[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1869 Introduced in Senate (IS)]
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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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) Short Title.--This Act may be cited as the ``Secure Federal
Leases from Espionage And Suspicious Entanglements Act'' or the
``Secure Federal LEASEs Act''.
(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 collects highest-
level and immediate ownership information through the System of
Award Management, but it is not currently required to collect
beneficial ownership information and lacks an adequate system
for doing so;
(3) the General Services Administration and Federal
agencies with leasing authority may not know if foreign owners
have a stake in the buildings leased by the agencies, either
through foreign-incorporated legal entities or through
ownership in United States-incorporated legal entities, even
when the leased space is used for classified operations or to
store sensitive data; and
(4) according to a report of the Government Accountability
Office, dated January 2017, that examined the risks of foreign
ownership of Government-leased real estate, ``leasing space in
foreign-owned buildings could present security risks such as
espionage and unauthorized cyber and physical access''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Beneficial owner.--
(A) In general.--Except as provided in subparagraph
(B), the term ``beneficial owner'' means, with respect
to a covered entity, each natural person who, directly
or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise--
(i) exercises control over the covered
entity; or
(ii) has a substantial 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 Act.
(2) Closely held.--The term ``closely held'' means a fund
that has less than 100 natural persons as direct or indirect
investors.
(3) Control.--The term ``control'' means, with respect to a
covered entity--
(A) having the authority or ability to determine
how a covered entity is utilized; or
(B) having some decision-making power for the use
of a covered entity.
(4) Covered entity.--The term ``covered entity'' means a
person, copartnership, corporation, or other public or private
entity.
(5) Executive agency.--The term ``Executive agency'' has
the meaning given the term in section 105 of title 5, United
States Code.
(6) Federal agency.--The term ``Federal agency'' means any
Executive agency or any establishment in the legislative or
judicial branch of the Government.
(7) 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.
(8) Foreign entity.--The term ``foreign entity'' means an
entity that is headquartered or incorporated in a country that
is not the United States.
(9) Foreign person.--The term ``foreign person'' means an
individual who is not a United States person.
(10) Federal tenant.--The term ``Federal tenant'' means a
Federal agency that is occupying or will occupy a high-security
leased space for which a lease agreement has been secured on
behalf of the Federal agency.
(11) 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 Federal tenant in consultation
with the Interagency Security Committee, the Department
of Homeland Security, and the General Services
Administration.
(12) Highest-level owner.--The term ``highest-level owner''
means the entity that owns or controls an immediate owner of
the offeror of a lease, or that owns or controls 1 or more
entities that control an immediate owner of the offeror.
(13) Immediate owner.--The term ``immediate owner'' means
an entity, other than the offeror of a lease, that has direct
control of the offeror, including ownership or interlocking
management, identity of interests among family members, shared
facilities and equipment, and the common use of employees.
(14) Substantial economic benefits.--The term ``substantial
economic benefits'' means, with respect to a natural person
described in paragraph (1)(A)(ii), having an entitlement to the
funds or assets of a covered entity that, as a practical
matter, enables the person, directly or indirectly, to control,
manage, or direct the covered entity.
(15) United states person.--The term ``United States
person'' means an individual who--
(A) is a citizen of the United States; or
(B) is an alien lawfully admitted for permanent
residence in the United States.
(16) Widely held.--The term ``widely held'' means a fund
that has not less than 100 natural persons as direct or
indirect investors.
SEC. 3. DISCLOSURE OF OWNERSHIP OF HIGH-SECURITY SPACE LEASED FOR
FEDERAL AGENCIES.
(a) Required Disclosures.--Before entering into a lease agreement
with a covered entity or approving a novation agreement with a covered
entity involving a change of ownership under a lease that will be used
for high-security leased space, a Federal lessee shall require the
covered entity to identify and disclose whether the immediate or
highest-level owner of the leased space, including an entity involved
in the financing thereof, is a foreign person or a foreign entity,
including the country associated with the ownership entity.
(b) Notification.--If a disclosure is made under subsection (a),
the Federal lessee shall notify the Federal tenant of the building or
other improvement that will be used for high-security space in writing,
and consult with the Federal tenant, regarding security concerns and
necessary mitigation measures, if any, prior to award of the lease or
approval of the novation agreement.
(c) Timing.--
(1) In general.--A Federal lessee shall require a covered
entity to provide the information described in subsection (a)
to a covered entity 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
subsection (a) annually, beginning on the date that is 1 year
after the date on which the Federal tenant began occupancy,
with information including--
(A) the list of immediate or highest-level owners
of the covered entity during the preceding 1-year
period of Federal occupancy; or
(B) the information required to be provided
relating to each such immediate or highest-level owner.
SEC. 4. IMMEDIATE, HIGHEST-LEVEL, AND BENEFICIAL OWNERS.
(a) Proposal.--The General Services Administration shall develop a
Government-wide proposal for identifying all immediate, highest-level,
or beneficial owners of high-security leased spaces before entering
into a lease agreement with a covered entity for the accommodation of a
Federal tenant in a high-security leased space.
(b) Requirements.--
(1) Contents.--The proposal described in subsection (a)
shall include a process for collecting and utilizing the
following information on each immediate, highest-level, or
beneficial owner of a high-security leased space:
(A) Name.
(B) Current residential or business street address.
(C) An identifying number or document that verifies
identity as a United States person or foreign person.
(2) Disclosures and notifications.--The proposal described
in subsection (a) shall--
(A) require the disclosure of any immediate,
highest-level, or beneficial owner that is a foreign
person;
(B) require that, if the Federal lessee is
assigning the building or other improvement that will
be used for high-security space to a Federal tenant,
the Federal tenant shall be notified of the disclosure
described in subparagraph (A); and
(C) exclude collecting ownership information on
widely held pooled-investment vehicles, mutual funds,
trusts, or other pooled-investment vehicles; and
(D) include ownership information on closely held
pooled-investment vehicles, mutual funds, trusts, or
other pooled-investment vehicles.
(c) Report and Implementation.--The General Services Administration
shall--
(1) not later than 1 year after the date of enactment of
this Act, submit the proposal described in subsection (a) to
the Committee on Homeland Security and Governmental Affairs of
the Senate and the Committee on Oversight and Reform of the
House of Representatives; and
(2) not later than 6 years after the date of enactment of
this Act, implement the proposal described in subsection (a).
SEC. 5. OTHER SECURITY AGREEMENTS FOR LEASED SPACE.
A lease agreement between a Federal lessee and a covered entity for
the accommodation of a Federal agency in a building or other
improvement that will be used for high-security space shall include
language that provides that--
(1) the covered entity and any member of the property
management company who may be responsible for oversight or
maintenance of the high-security space shall not--
(A) maintain access to the high-security space; or
(B) have access to the high-security space without
prior approval from the Federal tenant;
(2) access to the high-security space or any property or
information located within that space will only be granted by
the Federal tenant if the Federal tenant determines that the
access is clearly consistent with the mission and
responsibilities of the Federal tenant; and
(3) the Federal lessee shall have written procedures in
place, signed by the Federal lessee and the covered entity,
governing access to the high-security space in case of
emergencies that may damage the leased property.
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