IC 

116TH CONGRESS 

2D SESSION S. 1869 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2020 

Referred to the Committee on Transportation and Infrastructure 

AN ACT 

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, 


khammond on DSKJM1Z7X2PROD with BILLS
2 

•S 1869 RFH

1 SECTION 1. SHORT TITLE; FINDINGS. 

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

3 ‘‘Secure Federal Leases from Espionage And Suspicious 

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

5 Act’’. 

6 (b) FINDINGS.—Congress finds that— 

7 (1) the Government Accountability Office has 

8 reported that the Federal Government often leases 

9 high-security space from private sector landlords; 

10 (2) the General Services Administration collects 

11 highest-level and immediate ownership information 

12 through the System for Award Management, but it 

13 is not currently required to collect beneficial owner14 ship information and lacks an adequate system for 

15 doing so; 

16 (3) the General Services Administration and 

17 Federal agencies with leasing authority may not 

18 know if foreign owners have a stake in the buildings 

19 leased by the agencies, either through foreign-incor20 porated legal entities or through ownership in 

21 United States-incorporated legal entities, even when 

22 the leased space is used for classified operations or 

23 to store sensitive data; and 

24 (4) according to a report of the Government 

25 Accountability Office, dated January 2017, that ex26 amined the risks of foreign ownership of GovernVerDate Sep 11 2014 23:23 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1869.RFH S1869

khammond on DSKJM1Z7X2PROD with BILLS
3 

•S 1869 RFH

1 ment-leased real estate, ‘‘leasing space in foreign2 owned buildings could present security risks such as 

3 espionage and unauthorized cyber and physical ac4 cess’’. 

5 SEC. 2. DEFINITIONS. 

6 In this Act: 

7 (1) BENEFICIAL OWNER.— 

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

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

10 means, with respect to a covered entity, each 

11 natural person who, directly or indirectly, 

12 through any contract, arrangement, under13 standing, relationship, or otherwise— 

14 (i) exercises control over the covered 

15 entity; or 

16 (ii) has a substantial interest in or re17 ceives substantial economic benefits from 

18 the assets of the covered entity. 

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

20 owner’’ does not include, with respect to a cov21 ered entity— 

22 (i) a minor child; 

23 (ii) a person acting as a nominee, 

24 intermediary, custodian, or agent on behalf 

25 of another person; 


khammond on DSKJM1Z7X2PROD with BILLS
4 

•S 1869 RFH

1 (iii) a person acting solely as an em2 ployee of the covered entity and whose con3 trol over or economic benefits from the 

4 covered entity derives solely from the em5 ployment status of the person; 

6 (iv) a person whose only interest in 

7 the covered entity is through a right of in8 heritance, unless the person also meets the 

9 requirements of subparagraph (A); or 

10 (v) a creditor of the covered entity, 

11 unless the creditor also meets the require12 ments of subparagraph (A). 

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

14 under subparagraph (B) shall not apply if used 

15 for the purpose of evading, circumventing, or 

16 abusing the requirements of this Act. 

17 (2) CONTROL.—The term ‘‘control’’ means, 

18 with respect to a covered entity— 

19 (A) having the authority or ability to de20 termine how a covered entity is utilized; or 

21 (B) having some decision-making power for 

22 the use of a covered entity. 

23 (3) COVERED ENTITY.—The term ‘‘covered en24 tity’’ means— 


khammond on DSKJM1Z7X2PROD with BILLS
5 

•S 1869 RFH

1 (A) a person, corporation, company, busi2 ness association, partnership, society, trust, or 

3 any other nongovernmental entity, organization, 

4 or group; or 

5 (B) any governmental entity or instrumen6 tality of a government. 

7 (4) EXECUTIVE AGENCY.—The term ‘‘Executive 

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

9 105 of title 5, United States Code. 

10 (5) FEDERAL AGENCY.—The term ‘‘Federal 

11 agency’’ means any Executive agency or any estab12 lishment in the legislative or judicial branch of the 

13 Government. 

14 (6) FEDERAL LESSEE.—The term ‘‘Federal les15 see’’— 

16 (A) means the Administrator of General 

17 Services, the Architect of the Capitol, or the 

18 head of any Federal agency, other than the De19 partment of Defense, that has independent stat20 utory leasing authority; and 

21 (B) does not include the head of an ele22 ment of the intelligence community. 

23 (7) FEDERAL TENANT.—The term ‘‘Federal 

24 tenant’’— 


khammond on DSKJM1Z7X2PROD with BILLS
6 

•S 1869 RFH

1 (A) means a Federal agency that is occu2 pying or will occupy a high-security leased 

3 space for which a lease agreement has been se4 cured on behalf of the Federal agency; and 

5 (B) does not include an element of the in6 telligence community. 

7 (8) FOREIGN ENTITY.—The term ‘‘foreign enti8 ty’’ means a covered entity that is headquartered or 

9 incorporated in a country that is not the United 

10 States. 

11 (9) FOREIGN PERSON.—The term ‘‘foreign per12 son’’ means an individual who is not a United States 

13 person. 

14 (10) HIGH-SECURITY LEASED SPACE.—The 

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

16 leased by a Federal lessee that— 

17 (A) will be occupied by Federal employees 

18 for nonmilitary activities; and 

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

20 or V, as determined by the Federal tenant in 

21 consultation with the Interagency Security 

22 Committee, the Department of Homeland Secu23 rity, and the General Services Administration. 

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

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


khammond on DSKJM1Z7X2PROD with BILLS
7 

•S 1869 RFH

1 controls an immediate owner of the offeror of a 

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

3 that control an immediate owner of the offeror. 

4 (12) IMMEDIATE OWNER.—The term ‘‘imme5 diate owner’’ means an entity, other than the offeror 

6 of a lease, that has direct control of the offeror, in7 cluding ownership or interlocking management, iden8 tity of interests among family members, shared fa9 cilities and equipment, and the common use of em10 ployees. 

11 (13) INTELLIGENCE COMMUNITY.—The term 

12 ‘‘intelligence community’’ has the meaning given the 

13 term in section 3 of the National Security Act of 

14 1947 (50 U.S.C. 3003). 

15 (14) SUBSTANTIAL ECONOMIC BENEFITS.—The 

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

17 respect to a natural person described in paragraph 

18 (1)(A)(ii), having an entitlement to the funds or as19 sets of a covered entity that, as a practical matter, 

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

21 manage, or direct the covered entity. 

22 (15) UNITED STATES PERSON.—The term 

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

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


khammond on DSKJM1Z7X2PROD with BILLS
8 

•S 1869 RFH

1 (B) is an alien lawfully admitted for per2 manent residence in the United States. 

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

4 means a fund that has not less than 100 natural 

5 persons as direct or indirect investors. 

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

7 SPACE LEASED FOR FEDERAL AGENCIES. 

8 (a) REQUIRED DISCLOSURES.—Before entering into 

9 a lease agreement with a covered entity or approving a 

10 novation agreement with a covered entity involving a 

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

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

13 the covered entity to identify and disclose whether the im14 mediate or highest-level owner of the leased space, includ15 ing an entity involved in the financing thereof, is a foreign 

16 person or a foreign entity, including the country associated 

17 with the ownership entity. 

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

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

20 tenant of the building or other improvement that will be 

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

22 the Federal tenant, regarding security concerns and nec23 essary mitigation measures, if any, prior to award of the 

24 lease or approval of the novation agreement. 

25 (c) TIMING.— 


khammond on DSKJM1Z7X2PROD with BILLS
9 

•S 1869 RFH

1 (1) IN GENERAL.—A Federal lessee shall re2 quire a covered entity to provide the information de3 scribed in subsection (a) when first submitting a 

4 proposal in response to a solicitation for offers 

5 issued by the Federal lessee. 

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

7 covered entity to submit an update of the informa8 tion described in subsection (a) annually, beginning 

9 on the date that is 1 year after the date on which 

10 the Federal tenant began occupancy, with informa11 tion including— 

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

13 owners of the covered entity during the pre14 ceding 1-year period of Federal occupancy; or 

15 (B) the information required to be pro16 vided relating to each such immediate or high17 est-level owner. 

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

19 OWNERS. 

20 (a) PLAN.—The General Services Administration 

21 shall develop a Government-wide plan for identifying all 

22 immediate, highest-level, or beneficial owners of high-secu23 rity leased spaces before entering into a lease agreement 

24 with a covered entity for the accommodation of a Federal 

25 tenant in a high-security leased space. 


khammond on DSKJM1Z7X2PROD with BILLS
10 

•S 1869 RFH

1 (b) REQUIREMENTS.— 

2 (1) CONTENTS.—The plan described in sub3 section (a) shall include a process for collecting and 

4 utilizing the following information on each imme5 diate, highest-level, or beneficial owner of a high-se6 curity leased space: 

7 (A) Name. 

8 (B) Current residential or business street 

9 address. 

10 (C) An identifying number or document 

11 that verifies identity as a United States person, 

12 foreign person, or foreign entity. 

13 (2) DISCLOSURES AND NOTIFICATIONS.—The 

14 plan described in subsection (a) shall— 

15 (A) require the disclosure of any imme16 diate, highest-level, or beneficial owner that is a 

17 foreign person; 

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

19 assigning the building or other improvement 

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

21 Federal tenant, the Federal tenant shall be no22 tified of the disclosure described in subpara23 graph (A); and 

24 (C) exclude collecting ownership informa25 tion on widely held pooled-investment vehicles, 


khammond on DSKJM1Z7X2PROD with BILLS
11 

•S 1869 RFH

1 mutual funds, trusts, or other pooled-invest2 ment vehicles. 

3 (c) REPORT AND IMPLEMENTATION.—The General 

4 Services Administration shall— 

5 (1) not later than 1 year after the date of en6 actment of this Act, submit the plan described in 

7 subsection (a) to the Committee on Homeland Secu8 rity and Governmental Affairs of the Senate and the 

9 Committee on Oversight and Reform of the House 

10 of Representatives; 

11 (2) not later than 2 years after the date of en12 actment of this Act, implement the plan described in 

13 subsection (a); and 

14 (3) not later than 1 year after the implementa15 tion of the plan described in subsection (a), and each 

16 year thereafter for 9 years, submit a report to the 

17 Committee on Homeland Security and Governmental 

18 Affairs of the Senate and the Committee on Over19 sight and Reform of the House of Representatives 

20 on the status of the implementation of the plan, in21 cluding the number of disclosures made under sub22 section (b)(2). 


khammond on DSKJM1Z7X2PROD with BILLS
12 

•S 1869 RFH

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 leased space shall include language that pro7 vides 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 leased space shall not— 

12 (A) maintain access to the high-security 

13 leased space; or 

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

15 space without prior approval from the Federal 

16 tenant; 

17 (2) access to the high-security leased space or 

18 any property or information located within that 

19 space will only be granted by the Federal tenant if 

20 the Federal tenant determines that the access is 

21 clearly consistent with the mission and responsibil22 ities of the Federal tenant; and 

23 (3) the Federal lessee shall have written proce24 dures in place, signed by the Federal lessee and the 

25 covered entity, governing access to the high-security 


khammond on DSKJM1Z7X2PROD with BILLS
13 

•S 1869 RFH

1 leased space in case of emergencies that may dam2 age the leased property. 

3 SEC. 6. APPLICABILITY. 

4 Except where otherwise provided, this Act shall apply 

5 with respect to any lease or novation agreement entered 

6 into on or after the date of the enactment of this Act. 

Passed the Senate March 3, 2020. 

Attest: JULIE E. ADAMS 

Secretary. 


khammond on DSKJM1Z7X2PROD with BILLS