[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

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

29-010 PDF                       WASHINGTON : 2012 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2013     2014     2015     2016     2017   2013-2017
----------------------------------------------------------------------------------------------------------------
                                  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\
---------------------------------------------------------------------------
    \1\Congressional Budget Office, Cost Estimate: S 2178, Federal Real 
Property Management Reform Act of 2012 (Sept. 2012), p. 5.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.

                                  
