I 115th CONGRESS 1st Session H. R. 2426 IN THE HOUSE OF REPRESENTATIVES May 16, 2017 Mr. Lynch (for himself and Mr. King of New York ) introduced the following bill; which was referred to the Committee on Transportation and Infrastructure A BILL To require the disclosure of beneficial ownership by a foreign person of high-security space leased to accommodate a Federal agency, and for other purposes.

1. Short title; findings (a) Short title This Act may be cited as the Secure Government Buildings from Espionage Act of 2017 . (b) Findings Congress finds that— (1) the Government Accountability Office has reported that the Federal Government often leases high-security space from private sector landlords; (2) the General Services Administration and other Federal agencies with leasing authority are not currently required to collect beneficial ownership information and therefore do not know if foreign owners have a stake in the buildings leased by the agencies, even when the leased space is used for classified operations or to store sensitive data; and (3) according to a report of the Government Accountability Office, dated January 2017, that examined the risks of foreign ownership of G overnment-leased real estate, leasing space in foreign-owned buildings could present security risks such as espionage and unauthorized cyber and physical access . 2. Disclosure of beneficial ownership by foreign persons of high-security space leased for Federal agencies (a) In general Before entering into a lease agreement with a covered entity for the accommodation of a Federal agency in a building (or other improvement) that will be used for high-security leased space, a Federal lessee shall require the covered entity to— (1) identify each beneficial owner of the covered entity by— (A) name; (B) current residential or business street address; and (C) a unique identifying number from a nonexpired passport issued by the United States or a nonexpired drivers license issued by a State; (2) disclose to the Federal lessee any beneficial owner of the covered entity that is a foreign person; and (3) if the Federal lessee is assigning the building (or other improvement) to a Federal tenant, notify the Federal tenant of any disclosure made under paragraph (2). (b) Timing (1) In general A Federal lessee shall require a covered entity to provide the information described in subsections (a)(1) and (a)(2) when first submitting a proposal in response to a solicitation for offers issued by the Federal lessee. (2) Updates A Federal lessee shall require a covered entity to update a submission of the information described in subsections (a)(1) and (a)(2) not later than 60 days after the date of any change in— (A) the list of beneficial owners of the covered entity; or (B) the information required to be provided relating to each such beneficial owner. (c) Definitions In this section, the following definitions apply: (1) Beneficial owner (A) In general The term beneficial owner means, with respect to a covered entity, each natural person who, directly or indirectly— (i) exercises control over the covered entity through ownership interests, voting rights, agreements, or otherwise; or (ii) has an interest in or receives substantial economic benefits from the assets of the covered entity. (B) Exceptions The term beneficial owner does not include, with respect to a covered entity— (i) a minor child; (ii) a person acting as a nominee, intermediary, custodian, or agent on behalf of another person; (iii) a person acting solely as an employee of the covered entity and whose control over or economic benefits from the covered entity derives solely from the employment status of the person; (iv) a person whose only interest in the covered entity is through a right of inheritance, unless the person also meets the requirements of subparagraph (A); or (v) a creditor of the covered entity, unless the creditor also meets the requirements of subparagraph (A). (C) Anti-abuse rule The exceptions under subparagraph (B) shall not apply if used for the purpose of evading, circumventing, or abusing the requirements of this section. (2) Covered entity The term covered entity means a person, copartnership, corporation, or other public or private entity. (3) Executive agency The term Executive agency has the meaning given the term under section 105 of title 5, United States Code. (4) Federal agency The term Federal agency means any Executive agency or any establishment in the legislative or judicial branch of the Government. (5) Federal lessee The term Federal lessee means the Administrator of General Services, the Architect of the Capitol, or the head of any Federal agency, other than the Department of Defense, that has independent statutory leasing authority. (6) Foreign person The term foreign person means an individual who is not a United States person or an alien lawfully admitted for permanent residence into the United States. (7) High-security leased space The term high-security leased space means a space leased by a Federal lessee that— (A) will be occupied by Federal employees for nonmilitary activities; and (B) has a facility security level of III, IV, or V, as determined by the Interagency Security Committee. (8) United States person The term United States person means a natural person who is a citizen of the United States or who owes permanent allegiance to the United States.