**Managerial Flexibility Act of 2001 **

**Section-by-Section Summary **

**TITLE I - FEDERAL EMPLOYEE MANAGEMENT REFORMS **

**SUBTITLE A - FEDERAL EMPLOYMENT RESTRUCTURING ASSISTANCE **

This proposal would create a permanent Government-wide authority for
voluntary separation incentives (\"buyouts\"). Buyouts have been
available under various statutory authorities since 1992. Over the
years, they have proven to be an extremely effective tool for agencies
facing major downsizing or restructuring. They were a key tool in
efforts to reduce the Federal workforce by over 370,000 in the last
seven years and to accomplish base realignments and closures. The Office
of Personnel Management (OPM), the General Accounting Office, and the
Congressional Budget Office agree that buyouts are more cost-effective
and less disruptive than reductions in force (RIFs). They reduce the
number of involuntary separations when an agency is downsizing or
restructuring. Buyouts are more manageable and flexible than RIFs,
protect diversity, and minimize damage to morale brought about by RIFs.
Over the last few years more than 26 different buyout laws have been
enacted. Two of these were time-limited Government-wide authorities, and
the remainder covered specific agencies.

The proposal includes all of the safeguards and features that have
allowed buyouts to be useful and effective for agencies and attractive
to employees while still saving the taxpayers money. These safeguards
include: (1) requiring an agency to submit a detailed plan to the Office
of Management and Budget (OMB) describing the intended use of buyouts
and how the agency will be streamlined; (2) reducing an agency\'s
full-time equivalent (FTE) employment level by one position for each
employee who receives a buyout; and (3) requiring that any employee who
received an incentive and then accepted any paid employment with the
Government, or under a personal services contract with the Government,
within five years after separating, would have to repay the entire
amount of the incentive before the first day of the reemployment.

**Sec. 101. Voluntary separation incentives **

This section would create a new subchapter II in chapter 35 of title 5
U.S.C., to permanently authorize buyouts.

The new 5 U.S.C. 3521 would provide definitions of \"agency\" and
\"employee.\" This section would exclude certain employees from
eligibility for a buyout. Among these exclusions are reemployed
annuitants, employees eligible for disability retirement, employees
about to be separated for misconduct or unacceptable performance, and
employees who have previously received a buyout from the Federal
Government.

The amendments to Section 1115 and 1116 requires that payments to the
Fund for the Department of Defense uniformed services are from amounts
appropriated for military personnel accounts, rather than the Defense
Health Program.

The further amendment to section 1116(a) and the addition of section
1116(c) to the existing law -National Defense Authorization Act for
Fiscal Year 2001, Section 713 - would charge to the non-defense
uniformed services the accruing cost of retiree health benefits for
their respective uniformed service.

New Section 1118 provides that if actuarial determinations are not
available in time for budget preparation during the first year of
implementation, estimates made under Section 1115 will be the actual
payments contributed to the Fund. The original unfunded liability as
defined in Section 1115 will be adjusted to correct for the difference.

**Sec. 213. Effective date **

Section 213 provides that the subtitle shall take effect upon enactment
with respect to fiscal years beginning after 2002, except as otherwise
provided.

**TITLE III - FEDERAL PROPERTY ASSET MANAGEMENT REFORMS **

The Federal Property and Administrative Services Act of 1949 (Property
Act), as amended (40\
U.S.C. 471 et seq.), is the law of general application governing real
and personal property acquired to\
carry out Federal missions and programs. The Federal Government owns or
controls over 24 million\
acres of land and facilities, which have been acquired for use and
operation by Federal agencies in\
support of their missions. Since 1949, the Property Act has provided the
foundation for the\
management and disposal of these properties as well as for surplus
personal property.

This title reforms the Property Act by addressing all phases of an
asset\'s life cycle and would support\
an integrated portfolio-wide perspective for overall property management
decision-making by providing\
incentives for managing Federal property by authorizing agencies to:\
(1) exchange or transfer unneeded property with other Federal agencies;
(2) sublease unexpired\
portions of government-leased property; and (3) outlease assets that
must remain in Federal ownership,\
including underutilized portions of non-excess property to ensure full
utilization. Further, this title would\
not alter existing authorities for properties under the current Property
Act structure nor would it alter\
authorities that were granted under other statutes. Rather, it would
provide incentives and flexibility in\
addition to those authorities and grant agencies the necessary tools to
effectively and efficiently manage\
their assets.

**Sec. 301. Definitions **

This section amends Section 3 of the Property Act by adding a definition
for the term \"landholding agency.\" This term means any Federal agency
that, by specific or general statutory authority, has jurisdiction,
custody, or control over real property and would exclude agencies when
they are acting on behalf of a third party during the conveyance process
for a public benefit purpose.

**SUBTITLE A - LIFE CYCLE PLANNING AND MANAGEMENT **

New Section 213 amends Title II of the Property Act by requiring the GSA
Administrator, along with the heads of the landholding agencies, to
establish a set of real and personal property asset management
principles as a guide in the real and personal property decision-making
process. It also establishes specific principles that must be used with
respect to the outlease of Federal property through the use of
public-private partnerships. Additionally, it requires the GSA
Administrator to establish performance measures to determine the
effectiveness of Federal real property management.

New Section 214 amends Title II of the Property Act and requires the
head of each landholding agency to designate a Senior Real Property
Officer (SRPO) to oversee all real property asset management activities.
The agency SRPO would work with the Chief Financial Officer, Chief
Information Officer, and Chief Human Resources Officer to integrate
facilities, technology, human resources, and financial management
considerations into agency strategic planning. Also, it would provide
that the agency SRPO first give consideration to available Federal real
property holdings prior to a Federal agency acquiring any interest in
real property from a non-Federal source.

**SUBTITLE B - ENHANCED AUTHORITIES FOR REAL PROPERTY ASSET MANAGEMENT
**

**Sec. 311. Enhanced asset management tools **

Section 311 amends the Property Act by adding at the end of Title II the
following new sections to make several new enhanced asset management
tools available to landholding agencies.

The new Section 215 of Title II of the Property Act establishes criteria
for use of the new asset management tools. That criteria includes
determining if the use of the asset management tool: (1) supports the
goals and objectives in the agency\'s Strategic Plan and the asset
management plan required in section 214 of the Property Act as amended;
(2) is economical, cost effective, and in the best interest of the
United States for the use of the real property; and (3) is documented in
a business plan that analyzes all reasonable options for use of the
property and takes into account provisions of other applicable law
(e.g., the McKinney-Vento Homeless Assistance Act and the National
Environmental Policy Act).

The new Section 216 of Title II of the Property Act authorizes the use
of asset management tools and\
sets requirements for how and when they should be used.

Subsection 216(a) authorizes Federal agencies to be able to acquire
replacement real property by\
exchange or transfer in participation with another agency under mutually
agreeable terms.

Subsection 216(b) provides that a Federal agency would be able to
acquire replacement real property\
interests by selling or exchanging real property assets to or with any
non-Federal source. A transaction\
under this authority would be subject to the following requirements:\
(1) compliance with applicable law concerning Federal agency
acquisitions of real property;\
(2) making the property available for transfer or exchange with other
Federal agencies; and\
(3) receiving fair market value consideration for the property sold or
exchanged, which may include\
future consideration such as construction of a building, development
rights, fee interests, or leasehold\
interests.

Subsection 216(c) allows a Federal agency to be able to make unexpired
portions of leases of real\
property available for interim uses. Such uses could be enabled by a
lease, license, permit, or similar\
instrument issued to another Federal agency or a non-Federal entity.

Subsection 216(d) authorizes a Federal agency to be able to make
underutilized portions of\
Government-owned real property available through outlease agreements
with a Federal agency or a\
non-Federal entity. These outlease agreements could be in the form of a
partnership, cooperative\
venture, limited liability company, or other business arrangement. A
decision to outlease property\
would be subject to the head of the agency once he or she determines
that:\
(1) there is no long-term mission requirement for the property (but the
Federal government is not\
permitted to dispose of it) or there is a continuing long-term mission
requirement to retain the property;\
and (2) the use of the property by the prospective lessee will not be
inconsistent with the agency\'s\
mission. Additionally, any outleasing agreement shall not be for more
than 50 years.

This section also authorizes agencies to dispose of leased property if
the head of the agency determines,\
during the term of an outlease involving the development or substantial
rehabilitation/renovation of a\
Federal asset in partnership with a non-Federal entity, that the
property is no longer needed. This\
authority would not affect any authorities currently in statute that
authorize agencies to outlease\
property.

The new Section 217 of Title II of the Property Act provides for the
receipt of cash or cash\
equivalents, in-kind assets, services, future consideration, or any
combination of those values from the\
operation of one of the enhanced asset management tools authorized in
section 216.

The new Section 218 of Title II of the Property Act requires Federal
agencies to submit business plans to OMB and appropriate committees of
the Congress concerning each transaction under section 216 that involves
a sale, exchange, or outlease to a non-Federal party where the asset has
a value of more than \$2 million.

**Sec. 312. Repeal of section 312 of the Federal Property and
Administrative Services Act **

Section 312 of the draft bill repeals section 321 of the Act of June 30,
1932, 47 Stat. 412 (40 U.S.C. 303b).

**Sec. 313. Disposal of surplus property **

Section 313 would amend subsection 203(b) of the Property Act concerning
the authority for the care and handling and disposition of surplus
property. The provision requires that the GSA Administrator delegate,
upon the written request of the head of the landholding agency, disposal
authorities for surplus real and related personal property.

**SUBTITLE C - INCENTIVES FOR REAL AND PERSONAL PROPERTY MANAGEMENT
IMPROVEMENT **

**Sec. 321. Proceeds from transfer or disposition of property **

Section 321 amends section 204 of the Property Act (40 U.S.C. §485) to
allow agencies to retain the bulk of the net proceeds from real property
transactions.

It also amends section 204 of the Property Act to authorize the
establishment of individual agency capital asset accounts to fund the
Federal agencies\' capital transactional needs. The balances in each
agency\'s capital account would be made available until expended without
further appropriation action. Such account would consist of funds
generated from real property transactions. Funds in an agency account
would generally be available for such capital asset projects as
acquisitions of new facilities and equipment, major construction,
capital improvements; non-reoccurring maintenance including renovations,
alterations, expansions, environmental remediations; and disposition
expenses. In addition, agencies would be required to annually submit
with the President\'s budget a detailed account of all real property
transactions carried out during the previous fiscal year and of receipts
and disbursements from the agency\'s capital asset account.

This section authorizes landholding agencies to be reimbursed for their
full direct and indirect costs in disposing of property, from the
monetary proceeds of real property dispositions or other available
resources, including the agency\'s capital asset account.

Section 321 also amends subsection 204(i) of the Property Act to
authorize an agency selling personal property to retain the proceeds of
a sale such in amounts as are necessary to cover the full, direct and
indirect, disposal costs.

**Sec. 322. Relationship to other agencies\' authorities to use disposal
proceeds **

Section 322 states that the authority to retain proceeds granted under
section 321 would not supersede other provisions of Federal law.

**Sec. 323. Impact on other authorities to use disposal proceeds **

Section 323 authorizes agencies to retain the proceeds from real
property dispositions rather than providing the funds to other funding
sources, such as the Land and Water Conservation Fund.

**Sec. 324. Using a share of sale proceeds to maintain historic Treasury
receipts **

Section 324 requires agencies to transfer to the Treasury an amount
equal to the FY 2002 baseline estimate of surplus real property sales
receipts for FYs 2002 through 2006. OMB is required to notify the
affected agencies and House and Senate Appropriation Committees of the
allocation by agency within 30 days of enactment of this Act. If an
agency realizes less sale proceeds than its allocation for a fiscal
year, it will transfer all of the actual sale proceeds to the Treasury,
and its allocation for the subsequent year will be increased by the
shortfall. If by September 30, 2006, an agency has transferred less to
Treasury than its cumulative five-year allocation, the agency will be
required to transfer the difference out of funds otherwise available to
the agency. Agencies will be allowed to retain and use any surplus sale
proceeds that exceed the allocation made by OMB.

**SUBTITLE D - STREAMLINED AND ENHANCED DISPOSAL AUTHORITIES **

**Sec. 331. Including nonprofit organizations as eligible donees **

Section 331 amends subsection 203(k)(3) of the Property Act to add
qualified nonprofit institutions to the set of entities eligible to
receive surplus property for historic monument purposes.

**Sec. 332. Elimination of certain negotiated sale requirements **

Section 332(a) amends subsection 203(e) of the Property Act by modifying
certain requirements concerning negotiated sales of surplus real and
personal property in order to eliminate obsolete and unnecessary
limitations and therefore providing increased flexibility on negotiated
sales of both real and personal property.

Section 332(a) amends Subsection 203(e)(6) by repealing the current
requirements and adding new ones for the preparation of explanatory
statements and annual reports to Congress concerning negotiated sales of
surplus personal property. In the case of surplus real property, the
provision makes the negotiated sale value threshold of the surplus real
property above the explanatory statements threshold and equal to the
threshold value prescribed in section 218 of the Property Act as amended
by Subtitle B of this title. Consistent with personal property, the
annual real property report to Congress required under Section 203(e)(6)
would be eliminated.

Section 332(b) adds a subsection (s) to section 203 of the Property Act,
which would eliminate that any priority consideration be given to a
specific public benefit conveyance.

**Sec. 333. Exchange and sale of personal property **

Section 333 amends subsection 201(c) of the Property Act (40 U.S.C.
481(c)) by: (1) authorizing the acquisition of personal property and/or
related services through an exchange/sale of personal property; (2)
repealing the current provision that allows negotiated sales of such
property only when the reasonable value involved in the contract does
not exceed \$500 or when otherwise authorized by law; and (3) making the
sale of personal property under the exchange/sale authority subject to
the same conditions that apply to the sale of surplus personal property
under Subsection 203(e) of the Property Act.

**Sec. 334. Expansion of abandonment authority **

Section 334 amends subsection 202(h) of the Property Act by expanding
the current authority for abandonment of property to property which has
no commercial value or of which the estimated costs of continued care
and handling would exceed the estimated proceeds from its sale. The new
authority allows agencies to abandon property to both public and private
organizations when such property has no value.

**Sec. 335. Clarifying certain donation authorities **

Section 335 amends subsection 203(j) of the Property Act by making
educational activities of special interest eligible to acquire both
civilian agency and Department of Defense property through their local
State agencies for surplus property.

**Sec. 336. Streamlining consideration of surplus real property for
homeless assistance **

Section 336 would streamline and reform the process whereby Federal real
property is considered for use to assist the homeless by making several
amendments to section 501 of the McKinney-Vento Homeless Assistance Act,
as amended (42 U.S.C. 11411).

Section 336(a)(1) and (2) would limit agency quarterly reporting on
Federal properties to the Department of Housing and Urban Development
(HUD) to cover only those properties that have not been previously
reported to HUD in a prior quarterly period.

Paragraph (3) would reduce the deadline for agencies to submit \"notices
of intent\" concerning property availability from 45 days to 30 days.

Paragraphs (4) and (5) would limit the HUD quarterly publications in the
Federal Register to cover only properties that have not been previously
published in a prior quarterly period.

Paragraph (6) would reduce the administrative and Federal Register
publication costs for HUD and would repeal certain reporting and
publication requirements.

Paragraph (7) would require that the list of available properties be
published on a website maintained by the Secretary of HUD, and that the
local Continuum of Care (CoC) organization for homeless assistance where
the property is located (or the State if a CoC is not available) be
notified of the information on the list.

Paragraph (8) extends the holding period in which properties are
available solely for the purpose of assisting the homeless from 60 days
to 90 days.

Paragraph (9) allows applicants to submit a written expression of
interest in properties published quarterly to HHS after the 90-day
proposed holding period has expired if the property is still available
to assist the homeless.

Paragraph (10) requires HHS to give a preference to applications for
properties that contain a certification that their proposal is
consistent with the local CoC strategy for homeless assistance.

Paragraph (11) adds language to the McKinney-Vento Homeless Act that
states that the priority of consideration to obtain property will only
apply if HHS receives a written notice of intent with the 90-day
proposed holding period as described in paragraph 8.

Paragraph (12) changes the heading in Section 501(h) of the
McKinney-Vento Homeless Act to reflect the change in paragraph (11) to
add other property exemptions unrelated to the base closure process.

Paragraph (13) exempts from Section 501 of the McKinney-Vento Homeless
Act, buildings and property that are in a secured area for national
defense purposes or inaccessible by road and can be reached only by
crossing private property.

Subsection 13(b) requires HUD, within 30 days of enactment of this Act,
to survey landholding agencies to determine whether the properties
included in the last comprehensive list of properties

published pursuant to section 501(c)(1)(A) of the McKinney-Vento Act
remain available for application for use by the homeless. Such
properties would be required to remain available for application for use
to assist the homeless in accordance with sections 501(d) and 501(e) (as
amended by subsection (a) of this section) as if such properties had
been published under section 501(c)(1)(A)(ii).

**SUBTITLE E - MISCELLANEOUS **

**Sec. 341. Scope and construction **

Section 341 emphasizes that unless specifically expressed within, this
title neither itself imposes, nor places in the Property Act, any
provision that is to be construed to preempt or otherwise contest with
any preexisting statute that authorizes a Federal agency to manage or
engage in transactions involving real property.

**Sec. 342. Severability**\
**Sec. 343. No waiver**\
**Sec. 344. Agency discretion**\
**Sec. 345. Effective date**

The remaining sections in this subtitle address statutory housekeeping
subjects of severability, waiver, the exercise of agency discretion, and
the effective date of the Title, and requires the General Accounting
Office to report to Congress no later than five years from the date of
enactment of this Title on the use by Federal agencies of the
authorities provided by this Title.