[Federal Register Volume 62, Number 55 (Friday, March 21, 1997)]
[Rules and Regulations]
[Pages 13760-13763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7184]


-----------------------------------------------------------------------


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.

-----------------------------------------------------------------------

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