```

[Senate Report 110-279]
[From the U.S. Government Publishing Office]

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

                 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.

                                  

```