[DOCID: f:sr279.110]
From the Senate Reports Online via GPO Access
[wais.access.gpo.gov]
110th Congress Report
SENATE
2d Session 110-279
_______________________________________________________________________
Calendar No. 631
ESTABLISH A PILOT PROGRAM FOR THE EXPEDITED DISPOSAL OF FEDERAL REAL
PROPERTY
----------
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1667
TO ESTABLISH A PILOT PROGRAM FOR THE EXPEDITED DISPOSAL OF FEDERAL REAL
PROPERTY
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
April 7, 2008.--Ordered to be printed
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana TOM COBURN, Oklahoma
BARACK OBAMA, Illinois PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri JOHN WARNER, Virginia
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
Michael L. Alexander, Staff Director
Kevin J. Landy, Chief Counsel
Troy H. Cribb, Counsel
John P. Kilvington, Staff Director, Subcommittee on Federal Financial
Management, Government Information, Federal Services, and International
Security
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Amanda Wood, Minority Director of Governmental Affairs
Christopher J. Barkley, Minority Professional Staff Member,
Subcommittee on Federal Financial Management, Government Information,
Federal Services, and International Security
Trina Driessnack Tyrer, Chief Clerk
Calendar No. 631
110th Congress Report
SENATE
2d Session 110-279
======================================================================
ESTABLISH A PILOT PROGRAM FOR THE EXPEDITED DISPOSAL OF FEDERAL REAL
PROPERTY
_______
April 7, 2008.--Ordered to be printed
_______
Mr. Lieberman, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 1667]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1667) to establish
a pilot program for the expedited disposal of Federal real
property, having considered the same, reports favorably thereon
with an amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................5
V. Evaluation of Regulatory Impact..................................8
VI. Congressional Budget Office Cost Estimate........................9
VII. Changes in Existing Law Made by the Bill, as Reported...........11
I. Purpose and Summary
The purpose of S. 1667 is to provide the Office of
Management and Budget (OMB) with temporary authority to sell or
demolish property that the Federal government owns but no
longer needs, and to do so under more flexible rules than
currently exist. The bill would both expedite the disposal
process and create a financial incentive for agencies to sell
the property they no longer need.
As reported, the bill would also allow representatives of
the homeless to apply for properties that might be useful to
assist the homeless. Currently, under the McKinney-Vento
Homeless Assistance Act, unneeded Federal property is made
available for use to assist the homeless. This bill would
incorporate features from that process to ensure similar
treatment of the properties for purposes of the pilot program.
II. Background and Need for the Legislation
Property management is one of the most pressing management
problems facing the federal government today, according to the
Government Accountability Office (GAO). In 2003, GAO put
``Managing Federal Real Property'' on its biennial High Risk
List to draw attention to its serious concerns surrounding this
activity. According to GAO, the High Risk designation targets
those programs that expose taxpayers to at least $1 billion in
waste, and its purpose is ``to identify and help resolve
serious weaknesses in areas that involve substantial resources
and provide critical services to the public.''\1\ The Committee
believes urgent action is needed to resolve the problems
related to real property management before they grow larger and
put more tax dollars and agency missions at risk.
---------------------------------------------------------------------------
\1\Government Accountability Office, High Risk Series: An Update,
GAO-07-310, January 2007, p. 4. Can be found at http://www.gao.gov/
new.items/d07310.pdf.
---------------------------------------------------------------------------
The Committee's primary concern is that federal agencies
are holding more property in their portfolios than they need.
Rather than disposing of properties once they are no longer
useful, agencies often opt to hold onto them at the same time
that they are adding new properties to their inventory. For
example, according to GAO, the Department of Energy, the
Department of Homeland Security and the National Aeronautics
and Space Administration--which are three of the largest real
property-holding agencies--have reported that approximately 10
percent or more of the facilities in their inventories are
excess or underutilized.\2\ At the Department of Energy alone,
the amount of unneeded square footage is approximately 20
million square feet. That is more square footage than would be
contained within three buildings the size of the Pentagon,
which is the largest office building in the world.
---------------------------------------------------------------------------
\2\Testimony given to the Senate Subcommittee on Federal Financial
Management, Government Information, Federal Services and International
Security. Goldstein, Mark, Government Accountability Office, Federal
Real Property: An Update on High Risk Issues, GAO-07-895T, May 24,
2007, p. 10. Can be found at http://www.gao.gov/new.items/d07895t.pdf.
---------------------------------------------------------------------------
Every unneeded square foot of building space held by the
federal government requires annual funding for operations and
maintenance. This includes the costs of cleaning, heating,
lighting, and landscaping a building, as well as any costs
related to a mortgage or lease for the space, which also
includes costs associated with security. Additionally, holding
unneeded property carries a hidden opportunity cost due to both
the lost revenues that would be gained from selling the
property and the avoidance of future maintenance costs. Over a
long period of time, and with a large number of unneeded
properties in the government's portfolio, the costs could
likely add up to hundreds of millions, if not billions, of
dollars wasted. In addition, when an agency holds on to a
property it no longer needs, that property cannot be used for
other activities that can create jobs, spur innovations and
increase local and national prosperity.
In testimony before the Subcommittee on Federal Financial
Management, Government Information, Federal Services and
International Relations, Mark Goldstein of GAO underscored the
need for reform, stating, ``The magnitude of the problem with
underutilized or excess federal real property continues to put
the government at risk for lost dollars and missed
opportunities.''\3\
---------------------------------------------------------------------------
\3\Id.
---------------------------------------------------------------------------
To understand the magnitude of the problem it is important
to note the large number of unneeded properties that the
federal government is currently holding. The Federal Real
Property Council\4\ reports that the federal government owned
or operated more than 505,000 buildings worldwide in 2006,
worth an estimated total of $809 billion.\5\ Of those, more
than 21,000 buildings are reportedly no longer needed, all
worth a total of $18 billion, according to the Office of
Management and Budget (OMB).\6\ Under the Federal Property and
Administrative Services Act of 1949, 40 U.S.C. et seq.,
agencies report excess real property to the General Services
Administration (GSA), which makes it available to other federal
agencies. If no federal agency expresses interest, it is deemed
surplus federal property. The Act also authorizes a number of
public benefit conveyances of excess and surplus properties.
However, conveyances under these procedures do not occur as
often as they should. Since 2004, the government's building
portfolio has grown by several thousand each year despite the
tens of thousands of available excess properties. This,
combined with the fact that more than four percent of the
entire federal building inventory is unneeded, strongly
indicates that there is a significant problem with the process
for disposing of property.
---------------------------------------------------------------------------
\4\The Federal Real Property Council, an inter-agency council
chaired by the Office of Management and Budget, was established by
Executive Order 13327 on February 4, 2004 to develop guidance, serve as
a clearinghouse for best practices, and facilitate the efforts of
agency Senior Real Property Officers.
\5\Federal Real Property Council, FY 2006 Federal Real Property
Report: An Overview of the U.S. Federal Government's Real Property
Assets, July 2007, p. 4. Can be found at http://www.gsa.gov/gsa/
cm_attachments/GSA_DOCUMENT/FRPP112007_R2-tI3-v_0Z5RDZ-i34K-pR.pdf.
\6\Report of the Office of Management and Budget, Response to
Section 408 of Public Law 109-396, July 15, 2007, p. 2. Can be found at
http://www.whitehouse.gov/omb/financial/fia/response_section408.pdf.
---------------------------------------------------------------------------
According to David Winstead, the Commissioner of the Public
Building Service at the GSA, 30 percent of all federal assets
are considered underperforming or non-performing, and 7 percent
of all rentable square footage is vacant.\7\ In the short-run,
annual maintenance is cheaper for agencies than conducting a
lengthy and drawn-out disposal, and so the easy--and costly--
decision is made to keep unneeded property.
---------------------------------------------------------------------------
\7\Testimony given to the Senate Subcommittee on Federal Financial
Management, Government Information, Federal Services and International
Security. Winstead, David, General Services Administration, May 24,
2007, p. 4. Can be found at http://hsgac.senate.gov/public/_files/
FinalWinsteadStatement52407hearing0.pdf.
---------------------------------------------------------------------------
The Committee is concerned that the current process in
place for disposing of unneeded federal buildings is
inefficient and cumbersome, and likely largely at fault for the
disposal backlog of 21,000 properties. Federal rules and
regulations have created enormous obstacles for agencies that
try to dispose of property they no longer need. First, the
disposal process itself is long, complicated and expensive,
filled with numerous procedures that each agency must follow.
The disposal process, governed by subchapters III and IV of
chapter 5, title 40 of the U.S. Code, and under part 102 of
title 41 of the Code of Federal Regulations, requires agencies
to go through over a dozen separate processes to determine
possible uses of real property before disposal may proceed.
While undoubtedly well-intentioned, these requirements have
created a patchwork of cumbersome and confusing rules. Their
net effect has been to discourage agencies from initiating
disposal, thereby depriving non-federal entities of the
opportunity to make more productive use of the properties.
This leads to the second major obstacle in the disposal
process, which is that many agencies do not have a financial
incentive to dispose of their buildings. Current law requires
that when an agency sells a building, all funds received revert
to the Treasury even though it can be a significant expense to
get a building ready for disposal. This means that the agency
which undertook the process, and used significant budgetary and
personnel resources to do it, does not get to share in the
reward of its work, namely a portion of the proceeds from the
sale.
With so little incentive to spend the money and energy
needed to dispose of the property, these obstacles have served
to encourage agencies to pay for continued maintenance of an
unneeded property rather than go to the trouble and cost of
getting rid of it, to the detriment of taxpayers who fund the
maintenance through their tax dollars.
Certain agencies have specific statutory authority to
retain proceeds from the sale of their properties.\8\ Retention
of proceeds has proven to be an effective tool for federal
agencies to dispose of their unneeded properties. As David
Winstead from GSA testified before the Committee, ``Retention
of proceeds from sale is a good incentive for agencies to
dispose of unneeded assets and provides a much needed source of
reinvestment funds.''\9\ For that reason, the Committee
believes it is appropriate under the pilot program to allow
agencies to recoup the cost of selling buildings, plus an
additional 20%, as an incentive for disposing of the
properties.
---------------------------------------------------------------------------
\8\See, e.g., Consolidated Appropriations Act, 2005, Public Law
108-447, 118 Stat. 2809, 3259 (Dec. 8, 2004) (authority for GSA);
Public Law 109-54, Title V, 199 Stat. 559-563 (August 2, 2005)
(authority for the Department of Agriculture); and 38 U.S.C. 8162-8163
(authority for the Department of Veterans Affairs).
\9\Winstead testimony, supra note 7.
---------------------------------------------------------------------------
III. Legislative History
S. 1667 was introduced by Senator Carper and Senator Coburn
on June 20, 2007 and referred to the Committee on Homeland
Security and Governmental Affairs. Prior to the bill's
introduction, the Subcommittee on Federal Financial Management,
Government Information, Federal Services and International
Security held a hearing on May 24, 2007, to consider problems
with real property management identified by GAO. Witnesses at
the hearing were: the Honorable Clay Johnson III, Deputy
Director for Management, Office of Management and Budget; Mark
Goldstein, Director, Physical Infrastructure Issues, GAO; Boyd
Rutherford, Assistant Secretary for Administration, United
States Department of Agriculture; David Winstead, Commissioner
of Public Building Service, GSA; Philip Grone, Deputy
Undersecretary of Defense, Installations and Environment,
United States Department of Defense; and Robert Henke,
Assistant Secretary for Management, United States Department of
Veterans Affairs.
S. 1667 was reported favorably by the Committee by voice
vote on November 14, 2007, as amended by the Lieberman-Collins-
Carper-Coburn substitute. The substitute amendment: defines
terms for purposes of the pilot program; creates procedures
under which representatives of the homeless may apply for use
of property; places a limitation on the total number of
properties that may be disposed of by cash sale under the pilot
program; requires GAO to review the effectiveness of the pilot
program; and makes technical changes. Members present for the
vote on the bill as amended were Senators Lieberman, Carper,
McCaskill, Tester, Collins, Stevens, Voinovich, Coleman, and
Coburn.
IV. Section-by-Section Analysis
Section 1
The bill amends chapter 5, subtitle I of title 40, United
States Code, to add a new ``Subchapter VII--Expedited Disposal
of Real Property''. This new subchapter would contain new
sections 621 through 630 in title 40, as follows:
Section 621. Definitions
Section 621 defines the following terms for purposes of the
pilot program: Director, Expedited Disposal of a Real Property,
Landholding Agency, Real Property, and Representative of the
Homeless.
Real property is defined as property that an agency
determines to be excess, surplus, underperforming, or otherwise
not meeting the needs of the federal government. The Committee
limited the definition of real property only to buildings and
not to land assets. Additionally, property that is to be closed
or realigned under the Base Realignment and Closure Act
(BRAC)\10\ is not eligible for disposal under the pilot
program.
---------------------------------------------------------------------------
\10\Part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687
note.
---------------------------------------------------------------------------
Section 622. Pilot program
Section 622 requires the Director of the Office of
Management and Budget to establish the Federal Real Property
Disposal Pilot Project and limits its duration to five years
after enactment. The pilot project establishes a different
process for disposing of unneeded property, and provides
Congress an opportunity to evaluate the effectiveness of the
process for possible permanent reforms.
Section 623. Selection of real properties
Section 623 allows agencies to nominate candidate
properties for the pilot project, from which OMB is allowed to
select properties for participation.
This section also requires OMB to establish a public
website to post information about all of the properties
selected for the pilot project. Under the McKinney-Vento
Homeless Assistance Act (McKinney-Vento), 42 U.S.C. 11411 et
seq., there is currently no requirement that information
related to properties available for use to assist the homeless
be posted on a dedicated website. The Committee added this
requirement to ensure that any representative of the homeless,
or member of the general public, will have easy access to
information about those properties. In this respect, the pilot
program will be more transparent than the existing McKinney-
Vento rules. The Secretary of Housing and Urban Development
(HUD) also is required to conduct outreach to representatives
of the homeless to inform them about the existence of the pilot
project. The Committee believes that e-mail notifications to
interested non-profit organizations would be one means of
conducting effective outreach.
The Secretary of HUD is required to make available any
information (other than valuation information) that is
requested regarding each of the properties in the pilot
program. This provision mirrors the requirement for information
disclosure that is currently in McKinney-Vento.
Section 624. Suitability determination
This section requires the Secretary of HUD to make a
determination for each property as to whether it is suitable
for use to assist the homeless or not. The determination will
be made using the existing criteria found within McKinney-Vento
as well as two additional criteria: (1) For property located in
the middle of a federal installation, whether such property can
easily be transported to an off-site location; and (2) for
property where the predominant use is other than housing,
whether the size of the property is equal to or greater than
100,000 square feet.
Regarding the first additional criterion, the Committee
believes that property in the middle of an existing federal
installation, such as a military base, is not accessible to
members of the homeless community and therefore not appropriate
for assistance to the homeless. Such properties are not
accessible to the general public because of their sensitive
nature. However, some properties, such as trailers, may be
easily transported to an off-site location. Regarding the
second criterion, the Committee believes that since few
properties of this size are applied for under McKinney-Vento
procedures, and even fewer are conveyed to representatives of
the homeless, it would be appropriate to generally exclude such
properties from the pilot program.\11\ (Section 625, though,
does provide a process under which representatives of the
homeless can appeal to have such large properties deemed fit
for use by the homeless.)
---------------------------------------------------------------------------
\11\According to OMB officials, only 5 of 84 properties conveyed to
organizations representing the homeless under McKinney-Vento have been
larger than 100,000 square feet.
---------------------------------------------------------------------------
As soon as the determination is made by HUD, pertinent
information will be posted on the website created under Section
623. The Committee expects that the website will be in an
easily located place to facilitate its use by representatives
of the homeless. The website will contain, at a minimum, the
following information for each property: The address of the
property, the result of the suitability determination, and the
date which the property was listed on the website. The
Committee expects HUD to provide adequate justification of the
determination so that representatives of the homeless may make
an informed decision whether to appeal the determination.
Section 625. Unsuitable real property
Under section 625, if a property is determined by HUD to be
unsuitable for use by the homeless, such property will be put
on hold for 20 days, during which no disposal activity can take
place regarding that particular property.
During that 20-day period, any representative of the
homeless is allowed to appeal the suitability determination
made by HUD. If the property has been determined unsuitable
because it is larger than 100,000 square feet, and the
representative can provide clear and convincing evidence that
the property is in fact usable by the homeless, then HUD is
required to reverse its determination. HUD has 20 days to make
a final determination, at which point no further appeal is
available.
If no appeal is made after HUD's initial determination,
then any unsuitable property proceeds immediately to disposal
under expedited procedures.
Section 626. Suitable real property
Under section 626, all property determined by HUD to be
suitable for use by the homeless is put on hold for 90 days,
during which time no disposal activity can be taken regarding
the property.
During that 90-day period, any representative of the
homeless can apply to the Secretary of Health and Human
Services (HHS) to receive the property, at no cost, for use to
assist the homeless. If HHS believes that the application will
likely be accepted, but has otherwise run out of time in the
90-day period (for example, because of a request to the
applicant for additional information), it may extend the
deadline at its discretion. This extension authority is not
intended to operate as an automatic extension for all
applications, but should be used by HHS in circumstances where
an extension is reasonably justifiable. The Committee
recommends that HHS keep documentation regarding its procedures
for granting extensions as well as for each instance in which
an extension is granted.
HHS has 20 days to make a decision on whether to accept or
deny any applications submitted. If no applications are
submitted in the 90-day period, the property proceeds
immediately to disposal under expedited procedures.
Section 627. Expedited procedures
All properties sold under section 627 must be sold for no
less than fair market value. This provision is intended to
ensure that open market sales are the means by which properties
are sold in order to maximize the financial return to the
federal government.
A property may be sold under the pilot program only if the
property will generate monetary proceeds to the federal
government. A disposal of property under the pilot program may
not include any exchange, trade, transfer, acquisition of like-
kind property, or other non-cash transaction as part of the
disposal.
Expedited procedures waive the following existing
provisions: subchapter IV of chapter 5 of subtitle I of title
40, U.S.C. (regarding proceeds from sale or transfer); sections
550 and 553 of title 40 (regarding disposal of property for
certain purposes); section 501 of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11411); any other provision of law
authorizing the no-cost conveyance of real property owned by
the federal government; and certain congressional notification
requirements.
The expedited procedures under section 627 do not waive
requirements of the National Historic Preservation Act, 16
U.S.C. 470 et seq.
Section 628. Special rules and use of proceeds from disposal of real
property
Section 628 allows federal agencies that sell property
under this pilot project to keep 20% of the proceeds generated
from the sale, in addition to the administrative costs of
selling the property. The remaining 80% reverts to the
Treasury.
The funds retained by agencies under the pilot remain
available until expended, until the termination of the pilot
program, for activities related to federal real property
capital improvements and disposal activities. Upon termination
of the pilot program, any unobligated amounts shall be
transferred to the Treasury.
Under current rules, agencies are required to pay all of
the administrative costs associated with disposal, but receive
none of the benefits because all proceeds go to the Treasury.
This section provides an incentive to get unneeded properties
off the rolls, by allowing agencies to retain a share of the
portion of the proceeds from the sale.
Section 629. Limitation on number of permissible cash sales
Section 629 restricts the number of cash sales under the
pilot to 750. The number of demolitions is not be restricted by
any cap.
Section 630. Government Accountability Office study
Section 630 requires GAO to conduct oversight of the
administration of the pilot project and report to Congress
within 3 years of the date of enactment. The Committee expects
GAO to consult with the appropriate congressional committees
and bill sponsors prior to setting the terms of the
investigation and beginning the work.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill. The
Congressional Budget Office states that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would impose no costs on
state, local, or tribal governments, or private entities. The
enactment of this legislation will not have significant
regulatory impact.
VI. Congressional Budget Office Cost Estimate
January 30, 2008.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1667, a bill to
establish a pilot program for the expedited disposal of federal
real property.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Peter R. Orszag.
Enclosure.
S. 1667--A bill to establish a pilot program for the expedited disposal
of federal real property
Summary: S. 1667 would establish a pilot program to
expedite the disposal of surplus or underutilized federal
property for cash. The legislation also would create a process
for representatives of the homeless, including public and
private entities, to participate in the program. Finally, S.
1667 would require an evaluation of this program by the
Government Accountability Office (GAO).
CBO estimates that enacting the bill would increase direct
spending by $20 million over the 2009-2018 period. Added
administrative and reporting costs would come to another $15
million over that period, assuming appropriation of the
necessary funds. S. 1667 contains no intergovernmental or
private-sector mandates as defined in the Unfunded Mandates
Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1667 is shown in the following table.
The costs of this legislation fall within budget function 800
(general government).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009-2013 2009-2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority.................................. 4 4 4 4 4 0 0 0 0 0 20 20
Estimated Outlays........................................... 4 4 4 4 4 0 0 0 0 0 20 20
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Levels.............................. 3 3 3 3 3 0 0 0 0 0 15 15
Estimated Outlays........................................... 3 3 3 3 3 0 0 0 0 0 15 15
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted before the end of 2008.
Direct spending
S. 1667 would amend the Federal Property and Administrative
Services Act, which governs the disposition of most federal
real property. That act and other statutes that govern real
estate transactions of specific agencies and programs generally
require agencies to allocate excess property to other public
purposes before offering it for sale. About 30 federal agencies
with landholdings control approximately 1.2 billion real
property assets worldwide with a value of about $375 billion.
The net proceeds from such sales are deposited in the Treasury
as offsetting receipts and are not available to be spent. In
addition, some of the largest landholding agencies have
received special authorities to accept payments for leasing
federal property. Such payments can be either in the form of
cash or in-kind considerations such as construction,
maintenance, restoration, and repair services.
In most years, only a small portion of excess federal
property is sold. Some excess properties are transferred to
public agencies and institutions through public benefit
conveyances. S. 1667 would establish a five-year pilot program
to expedite the disposal of excess, surplus, or underutilized
federal property. The Director of the Office of Management and
Budget, in consultation with agencies, would be required to
select federal properties for disposal under the program. The
program would terminate five years after enactment and would be
limited to no more than 750 properties. Those selected
properties would then be subject to an expedited review process
by the Department of Housing and Urban Development (HUD) to
determine if they are suitable to be converted into housing for
the homeless. The remaining properties could be sold, and the
net proceeds from such sales would then be divided: 80 percent
would be deposited in the Treasury as miscellaneous receipts,
while 20 percent would be retained and spent by the affected
agency.
Under current law, CBO estimates that governmentwide
receipts from the sale of surplus property will total about $20
million per year. Under the proposed legislation, an agency
could retain and spend 20 percent of the proceeds from the sale
of its excess, surplus, or underutilized property. CBO expects
that enacting S. 1667 would not significantly increase the
number of properties sold above the number anticipated under
current law because most federal agencies that manage
significant numbers of properties would likely opt to continue
using their flexible leasing authorities rather than
disposition authority to manage underutilized property. Thus,
we estimate that the use of proceeds under the bill from the
future sale of surplus property would increase direct spending
by $20 million over the five-year period of the pilot program.
Spending subject to appropriation
Implementing S. 1667 would increase the workload of GSA and
HUD to expedite the process of evaluating and disposing of
properties for use as housing for homeless persons. In
addition, the legislation would require GAO to report within
three years on the pilot program, including recommendations for
reforms to federal property laws. Based on information from
some landholding agencies and the cost of similar activities
and reports, CBO estimates that such activities would cost
about $3 million annually.
Intergovernmental and private-sector impact: S. 1667
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments, or private entities. The bill would allow
representatives of the homeless, including public and private
entities, to acquire federal property using an expedited
process. Any costs that those entities incur would result from
complying with conditions of federal assistance.
Estimate prepared by: Federal Costs: Matthew Pickford;
Impact on State, Local, and Tribal Governments: Elizabeth Cove;
Impact on the Private Sector: MarDestinee Perez.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
VII. Changes to Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 1667 as reported are shown as follows (existing law proposed
to be omitted is enclosed in brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman):
UNITED STATES CODE
TITLE 40--PUBLIC BUILDINGS, PROPERTY, AND WORKS
* * * * * * *
CHAPTER 5--PROPERTY MANAGEMENT
* * * * * * *
Subchapter VII--Expedited Disposal of Real Property
621. Definitions
In this subchapter:
(1) Director.--The term ``Director'' means the
Director of the Office of Management and Budget.
(2) Expedited disposal of a real property.--The term
``expedited disposal of a real property'' means a
demolition of real property or a sale of real property
for cash that is conducted under the requirements of
section 545.
(3) Landholding agency.--The term ``landholding
agency'' means a landholding agency as defined under
section 501(i)(3) of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11411(i)(3)).
(4) Real property.--
(A) In general.--The term ``real property''
means--
(i) a parcel of real property under
the administrative jurisdiction of the
Federal Government that is--
(I) excess;
(II) surplus;
(III) underperforming; or
(IV) otherwise not meeting
the needs of the Federal
Government, as determined by
the Director; and
(ii) a building or other structure
located on real property described
under clause (i).
(B) Exclusion.--The term ``real property''
excludes any parcel of real property or
building or other structure located on such
real property that is to be closed or realigned
under the Defense Base Closure and Realignment
Act of 1990 (part A of title XXIX of Public Law
101-510; 10 U.S.C. 2687 note).
(5) Representative of the homeless.--The term
``representative of the homeless'' means a
representative of the homeless as defined under section
501(i)(4) of the McKinney-Vento Homeless Assistance Act
(42 U.S.C. 11411(i)(4)).
622. Pilot program
(a) The Director of the Office of Management and Budget
shall conduct a pilot program, to be known as the ``Federal
Real Property Disposal Pilot Program'', under which real
property that is not meeting Federal Government needs may be
disposed of in accordance with this subchapter.
(b) The Federal Real Property Disposal Pilot Program shall
terminate 5 years after the date of the enactment of this
subchapter.
623. Selection of real properties
(a) Agencies shall recommend candidate disposition real
properties to the Director for participation in the pilot
program established under section 622.
(b) The Director, with the concurrence of the head of the
executive agency concerned and consistent with the criteria
established in this subchapter, may then select such candidate
real properties for participation in the pilot program and
notify the recommending agency accordingly.
(c) The Director shall ensure that all real properties
selected for disposition under this section are listed on a
website that shall--
(1) be updated routinely; and
(2) include the functionality to allow members of the
public, at their option, to receive such updates
through electronic mail.
(d) The Secretary of Housing and Urban Development shall
ensure that efforts are taken to inform representatives of the
homeless about--
(1) the pilot program established under section 622;
and
(2) the website under subsection (c).
(e) The Secretary of Housing and Urban Development shall--
(1) make available to the public upon request all
information (other than valuation information),
regardless of format, in the possession of the
Department of Housing and Urban Development relating to
the properties listed on the website under subsection
(c), including environmental assessment data; and
(2) maintain a current list of agency contacts for
making referrals to inquiries for information relating
to specific properties.
624. Suitability determination
(a) After the Director selects the candidate real
properties that may participate in the pilot program under
section 623, the Secretary of Housing and Urban Development
shall determine whether each such real property is suitable for
use to assist the homeless.
(b) The Secretary of Housing and Urban Development shall
base the suitability determination required under subsection
(a)--
(1) on the suitability criteria identified by the
Secretary of Housing and Urban Development under
section 501(a) of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11411(a));
(2) for real properties located within a Federal
installation, campus, or compound, on whether such
property can easily be transported to an off-site
location; and
(3) for real properties where the predominant use is
other than housing, on whether the size of the real
property is equal to or greater than 100,000 square
feet.
(c) Immediately after a determination of suitability is
made under this section, the Director shall publish, on the
website described in section 623(c) the following information:
(1) The address of each such real property.
(2) The result of the suitability determination
required under subsection (a) for each such real
property.
(3) The date on which the suitability determination
was made.
625. Unsuitable real property
(a) If a real property is determined unsuitable under
section 624, such real property may not be disposed of or
otherwise used for any other purpose for at least 20 days after
such determination was made.
(b)(1) Not later than 20 days after a real property has
been determined unsuitable under section 624 and before
disposal of the real property in accordance with subsection
(d), any representative of the homeless may appeal to the
Secretary of Housing and Urban Development for a secondary
review of such determination.
(2) Not later than 20 days after a real property has been
determined unsuitable under subsection (b)(3) of section 624,
the Secretary of Housing and Urban Development shall deem such
real property suitable notwithstanding the requirements of that
subsection if a representative of the homeless has produced
clear and convincing evidence that such property can be
utilized for the benefit of the homeless. Any determination
under this paragraph shall be committed to the unreviewable
discretion of the Secretary of Housing and Urban Development.
(c) Not later than 20 days after the receipt of any appeal
under subsection (b), the Secretary of Housing and Urban
Development shall respond to such appeal and shall make a final
suitability determination regarding the real property.
(d)(1) If at the end of the 20-day period required under
subsection (a), no appeal for review of a determination of
unsuitability is received by the Secretary of Housing and Urban
Development, such real property shall be disposed of in
accordance with section 627.
(2) If after conducting a secondary review of a
determination of unsuitability under subsection (b), the
Secretary of Housing and Urban Development determines that the
real property remains unsuitable under subsection (c), such
real property shall be disposed of in accordance with section
627.
(3) If after conducting a secondary review of a
determination of unsuitability under subsection (b), the
Secretary of Housing and Urban Development determines that the
real property is suitable under subsection (c), such real
property shall be treated as suitable property for purposes of
section 626.
626. Suitable real property
(a)(1) If a real property is determined suitable under
section 624 or upon a secondary review under section 625(d),
any representative of the homeless shall have not more than 90
days after such determination to submit an application to the
Secretary of Health and Human Services for the transfer of the
real property to that representative. If an application cannot
be completed within the 90-day period due to non-material
factors, the Secretary of Health and Human Services, with the
concurrence of the appropriate landholding agency may grant
reasonable extensions.
(2) If at the end of the time period described under
paragraph (1), no representative of the homeless has submitted
an application, such real property shall be disposed of in
accordance with section 627.
(b)(1) Not later than 20 days after the receipt of any
application under subsection (a)(1), the Secretary of Health
and Human Services shall assess such application and determine
whether to approve or deny the request for the transfer of the
real property to such applicant.
(2) If the application of a representative of the homeless
is denied by the Secretary of Health and Human Services under
paragraph (1), such real property shall be disposed of in
accordance with section 627.
(3) If the application of a representative of the homeless
is approved by the Secretary of Health and Human Services under
paragraph (1), such real property shall be made promptly
available to that representative by permit or lease, or by
deed, as a public health use under subsections (a) through (d)
of section 550.
627. Expedited disposal requirements
(a) Real property sold under the pilot program established
under this subchapter shall be sold at not less than the fair
market value, as determined by the Director in consultation
with the head of the executive agency. Costs associated with
such disposal may not exceed the fair market value of the
property unless the Director approves incurring such costs.
(b) A real property may be sold under the pilot program
established under this subchapter only if the property will
generate monetary proceeds to the Federal Government, as
provided in subsection (a). A disposal of real property under
the pilot program may not include any exchange, trade,
transfer, acquisition of like-kind property, or other non-cash
transaction as part of the disposal.
(c) Nothing in this subchapter shall be construed as
terminating or in any way limiting authorities that are
otherwise available to agencies under other provisions of law
to dispose of Federal real property, except as provided in
subsection (d).
(d) Any expedited disposal of a real property conducted
under this subchapter shall not be subject to--
(1) subchapter IV of this chapter;
(2) sections 550 and 553 of this title;
(3) section 501 of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11411);
(4) any other provision of law authorizing the no-
cost conveyance of real property owned by the Federal
Government; or
(5) any congressional notification requirement other
than that in section 545.
628. Special rules for deposit and use of proceeds from disposal of
real property
(a) Agencies that conduct the disposal of real properties
under this subchapter shall be reimbursed from the proceeds, if
any, from such disposal for the administrative expenses
associated with such disposal. Such amounts shall be credited
as offsetting collections to the account that incurred such
expenses, to remain available until expended.
(b)(1) After payment of such administrative costs, the
balance of the proceeds shall be distributed as follows:
(A) 80 percent shall be deposited into the Treasury
as miscellaneous receipts.
(B) 20 percent shall be deposited into the account of
the agency that owned the real property and initiated
the disposal action.
(2) Funds deposited under paragraph (1)(B) shall remain
available until expended for the period of the pilot program,
for activities related to Federal real property capital
improvements and disposal activities. Upon termination of the
pilot program, any unobligated amounts shall be transferred to
the general fund of the Treasury.
629. Limitation on number of permissible cash sales
The total number of cash sales of real properties to be
disposed of under this subchapter over the 5-year term of the
Federal Real Property Disposal Pilot Program shall not exceed
750.
630. Government Accountability Office study
(a) Not later than 36 months after the date of enactment of
this subchapter, the Comptroller General of the United States
shall submit to Congress and make publicly available a study of
the effectiveness of the pilot program.
(b) The study described under subsection (a) shall include
at a minimum--
(1) recommendations for permanent reforms to statutes
governing real property disposals and no cost
conveyances; and
(2) recommendations for improving the permanent
process by which Federal properties are made available
for use by the homeless.
<all>