[Federal Register: May 25, 2000 (Volume 65, Number 102)]
[Proposed Rules]
[Page 33799-33801]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25my00-37]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 552 and 570
[APD 2800.12B, Case No. GSAR 5-422]
RIN 3090-AH03
General Services Administration Acquisition Regulation: Tax
Adjustment
AGENCY: Office of Acquisition Policy, GSA.
ACTION: Proposed rule.
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SUMMARY: The General Services Administration (GSA) proposes to amend
the General Services Administration Acquisition Regulation (GSAR) by
adding a new clause Tax Adjustment, and by revising the section GSAR
contract clauses.
DATES: Comments should be submitted on or before July 24, 2000 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, Office of Acquisition Policy, GSA
Acquisition Policy Division (MVP), 1800 F Street, NW, Room 4027,
Washington, DC 20405.
FOR FURTHER INFORMATION CONTACT: Cecelia L. Davis, GSA Acquisition
Policy Division, (202) 219-0202.
SUPPLEMENTARY INFORMATION:
A. Background
GSA proposes to amend the GSAR by revising Parts 552 and 570 to
prescribe and to incorporate a new clause 552.270-30, Tax Adjustment.
The clause will be incorporated in acquisitions of leasehold interest
in real property when GSA determined that a tax adjustment is
necessary.
B. Executive Order 12866
This regulatory action was not subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993,
and is not a major rule under 5 U.S.C. 804.
C. Regulatory Flexibility Act
GSA does not expect this proposed rule to have a significant
economic impact on a substantial number of small
[[Page 33800]]
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C.
601, et seq., because the rule simply provides a mechanism for
adjusting rent to account for changes in real estate taxes.
D. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the GSAR do not impose recordkeeping or information collection
requirements, or otherwise collect information from offerors,
contractors, or members of the public that require approval of the
Office of Management and Budget under 44 U.S.C. 3501 et seq.
List of Subject in 48 CFR Part 552 and 570
Government procurement.
Accordingly, GSA proposes to amend 48 CFR Part 552 and 570 as
follows:
1. The authority citation for 48 CFR Parts 552 and 570 continues to
read as follows:
Authority: 40 U.S.C. 486(c).
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
2. Section 552.270-30 is added to read as follows:
552.270-30 Tax Adjustment
As prescribed in 570.603, inset the following clause:
Tax Adjustment (Date)
(a) Definitions. ``Base year taxes,'' as used in this clause,
mean the real estate taxes for the first twelve (12) month period
coincident with full assessment, or an amount negotiated by the
parties that reflect an agreed on base for a fully assessed value of
the property.
``Full assessment,'' as used in this clause, means that the
taxing jurisdiction has considered all contemplated improvements to
the assessed property in the valuation of the same. Partial
assessments for newly constructed projects or for projects or for
projects under construction, conversion, or renovation will not be
used for establishing the Government's base year for taxes.
``Real estate taxes,'' as used in this clause, mean only those
taxes assessed against the building or the land on which the
building is located, without regard to benefit to the property, for
the purpose of funding general government services. Real estate
taxes shall not include general or special assessments, business
improvement district assessments, or any other present or future
taxes or governmental charges imposed on Lessor or assessed against
the building or the land upon which the building is located.
(b) Adjustment for changes in real estate taxes. This lease
provides for adjustments due to changes in real estate taxes on land
and buildings occupied by the Government under this lease.
Adjustments shall apply to each tax year during the lease term after
the base tax year. Under the procedures established in this clause,
the Government shall either:
(1) Make a single annual lump sum payment to the Lessor for its
share of any increase in real estate taxes during the lease term
over the amount established as the base year taxes.
(2) Receive an annual rental credit or lump sum payment from the
Lessor for its share of any decreases in real estate taxes during
the lease term below the amount established as the base year taxes.
(c) Notices regarding real estate taxes. The Lessor shall
furnish the Contracting Officer with copies of each of the following
within ten (10) calendar days of receipt:
(1) Any notice which may affect the valuation of land and
buildings covered by this lease for real estate tax purposes.
(2) Any notice of a tax credit or tax refund related to land and
buildings covered by this lease.
(3) Each tax bill related to land and building covered by this
lease.
(d) Increases in real estate taxes. The following procedures
apply for any tax year in which the real estate taxes increase over
the base year taxes.
(1) Invoice. The Lessor shall submit a proper invoice (as
described in the Prompt Payment clause of this lease, GSAR 552.232-
75) for the tax adjustment. The invoice must include the calculation
of the adjustment for the tax year. The Lessor must also provide a
copy of all paid tax receipts for the tax year with the invoice. If
the taxing authority does not give tax receipts, the Lessor must
provide other similar evidence of payment acceptable to the Contract
Officer. The Lessor must submit the invoice together with tax
receipts or other evidence of payment no later than sixty (60) days
after the date that the final tax payment for the year is due from
the Lessor to the taxing authority.
(2) Payment. Upon receipt of a proper invoice and evidence of
payment, the Government shall make payment no later than thirty (30)
days after receipt of the invoice or thirty (30) days after the
anniversary date of the lease, whichever is later. If the lease
terminates before the end of a tax year, payment for the tax
increase due will be prorated based on the number of days the
Government occupied the space.
(3) Waiver of right to adjustment. If the Lessor fails to submit
a proper invoice and tax receipts or other evidence of payment
within sixty (60) days after the date that the final tax payment for
the year is due, then the Lessor waives its right to receive payment
for the increased taxes under this clause.
(e) Decreases in real estate taxes. The following procedures
apply for any tax year in which the real estate taxes decrease from
the base year taxes or during which the Lessor receives a refund or
tax deduction for real estate taxes.
(1) The Government shall be entitled to and shall receive a pro
rata credit for the reduction in taxes, regardless of whether the
Government has not yet made the tax payment for that year.
(2) During the lease term, the Government shall apply any credit
as a deduction from the rent.
(3) For any credit due after the expiration or earlier
termination of the lease, at the Contracting Officer's direction,
the Lessor shall either make a lump sum payment to the Government or
provide a rental credit under a succeeding lease. This includes, but
is not limited to, credits resulting from a tax decrease pursuant to
a tax credit due the Lessor, a reduction in the tax assessment, or a
tax appeal proceeding for a year or a portion of the lease. If
directed to remit a lump sum payment, the Lessor must make payment
to the Government within fifteen (15) days of the Contracting
Officer's direction. If the credit due the Government is not paid by
the due date, interest shall accrue on the late payment at the rate
established by the Secretary of the Treasury under Section 12 of the
Contract Disputes Act of 1978 (41 U.S.C. 611) in effect on the day
after the due date. The Government shall have the right to pursue
the outstanding balance of any tax credit using all collection
methods available to the United States to collect debts. Such
collection rights survive the expiration of this lease.
(f) Calculating tax share. The Government shall pay its share of
tax increases or receive its share of any tax decrease based on the
ratio of the rentable square feet occupied by the Government to the
total rentable square feet in the building or complex (percentage of
occupancy). For this lease, the Government's percentage of occupancy
as of the effective date of the lease is __%. This percentage shall
take into account additions or reductions of the amount of space as
may be contemplated in this lease or amendments hereto. The block
and lot/parcel or other identification numbers for the property,
building(s) and parking areas(s) occupied under this lease are ____.
(g) Appeals to tax assessments. The Government may direct the
Lessor upon reasonable notice to initiate a tax appeal or the
Government may decide to contest a tax assessment on behalf of both
the Government and the Lessor or for the Government alone. The
Lessor shall furnish to the Government information necessary for
appeal of the tax assessment in accordance with the filing
requirements on its own behalf or on behalf of both the Government
and the Lessor, the Lessor shall cooperate and use all reasonable
efforts including, but not limited to, affirming the accuracy of the
documents, executing documents required for any legal proceeding,
and taking such other actions as may be required. If the Lessor
initiates an appeal on behalf of the Government, the Government and
the Lessor will enter into an agreement to establish a method for
sharing expenses and tax savings.
(End of Clause)
PART 570--ACQUIRING LEASEHOLD INTERESTS IN REAL PROPERTY
3. Section 570.603 is amended by adding a new prescription at the
end of the section to read as follows:
570.603 GSAR contract clauses.
* * * * *
[[Page 33801]]
552.270-30 Tax Adjustment. Insert this clause in solicitations and
contracts if you determine that a tax adjustment is necessary.
Dated: May 17, 2000.
Sue McIver,
Acting Deputy Associated Administrator for Acquisition Policy.
[FR Doc. 00-13157 Filed 5-24-00; 8:45 am]
BILLING CODE 6820-61-M