E7-12433. Federal Travel Regulation; Relocation Allowances-Standard Mileage Rate for Moving Purposes

AGENCY:

Office of Governmentwide Policy, General Services Administration (GSA).

ACTION:

Final rule.

SUMMARY:

The General Services Administration (GSA), Office of Governmentwide Policy (OGP), plans to establish the Internal Revenue Service (IRS) Standard Mileage Rate for moving purposes as the rate at which agencies will reimburse an employee for using a privately owned vehicle (POV) for relocation. The FTR and any corresponding documents may be accessed at GSA's website at http://www.gsa.gov/​ftr.

DATES:

Effective Date: September 25, 2007.

FOR FURTHER INFORMATION CONTACT:

The Regulatory Secretariat (VIR), Room 4035, GS Building, Washington, DC, 20405, [phone], for information pertaining to status or publication schedules. For clarification of content, contact Mr. Ed Davis, Office of Governmentwide Policy (M), Office of Travel, Transportation and Asset Management (MT), General Services Administration at [phone] or e-mail at [e-mail]. Please cite FTR Amendment 2007-03; FTR case 2007-301.

SUPPLEMENTARY INFORMATION:

A. Background

Relocation is an area that continuously evolves because of changes in the housing market, transportation industry, technology, etc. The General Services Administration (GSA), Office of Governmentwide Policy (OGP), routinely reviews the relocation regulations to address current Government relocation needs, to incorporate appropriate private industry policies, and to implement any best practices that fit well into the Federal setting.

To help accomplish these goals, GSA created the Relocation Best Practices Committee (RBPC) in 2002. Many of this Committee's recommendations were reflected in a proposed rule published in the Federal Register at 69 FR 68111, November 23, 2004.

The proposed rule included 30 changes; however, this final rule focuses on only one of those proposed changes, namely adopting the mileage rate established by the IRS for computing relocation, or moving, costs for income tax purposes for reimbursing Federal employees for using their POVs for relocation travel to a new duty station for PCS. GSA will address the remaining Federal Travel Regulation (FTR) changes from the proposed rule in one or more future final rule(s).

Section 302-4.300 of the FTR (41 CFR 302-4.300) currently provides tiered reimbursements for POV use in en route travel to the new duty station based on the number of occupants. This final rule will eliminate the tiered rates. Instead, the agency will reimburse the employee who relocates by POV at the established IRS rate for use of a car for moving purposes. GSA will publish this rate in an FTR Bulletin to coincide with updates issued by the IRS. The IRS generally issues such updates annually, but for special cases, such as Hurricane Katrina, the IRS may issue updates during the year and GSA will follow suit.

The IRS allows two methods for computing the standard mileage rates for use of a car in moving: a single mileage rate or actual expense. GSA has decided to allow only reimbursement at the single mileage rate, since this approach is easier to administer and does not involve collecting and auditing small value receipts.

Many transferees compare the reimbursement rate for using a POV for temporary duty travel (TDY) to the rate for using a POV for relocation travel and do not understand why those rates differ. The more generous rate for using a POV for TDY travel is intended to cover the fixed costs of operating an automobile, such as depreciation (or lease payments), insurance, and license and registration fees, as well as the operating cost. None of these fixed costs are tax deductible as a moving expense, so none of these fixed costs are included in the moving rate mileage calculation. The IRS intends the rate for using a POV in moving to cover only actual operating expenses (e.g., fuel, oil, tolls, etc.). The IRS then uses the operating costs for a combination of standard vehicles to calculate the moving rate.

GSA consulted the members of the Executive Relocation Steering Committee about this change. All members agreed that this adoption of the single IRS rate is appropriate.

B. Summary of Comments Received and the Issues Involved

GSA received comments from 12 entities on the proposed mileage rate change that was included in the proposed rule published in the Federal Register at 69 FR 68111, November 23, 2004. The main thrust of the comments was that payments to employees driving their automobiles should not be lowered. This argument was valid in 2004, at the time the proposed rule was issued. The IRS rate for using an automobile for relocation at that time was 14 cents per mile, which was lower than any rate on the FTR chart. The IRS rate for 2007 will be 20 cents per mile, which means that all drivers regardless of the number of passengers, will be receiving the equivalent of the highest possible rate in the current regulation.

Another objection to the proposed rule was that small agencies or isolated posts might not receive the GSA updates on the mileage rate. This has not been the case for the TDY mileage rate. Agencies adopt the TDY mileage rate quickly and accurately when it changes. GSA expects this to be the same for the relocation mileage rate.

C. Changes to Current FTR

This final rule:

• Revises section 302-4.300 to reflect the Internal Revenue Service single mileage rate for relocation by POV.
• Adds section 302-4.303 to disallow the use of the IRS actual expense rate for relocation in CONUS.

D. Executive Order 12866

This regulation is excepted from the definition of “regulation” or “rule” under Section 3(d)(3) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993 and, therefore, was not subject to review under Section 6(b) of that executive order.

E. 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, 5 U.S.C. 601, et seq., does not apply.

F. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FTR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, 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 Part 302-4

• Government employees
• Relocation
• Travel and transportation Expenses

Dated: March 19, 2007.

Lurita Doan,

Administrator of General Services.

For the reasons set out in this preamble, 41 CFR part 302-4 is amended as set forth below:

PART 302-4—ALLOWANCES FOR SUBSISTENCE AND TRANSPORTATION

1. The authority citation for 41 CFR part 302-4 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, 1971-1973 Comp., p. 586.

2. Revise § 302-4.300 to read as follows:

§ 302-4.300

What is the POV mileage rate for PCS travel within the continental United States (CONUS)?

For approved/authorized PCS travel by POV in CONUS, the mileage reimbursement rate is the same as the moving expense standard mileage rate established by the Internal Revenue Service (IRS) for moving expense deductions. See IRS guidance available on the Internet at www.irs.gov. GSA will publish the rate for mileage reimbursement in an FTR Bulletin on an intermittent basis to coincide with the rate changes published by the IRS. You may find the FTR Bulletins at www.gsa.gov/​relo.

3. Add § 302-4.303 to read as follows:

§ 302-4.303

For relocation within the continental United States (CONUS), may I use the actual expense method of reimbursement instead of the POV mileage rate specified in § 302-4.300?

No, for a PCS relocation within CONUS involving POV usage, your agency will reimburse you at the standard mileage rate specified in § 302-4.300.