

and Transportation Reform Act of 1998. This amendment also adds a fifth

exception to use of a GSA airline contract city-pair fare, when smoking

is permitted on the contract flight, and the nonsmoking section of the

aircraft is not acceptable to the traveler.

On October 19, 1998, the President signed the Travel and

Transportation Reform Act of 1998 (Pub. L. 105-264) which, among other

things, clarifies the definitions of ``United States'' and ``Foreign

Service of the United States'', and allows an agency to pay for--

(1) Property management services when an employee transfers within

the continental United States; and

(2) Househunting trip expenses to the Commonwealths of Puerto Rico

and the Northern Mariana Islands, the territories and possessions of

the United States, and the areas and installations in the Republic of

Panama that are made available to the United States pursuant to the

Panama Canal Treaty of 1977 and related agreements.

This amendment also includes miscellaneous technical corrections

contained in Section 7 of the Act.

B. Executive Order 12866

GSA has determined that this final rule is not a significant

regulatory action for the purposes of Executive Order 12866 of

September 30, 1993.

C. Regulatory Flexibility Act

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.

D. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the final rule

does not impose recordkeeping or information collection requirements,

or the collection of information from offerors, contractors, or members

of the public which require the approval of the Office of Management

and Budget under 44 U.S.C. 501, et seq.

E. Small Business Regulatory Enforcement Fairness Act

This final rule is also 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 Parts 301-10, 302-1, 302-5, 302-6, 302-

8, 302-10, 302-11, and 302-15

Entitlements and transfers, Government employees, Relocation

allowances, Travel and transportation expenses.

For the reasons set forth in the preamble, 41 CFR parts 301-10,

302-1, 302-5, 302-6, 302-8, 302-10, 302-11, and 302-15 are amended to

read as follows:

PART 301-10--TRANSPORTATION EXPENSES

1. The authority citation for 41 CFR part 301-10 continues to read

as follows:

Authority: 5 U.S.C. 5707; 40 U.S.C. 486(c); 49 U.S.C. 40118.

2. Section 301-10.107 is revised to read as follows:

Sec. 301-10.107 When must I use a contract city-pair fare?

You must always use a contract city-pair fare (an Internet list of

city-pairs is available at http://pub.fss.gsa.gov/services/citypairs),

if you are a civilian employee of an agency (see Sec. 301-1.1 of this

chapter), unless one or more of the following conditions exist(s):

(a) Space or a scheduled contract flight is not available in time

to accomplish the purpose of your travel, or use of contract service

would require you to incur unnecessary overnight lodging costs which

would increase the total cost of the trip; or

(b) The contractor's flight schedule is inconsistent with explicit

policies of your Federal department or agency with regard to scheduling

travel during normal working hours; or

(c) A non-contract carrier offers a lower fare available to the

general public, the use of which will result in a lower total trip cost

to the Government, to include the combined costs of transportation,

lodging, meals, and related expenses.

Note to paragraph (c): This exception does not apply if the

contract carrier offers a comparable fare and has seats available at

that fare, or if the lower fare offered by a noncontract carrier is

restricted to Government and military travelers on official business

and may only be purchased with a GTR, contractor-issued charge card,

or centrally billed account (e.g., YDG, MDG, ODG, VDG, and similar

fares); or

(d) Rail service is available and such service is cost effective

and consistent with mission requirements; or

(e) Smoking is permitted on the contract flight and the nonsmoking

section of the aircraft for the contract flight is not acceptable to

you.

PART 302-1--APPLICABILITY, GENERAL RULES, AND ELIGIBILITY

CONDITIONS

3. The authority citation for part 302-1 continues to read as

follows:

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

13747, 3 CFR, 1971-1975 Comp., p. 586.

[[Page 29163]]

4. Section 302-1.4 is amended by revising paragraph (b) and adding

paragraph (m) to read as follows:

Sec. 302-1.4 Definitions.

* * * * *

(b) United States. United States means the several States, the

District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth

of the Northern Mariana Islands, the territories and possessions of the

United States, and the areas and installations in the Republic of

Panama that are made available to the United States pursuant to the

Panama Canal Treaty of 1977 and related agreements (as described in

section 3(a) of the Panama Canal Act of 1979).

* * * * *

(m) Foreign Service of the United States. Foreign Service of the

United States means the Foreign Service as constituted under the

Foreign Service Act of 1980.

Sec. 302-1.5 [Amended]

5. Section 302-1.5 is amended in the second sentence of paragraph

(a), the last sentence of paragraph (b)(1)(iii), and the second

sentence of paragraph (c) by removing the words ``United States'' each

time they appear and adding the word ``Government'' in their place.

Sec. 302-1.12 [Amended]

6. Section 302-1.12 is amended in paragraphs (e)(1), (e)(5), and in

the first sentence of (e)(6) by removing the words ``the 50 States, the

District of Columbia, the Commonwealth of Puerto Rico or the

Commonwealth of the Northern Mariana Islands, or a United States

territory or possession'' and adding the words ``the United States'' in

their place.

Sec. 302-1.13 [Amended]

7. Section 302-1.13 is amended in paragraph (b)(3) by removing the

words ``the United States, the Commonwealth of Puerto Rico or the

Commonwealth of the Northern Mariana Islands, a United States territory

or possession,'' and ``the United States, the Commonwealth of Puerto

Rico or the Commonwealth of the Northern Mariana Islands, or a United

States territory or possession'' and adding the words ``the United

States'' in their place; and in paragraph (d)(1)(iv)(A) by removing the

words ``United States'' and inserting the word ``Government'' in their

place.

Sec. 302-1.105 [Amended]

8. Section 302-1.105 is amended in paragraph (a) by removing the

words ``the United States, the Commonwealth of Puerto Rico or the

Commonwealth of the Northern Mariana Islands, a United States territory

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

installations in the Republic of Panama made available to the United

States under the Panama Canal Treaty of 1977 and related agreements (as

described in section 3(a) of the Panama Canal Act of 1979))'' and

adding the words ``the United States'' in their place.

Sec. 302-1.228 [Amended]

9. Section 302-1.228 is amended in paragraph (c) by removing the

words ``under part 302-14'' and adding the words ``under part 302-15''

in their place.

PART 302-5--ALLOWANCE FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES

10. The authority citation for part 302-5 is revised to read as

follows:

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

13747, 3 CFR, 1971-1975 Comp., p. 586.

Sec. 302-5.4 [Amended]

11. Section 302-5.4 is amended in paragraph (a) by removing the

words ``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)))'' and adding the words ``the United States'' in their place.

Sec. 302-5.17 [Amended]

12. Section 302-5.17 is amended by removing the words ``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)))'' and adding

the words ``the United States'' in their place.

PART 302-6--ALLOWANCE FOR EXPENSES INCURRED IN CONNECTION WITH

RESIDENCE TRANSACTIONS

13. The authority citation for part 302-6 is revised to read as

follows:

Authority: 5 U.S.C. 5738; and E.O. 11609, 36 FR 13747, 3 CFR,

1971-1975, Comp., p. 586.

Sec. 302-6.1 [Amended]

14. Section 302-6.1 is amended in paragraph (a) by removing the

words ``the 50 States, the District of Columbia, the Commonwealth of

Puerto Rico or the Commonwealth of the Northern Mariana Islands, a

United States territory or possession, or the former Canal Zone area

(i.e., areas and installations in the Republic of Panama made available

to the United States under the Panama Canal Treaty of 1977 and related

agreements (as described in section 3(a) of the Panama Canal Act of

1979))'' and adding the words ``the United States'' in their place, and

in paragraph (g)(1)(ii) by removing the words ``the United States, its

territories or possessions, the Commonwealth of Puerto Rico, the

Commonwealth of 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 section 3(a) of the Panama

Canal Act of 1979))'' and adding the words ``the United States'' in

their place.

PART 302-8--TRANSPORTATION AND TEMPORARY STORAGE OF HOUSEHOLD GOODS

AND PROFESSIONAL BOOKS, PAPERS, AND EQUIPMENT

15. The authority citation for part 302-8 is revised to read as

follows:

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

13747, 3 CFR, 1971-1975 Comp., p. 586.

Sec. 302-8.5 [Amended]

16. Section 302-8.5 is amended in the first sentence of paragraph

(b)(2) by removing the words ``within or outside the United States''.

PART 302-10--ALLOWANCES FOR TRANSPORTATION AND EMERGENCY STORAGE OF

A PRIVATELY OWNED VEHICLE

17. The authority citation for part 302-10 continues to read as

follows:

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

13747, 3 CFR, 1971-1975 Comp., p. 586.

Sec. 302-10.174 [Amended]

18. Section 302-10.174 is amended by removing the words ``the

United States'' and adding the words ``the several States and the

District of Columbia'' in their place.

[[Page 29164]]

PART 302-11--RELOCATION INCOME TAX (RIT) ALLOWANCE

19. The authority citation for part 302-11 is revised to read as

follows:

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

13747, 3 CFR, 1971-1975 Comp., p. 586.

Sec. 302-11.8 [Amended]

20. Section 302-11.8 is amended in the second sentence of paragraph

(e)(4)(i) by removing the words ``United States'' and adding the words

``U.S. Government'' in their place.

Sec. 302-11.10 [Amended]

21. Section 302-11.10 is amended in paragraph (c) by removing the

words ``United States'' wherever they appear and adding the word

``Government'' in their place.

Sec. 302-11.11 [Amended]

22. Section 302-11.11 is amended by removing the words ``United

States'' and adding the word ``Government'' in their place.

23. Part 302-15 is revised 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 are the purposes of the allowance for property

management services?

302-15.3 Am I eligible for payment for property management services

under this subpart?

302-15.4 Who is not eligible for payment for property management

services?

302-15.5 Is my agency required to authorize payment for property

management services?

302-15.6 Under what circumstances may my agency authorize payment

under this part?

302-15.7 For what property may my agency authorize payment under

this part?

302-15.8 When my agency authorizes payment for me under this part,

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

my residence at Government expense?

302-15.9 Must I repay property management expenses my agency paid

under this part if I elect to sell my former residence in the United

States at Government expense when I am transferred from my current

foreign post of duty to an official station in the United States

other than the one I left?

302-15.10 How long may my agency pay under this part?

302-15.11 If my agency authorized, and I elected to receive,

payment for property management expenses, may I later elect to sell

my residence at Government expense?

302-15.12 If my agency is paying for property management services

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

ensure that payment for property management services continues?

302-15.13 What are the income tax consequences when my agency pays

for my property management services?

Subpart B--Agency Responsibilities

302-15.70 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

13747, 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 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

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

maintaining a home in the United States while stationed at a foreign

post of duty.

Sec. 302-15.3 Am I eligible for payment for property management

services under this subpart?

Yes, when:

(a) You transfer in the interest of the Government; 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. 302-15.4 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 outside

the United States are not eligible. However, relocations wholly outside

the United States do not affect previously authorized property

management services as long as the employee continues to meet the

requirements of Sec. 302-15.6 and any other conditions established by

the agency.

Sec. 302-15.5 Is my agency required to authorize payment for property

management services?

No, your agency determines:

(a) When you meet the conditions set forth in Sec. 302-15.3;

(b) When to authorize payment for these services; and

(c) What procedures you must follow when it authorizes such

payment.

Sec. 302-15.6 Under what circumstances may my agency authorize payment

under this part?

(a) For a relocation to an official station in the United States,

your agency may authorize payment under this part when:

(1) You are being returned from a foreign post of duty to a

different official station than the one from which you were transferred

for your foreign tour of duty;

(2) Your agency has determined that property management services

are more advantageous and cost effective for the Government than sale

of your residence;

(3) You have signed a service agreement; and

(4) You meet any other conditions that your agency has established.

(b) For relocations to official stations outside the United States,

your agency will authorize payment under this part when you meet

conditions set forth in paragraphs (a)(3) and (a)(4) of this section.

Sec. 302-15.7 For what property may my agency authorize payment under

this part?

Payment may be authorized only on your residence at the last

official station in the United States from which you transferred.

Sec. 302-15.8 When my agency authorizes payment for me under this

part, 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

[[Page 29165]]

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

residence at Government expense or to use the property management

services allowance.

Sec. 302-15.9 Must I repay property management expenses my agency paid

under this part if I elect to sell my former residence in the United

States at Government expense when I am transferred from my current

foreign post of duty to an official station in the United States other

than the one I left?

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

services under this part when you are transferred to a foreign post of

duty arises from your transfer to the foreign post of duty and is

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

at Government expense when you are transferred to an official station

in the United States other than the official station from which you

were transferred to the foreign post of duty.

Sec. 302-15.10 How long may my agency pay under this part?

Your agency may pay:

(a) For transfers within the United States, a period not to exceed

2 years from your effective date of transfer, with up to a 1-year

extension, under the same conditions required in Sec. 302-6.1(e)(2) of

this chapter; or

(b) From the time you transfer to a foreign post of duty until one

of the following occurs:

(1) You transfer back to an official station in the United States;

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

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

(3) You separate from Government service.

Sec. 302-15.11 If my agency authorized, and I elected to receive,

payment for property management expenses, 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 sale of your residence at Government expense is

offset in accordance with your agency's policy established under

Sec. 302-15.70(d).

Sec. 302-15.12 If my agency is paying for property management services

under this part, 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. (See Sec. 302-1.5 of this

chapter.)

Sec. 302-15.13 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.

Subpart B--Agency Responsibilities

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

throughout this subpart refers to the agency.

Sec. 302-15.70 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 in the interest of the

Government;

(b) Who will determine, for relocations to official stations in the

United States, whether payment for property management services is more

advantageous and cost effective than sale of an employee's residence at

Government expense;

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

accepted payment for property management services to change his/her

mind and elect instead to sell his/her residence at Government expense

in accordance with paragraph (d) of this section; and

(d) 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: May 7, 1999.

David. J. Barram,

Administrator of General Services.

[FR Doc. 99-13126 Filed 5-27-99; 8:45 am]

BILLING CODE 6820-34-P