[Congressional Record Volume 166, Number 195 (Tuesday, November 17, 2020)]
[House]
[Pages H5854-H5856]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SECURE FEDERAL LEASES FROM ESPIONAGE AND SUSPICIOUS ENTANGLEMENTS ACT

  Ms. NORTON. Mr. Speaker, I move to suspend the rules and pass the 
bill (S. 1869) to require the disclosure of ownership of high-security 
space leased to accommodate a Federal agency, and for other purposes, 
as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                S. 1869

       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 
     for 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--

[[Page H5855]]

       (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) 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.
       (3) Covered entity.--The term ``covered entity'' means--
       (A) a person, corporation, company, business association, 
     partnership, society, trust, or any other nongovernmental 
     entity, organization, or group; or
       (B) any governmental entity or instrumentality of a 
     government.
       (4) Executive agency.--The term ``Executive agency'' has 
     the meaning given the term in section 105 of title 5, United 
     States Code.
       (5) Federal agency.--The term ``Federal agency'' means any 
     Executive agency or any establishment in the legislative or 
     judicial branch of the Government.
       (6) Federal lessee.--The term ``Federal lessee''--
       (A) 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; and
       (B) does not include the head of an element of the 
     intelligence community.
       (7) Federal tenant.--The term ``Federal tenant''--
       (A) 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; and
       (B) does not include an element of the intelligence 
     community.
       (8) Foreign entity.--The term ``foreign entity'' means a 
     covered 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) 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.
       (11) 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.
       (12) 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.
       (13) Intelligence community.--The term ``intelligence 
     community'' has the meaning given the term in section 3 of 
     the National Security Act of 1947 (50 U.S.C. 3003).
       (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) 
     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 submit an update 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) Plan.--The General Services Administration, in 
     coordination with the Office of Management and Budget, shall 
     develop a Government-wide plan for agencies (as such term is 
     defined in section 551 of title 5, United States Code) 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 plan 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, foreign person, or 
     foreign entity.
       (2) Disclosures and notifications.--The plan 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.
       (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 plan described in subsection (a) to the 
     Committee on Homeland Security and Governmental Affairs of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives;
       (2) not later than 2 years after the date of enactment of 
     this Act, implement the plan described in subsection (a); and
       (3) not later than 1 year after the implementation of the 
     plan described in subsection (a), and each year thereafter 
     for years, submit a report to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Transportation and Infrastructure of the House 
     of Representatives on the status of the implementation of the 
     plan, including the number of disclosures made under 
     subsection (b)(2).

     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 leased 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 leased space shall not--
       (A) maintain access to the high-security leased space; or
       (B) have access to the high-security leased space without 
     prior approval from the Federal tenant;
       (2) access to the high-security leased 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 leased space in case of 
     emergencies that may damage the leased property.

     SEC. 6. AGENCY NOTIFICATIONS.

       Not later than 60 days after the date of enactment of this 
     Act, the Administrator of General Services, in consultation 
     with the Office of Management and Budget, shall provide 
     notification to relevant Executive branch agencies with 
     independent leasing authorities of the requirements of this 
     Act.

     SEC. 7. APPLICABILITY.

       Except where otherwise provided, this Act shall apply with 
     respect to any lease or novation agreement entered into on or 
     after the date that is 6 months after the date of enactment 
     of this Act.


[[Page H5856]]


  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
the District of Columbia (Ms. Norton) and the gentleman from North 
Carolina (Mr. Rouzer) each will control 20 minutes.
  The Chair recognizes the gentlewoman from the District of Columbia.


                             General Leave

  Ms. NORTON. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on S. 1869, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from the District of Columbia?
  There was no objection.

                              {time}  1615

  Ms. NORTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of S. 1869, the Secure Federal Leases 
from Espionage and Suspicious Entanglement Act, or the Secure Federal 
LEASEs Act, introduced by Senator Peters from Michigan.
  In 2017, the Government Accountability Office published a report that 
found that several Federal agencies were unknowingly leasing office 
space in foreign-owned properties, some of which were used for high-
security purposes. While the General Services Administration 
subsequently implemented some policies to improve this lack of 
awareness, more needs to be done.
  S. 1869, the Secure Federal LEASEs Act, requires agencies to verify 
the identity of a property's immediate or highest level owners if the 
space will be used for high-security purposes. It does this by 
requiring a property's owner to identify and disclose whether they are 
a foreign person or entity, or if they are financed by foreign persons 
or entities, before the Federal agency enters into a new or amended 
lease agreement.
  The bill also requires GSA and other agencies to include provisions 
in future leases for high-security spaces that will require owners to 
agree to having limited access, except where allowed by the tenant 
agency.
  To tackle the issue of foreign beneficial owners, this bill also 
directs GSA to develop a governmentwide system that will enable Federal 
property managers to collect individual information about each 
beneficial owner of a property--including name, address, and some 
government-issued identification--within 2 years of passage. This would 
allow for the identification and disclosure of foreign ownership that 
might otherwise elude detection under GSA's current system.
  GSA has made some positive changes in response to the 2017 GAO report 
on this issue, but this legislation ensures that their best-practice 
policies are followed uniformly by all agencies, particularly those 
with independent leasing authority, and improved going forward.
  While a lessor may be approved by the Federal Government, it may not 
be appropriate for an agency to lease a high-security space from the 
lessor. This legislation will require agencies to evaluate the risks of 
doing so. By developing a new, more rigorous beneficial owner 
identification system, the Federal Government can be more vigilant in 
ensuring that foreign governments do not have access to our most 
sensitive leased properties.
  Mr. Speaker, I support this legislation and urge my colleagues to do 
the same, and I reserve the balance of my time.
  Mr. ROUZER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, S. 1869, the Secure Federal LEASEs Act, would require 
entities that lease commercial space to high-security Federal agencies 
to identify any foreign ownership interest in the property.
  In 2017, the General Accountability Office issued a report revealing 
that there was insufficient information on the ownership of certain 
high-security federally leased buildings.
  The GAO recommended additional information be collected and reported 
to tenant Federal agencies to determine if security precautions are 
necessary. The General Services Administration, GSA, has already taken 
steps to address the vulnerabilities raised by GAO, and this bill will 
help support those efforts.
  S. 1869 would require Federal agencies with leasing authority to 
collect this information to improve the security of Federal facilities.
  I thank the sponsors of this legislation for working with us on 
amendments to this bill that will help to ensure its effectiveness.
  Mr. Speaker, S. 1869 will help identify any foreign ownership 
interest in proposed leases for high-security agencies and improve the 
security of sensitive Federal facilities.
  Mr. Speaker, I urge support for this legislation, and I yield back 
the balance of my time.
  Ms. NORTON. Mr. Speaker, I urge my colleagues to support this 
legislation, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from the District of Columbia (Ms. Norton) that the House 
suspend the rules and pass the bill, S. 1869, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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