II 

116TH CONGRESS 

1ST SESSION S. 1869 

To require the disclosure of ownership of high-security space leased to 

accommodate a Federal agency, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 13, 2019 

Mr. PETERS (for himself and Mr. PORTMAN) introduced the following bill; 

which was read twice and referred to the Committee on Homeland Security and Governmental Affairs 

A BILL 

To require the disclosure of ownership of high-security space 

leased to accommodate a Federal agency, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Secure Federal Leases from Espionage And Suspicious 

6 Entanglements Act’’ or the ‘‘Secure Federal LEASEs 

7 Act’’. 

8 (b) FINDINGS.—Congress finds that— 


lotter on DSKBCFDHB2PROD with BILLS
2 

•S 1869 IS

1 (1) the Government Accountability Office has 

2 reported that the Federal Government often leases 

3 high-security space from private sector landlords; 

4 (2) the General Services Administration collects 

5 highest-level and immediate ownership information 

6 through the System of Award Management, but it is 

7 not currently required to collect beneficial ownership 

8 information and lacks an adequate system for doing 

9 so; 

10 (3) the General Services Administration and 

11 Federal agencies with leasing authority may not 

12 know if foreign owners have a stake in the buildings 

13 leased by the agencies, either through foreign-incor14 porated legal entities or through ownership in 

15 United States-incorporated legal entities, even when 

16 the leased space is used for classified operations or 

17 to store sensitive data; and 

18 (4) according to a report of the Government 

19 Accountability Office, dated January 2017, that ex20 amined the risks of foreign ownership of Govern21 ment-leased real estate, ‘‘leasing space in foreign22 owned buildings could present security risks such as 

23 espionage and unauthorized cyber and physical ac24 cess’’. 


lotter on DSKBCFDHB2PROD with BILLS
3 

•S 1869 IS

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) BENEFICIAL OWNER.— 

4 (A) IN GENERAL.—Except as provided in 

5 subparagraph (B), the term ‘‘beneficial owner’’ 

6 means, with respect to a covered entity, each 

7 natural person who, directly or indirectly, 

8 through any contract, arrangement, under9 standing, relationship, or otherwise— 

10 (i) exercises control over the covered 

11 entity; or 

12 (ii) has a substantial interest in or re13 ceives substantial economic benefits from 

14 the assets of the covered entity. 

15 (B) EXCEPTIONS.—The term ‘‘beneficial 

16 owner’’ does not include, with respect to a cov17 ered entity— 

18 (i) a minor child; 

19 (ii) a person acting as a nominee, 

20 intermediary, custodian, or agent on behalf 

21 of another person; 

22 (iii) a person acting solely as an em23 ployee of the covered entity and whose con24 trol over or economic benefits from the 

25 covered entity derives solely from the em26 ployment status of the person; 


lotter on DSKBCFDHB2PROD with BILLS
4 

•S 1869 IS

1 (iv) a person whose only interest in 

2 the covered entity is through a right of in3 heritance, unless the person also meets the 

4 requirements of subparagraph (A); or 

5 (v) a creditor of the covered entity, 

6 unless the creditor also meets the require7 ments of subparagraph (A). 

8 (C) ANTI-ABUSE RULE.—The exceptions 

9 under subparagraph (B) shall not apply if used 

10 for the purpose of evading, circumventing, or 

11 abusing the requirements of this Act. 

12 (2) CLOSELY HELD.—The term ‘‘closely held’’ 

13 means a fund that has less than 100 natural persons 

14 as direct or indirect investors. 

15 (3) CONTROL.—The term ‘‘control’’ means, 

16 with respect to a covered entity— 

17 (A) having the authority or ability to de18 termine how a covered entity is utilized; or 

19 (B) having some decision-making power for 

20 the use of a covered entity. 

21 (4) COVERED ENTITY.—The term ‘‘covered en22 tity’’ means a person, copartnership, corporation, or 

23 other public or private entity. 


lotter on DSKBCFDHB2PROD with BILLS
5 

•S 1869 IS

1 (5) EXECUTIVE AGENCY.—The term ‘‘Executive 

2 agency’’ has the meaning given the term in section 

3 105 of title 5, United States Code. 

4 (6) FEDERAL AGENCY.—The term ‘‘Federal 

5 agency’’ means any Executive agency or any estab6 lishment in the legislative or judicial branch of the 

7 Government. 

8 (7) FEDERAL LESSEE.—The term ‘‘Federal les9 see’’ means the Administrator of General Services, 

10 the Architect of the Capitol, or the head of any Fed11 eral agency, other than the Department of Defense, 

12 that has independent statutory leasing authority. 

13 (8) FOREIGN ENTITY.—The term ‘‘foreign enti14 ty’’ means an entity that is headquartered or incor15 porated in a country that is not the United States. 

16 (9) FOREIGN PERSON.—The term ‘‘foreign per17 son’’ means an individual who is not a United States 

18 person. 

19 (10) FEDERAL TENANT.—The term ‘‘Federal 

20 tenant’’ means a Federal agency that is occupying 

21 or will occupy a high-security leased space for which 

22 a lease agreement has been secured on behalf of the 

23 Federal agency. 


lotter on DSKBCFDHB2PROD with BILLS
6 

•S 1869 IS

1 (11) HIGH-SECURITY LEASED SPACE.—The 

2 term ‘‘high-security leased space’’ means a space 

3 leased by a Federal lessee that— 

4 (A) will be occupied by Federal employees 

5 for nonmilitary activities; and 

6 (B) has a facility security level of III, IV, 

7 or V, as determined by the Federal tenant in 

8 consultation with the Interagency Security 

9 Committee, the Department of Homeland Secu10 rity, and the General Services Administration. 

11 (12) HIGHEST-LEVEL OWNER.—The term 

12 ‘‘highest-level owner’’ means the entity that owns or 

13 controls an immediate owner of the offeror of a 

14 lease, or that owns or controls 1 or more entities 

15 that control an immediate owner of the offeror. 

16 (13) IMMEDIATE OWNER.—The term ‘‘imme17 diate owner’’ means an entity, other than the offeror 

18 of a lease, that has direct control of the offeror, in19 cluding ownership or interlocking management, iden20 tity of interests among family members, shared fa21 cilities and equipment, and the common use of em22 ployees. 

23 (14) SUBSTANTIAL ECONOMIC BENEFITS.—The 

24 term ‘‘substantial economic benefits’’ means, with 

25 respect to a natural person described in paragraph 


lotter on DSKBCFDHB2PROD with BILLS
7 

•S 1869 IS

1 (1)(A)(ii), having an entitlement to the funds or as2 sets of a covered entity that, as a practical matter, 

3 enables the person, directly or indirectly, to control, 

4 manage, or direct the covered entity. 

5 (15) UNITED STATES PERSON.—The term 

6 ‘‘United States person’’ means an individual who— 

7 (A) is a citizen of the United States; or 

8 (B) is an alien lawfully admitted for per9 manent residence in the United States. 

10 (16) WIDELY HELD.—The term ‘‘widely held’’ 

11 means a fund that has not less than 100 natural 

12 persons as direct or indirect investors. 

13 SEC. 3. DISCLOSURE OF OWNERSHIP OF HIGH-SECURITY 

14 SPACE LEASED FOR FEDERAL AGENCIES. 

15 (a) REQUIRED DISCLOSURES.—Before entering into 

16 a lease agreement with a covered entity or approving a 

17 novation agreement with a covered entity involving a 

18 change of ownership under a lease that will be used for 

19 high-security leased space, a Federal lessee shall require 

20 the covered entity to identify and disclose whether the im21 mediate or highest-level owner of the leased space, includ22 ing an entity involved in the financing thereof, is a foreign 

23 person or a foreign entity, including the country associated 

24 with the ownership entity. 


lotter on DSKBCFDHB2PROD with BILLS
8 

•S 1869 IS

1 (b) NOTIFICATION.—If a disclosure is made under 

2 subsection (a), the Federal lessee shall notify the Federal 

3 tenant of the building or other improvement that will be 

4 used for high-security space in writing, and consult with 

5 the Federal tenant, regarding security concerns and nec6 essary mitigation measures, if any, prior to award of the 

7 lease or approval of the novation agreement. 

8 (c) TIMING.— 

9 (1) IN GENERAL.—A Federal lessee shall re10 quire a covered entity to provide the information de11 scribed in subsection (a) to a covered entity when 

12 first submitting a proposal in response to a solicita13 tion for offers issued by the Federal lessee. 

14 (2) UPDATES.—A Federal lessee shall require a 

15 covered entity to update a submission of the infor16 mation described in subsection (a) annually, begin17 ning on the date that is 1 year after the date on 

18 which the Federal tenant began occupancy, with in19 formation including— 

20 (A) the list of immediate or highest-level 

21 owners of the covered entity during the pre22 ceding 1-year period of Federal occupancy; or 

23 (B) the information required to be pro24 vided relating to each such immediate or high25 est-level owner. 


lotter on DSKBCFDHB2PROD with BILLS
9 

•S 1869 IS

1 SEC. 4. IMMEDIATE, HIGHEST-LEVEL, AND BENEFICIAL 

2 OWNERS. 

3 (a) PROPOSAL.—The General Services Administra4 tion shall develop a Government-wide proposal for identi5 fying all immediate, highest-level, or beneficial owners of 

6 high-security leased spaces before entering into a lease 

7 agreement with a covered entity for the accommodation 

8 of a Federal tenant in a high-security leased space. 

9 (b) REQUIREMENTS.— 

10 (1) CONTENTS.—The proposal described in sub11 section (a) shall include a process for collecting and 

12 utilizing the following information on each imme13 diate, highest-level, or beneficial owner of a high-se14 curity leased space: 

15 (A) Name. 

16 (B) Current residential or business street 

17 address. 

18 (C) An identifying number or document 

19 that verifies identity as a United States person 

20 or foreign person. 

21 (2) DISCLOSURES AND NOTIFICATIONS.—The 

22 proposal described in subsection (a) shall— 

23 (A) require the disclosure of any imme24 diate, highest-level, or beneficial owner that is a 

25 foreign person; 


lotter on DSKBCFDHB2PROD with BILLS
10 

•S 1869 IS

1 (B) require that, if the Federal lessee is 

2 assigning the building or other improvement 

3 that will be used for high-security space to a 

4 Federal tenant, the Federal tenant shall be no5 tified of the disclosure described in subpara6 graph (A); and 

7 (C) exclude collecting ownership informa8 tion on widely held pooled-investment vehicles, 

9 mutual funds, trusts, or other pooled-invest10 ment vehicles; and 

11 (D) include ownership information on 

12 closely held pooled-investment vehicles, mutual 

13 funds, trusts, or other pooled-investment vehi14 cles. 

15 (c) REPORT AND IMPLEMENTATION.—The General 

16 Services Administration shall— 

17 (1) not later than 1 year after the date of en18 actment of this Act, submit the proposal described 

19 in subsection (a) to the Committee on Homeland Se20 curity and Governmental Affairs of the Senate and 

21 the Committee on Oversight and Reform of the 

22 House of Representatives; and 

23 (2) not later than 6 years after the date of en24 actment of this Act, implement the proposal de25 scribed in subsection (a). 


lotter on DSKBCFDHB2PROD with BILLS
11 

•S 1869 IS

1 SEC. 5. OTHER SECURITY AGREEMENTS FOR LEASED 

2 SPACE. 

3 A lease agreement between a Federal lessee and a 

4 covered entity for the accommodation of a Federal agency 

5 in a building or other improvement that will be used for 

6 high-security space shall include language that provides 

7 that— 

8 (1) the covered entity and any member of the 

9 property management company who may be respon10 sible for oversight or maintenance of the high-secu11 rity space shall not— 

12 (A) maintain access to the high-security 

13 space; or 

14 (B) have access to the high-security space 

15 without prior approval from the Federal tenant; 

16 (2) access to the high-security space or any 

17 property or information located within that space 

18 will only be granted by the Federal tenant if the 

19 Federal tenant determines that the access is clearly 

20 consistent with the mission and responsibilities of 

21 the Federal tenant; and 

22 (3) the Federal lessee shall have written proce23 dures in place, signed by the Federal lessee and the 

24 covered entity, governing access to the high-security 


lotter on DSKBCFDHB2PROD with BILLS
12 

•S 1869 IS

1 space in case of emergencies that may damage the 

2 leased property. 

Æ 


lotter on DSKBCFDHB2PROD with BILLS