Senate Report 112-241 - FEDERAL REAL PROPERTY ASSET MANAGEMENT REFORM ACT OF 2012

[Senate Report 112-241]
[From the U.S. Government Publishing Office]

112th Congress } { Report
2d Session } SENATE { 112-241
_______________________________________________________________________

Calendar No. 555

FEDERAL REAL PROPERTY ASSET MANAGEMENT REFORM ACT OF 2012

__________

R E P O R T

of the

COMMITTEE ON HOMELAND SECURITY AND

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

to accompany

S. 2178

together with

ADDITIONAL VIEWS

TO REQUIRE THE FEDERAL GOVERNMENT TO EXPEDITE THE SALE OF UNDERUTILIZED
FEDERAL REAL PROPERTY

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

November 27, 2012.--Ordered to be printed

----------
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Washington, DC 20402-0001

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska JERRY MORAN, Kansas

Michael L. Alexander, Staff Director
Beth M. Grossman, Deputy Staff Director and Chief Counsel
Kristine V. Lam, Professional Staff Member
Velvet D. Johnson, Counsel, Subcommittee on Federal Financial
Management, Government Information, Federal Services, and International
Security
Nicholas A. Rossi, Minority Staff Director
Mark B. LeDuc, Minority General Counsel
Patrick J. Bailey, Minority Associate Counsel
Trina Driessnack Tyrer, Chief Clerk

Calendar No. 555
112th Congress } { Report
2nd Session } SENATE { 112-241

=======================================================================

FEDERAL REAL PROPERTY ASSET MANAGEMENT REFORM ACT OF 2012

_______

November 27, 2012.--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. 2178]

The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 2178) to require
the Federal Government to expedite the sale of underutilized
Federal real property, having considered the same, reports
favorably thereon with an amendment in the nature of a
substitute and recommends that the bill do pass.

CONTENTS

Page
I. Purpose..........................................................1
II. Background and Need for Legislation..............................2
III. Legislative History..............................................6
IV. Section-by-Section Analysis of the Bill, as Reported.............7
V. Evaluation of Regulatory Impact.................................10
VI. Congressional Budget Office Estimate............................10
VII. Changes in Existing Law Made by the Bill, as Reported...........13
VIII.Additional Views................................................24

I. Purpose and Summary

The purpose of S. 2178 is to streamline the current
statutory framework governing the disposal of Federal real
property, so that the government can dispose of unneeded or
underutilized properties in a more efficient and timely manner.
The bill provides the Office of Management and Budget (OMB)
with temporary authority to expedite the disposal of unneeded
Federal real property and creates a financial incentive for
agencies to achieve greater efficiency in their real estate
portfolios. Additionally, the bill requires the Secretary of
the Department of Housing and Urban Development (HUD) to use
funds made available through the expedited disposal program to
provide grants to eligible non-profit organizations for the
purposes of acquiring or rehabilitating property in order to
provide housing or shelter for the homeless.

II. Background and Need for the Legislation

Property management is one of the most pressing management
problems facing the Federal government today--so much so, that
the Government Accountability Office (GAO) has for nearly a
decade continuously placed real property management on its
``high risk list'' of programs whose management problems expose
taxpayers to at least $1 billion in waste annually.\1\ In 2003,
GAO cited long-standing problems with (1) excess and
underutilized property; (2) deteriorating and aging facilities;
(3) unreliable property data; and (4) a heavy reliance on
costly leasing instead of ownership to meet new needs.\2\ By
early 2009 and again in early 2011, GAO confirmed that, while
agencies had taken some positive steps to address real property
issues, some of the core problems that led to the original
high-risk designation persist.\3\
---------------------------------------------------------------------------
\1\U.S. Government Accountability Office, High Risk Series: Federal
Real Property (Jan. 2003) (GAO-03-122).
\2\Id.
\3\U.S. Government Accountability Office, High Risk Series: An
Update (Jan. 2009) (GAO-09-271); U.S. Government Accountability Office,
High Risk Series: An Update (Feb. 2011) (GAO-11-278).
---------------------------------------------------------------------------
Both the current and previous administrations have
demonstrated a commitment to addressing the Federal
government's property management challenges. In response to
administrative reform initiatives and related executive orders
and memoranda, by 2003, many Federal agencies established real
property asset management plans, standardized property data,
and adopted property management performance measures.\4\ A 2004
Presidential Executive Order established a Federal Real
Property Council (FRPC), comprised of the Office of Management
and Budget (OMB) Controller and senior real property officers
of all twenty-four landholding agencies and charged with
promoting reform efforts.\5\ Most recently, a June 2010
presidential memorandum directed agencies to identify and
eliminate excess properties to produce a $3 billion cost
savings by the end of Fiscal Year (FY) 2012. The memo directed
that these cost savings be derived from increased proceeds from
the sale of assets and reduced operating, maintenance, and
energy expenses from disposals or other space consolidation
efforts.\6\
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\4\The White House, Office of the Press Secretary, Presidential
Memorandum--Disposing of Unneeded Federal Real Estate (June 10, 2010).
Can be found at http://www.whitehouse.gov/the-press-office/
presidential-memorandum-disposing-unneeded-federal-real-estate.
\5\Exec. Order No. 13327, 69 Fed. Reg. 5897 (Feb. 4, 2004).
\6\White House, Presidential Memorandum--Disposing of Unneeded
Federal Real Estate (June 10, 2010). Can be found at http://
www.whitehouse.gov/the-press-office/presidential-memorandum-disposing-
unneeded-Federal-real-estate).
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Despite these efforts, weaknesses in the property
disposition process have left the Federal government with a
large inventory of vacant and underutilized properties. While
there continue to be problems with missing data on this
inventory, the twenty-four agencies required to submit property
data in FY 2010 collectively reported that they currently own
or lease more than 3.35 billion square feet of building floor
area in 399,000 separate buildings.\7\ About 557 million square
feet (or seventeen percent) of this total space is leased. Of
these assets, nearly 78,000 were reported vacant or
underutilized, costing the Federal government more than $1.6
billion in annual operating expenses.\8\
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\7\Federal Real Property Council, FY 2010 Federal Real Property
Report: An Overview of the U.S. Government's Real Property Assets, p.
3. Can be found at http://www.gsa.gov/graphics/ogp/
FY_2010_FRPP_Report_Final.pdf.
\8\Id. at 4.
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Vacant and underutilized Federal properties are costly to
maintain. 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, landscaping, and security, as well as any costs
related to mortgage or lease payments. Additionally, holding
unneeded property carries a hidden opportunity cost due to both
the lost revenues that would be gained from selling the
property. 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 by
other entities such as private business or non-profits to
create jobs, spur innovation, increase local and national
prosperity, or meet other needs. These properties could be put
to more cost-beneficial uses, exchanged for other needed
property, or sold to generate revenue for the Federal
government.
The Committee is concerned that the current process in
place for disposing of Federal property is inefficient and
largely at fault for the costs agencies incur each year to
maintain vacant and underutilized properties. The disposal
process, governed by 40 U.S.C. 5 subchapters III and IV, and
under part 101 of title 41 of the Code of Federal Regulations,
requires agencies to report excess property to the General
Services Administration (GSA). GSA then makes it available to
other Federal agencies, which generally pay market value for
properties they wish to acquire. However, if no Federal agency
expresses interest, the property is deemed surplus Federal and
must then go through a lengthy screening process to determine
whether it can be offered to state and local governments, and
qualified nonprofits, for use in accomplishing public purposes
specified in statutes, such as use as educational facilities or
for providing services to the homeless. Conveyances under these
procedures are either donated or made at values below the fair
market.
Agencies have consistently argued that these statutory
requirements slow down the disposal process, compelling
agencies to incur operating costs for extended periods of time
while the properties are being screened. For example, real
property officials at the Department of Veterans Affairs (VA)
have said the McKinney-Vento Act, which mandates that all
surplus property be screened for homeless use, can add as much
as two years to the disposal process.\9\ Because public benefit
conveyance requirements are set in law, agencies do not have
the authority to bypass this step in the process, even for
surplus properties that cannot be realistically conveyed, such
as those that are uninhabitable due to environmental concerns.
Similarly, the Department of Energy (DOE) informed auditors
that it has properties that could be disposed of only by
demolition, due to their condition or location, but were still
subject to the screening process, thereby forcing the agency to
pay maintenance costs that could have been avoided.\10\ 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
actions, thereby depriving non-Federal entities of the
opportunity to make more productive use of these properties.
---------------------------------------------------------------------------
\9\U.S. Government Accountability Office, Federal Real Property:
Progress Made in Reducing Unneeded Property, but VA Needs Better
Information to Make Further Reductions (Sept. 2008) (GAO-08-939), p.
39.
\10\U.S. Government Accountability Office, Federal Real Property:
Progress Made Toward Addressing Problems, but Underlying Obstacles
Continue to Hamper Reform, (April 2007) (GAO-07-349), p. 40.
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The second major obstacle in the disposal process is the
lack of financial resources necessary for many agencies to
dispose of their surplus facilities. Vacant and underutilized
properties are often among the older, most deteriorating assets
in agencies' portfolios. Agencies must complete expensive
repairs and renovations before the properties are ready for
disposal. At the end of FY 2011, GSA identified a $4.6 billion
maintenance and repair liability for the next 10 years.\11\ Of
this total, $1.3 billion is for immediate maintenance and
repair needs.\12\ However, funding for restoration and repairs
has declined since 2006 and will be difficult to obtain in the
current fiscal environment.\13\
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\11\U.S. Government Accountability Office, Federal Buildings Fund:
Improved Transparency and Long-Term Plan Needed to Clarify Capital
Funding Priorities (July 2012) (GAO-12-656), p. 16.
\12\Id.
\13\Id.
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Further exacerbating the problem, current law requires most
agencies to return funds received from the sale of surplus
property to the Treasury, even though it can require a
significant upfront investment to get a building ready for
disposal. Therefore, an agency that goes through the lengthy
disposal process, and uses significant budgetary and personnel
resources to do it, is not able to retain the proceeds from the
sale. With little incentive to spend the money and other
resources needed to dispose of the property, property managers
often decide to pay for continued maintenance of vacant or
underutilized property rather than to go through the trouble
and cost of disposing of it.
Certain agencies have been granted specific statutory
authority to retain proceeds from the sale of their
property.\14\ Retention of proceeds has proven to be an
effective tool for Federal agencies to dispose of their
unneeded properties.\15\ In testimony before the Committee,
Robert Peck, the former Commissioner of the Public Buildings
Service at GSA, reported that proceeds retention authority has
given agencies the incentive to eliminate unneeded assets and
an important source of reinvestment funds.\16\ For that reason,
the Committee believes it is appropriate under the pilot
program authorized in S. 2178 to allow agencies to recoup the
costs of preparing a property for sale, plus up to 18 percent
of net proceeds, as an incentive for disposing of these
properties.
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\14\U.S. Government Accountability Office, Federal Real Property:
Authorities and Actions Regarding Enhanced Use Leases and Sale of
Unneeded Real Property (Feb. 2009) (GAO-09-283R), p. 4.
\15\Id.
\16\Testimony given to the Senate Subcommittee on Federal Financial
Management, Government Information, Federal Services and International
Security. Peck, Robert, General Services Administration, June 9, 2011,
p. 3.
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Compounding the Federal government's property management
challenges is agencies' reliance on costly leasing, instead of
ownership, to meet new space needs. In a 2011 report, GAO noted
that overreliance on costly leased space was one of the primary
reasons that Federal real property management remains a high-
risk area.\17\ According to GAO, the Federal government leases
more property than it owns.\18\ While leasing may be a viable
option when an agency has a desire or need for flexibility or a
short-term need, studies have shown that building ownership
options through construction or purchase are generally the
least expensive ways to meet agencies' long-term occupancy
needs.\19\
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\17\U.S. Government Accountability Office, Federal Real Property:
Overreliance on Leasing Contributed to High-Risk Designation (Aug.
2011) (GAO-11-879T), p. 1.
\18\Id.
\19\U.S. Government Accountability Office, Federal Real Property:
Reliance on Costly Leasing to Meet New Space Needs is an Ongoing
Problem (Oct. 2005) (GAO-06-136T), p. 2.
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Under current law, the GSA is authorized to lease property
for itself and on behalf of many other agencies; however,
certain agencies have limited independent leasing authority,
which means they do not have to work with GSA to acquire leased
space. Some agencies with independent leasing authority, such
as the VA, have established in-house real estate expertise,
while other agencies with independent leasing authority have
not. For example, in 2010, the Securities and Exchange
Commission (SEC) executed a $557 million, 10-year lease for
900,000 square feet of office space, which the SEC's Inspector
General described as ``another in a long history of missteps
and misguided leasing decisions made by the SEC since it was
granted independent leasing authority by Congress in
1990.''\20\ The Committee believes that urgent action is needed
to consolidate Federal operations onto government-owned sites,
where appropriate, thereby reducing the Federal government's
leasing portfolio in a way that is advantageous for Federal
agencies, stakeholders, and the clientele served by those
agencies. This legislation puts in place a strategy for
reducing the amount of leased space used for long-term needs
when doing so would be less costly.
---------------------------------------------------------------------------
\20\U.S. Securities and Exchange Commission Office of Inspector
General, Improper Actions Relating to the Leasing of Office Space (May
2011) (Case No. OIG-553), p. 2.
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Homeless advocates have raised concerns regarding the
proposed changes to the McKinney-Vento program. However,
although thousands of properties are screened every year for
homeless use, very few are deemed suitable for transfer to
groups assisting the homeless population and even fewer are
actually donated to those groups. According to data provided to
Committee by GAO, since the inception of the McKinney Vento
program in 1987, only 81 properties have been conveyed to
groups assisting the homeless, and in the past ten years, only
37 properties have been conveyed. Last year, only one property
was given to homeless assistance groups. Meanwhile both
taxpayer dollars and energy resources are being wasted to
maintain the excess assets in line to be screened or are tied
up in legal disputes.
S. 2178 offers a common sense approach that would allow the
federal government to maintain its commitment to the homeless,
but to do so in a more cost-effective way. First, it would only
waive homeless screenings for a small subset of properties that
are selected to go through the temporary disposal program we
authorize. The language is carefully drafted to make only those
properties that can bring in significant revenue eligible for
that process. The remaining properties would still be subject
to the McKinney-Vento Act. Moreover, the bill authorizes a
grant program that would provide 2 percent of the proceeds from
the properties sold under the bill to allow homeless providers
to purchase or rehabilitate alternative properties to those
being sold.
The Committee believes that many of the obstacles that
contribute to poor property management can be addressed by
offering agencies incentives to dispose of underutilized
property, requiring agencies to maintain better data on its
real property, and prohibiting agencies from acquiring new real
property without disposing of underutilized properties. While
the Federal government should always strive to be a good
steward of the land and property it owns, it is especially
important during a time of shrinking budgets and scarce
resources. S. 2178 sets Federal agencies on the path towards
improved real property management by facilitating the disposal
of unneeded facilities, while establishing a framework for
Federal agencies to make more efficient use of existing space.
The measure also eliminates costly leasing arrangements,
particularly when agencies would be better served by owning the
building. This legislation has the potential to generate
billions of dollars in proceeds and savings that can be used to
reduce the budget deficit and to help agencies obtain the
resources that will allow them to better maintain the property
necessary for them to fulfill their mission.

III. Legislative History

On June 9, 2011, the Homeland Security and Governmental
Affairs Committee's Subcommittee on Federal Financial
Management, Government Information, Federal Services, and
International Security held a hearing to discuss weaknesses in
Federal real property management identified by GAO. Witnesses
at the hearing were: the Honorable Alan Dixon, Former Chairman,
Defense Base Realignment and Closure Commission; Dave Baxa,
Chief Executive Officer, VISTA Technology Services, Inc.; Tim
Ford, Chief Executive Officer, Association of Defense
Communities; Maria Foscarinis, Executive Director, National Law
Center on Homelessness and Poverty; the Honorable Daniel I.
Werfel, Controller, Office of Federal Financial Management,
Office of Management and Budget; Robert Peck, Commissioner,
Public Buildings Service, U.S. General Services Administration;
James Sullivan, Director, Office of Asset Enterprise
Management, U.S. Department of Veterans Affairs; David Wise,
Director, Physical Infrastructure Issues, U.S. Government
Accountability Office; and Brian Lepore, Director, Defense
Capabilities and Management, U.S. Government Accountability
Office.
On August 4, 2011, the Subcommittee on Federal Financial
Management, Government Information, Federal Services, and
International Security held a hearing evaluating Federal
leasing trends and challenges. Witnesses at the hearing were:
the Honorable David Kotz, Inspector General, U.S. Securities
and Exchange Commission; David Foley, Deputy Commissioner,
Public Buildings Service, U.S. General Services Administration;
James Sullivan, Director, Office of Asset Enterprise
Management, U.S. Department of Veterans Affairs; Jeff Heslop,
Chief Operating Officer, U.S. Securities and Exchange
Commission; and David Wise, Director, Physical Infrastructure
Issues, U.S. Government Accountability Office.
On March 8, 2012, Senators Carper and Portman introduced S.
2178, which was referred to the Committee on Homeland Security
and Governmental Affairs. The Committee initially considered
the legislation at a business meeting on June 27, 2012. The
Committee adopted a substitute amendment offered by Senators
Carper, Portman, Brown, Pryor, Coburn, Collins, McCaskill, and
Begich by voice vote with Senator Akaka asking to be recorded
as voting present. Present for the vote were Senators
Lieberman, Akaka, Carper, Begich, Collins, Johnson, and
Portman. The substitute amendment requires Federal agencies to
achieve $15 billion in real estate savings over a 10-year
period, prohibits agencies from acquiring additional space
unless the square footage of the increase is offset by the
disposal of space from the inventory of that agency, and makes
technical changes.
The Committee continued its business meeting on June 29,
2012. On that date, it ordered the bill favorably reported by
voice vote with Senator Levin asking to be recorded as voting
against the bill and Senator Akaka asking to be recorded as
voting present. Members present for the vote on the bill were
Senators Lieberman, Levin, Akaka, Carper, Pryor, Landrieu,
Tester, Begich, Collins, Brown, McCain, Johnson, Portman, and
Moran.

IV. Section-by-Section Analysis of the Bill, as Reported

Section 1

This section amends 5 U.S.C. Sec. 40 to add a new
``Subchapter VII--Expedited Disposal of Real Property.'' The
new subchapter would contain new sections 621 through 627 in
title 40, as follows:

Section 621. Definitions

Section 621 defines the following terms for purposes of the
pilot program: Administrator, Council, Director, Disposal,
Federal Agency, Real Property, Field Office, Small Business
Concern, and Underutilized Property.
Real property, the term used to refer to the property
targeted by the legislative changes in the bill, is defined as
any Federal asset and includes Federal buildings, occupied and
improved grounds, leased space, or other physical structures
under the custody and control of any Federal agency.

Section 622. Duties of Federal agencies

Section 622 requires executive agencies to develop a system
of managing their real property holdings. Agencies are required
to: maintain adequate inventory controls and accountability
systems; define future workforce projections and their real
property needs; identify underutilized properties through
ongoing surveys; report underutilized property to GSA promptly;
establish goals for reducing underutilized property; reassign
underutilized property to another activity within the agency;
transfer underutilized property to other Federal agencies;
obtain underutilized properties from other Federal agencies
before acquiring nonfederal property when new space is needed;
and adopt workplace practices, management techniques, and space
configurations that decrease the need for space.

Section 623. Establishment of a Federal Real Property Council

This section establishes the Federal Real Property Council
(FRPC) comprised of the Senior Real Property Officer of each
agency, the Deputy Director for Management of OMB, the OMB
Controller and the GSA Administrator. The Deputy Director for
Management of OMB will chair the FRPC and provide
administrative support and funding as necessary. This section
requires the FRPC to develop government-wide asset management
guidance for executive branch agencies.
This section also requires the FRPC to publish an annual
asset management plan that includes performance measures
allowing Congress to track progress in achieving property
management goals government-wide and compare the performance of
executive agencies against industry and other public sector
agencies.
Finally, the provision directs that within 180 days after
the enactment of this legislation and annually for a five-year
period thereafter, the FRPC must submit to Congress a list of
agency field offices that are suitable for co-location with
another Federal civilian property asset, including assets owned
by the U.S. Postal Service. Within 30 days of the submission of
this list, the OMB Director and the Postmaster General must
identify the field offices within a reasonable distance of
Postal property. Not later than 90 days after the receipt of
the list, the Postmaster General must review the list and
submit to the Director of OMB a report containing the
conclusions of the review. After these steps are completed,
agencies may lease space in Postal Service facilities for
durations of not less than five years at a cost that is within
5 percent of the prevailing market lease rate of similarly
situated space.

Section 624. Database

This section requires the GSA Administrator to establish
and maintain a single comprehensive and descriptive database of
all Federal real property. The Administrator is required to
collect the information necessary to describe the nature, use,
and size of the government's portfolio, and to make the
database accessible to the public at no cost.

Section 625. Limitation on certain leasing authorities

This section requires each agency with independent leasing
authority to consult with GSA about leases that exceed the
threshold set by GSA annually pursuant to 40 U.S.C. Sec. 3307,
which establishes a prospectus threshold for the construction,
alteration, purchase, or lease of a public building.
Additionally each of these agencies must acquire space at rates
comparable to other properties in the area and submit a report
to the GSA Administrator within 180 days of enactment
describing the use of independent leasing authority by the
agency.

Section 626. Expedited disposal program

This section establishes a five year-pilot program under
which agencies may use an expedited process to dispose of
certain underutilized properties. This disposal program
requires agencies to dispose of underutilized properties as
established in their annual asset management plans. All
properties selected for the disposal program would be exempt
from a range of provisions in existing laws, including
statutory provisions requiring agencies to offer the selected
properties for public benefit conveyance. Under this section,
the OMB Director is required to select properties already
designated as underutilized to participate in this expedited
disposal program. Agencies must make property available for
sale within 18 months after receiving a determination from the
OMB Director that the property is underutilized. Properties
being disposed under the program must be sold at an auction
that is structured and marketed to ensure the maximum amount of
net proceeds. Under this disposal program, if an agency fails
to sell a designated underutilized property within 18 months of
being directed to do so by the OMB Director, the agency will no
longer be allowed to acquire additional property unless the
square footage of the increase is offset through consolidation,
co-location with another agency, or disposal of another
property from the inventory of that agency.
Additionally, proceeds from the disposal of real property
under this disposal program will be distributed as follows:
eighty percent to the Treasury for deficit reduction; the
lesser of 18 percent or the share of proceeds otherwise
authorized to be retained under law will be retained by the
landholding agency conducting the sale; and not more than two
percent will be used to fund homeless assistance grants as
authorized in the new section 627 of title 40 as added by the
bill. Agencies will have one year to use any proceeds they
receive, but only after use of those funds have been authorized
in annual appropriations acts. The funds may only be used for
real property asset management and disposal.
Finally, this section requires the FRPC to submit an annual
report to the OMB Director listing each Federal agency that
fails to meet its underutilized property reduction goal as well
as a list of the remaining underutilized properties of that
agency. This report must be submitted within a year of
enactment and annually thereafter for a period of five years.
In addition, the Director is required to issue an annual
scorecard that measures the success of each agency in achieving
savings and determines whether the government is on track to
meeting a goal of $15 billion in property savings over a ten-
year period.

Section 627. Homeless assistance grants

This section requires the Secretary of the Department of
Housing and Urban Development (HUD) to use funds received from
the proceeds of property sales under the pilot program for
grants to eligible private non-profit organizations through the
continuum of care program established under title IV of the
McKinney-Vento Homeless Assistance Act.

Sec. 202

This section amends 40 U.S.C. Sec. 3305 to add a new
``Section--Consideration of Life-Cycle Costs Required.'' This
section requires that the full life-cycle cost of a public
building is considered in the construction or lease of a public
building.

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 Committee
agrees with the Congressional Budget Office 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 Estimate

September 10, 2012.
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. 2178, the Federal
Real Property Asset Management Reform Act of 2012.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact for this
estimate is Matthew Pickford.
Sincerely,
Douglas W. Elmendorf.
Enclosure.

S. 2178--Federal Real Property Asset Management Reform Act of 2012

Summary: S. 2178 would amend the Federal Property and
Administrative Services Act (Property Act) to facilitate the
disposal of federal real property. The legislation would expand
the duties and responsibilities of the Federal Real Property
Council (FRPC), provide new authorities to the General Services
Administration (GSA), and establish a five-year program to
expedite the disposal of underutilized federal property.
CBO estimates that, assuming the availability of
appropriated funds, implementing S. 2178 would cost $103
million over the 2013-2017 period for additional administrative
and reporting activities related to disposing of property.
Enacting the bill would affect direct spending by
increasing both receipts from property sales and spending of
those receipts; therefore, pay-as-you-go procedures apply. CBO
estimates, however, that any change in net direct spending
would not be significant. Enacting the legislation would not
affect revenues.
S. 2178 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 2178 is shown in the following table.
The costs of this legislation fall within budget function 800
(general government).

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By fiscal year, in millions of dollars--
-------------------------------------------------------
2013 2014 2015 2016 2017 2013-2017
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Federal Real Property Council:
Estimated Authorization Level....................... 20 21 21 21 22 105
Estimated Outlays................................... 16 20 21 21 22 100
Other Provisions:
Estimated Authorization Level....................... 1 * * * * 3
Estimated Outlays................................... 1 * * * * 3
Total Changes:
Estimated Authorization Level................... 21 21 21 21 22 108
Estimated Outlays............................... 17 20 21 21 22 103
----------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000.

Basis of estimate: For this estimate, CBO assumes that S.
2178 will be enacted near the end of 2012, that the necessary
funds will be provided for each year, and that spending will
follow historical patterns for the affected programs.

Federal Real Property Council

S. 2178 would codify and expand the duties of the FRPC.
Under the legislation, the council would be required to publish
an annual asset management plan that includes performance
measures for managing real property. The FRPC also would have
to submit a report to the Congress that analyzes the entire
federal property inventory within 180 days of enactment of the
bill and annually for the subsequent five years. The report
would include information collected by GSA on leased property,
an analysis of the suitability of properties for co-locating
federal agencies, an analysis of the extent of underutilized
property, and a plan to dispose of assets. Based on information
from GSA and the cost of similar councils and commissions, CBO
estimates that implementing those provisions would cost about
$20 million annually.

Other provisions

The legislation would require GSA to improve its database
of real property and the Government Accountability Office to
prepare a report for the Congress on the federal properties
conveyed to organizations that assist homeless persons. Based
on information from GSA and on similar GAO reports, CBO
estimates that those activities would cost $3 million over the
2013-2017 period, assuming the availability of appropriated
funds.

Direct spending

Under the Property Act, GSA currently manages the disposal
of surplus federal property for most agencies. That act allows
GSA to retain 12 percent of the proceeds from public sales to
cover the direct costs of such activities as paying auction
fees and conducting appraisals. S. 2178 would allow GSA to
retain and use additional proceeds from the sales of
underutilized property to help pay for the direct and indirect
costs of other agencies' disposal activities. Such costs would
include market research, cost/benefit analyses, and other
activities to identify and prepare properties for disposal that
have not yet been declared excess to the government's needs.
Under the bill, any remaining net proceeds from federal
property sales would be available, subject to future
appropriation, to cover the costs of other property management
activities.
The legislation also would establish a five-year program to
expedite the disposal of underutilized federal property. Under
that program, properties could be sold without some of the
administrative reviews and determinations that must occur under
current law. Proceeds from those sales would be available to be
spent, subject to future appropriation. The Director of the
Office of Management and Budget would identify the federal
properties available for disposal under this expedited program,
which would terminate five years after enactment. Under the
bill, agencies would be prohibited from acquiring or leasing
new property until they have disposed of all of their
underutilized property.
CBO expects that GSA and other federal agencies would use
some of the new authorities provided in this bill to make more
properties available for disposal than would be available under
current law. The number of additional properties made available
would be modest, however, because we expect that many of the
largest federal agencies that manage significant numbers of
properties would probably opt to continue using their enhanced-
use leasing authorities rather than GSA's disposal services to
leverage value from underused real property. In addition,
spending of the proceeds from property sales that are expected
to occur under current law would increase because S. 2178 would
expand the purposes for which such receipts could be used. In
total, the net change in direct spending would be
insignificant, CBO estimates.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act establishes budget-reporting and enforcement procedures for
legislation affecting direct spending or revenues. CBO
estimates that enacting S. 2178 would affect net direct
spending, but any such effects would be insignificant. Enacting
the legislation would not affect revenues.
Intergovernmental and private-sector impact: S. 2178
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Previous CBO estimates: CBO has prepared cost estimates for
four other pieces of legislation concerned with the management
of federal real property:
On March 13, 2012, CBO transmitted a cost estimate
for H.R. 665, the Excess Federal Building and Property Disposal
Act of 2012, as provided to CBO by the House Committee on
Oversight and Government Reform on February 28, 2012.
On February 24, 2012, CBO transmitted a cost
estimate for H.R. 665, as ordered reported by the House
Committee on Oversight and Government Reform on November 17,
2011.
On February 1, 2012, CBO transmitted a cost
estimate for H.R. 1734, the Civilian Property Realignment Act,
as transmitted to the Congressional Budget Office by the House
Committee on the Budget on January 24, 2012.
On December 8, 2011, CBO transmitted a cost
estimate for H.R. 1734, as ordered reported by the House
Committee on Transportation and Infrastructure on October 13,
2011.
S. 2178 and these four pieces of legislation address the
disposal of unwanted federal property, but because the bills
differ in terms of their comprehensiveness and general approach
to property management and disposal, CBO's estimates of their
budgetary impacts are different.
Estimate prepared by: Federal Spending: Matthew Pickford;
Impact on State, Local, and Tribal Governments: Paige Piper/
Bach; Impact on the Private Sector: Elizabeth Cove Delisle.
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. 2178 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

SEC. 621. DEFINITIONS.

In this subchapter:
(1) Administrator.--The term `Administrator' means
the Administrator of General Services.
(2) Council.--The term `Council' means the Federal
Real Property Council established by section 623(a).
(3) Director.--The term `Director' means the Director
of the Office of Management and Budget.
(4) Disposal.--The term `disposal' means any action
that constitutes the removal of any real property from
the Federal inventory, including sale, deed,
demolition, or exchange.
(5) Federal Agency.--The term `Federal agency'
means--
(A) an executive department or independent
establishment in the executive branch of the
Government; and
(B) a wholly owned Government corporation.
(6) Real Property.--
(A) In general.--The term `real property'
means any Federal real property asset.
(B) Inclusions.--The term `real property'
includes--
(i) Federal buildings (as defined in
section 3301); and
(ii) occupied and improved grounds,
leased space, or other physical
structures under the custody and
control of any Federal agency.
(C) Exclusions.--The terms `real property'
does not include--
(i) any military installation (as
defined in section 2910 of the Defense
Base Closure and Realignment Act of
1990 (10 U.S.C. 2687 note; Public Law
101-510));
(ii) any property that is excepted
from the definition of the term
`property' under section 102;
(iii) a designated wilderness study
area or other areas managed for
wilderness characteristics;
(iv) Indian and native Eskimo
property held in trust by the Federal
Government as described in section
3301(a)(5)(C)(iii);
(v) property operated and maintained
by the Tennessee Valley Authority
pursuant to the Tennessee Valley
Authority Act of 1933 (16 U.S.C. 831 et
seq.);
(vi) postal property owned by the
United States Postal Service; or
(vii) any property the Director
excludes for reasons of national
security.
(7) Field office.--The term `field office' means any
office of a Federal agency that is not the headquarters
office location for the Federal agency.
(8) Small business concern.--The term `small business
concern' has the meaning given the term in section 3 of
the Small Business Act (15 U.S.C. 632).
(9) Underutilized property.--The term `underutilized
property' means any real property that is--
(A) excess;
(B) surplus;
(C) underperforming; or
(D) otherwise not meeting the needs of the
Federal Government, as determined by the
Director.

SEC. 622. DUTIES OF FEDERAL AGENCIES.

Each Federal agency shall--
(1) maintain adequate inventory controls and
accountability systems for real property under the
control of the agency;
(2) define current and future workforce projections
so as to have the capacity to assess the needs of the
Federal workforce regarding the use of real property;
(3) continuously survey real property under the
control of the agency to identify underutilized
property;
(4) promptly report underutilized property to the
Administrator;
(5) establish goals that lead the agency to reduce
underutilized property in the inventory of the agency
not later than December 31, 2016;
(6) reassign underutilized property to another
activity within the agency if the property is no longer
required for purposes of the appropriation used to make
the purchase;
(7) transfer underutilized property under the control
of the agency to other Federal agencies and to
organizations specified in section 321(c)(2);
(8) obtain underutilized properties from other
Federal agencies to meet mission needs before acquiring
non-Federal property; and
(9) adopt workplace practices, configurations, and
management techniques that can achieve increased levels
of productivity and decrease the need for real property
assets.

SEC. 623. ESTABLISHMENT OF A FEDERAL REAL PROPERTY COUNCIL.

(a) Establishment.--There is established a Federal Real
Property Council.
(b) Purpose.--The purpose of the Council shall be to
develop guidance for the asset management program of each
Federal agency.
(c) Composition.--
(1) In general.--The Council shall be composed
exclusively of--
(A) the senior real property officers of each
executive agency;
(B) the Deputy Director for Management of the
Office of Management and Budget;
(C) the Controller of the Office of
Management and Budget;
(D) the Administrator; and
(E) any other full-time or permanent part-
time Federal officials or employees, as the
Chairperson determines to be necessary.
(2) Chairperson.--The Deputy Director for Management
of the Office of Management and Budget shall serve as
Chairperson of the Council.
(3) Administrative support.--The Office of Management
and Budget shall provide funding and administrative
support for the Council, as appropriate.
(d) Duties.--The Council, in consultation with the Director
and the Administrator, shall--
(1) establish an asset management plan, to be updated
annually, which shall include performance measures to
determine the effectiveness of real property management
that are designed--
(A) to enable Congress and heads of Federal
agencies to track progress in the achievement
of property management objectives on a
government-wide basis; and
(B) allow for comparison of the performance
of Federal agencies against industry and other
public sector agencies in terms of performance;
(2) develop standard use rates consistent throughout
each category of space and with nongovernmental space
use rates;
(3) not later than 180 days after the date of
enactment of this subchapter, and annually for a 5-year
period thereafter, submit to the Committees on
Environment and Public Works and Homeland Security and
Governmental Affairs of the Senate and the Committees
on Transportation and Infrastructure and Oversight and
Government Reform of the House of Representatives a
report that contains--
(A) an analysis of the existing inventory of
real property and the condition of that
property, including data relating to--
(i) the age and condition of the
property;
(ii) the size of the property in
square footage and acreage;
(iii) the geographical location of
the property, including an address and
description;
(iv) operating costs associated with
the property;
(v) the history of capital
expenditures associated with the
property;
(vi) sustainability metrics
associated with the property;
(vii) the number of Federal employees
and functions housed in the property;
and
(viii) the relevance of each property
to the mission of the Federal agency;
(B) a list of real property assets that are
field offices that are suitable for co-location
into another real property asset;
(C) an evaluation of the leasing process in
effect as of the date of submission of the
report to identify and document inefficiencies
in that process;
(D) a suggested strategy to reduce the
reliance of Federal agencies on leased space
for long-term needs if ownership would be less
costly; and
(E) an assessment of Federally leased space,
including--
(i) a description of the overall
quantity and type of space leased by
Federal agencies; and
(ii) an identification of current
contracts for leased office space in
which the leased space is not fully
used or occupied (including a plan for
subletting of unoccupied space if
appropriate);
(F) an analysis of all underutilized property
under the jurisdiction of each Federal agency
that can be removed from the Federal inventory
and sold for proceeds, transferred, or
otherwise disposed of, so as to reduce the
civilian real property inventory and associated
operating costs of the Federal Government;
(G) an asset disposal plan, or an update of
an asset disposal plan, that includes an annual
goal established under section 622(5) to be
used by Federal agencies in reducing, by not
later than 5 years after the date of enactment
of this subchapter, underutilized property in
the inventory of the Federal Government;
(H) the number of real property disposals
completed, including the disposal method used
for each individual real property; and
(I) specific milestones, measurable savings,
and evaluation criteria for the disposal of
real property under this subchapter;
(4) in accordance with subsection (e), identify and
compile a list of real property assets that are field
offices that are suitable for co-location into other
real property assets; and
(5)(A) review contracts for leased office space that
are in effect as of the date of submission of the
report; and
(B) work with Federal agencies to renegotiate
leases having at least 2 years remaining in the
term of the leases to recognize potential cost
savings as quickly as practicable.
(e) Co-Location Among Postal Service Properties.--
(1) Definition of postal property.--In this
subsection, the term `Postal property' means any
building owned by the United States Postal Service.
(2) Identification of real property assets.--Each
year, the Council shall--
(A) identify and compile a list of field
offices that are suitable for co-location with
another real property asset; and
(B) submit the list to the Director of the
Office of Management and Budget and the
Postmaster General.
(3) Postal property.--
``(A) In general.--Not later than 30 days
after the completion of the list under
paragraph (2), the Director of the Office of
Management and Budget, in collaboration with
the Postmaster General, shall identify field
offices on the list that are within reasonable
distance of a Postal property.
(B) Reasonable distance.--For purposes of
this paragraph, a field office shall be
considered within reasonable distance of a
Postal property if the office would be able to
fulfill the mission of the office if the office
is located at the Postal property.
(C) Review by postal service.--Not later than
90 days after the receipt of the list submitted
under paragraph (3)(B), the Postmaster General
shall--
(i) review the list; and
(ii) submit to the Director of the
Office of Management and Budget a
report containing the conclusions of
the review.
(4) Terms of co-location.--On approval of the
recommendations under paragraph (4) by the Postmaster
General and the applicable agency head, the co-location
of a Postal property and an field office shall consist
of the Executive agency that owns or leases the field
office entering into a lease for space within the
Postal property with United States Postal Service that
has--
(A) an initial lease term of not less than 5
years;
(B) a cost that is within 5 percent of the
prevailing market lease rate for a similarly
situated space identified under this
subsection.''.

TITLE II--PROPERTY MANAGEMENT POLICY

SEC. 201. PROPERTY MANAGEMENT POLICY.

(a) In general.--Chapter 5 of subtitle I of title 40,
United States Code (as amended by title I) is amended by adding
at the end the following:

SEC. 624. DATABASE.

The Administrator shall--
(1) not later than 1 year after the date of enactment
of this subchapter, establish and maintain a single,
comprehensive, and descriptive database of all real
property under the custody and control of all Federal
branch agencies, except when otherwise required for
reasons of national security;
(2) collect from each Federal agency such descriptive
information (except for classified information) as the
Administrator determines will best describe the nature,
use, and extent of real property holdings for the
Federal Government; and
(3) to the extent consistent with national security,
make the database established under paragraph (1)
accessible to the public at no cost through the website
of the General Services Administration.

SEC. 625. LIMITATION ON CERTAIN LEASING AUTHORITIES.

Notwithstanding any other provision of this subchapter, a
Federal agency with independent leasing authority shall--
(1) consult with the Administrator for all leases
requiring a prospectus under section 3307;
(2) acquire space at rates consistent with prevailing
market rates for comparable facilities within the
specified geographical area; and
(3) not later than 180 days after the date of
enactment of this subchapter and annually thereafter,
submit to the Administrator a report that describes the
use of the independent leasing authority during the
period covered by the report.

SEC. 626. EXPEDITED DISPOSAL PROGRAM.

(a) In General.--
(1) Required disposal.--
(A) In general.--On an annual basis, the
Director shall require Federal agencies to
dispose of, by sale, transfer, or other means
of disposal, any real property determined by
the Director to be underutilized property.
(B) Costs associated with disposal.--
(i) In general.--The Administrator
may obligate an amount to pay any
direct and indirect costs under section
572 related to identifying and
preparing properties to be reported as
excess by a Federal agency.
(ii) Reimbursement.--An amount
obligated under clause (i) shall be
paid from the proceeds of any sale of
underutilized property.
(iii) Net proceeds.--Net proceeds
shall be distributed under subsection
(b).
(C) Maximum net proceeds.--Underutilized
property required to be disposed of by sale of
under subparagraph (A) shall be sold at an
auction that, as determined by the
Administrator in consultation with the head of
the applicable Federal agency, is structured
and marketed to ensure the maximum amount of
net proceeds.
(D) Monetary proceeds requirement.--
(i) In general.--Underutilized
property may be sold under this section
only if disposal of the property will
generate monetary proceeds to the
Federal Government that exceed the
costs of disposal of the property.
(ii) Prohibitions on noncash
transactions.--A disposal of
underutilized property under this
section may not include any exchange,
trade, transfer, acquisition of the
like-kind property, or other noncash
transaction as part of the disposal.
(2) Applicability of certain law.--Any expedited
disposal of underutilized property conducted under this
section shall not be subject to--
(A) any section of An Act Authorizing the
Transfer of Certain Real Property for Wildlife,
or other Purposes (16 U.S.C. 667b);
(B) sections 107 and 317 of title 23;
(C) sections 545(b)(8), 550, 553, 554, and
1304(b) of this title;
(D) section 501 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11411);
(E) section 47151 of title 49;
(F) section 13(d) of the Surplus Property Act
of 1944 (50 U.S.C. App. 1622(d));
(G) any other provision of law authorizing
the conveyance of real property owned by the
Federal Government for no consideration; or
(H) any congressional notification
requirement other than that in section 545 of
this title.
(b) Use of Proceeds.--
(1) In general.--Of the proceeds received from the
disposal of any real property under this subchapter--
(A) not less than 80 percent shall be
returned to the general fund of the Treasury
for debt reduction;
(B) the lesser of 18 percent or the share of
proceeds otherwise authorized to be retained
under law shall be retained by Federal
agencies, subject to paragraph (2);
(C) not more than 2 percent shall be made
available to carry out section 627, subject to
annual appropriations; and
(D) any remaining share of the proceeds shall
be returned to the general fund of the Treasury
for Federal budget deficit reduction.
(2) Limitation on use of proceeds.--Any proceeds
retained by Federal agencies under this section shall
be--
(A) deposited into the appropriate real
property account of the agency that had custody
and accountability for the underutilized
property, with the funds expended only as
authorized in annual appropriations Acts;
(B) used--
(i) by not later than 1 year after
the date of disposal of the real
property; and
(ii) only for activities relating to
Federal real property asset management
and disposal; and
(C) if not used by the date described in
subparagraph (A)(i), shall be deposited in the
Treasury and used for Federal budget deficit
reduction.
(c) Public Benefit.--
(1) Conveyance.--If an underutilized property has not
been disposed of by the date that is 2 years after the
date the property is listed for sale, the Director, in
consultation with the Administrator and the Secretary
of Housing and Urban Development, may consider a
request from the disposing agency that the
underutilized property be conveyed to State and local
governments or nonprofit organizations for various
public purposes or uses as permitted by applicable law.
(2) Predominant use and size standards.--
(A) In general.--Underutilized property the
predominant use of which is other than housing,
and the area of which is equal to or greater
than 25,000 square feet or the appraised fair
market value of which exceeds $2,000,000, shall
be considered to be unsuitable for disposal
under this subsection.
(B) Appraised fair market value.--The
appraised fair market value described in
subparagraph (A) shall be determined by the
Federal agency with custody or control of the
property, in consultation with the
Administrator and standard appraisal practice.
(d) Enforcement.--
(1) In general.--
(A) Increase in size of inventory.--Except as
provided in subparagraph (B) and paragraph (2)
and, if a Federal agency fails to make
available for public sale the underutilized
properties described in subsection (a) by the
date that is 18 months after the date of a
determination by the Director under subsection
(a), that Federal agency, except for specific
exceptions promulgated by the Director, shall
not increase the size of the civilian real
property inventory, unless the square footage
of the increase is offset, within an
appropriate time as determined by the Director,
through consolidation, colocation, or disposal
of another building space from the inventory of
that agency.
(B) Exception.--Subparagraph (A) shall not
apply to a Federal agency that acquires any
real property not under the administrative
jurisdiction of the Federal Government, by sale
or lease, until the Director submits a
certification to Congress of the disposal of
all of those surplus real properties.
(2) Waiver.--Paragraph (1) shall not apply to a
Federal agency if--
(A) the Federal agency submits to the
Director and the Committees on Environment and
Public Works and Homeland Security and
Governmental Affairs of the Senate and the
Committees on Transportation and Infrastructure
and Oversight and Government Reform of the
House of Representatives a written
justification describing--
(i) the reasons why the surplus real
properties described in subsection (a)
under the jurisdiction of the Federal
agency were not disposed of; or
(ii) why the restriction on growth
without an identified offset obstructs
the performance of a mission-critical
function; and
(B) Congress enacts a law approving the
waiver.
(3) OMB Scorecard.--
(A) In general.--The Director shall prepare
an annual scorecard measuring the success of
each Federal agency in achieving savings under
this subchapter.
(B) Government-wide savings.--The Director
shall use the scorecard described in
subparagraph (A) to determine whether the sum
of the savings of each agency is at least
$15,000,000,000 over a 10-year period.
(4) Report.--Not later than 1 year after the date of
enactment of this subchapter and once for every 5-year
period thereafter, the Council shall submit to the
Director a report listing each Federal agency that
fails to meet the applicable underutilized property
reduction goal established under section 622(5), along
with a list of the remaining underutilized properties
of the Federal agency.
(e) Termination of Authority.--The authority provided by
this section terminates on the date that is 5 years after the
date of enactment of this subchapter.

SEC. 627. HOMELESS ASSISTANCE GRANTS.

``(a) Definitions.--In this section:
(1) Eligible nonprofit organization.--The term
`eligible nonprofit organization' means a nonprofit
organization that is a representative of the homeless.
(2) Homeless.--The term `homeless' has the meaning
given the term in section 103 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11302), except that
subsection (c) of that section shall not apply.
(3) Permanent housing.--The term `permanent housing'
has the meaning given the term section 401 of the
McKinney-Vento Homeless Assistance Act (42 U.S.C.
11360).
(4) Private nonprofit organization.--The term
`private nonprofit organization' has the meaning given
the term in section 401 of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11360).
(5) Representative of the homeless.--The term
`representative of the homeless' has the meaning given
the term in section 501(i) of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11411(i)).
(6) Secretary.--The term `Secretary' means the
Secretary of Housing and Urban Development.
(7) Transitional housing.--The term `transitional
housing' has the meaning given the term in section 401
of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11360).
(b) Grant Authority.--
(1) In general.--To the extent amounts are made
available under section 626 for use under this section,
the Secretary shall make grants to eligible private
nonprofit organizations through the continuum of care
program established under subtitle C of title IV of the
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11381
et seq.), to purchase property suitable for use to
assist the homeless in accordance with subsection (c).
``(2) Terms and conditions.--Except as otherwise
provided in this section, a grant under this section
shall be subject to the same terms and conditions as a
grant under the continuum of care program established
under subtitle C of title IV of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11381 et seq.).
(c) Use of Properties for Housing or Shelter for the
Homeless.--
(1) Eligible uses.--An eligible private nonprofit
organization that receives a grant under subsection (b)
shall use the amounts received only to purchase or
rehabilitate real property for use to provide permanent
housing, transitional housing, or temporary shelter to
the homeless.
(2) Term of use.--The Secretary may not make a grant
under subsection (b) to an eligible private nonprofit
organization unless the eligible private nonprofit
organization provides to the Secretary such assurances
as the Secretary determines necessary to ensure that
any property purchased or rehabilitated using amounts
received under the grant is used only for the uses
described in paragraph (1) for a period of not less
than 15 years.
(d) Preference.--In awarding grants under subsection (b),
the Secretary shall give preference to eligible private
nonprofit organizations that operate within areas in which
Federal real property is being sold under the disposal program
authorized under section 626.
(e) Regulations.--The Secretary may promulgate such
regulations as are necessary to carry out this section.''.
(b) Report of the Comptroller General.--Not later than 5
years after the date of enactment of this Act, the Comptroller
General of the United States shall submit to Congress a report
on the use by executive agencies of the authorities provided by
this Act and amendments made by this Act.

SEC. 202. CONSIDERATION OF LIFE-CYCLE COST REQUIRED.

(a) In general.--Section 3305 of title 40, United States
Code, is amended by adding at the end the following:
(d) Consideration of Life-Cycle Cost Required.--
(1) Definitions.--In this subsection:
(A) Life-cycle cost.--The term `life-cycle
cost' means the sum of the following costs, as
estimated for the lifetime of a building:
(i) Investment costs.
(ii) Capital costs.
(iii) Installation costs.
(iv) Energy costs.
(v) Operating costs.
(vi) Maintenance costs.
(vii) Replacement costs.
(B) Lifetime of a building.--The term
`lifetime of a real property asset' means, with
respect to an asset, the greater of--
(i) the period of time during which
the asset is projected to be used; or
(ii) 50 years.
(2) Requirement.--The Council shall ensure that the
life-cycle cost of a real property asset is considered
in the construction or lease of a real property asset
described in paragraph (3).
(3) Federal public buildings subject to
requirement.--A real property asset shall be subject to
the requirement under paragraph (2) if--
(A) construction or lease of the asset begins
after the date on which the Council is
established;
(B) the estimated construction costs of the
asset exceed $1,000,000;
(C) in the case of a lease, the square
footage of the asset is more than 25,000 square
feet; and
``(D) Federal funding comprises more than 50
percent of the funding for the estimated
construction or lease costs of the asset.''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 5 of subtitle I of title 40, United States
Code, is amended by inserting after the item relating to
section 611 the following:

ADDITIONAL VIEWS

The Committee reported bill requires federal agencies to
dispose of property determined by the Director of OMB to be
underutilized. The bill further requires the Director to report
on which agencies do not achieve at least $15 billion in real
estate cost-savings over a 10-year period, yet the cost
estimate from the Congressional Budget Office (CBO) finds that
this bill would increase spending by $103 million in the 2013-
2017 time period. There is little evidence that the bill will
achieve the requirements it would place on federal agencies, as
is likely since the CBO analysis concluded that any increase in
the number of properties disposed under the expedited process
established under the bill would be modest.\1\
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\1\Congressional Budget Office, Cost Estimate: S 2178, Federal Real
Property Management Reform Act of 2012 (Sept. 2012), p. 5.
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Also, the committee report cites a Government
Accountability Office report indicating that McKinney-Vento
screening at the Veterans Administration (VA) may add 2 years
to the disposal process. But this same GAO report outlines a
process of 7 months to determine whether a property is suitable
for use in fighting homelessness. It's unclear why a seven-
month process should result in two-year delays, but it seems
unlikely that the McKinney-Vento process is the culprit. The
report also cites additional problems faced by the VA that this
bill does not address such as the need to conduct environmental
cleanups and compliance with the National Historic Preservation
Act.\2\ Considering that McKinney-Vento screening can occur at
the same time as environmental assessment and historic
preservation review, it does not appear that the screening
should be a major impediment to disposal of surplus property.
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\2\U.S. Government Accountability Office, Federal Real Property:
Progress Made in Reducing Unneeded Property, but VA Needs Better
Information to Make Further Reductions (Sept. 2008) (GAO-08-939), p.
33.
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The GAO report also found that key stakeholders, including
veterans groups, community members, state and local
governments, historic preservation organizations, advocacy
groups, and the public in general may have conflicting
priorities for reuse of VA property.\3\ The committee reported
bill does not offer remedies to help resolve these conflicting
priorities, instead emphasizing maximum net proceeds to the
federal government.\4\ But we have at our disposal models for
better ways to address local concerns, even when they are
conflicting, with the federal government's need to protect the
taxpayer. According to a June 2006 GAO report on public benefit
conveyances, properties disposed under the Base Realignment and
Closure process used by the Department of Defense often involve
the use of a local redevelopment authority (LRA).\5\ According
to this report, the LRA acts as a single point of contact
between the government and stakeholders in the community and
takes into consideration community needs, possible reuse,
environmental condition and consideration of homeless needs.
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\3\U.S. Government Accountability Office, Federal Real Property:
Progress Made in Reducing Unneeded Property, but VA Needs Better
Information to Make Further Reductions (Sept. 2008) (GAO-08-939), p.
36.
\4\S 2178 as Reported (SIL12754) p. 40.
\5\U.S. Government Accountability Office, Federal Real Property:
Most Public Benefit Conveyances Used as Intended, but Opportunities
Exist to Enhance Federal Oversight (June 2006) (GAO-06-511), p. 10.
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So, while I support the goal of disposing excess and
surplus property, this bill will not accomplish that goal, and
is likely to fall far short of its cost-cutting requirements.
While failing at that goal, it sets an unwise precedent of
waiving all existing public benefit conveyance laws for select
properties to be conveyed under an expedited disposal program
which would ignore the needs of local communities and
stakeholders. We should focus our efforts on streamlining the
federal real property disposal process in a way that considers
the needs of local communities and stakeholders and that
achieves real savings for the taxpayer.

Carl Levin.