[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13013]


[[Page Unknown]]

[Federal Register: May 27, 1994]


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GENERAL SERVICES ADMINISTRATION
 

41 CFR Parts 301-3, 301-9, 302-1, 302-6 and 302-11

[FTR Amendment 37]

RIN 3090-AE48

Federal Travel Regulation; Title Requirements for Reimbursement of 
Residence Transaction Expenses

AGENCY: Federal Supply Service, GSA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Federal Travel Regulation (FTR) to 
allow reimbursement for residence transaction expenses in accordance 
with equitable title ownership, and to incorporate certain editorial 
corrections and clarifications. This amendment is intended to provide 
equitable residence transaction expense reimbursement to Federal 
employees who transfer in the interest of the Government.

DATES: Effective date: The provisions of this final rule are effective 
May 27, 1994.

    Applicability dates: The provisions of this final rule amending 
chapter 301 apply for travel (including travel incident to a change of 
official station) performed on or after May 27, 1994. The provisions of 
this final rule amending chapter 302 apply to an employee whose 
effective date of transfer (date the employee reports for duty at the 
new official station) is on or after May 27, 1994.

FOR FURTHER INFORMATION CONTACT: Robert A. Clauson, Transportation 
Management Division (FBX), Washington, DC 20406, telephone 703-305-
5745.

SUPPLEMENTARY INFORMATION: This amendment modifies the rules governing 
residence title requirements to recognize and provide reimbursement to 
an employee based on equitable title interests. This amendment 
recognizes the following four specific equitable title situations: (1) 
when title is held in trust for the benefit of the employee; (2) when 
title is held in the name of a financial institution pursuant to state 
laws governing financing arrangements secured by real property; (3) 
when title is held in the name of an accommodation party; and (4) when 
title is held by the seller of the real property under a financial 
arrangement which requires fixed periodic payments and transfer of 
title to the employee upon completion of the payment schedule. The 
amendment also recognizes ``other equitable title situations'' when 
documentation requirements specified in the regulation can be met.

Title Held in Trust

    This amendment modifies the FTR to allow an employee to be 
reimbursed for the sale or purchase of real property when title to the 
property is held in trust for the benefit of the employee, a member of 
the employee's immediate family, or both. Previously, this was allowed 
under a decision of the Comptroller General (CG) of the United States 
(Paul D. Atkinson, 70 Comp. Gen. 363 (1991)). This amendment explicitly 
states the conditions necessary for reimbursement.

Title Held by Financial Institution

    This amendment modifies the FTR to allow an employee to be 
reimbursed for the sale or purchase of real property when title to the 
property is held by a financial institution pursuant to state financing 
laws. Some states require that lenders take title to real property in 
order to perfect (i.e., protect) the lender's security interest. Other 
states require the lender to record a lien against the title in the 
residence records to perfect the lender's security interest. This 
amendment ensures equal treatment for employees who enter into a 
financing arrangement (e.g., a mortgage) for real property and who 
offer the real property as security for the financing arrangement.

Accommodation Parties

    This amendment modifies the FTR to allow an employee to be 
reimbursed for the sale or purchase of real property when the name of 
an accommodation party appears on the title document. An accommodation 
party is an individual who signs an employee's financing arrangement 
(e.g., a mortgage) to lend his/her name (i.e., credit) to the 
arrangement. Such an individual is a surety, becoming responsible for 
the payments should the employee not perform, but the individual has no 
beneficial interest in the property as long as the arrangement is not 
in default.

Financing Arrangements with the Seller of the Property

    This amendment modifies the FTR to allow an employee to be 
reimbursed for the sale or purchase of real property when the title is 
held in the name of the seller of the property pursuant to a financing 
arrangement (e.g., land contract) providing for fixed periodic payments 
and transfer of title to the employee and/or a member(s) of the 
immediate family upon completion of the payment schedule. Previously, 
this was allowed by CG decision (B-200207, September 29, 1981).

Other Equitable Title Situations

    There are situations other than those listed above in which an 
employee can demonstrate that he/she has equitable title based on the 
following criteria: only the employee and/or a member(s) of the 
immediate family has made payments on the residence, and the employee 
and/or a member(s) of the immediate family must have received all 
proceeds from the sale of the property. This amendment modifies the FTR 
to authorize reimbursement to an employee for the sale of real property 
in ``other equitable title situations'' meeting these criteria. More 
extensive documentation requirements enumerated within the amendment 
apply when this general ``other equitable title situations'' provision 
is used. When both the general provision and one of the specific 
equitable title provisions apply, reimbursement to the employee will be 
covered under the specific provision instead of the general provision.
    This amendment adds language to the section in part 1 of chapter 
302 that addresses ``applicability'' to clarify that chapter 302 covers 
``last move home'' benefits for career appointees to the Senior 
Executive Service (SES) and prior SES appointees who have elected to 
retain their SES retirement benefits. This amendment also makes certain 
editorial and technical corrections. GSA has determined that this rule 
is not a significant regulatory action for the purposes of Executive 
Order 12866 of September 30, 1993.

List of Subjects

41 CFR Parts 301-3 and 301-9

    Government employees, Travel, Travel allowances, Travel and 
transportation expenses

41 CFR Parts 302-1, 302-6, and 302-11

    Government employees, Income taxes, Relocation allowances and 
entitlements, Transfers

    For the reasons set out in the preamble, 41 CFR parts 301-3, 301-9, 
302-1, 302-6 and 302-11 are amended to read as follows:

PART 301-3--USE OF COMMERCIAL TRANSPORTATION

    1. The authority citation for part 301-3 continues to read as 
follows:

    Authority: 5 U.S.C. 5701-5709; E.O. 11609, 36 FR 13747, 3 CFR, 
1971-1975 Comp., p. 586.


Sec. 301-3.3  [Amended]

    2. Section 301-3.3 is amended by removing the phrase ``or security 
reasons'' in the parenthetical in paragraph (e)(1)(vi), and by adding 
in its place ``security reasons, or inadequate foreign coach-class 
train accommodations''.

PART 301-9--MISCELLANEOUS EXPENSES

    3. The authority citation for part 301-9 continues to read as 
follows:

    Authority: 5 U.S.C. 5701-5709; E.O. 11609, 36 FR 13747, 3 CFR, 
1971-1975 Comp., p. 586.

    4. Section 301-9.2 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 301-9.2  Additional travel expenses incurred by an employee with a 
disability.

    (a) * * *
    (1) Policy. In accordance with the Rehabilitation Act of 1973, as 
amended, (29 U.S.C. 701 et seq.) and 5 U.S.C. 3102, these provisions 
are intended to accommodate an employee with a disability by providing 
for reimbursement of necessary additional travel expenses incurred in 
the performance of official travel.
 * * * * *

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

    5. The authority citation for part 302-1 continues to read as 
follows:

    Authority: 5 U.S.C. 5721-5734; 20 U.S.C. 905(a); E.O. 11609, 36 
FR 13747, 3 CFR, 1971-1975 Comp., p. 586; E.O. 12466, 49 FR 7349, 3 
CFR, 1984 Comp., p. 165; E.O. 12522, 50 FR 26337, 3 CFR, 1985 Comp., 
p. 375.

SUBPART A--NEW APPOINTEES AND TRANSFERRED EMPLOYEES

    6. Section 302-1.2 is amended by adding paragraph (a)(7) to read as 
follows:

Sec. 302-1.2  Applicability.

    (a) * * *
    (7) Career appointees to the Senior Executive Service (SES), and 
prior SES appointees who have elected to retain SES retirement 
benefits, upon their retirement and return to the place the individual 
has elected to reside.
 * * * * *


Sec. 302-1.10  [Amended]

    7. Section 302-1.10 is amended by removing the reference 
``paragraph (d)'' in paragraph (b)(1), and by adding in its place, the 
reference ``paragraph (e)''.

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

    8. The authority citation for part 302-6 continues to read as 
follows:

    Authority: 5 U.S.C. 5721-5734; 20 U.S.C. 905(a); E.O. 11609, 36 
FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

    9. Section 302-6.1 is amended by revising paragraphs (c) and (f) to 
read as follows:

Sec. 302-6.1  Conditions and requirements under which allowances are 
payable.

 * * * * *
    (c) Title requirements. The title to the residence or dwelling at 
the old or new official station, or the interest in a cooperatively 
owned dwelling or in an unexpired lease, is in the name of the employee 
alone, or in the joint names of the employee and one or more members of 
his/her immediate family, or solely in the name of one or more members 
of his/her immediate family. The rules in paragraphs (c) (1) through 
(3) of this section apply in determining title to the residence.
    (1) Title interest must have been acquired prior to notification of 
transfer. For an employee to be eligible for reimbursement of the costs 
of selling a dwelling or terminating a lease at the old official 
station, the employee's property interest must have been acquired prior 
to the date the employee was first officially notified of his/her 
transfer to the new official station. In the case of an employee 
covered by paragraph (g) of this section, the employee's interest must 
have been acquired prior to the date the employee was first officially 
notified of his/her transfer to the foreign area.
    (2) Legal title interest. Except as provided in paragraph (c)(3) of 
this section, title to the residence is determined by the name of the 
party (or parties) on the title document (e.g., the deed).
    (3) Equitable title interest. The employee, and/or a member(s) of 
his/her immediate family, in a situation listed in paragraphs (c)(3) 
(i) through (v) of this section is deemed to have title to the 
residence without regard to whether his/her name appears on the title 
document.

    (i) Title held in trust. The property is held in trust and the 
conditions in paragraphs (c)(3)(i) (A) through (F) of this section 
apply.

    (A) The property must be the employee's residence as described in 
paragraph (b) of this section.
    (B) The employee and/or a member(s) of the immediate family must be 
the only beneficiary(ies) of the trust during his/her lifetime.
    (C) The employee and/or a member(s) of the immediate family must 
retain the right to distribute the property during his/her lifetime.
    (D) The employee and/or a member(s) of the immediate family must 
retain the right to manage the property.
    (E) The employee and/or a member(s) of the immediate family must be 
the only grantor/settlor of the trust, or must retain the right to 
direct distribution of the property upon dissolution of the trust or 
death.
    (F) The employee provides the agency with a copy of the trust 
document.

    (ii) Title held by financial institution. The title is held in the 
name of a financial institution and the conditions in paragraphs 
(c)(3)(ii) (A) through (D) of this section apply.
    (A) The property is the employee's residence as described in 
paragraph (b) of this section.
    (B) The employee and/or a member(s) of the immediate family 
executed a financing agreement (e.g., mortgage) with the financial 
institution.
    (C) State or local law requires that lending parties take title to 
perfect (i.e., protect) a security interest in the property, or the 
financial institution requires that it take possession of title as a 
condition of the financing agreement.
    (D) The employee must provide the agency with a copy of the 
financing document. The agency may require that the employee also 
provide proof of state or local laws governing secured credit.

    (iii) Title includes an accommodation party or parties. The title 
is held both in the names of: the employee singularly, or the employee 
and one or more members of his/her immediate family jointly, or one or 
more members of his/her immediate family; and an individual 
(accommodation party) who is not an immediate family member. In 
addition, the conditions in paragraphs (c)(3)(iii) (A) through (G) of 
this section apply. (An accommodation party is an individual who signs 
an employee's financing agreement (e.g., a mortgage) to lend his/her 
name (i.e., credit) to the arrangement.)
    (A) The property is the employee's residence as described in 
paragraph (b) of this section.
    (B) The employee and/or a member(s) of the immediate family has 
right to use the property and to direct conveyance of the property.
    (C) The lender requires signature of the accommodation party on the 
financing document.
    (D) The employee and/or a member of the immediate family, is liable 
for payments under the financing arrangement (e.g., mortgage).
    (E) The accommodation party's name is on the title.
    (F) The accommodation party does not have a financial interest in 
the property unless the employee and/or a member(s) of the immediate 
family defaults on the financing arrangement.
    (G) The employee provides the agency with acceptable documentation 
of the accommodation. Agencies shall issue policy defining acceptable 
documentation of the accommodation. Such documentation may include a 
copy of the financing document and/or a written statement from the 
employee certifying that the conditions in paragraphs (c)(3)(iii) (A) 
through (G) of this section apply. Such documentation also may include 
a written statement from the accommodation party certifying that he/she 
does not have a financial interest in the property.

    (iv) Title held by seller of the property. The title is held in the 
name of the seller of the property and the conditions in paragraphs 
(c)(3)(iv) (A) through (D) of this section apply.
    (A) The property is the employee's residence as described in 
paragraph (b) of this section.
    (B) The employee and/or a member(s) of the immediate family has 
right to use the property and to direct conveyance of the property.
    (C) The employee and/or a member(s) of the immediate family must 
have signed a financing agreement with the seller of the property 
(e.g., a land contract) providing for fixed periodic payments and 
transfer of title to the employee and/or a member(s) of the immediate 
family upon completion of the payment schedule.
    (D) The employee must provide the agency with a copy of the 
financing agreement.

    (v) Other equitable title situations. The title is held both in the 
names of: the employee singularly, or the employee and one or more 
members of his/her immediate family jointly, or one or more members of 
his/her immediate family; and an individual who is not an immediate 
family member. In addition, the conditions in paragraphs (c)(3)(v) (A) 
through (E) of this section apply.
    (A) The property is the employee's residence as described in 
paragraph (b) of this section.
    (B) The employee and/or a member(s) of the immediate family has 
right to use the property and to direct conveyance of the property.
    (C) Only the employee and/or a member(s) of the immediate family 
has made payments on the property.
    (D) The employee and/or a member(s) of the immediate family 
received all proceeds from the sale of the property.
    (E) The employee must provide suitable documentation to the agency 
that the conditions listed in paragraphs (c)(3)(v) (A) through (D) of 
this section have been met. Agencies shall issue policy defining 
acceptable documentation. Such documentation must include financial 
documents proving that only the employee and/or a member(s) of the 
immediate family made payments on the property, and financial documents 
proving that the employee and/or a member(s) of the immediate family 
received all proceeds from the sale of the property.

 * * * * *
    (f) Reimbursement of expenses. The rules in paragraphs (f) (1) and 
(2) of this section govern the reimbursement of employee residence 
transaction expenses.
    (1) Employee must actually incur the expenses. An employee shall be 
reimbursed only for expenses actually incurred and paid by the employee 
or a member of the employee's immediate family. If any expenses were 
shared by persons other than the employee or a member of his/her 
immediate family, reimbursement is limited to the portion actually paid 
by the employee and/or a member of his/her immediate family.
    (2) Pro rata reimbursement. The employee shall be reimbursed on a 
pro rata basis in the situations listed in paragraphs (f)(2) (i) and 
(ii) of this section. When an employee is deemed to have a title 
interest under paragraph (c)(3) of this section, the employee shall be 
reimbursed on a pro rata basis to the extent of his/her actual title 
interest plus his/her deemed title interest in the residence.
    (i) Multiple occupancy dwelling. If the residence is a duplex or 
another type of multiple occupancy dwelling which is occupied only 
partially by the employee, or whenever the employee shares 
responsibility for a leased property (e.g., a shared apartment 
arrangement), expenses shall be reimbursed on a pro rata basis.
    (ii) Excess land. The employee shall be limited to pro rata 
reimbursement when he/she sells or purchases land in excess of that 
which reasonably relates to the residence site.
 * * * * *

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

    10. The authority citation for part 302-11 continues to read as 
follows:

    Authority: 5 U.S.C. 5721-5734; 20 U.S.C. 905(a); E.O. 11609, 36 
FR 13747, 3 CFR, 1971-1975 Comp., p. 586; E.O. 12466, 49 FR 7349, 3 
CFR, 1984 Comp., p. 165.


Sec. 302-11.8  [Amended]

    11. Section 302-11.8 is amended by removing the phrase ``paragraph 
(e)(4)'' in paragraph (e)(2)(iii), and by adding in its place the 
phrase ``paragraph (e)(5)''.
    Dated: May 16, 1994.
Roger W. Johnson,
Administrator of General Services.
[FR Doc. 94-13013 Filed 5-26-94; 8:45 am]
BILLING CODE 6820-24-F