[Federal Register Volume 60, Number 139 (Thursday, July 20, 1995)]
[Rules and Regulations]
[Pages 37337-37348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17737]



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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Parts 90 and 91

[RINs 0790-AF61 and 0790-AF62]


Revitalizing Base Closure Communities and Community Assistance

AGENCY: Office of the Assistant Secretary of Defense for Economic 
Security, DoD.

ACTION: Final rule.

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SUMMARY: This rule amends DoD's Revitalizing Base Closure Communities 
and Community Assistance regulation, and promulgates guidance required 
by Title XXIX of the National Defense Authorization Act for Fiscal Year 
1994, including those provisions required by Section 2903. This rule 
also establishes policy and procedures, assigns responsibilities, and 
delegates authority to implement the President's Program to Revitalize 
Base Closure Communities, July 2, 1993. This document does not include 
guidance on acquiring property for the cost of environmental cleanup 
(Section 2908) or on the substantial changes made in the Base Closure 
Community Redevelopment and Homeless Assistance Act of 1994. The 
changes stemming from this Act will be made in an accompanying rule, 
which will be open for public comment and which will be published by 
the Departments of Defense and Housing and Urban Development.

EFFECTIVE DATE: July 20, 1995.

ADDRESSES: Inquiries should be sent to the Office of the Assistant 
Secretary of Defense for Economic Security, Room 1D760, The Pentagon, 
Washington, DC 20301-3300; email: [email protected]

FOR FURTHER INFORMATION CONTACT:
Robert Hertzfeld, telephone (703) 695-1470; email: [email protected]

SUPPLEMENTARY INFORMATION:

Background

    On April 6, 1994, the Office of the Secretary of Defense published 
an Interim Final Rule (59 FR 16123) that changed the process for 
disposing of real and personal property at closing and realigning 
military bases. Four outreach seminars (in Washington, DC, Chicago, 
Dallas, and San Francisco) and a public hearing (in Washington, D.C.) 
were held between April 28, 1994, and August 15, 1994, to explain the 
Interim Final Rule and foster public comments.
    On October 26, 1994, the Office of the Secretary of Defense amended 
the Interim Final Rule (59 FR 53735). That amendment amended the 
previous guidance on ``jobs-centered property disposal'', clarified the 
procedures for applying for an economic development conveyance, and 
provided guidance for greater flexibility on the compensation to the 
federal government for real property conveyed under an economic 
development conveyance.
    On October 25, 1994, the Congress enacted the Base Closure 
Community Redevelopment and Homeless Assistance Act of 1994 (Pub. L. 
103-421). That Act exempts certain base closure property from the 
procedures contained in the Stewart B. McKinney Homeless Assistance Act 
(42 U.S.C. 11301) and creates a new process for the federal government 
and local communities affected by base closure to address the needs of 
the homeless. This publication does not provide guidance on the 
substantial changes made by Public Law 103-421, which will be addressed 
in a publication of the Departments of Defense and Housing and Urban 
Development.

Approach

    This rule marks another step in the Department of Defense's effort 
to improve the base closure and reuse process. The rulemaking process 
was an open one, in which Department personnel sought advice from 
individuals and organizations involved in the reuse process at a public 
hearing, at outreach seminars, at conferences, and through written 
public comments.
    In order to encourage the rapid disposal and reuse of base closure 
property, the Department has been working to improve its process 
towards one that:
     Is based, to the greatest extent possible, on a 
comprehensive, community-based planning process;
     Encourages formation of and reliance upon local reuse 
authorities;
     Is targeted towards community needs generated from the 
closure of the installation; and,
     Allows for common sense decisions by the implementors.
    To achieve these goals, the Department developed regulations and 
policies around three key themes:
     Consultation. The Military Department and the Local 
Redevelopment Authority should be in 

[[Page 37338]]
constant contact throughout the base closure and reuse process. 
Problems can be avoided through consultation.
     Partnering. The Military Departments and LRAs should work 
together honestly and with full disclosure. Their efforts should be 
coordinated to minimize duplicative efforts and avoid 
misunderstandings. Mutual goals can be achieved between parties that 
treat each other as partners, not adversaries.
     Flexibility. To maximize flexibility and allow for site-
specific solutions, these regulations have been generally limited to 
those provisions required by law, as well as those that affect other 
federal agencies. Discretion has been left, where possible, for 
solutions that are most appropriate for a given installation.
    These regulations reflect the Administration's effort to create a 
flexible process that works better and costs less. Regulations which 
are intended to cover all situations straight jacket federal employees 
and confuse the public. In order to maintain flexibility while 
providing guidance, the Office of the Secretary of Defense prepared a 
Base Reuse Implementation Manual for use by the Military Departments. 
The Manual, which provides greater detail about the issues addressed in 
this part, is available to Local Redevelopment Authorities and other 
interested parties. Copies will be available, at cost, from the 
National Technical Information Service, 5285 Port Royal Road, 
Springfield, VA 22161.

Overview of changes

     What has changed in the section on the identification of 
interests (``screening'') in real property?
     The timetables for federal screening have been clarified 
and shortened.
     The review criteria have been clearly articulated.
     What has changed in the leasing procedures?
     The differences between interim and long-term leases have 
been clarified.
     The term of interim leases have been clarified. These 
leases can now last for up to five years, including options to renew.
     A termination-at will clause is no longer required.
     If property is leased for less than fair market value and 
the lease permits the property to be sublet, the rents from the 
subleases must be applied to the protection, maintenance, repair, 
improvement, and costs related to the property.
     What has changed in the handling of personal property?
     The regulation has been revised to require the Military 
Departments to:
     Provide a comprehensive inventory list to the Local 
Redevelopment Authority.
     Consult with the Local Redevelopment Authority before 
establishing the deadlines for removing equipment from the closing 
base.
     Prohibit the transfer of ordinary fixtures unless not 
required for redevelopment.
     Permit the transfer of other personal property required 
for Military Department use when the LRA objects, only if the transfer 
is approved by an Assistant Secretary of the Military Department.
     Consult with the redevelopment authority before offering 
it a suitable substitute for property being removed.
     Two procedures for transfers of personal property not 
related to real property have been created.
     What has changed regarding Economic Development 
Conveyances?
     Valuation terms have been clarified.
     The requirement for an excess profits clause has been 
removed.
     What has changed in the section on maintenance, utilities, 
and services?
     DoD clarified the procedures for determining the initial 
levels of maintenance to encourage quick reuse and specified the time 
periods for which the Military Departments will sustain the initial 
levels of maintenance. The time periods are now greater than the legal 
minimums, and the Secretaries of the Military Departments may extend 
them (under specific circumstances).

Discussion of Public Comments and Changes

    In response to the April 6, 1994, publication of the Interim Final 
Rule in the Federal Register, DoD received comments from 126 separate 
sources, consisting of redevelopment authorities and local governments, 
State and regional governments, public and private organizations, 
federal departments and agencies, members of Congress, and individuals. 
Almost half of these comments were addressed when the Interim Final 
Rule was amended (59 FR 53735, October 26, 1994). This amendment 
removed Sec. 91.7(d), ``Jobs-Centered Property Disposal,'' and revised 
Secs. 91.7(e), ``economic development conveyance,'' and 91.7(f), 
``Profit Sharing.''
    The response to the remainder of the comments is divided into 
sections corresponding to the regulation.

Identification of Interests in Real Property

    The public comments regarding real property screening spanned two 
sections of the Interim Final Rule: real property screening and 
McKinney Act screening.
     Federal agency priority. Several federal entities 
suggested that DoD Components and federal agencies have an un-
questioned right to property.
    RESPONSE: DoD specified time tables and requirements that federal 
agencies must follow to claim base closure property under the priority 
accorded to them by the Federal Property and Administrative Services 
Act of 1949. If the agencies meet these strict requirements within the 
given time tables, their request will be considered prior to others. 
However, DoD remains committed to promoting economic recovery and rapid 
job creation in the communities adversely affected by base closures, 
while still ensuring that federal resources are available for other 
important public uses. To carry out those dual responsibilities, DoD 
must maintain the flexibility to determine the highest and best use for 
the property.
     Fair Market Value. Other federal agencies suggested 
waiving the requirement for federal agencies to pay fair market value 
for the property.
    RESPONSE: DoD will continue to follow current federal policies (41 
CFR 101-47.203-7(f)(2)) that require federal agencies to pay fair 
market value to DoD for its property, unless specifically granted an 
exemption by the Office of Management and Budget.
     Timetables. Many comments suggested clarifying timetables 
for federal screening and for submitting applications for the property 
to the Military Departments.
    RESPONSE: DoD revised the rule in response to these requests.
     Native American interests. Several comments requested 
clarification regarding Native American tribes' participation in the 
screening process.
    RESPONSE: Native American interests can be addressed at two points 
in the screening process. First, Native American tribes can submit 
expressions of interest to the Bureau of Indian Affairs (BIA), which is 
held to the same tight timetables and criteria as other federal 
agencies. Interested Native American tribes should contact BIA for 
information about its policy for expressions of interest. 
Alternatively, tribal governments may participate in the local 
comprehensive planning process and express their interests to the LRA. 
Tribes adversely affected by the base closure should be part of the LRA 
and should work within this process to see that their needs are 
addressed through a single, comprehensive plan.
     Local control over the planning process. Comments from 
non-federal 

[[Page 37339]]
sources criticized the Interim Final Rule for not giving redevelopment 
authorities sufficient control over redevelopment and disposal 
planning. Their comments focused on the timing for the screening of 
property with federal agencies and homeless assistance providers and 
the need for coordination between applicants for property and 
redevelopment authorities.
    RESPONSE: As part of DoD's response to the public comments, the 
Department worked with other federal agencies to assist the Congress in 
enacting the Base Closure Community Redevelopment and Homeless 
Assistance Act of 1994. This law (Pub. L. 103-421) significantly 
altered the screening process. The changes stemming from this 
legislation will be implemented in a publication by the Departments of 
Defense and Housing and Urban Development.

Local Redevelopment Planning

    The public comments regarding the local redevelopment plan section 
of the Interim Final Rule were primarily editorial, reflecting concern 
that this section of the regulation was unclear.
    RESPONSE: DoD responded to those comments by clarifying the process 
in the section on economic development conveyances. DoD also published 
the ``Community Guide to Base Reuse,'' an Office of Economic Adjustment 
booklet that contains an overview of the reuse planning process. To 
obtain a copy, contact the Office of Economic Adjustment, 400 Army Navy 
Drive, Suite 200, Arlington, VA 22202-2884; (703) 604-6131; email: 
[email protected].
Leasing of Real Property

    The public comments concerning the Interim Final Rule on the 
leasing of real property focused primarily on five areas:
     Clarify the term of interim leases.
    RESPONSE: The Department responded to these concerns by specifying 
that a lease may be for up to five years, including options to renew, 
when it is entered into prior to completion of final disposal decisions 
under the National Environmental Policy Act (NEPA) process. DoD also 
specified that the term of a lease entered into after completion of the 
final disposal decisions under the NEPA process (a lease in furtherance 
of conveyance) may be longer than five years. In addition, the Military 
Departments have historically included a termination-at-will clause in 
lease documents that would allow the Military Department to terminate 
the lease if the property was ever needed for military purposes. This 
practice is no longer required.
     Reconcile differing leasing practices among the Military 
Departments. Comments in this area expressed the concern that the 
differing practices led to inconsistent and unequal treatment. Examples 
of inconsistencies cited included the lack of standard procedures, 
differing termination provisions, and inconsistent policies on 
obtaining insurance for the property.
    RESPONSE: The Department of Defense responded to these concerns by 
developing a uniform policy for the Military Departments to follow. 
Thus, the DoD Base Reuse Implementation Manual, intended primarily for 
Service implementors, includes a sample lease application package, and 
a sample review checklist. Model lease provisions, which will generally 
be used by the Military Departments, are also included in this manual. 
DoD believes that these improvements will foster a more consistent 
approach and quicker response to lease applicants.
     Clarify the consideration required for interim leases.
    RESPONSE: In response to the comments about consideration, DoD 
reiterated in the rule that property could be leased for less than fair 
market value if the Secretary of the Military Department determines 
that a public interest is served as a result of the lease and the fair 
market value of the lease is either unobtainable or not compatible with 
the public benefit that would be served.
     Clarify the policy on subleasing.
    RESPONSE: DoD revised the rule to specify that if the property is 
leased for less than fair market value and the lease permits the 
property to be sublet, the rents from the subleases must be applied to 
the protection, maintenance, repair, improvement, and costs related to 
the property.
     Improve the leasing process, shortening the time it takes 
to conclude a lease agreement. Comments in this area suggested that DoD 
should expedite its environmental review process, establish deadlines 
for the Military Departments to respond to leasing requests, and 
delegate authority to grant interim leases to relatively low levels of 
authority within the Departments.
    RESPONSE: DoD is convinced that all of the improvements mentioned 
above will improve and accelerate the leasing process. Additionally, 
DoD will continue to seek other ways to improve the process. For 
example, DoD continues to review its environmental review procedures to 
hasten that process while ensuring compliance with all pertinent laws 
and regulations. Also, DoD has created a tri-Service team to identify 
additional opportunities for improvement of the leasing process. In the 
meantime, the Military Departments will be encouraged to delegate 
leasing authority to the level that can best respond to local needs and 
still ensure compliance with statutory and regulatory requirements.

Personal Property

    The public comments concerning the personal property section of the 
Interim Final Rule concentrated on six areas. Procedures for trading 
emission reduction credits are not addressed in this rule. A discussion 
on this subject is contained in the DoD Base Reuse Implementation 
Manual.
     Provide the LRA with a complete inventory. From the 
comments, DoD recognized that providing the redevelopment authority 
with an incomplete inventory list left the impression that the Military 
Departments were trying to hide property from the community.
    RESPONSE: To counter that impression and promote trust and 
confidence between the Military Departments and Local Redevelopment 
Authorities, DoD revised the rule to require the Military Departments 
to provide a complete inventory list to the redevelopment authority.
     Deadlines. DoD recognized from the comments that the 
strict deadlines for removing equipment could leave the communities 
with the impression that Military Departments would be insensitive to 
the special needs of the community.
    RESPONSE: DoD revised the rule to require the Military Departments 
to consult with the redevelopment authority before establishing 
deadlines for removing equipment from the closing base.
     Redistribution. Comments in this area criticized DoD for 
giving the Military Departments and the federal government priority for 
the personal property over the Local Redevelopment Authority, 
especially for those items that were not uniquely military. These 
submissions contended that if the communities needed the personal 
property for redevelopment purposes, they should have priority for it, 
since the Department's base closures created the need for 
redevelopment.
    On the other hand, others contended that the Military Departments' 
authority to redistribute property had been unduly restricted. They 
asked that the Military Departments be given top priority for non-
military items needed at another installation.

[[Page 37340]]

    RESPONSE: DoD has struck a balance between these concerns. Personal 
property, except ordinary fixtures, required by the Military Department 
for the operation of transferring unit, function, component, weapon, or 
weapon systems may be removed upon approval of the base commander or 
higher authority. Other personal property, except ordinary fixtures, 
required by the Military Department for the operation of a unit, 
function, component, weapon, or weapon systems at another installation 
will be subject to consultation with the community. Where the community 
disputes a transfer, the approval by an Assistant Secretary of the 
Military Department will be required.
     Substitutions. Several comments criticized the provision 
that allowed the Military Departments to provide the redevelopment 
authority with substitute equipment instead of the actual item 
requested. They were concerned that the communities would get stuck 
with older, inferior equipment.
    RESPONSE: DoD revised the rule to require the Military Departments 
and Defense Agencies to consult with the Local Redevelopment Authority 
before offering it a suitable substitute.
     Complaints. Some comments objected to the dispute 
resolution process. They suggested that DoD should establish another 
mechanism for resolving disputes--ideally one outside the purview of 
the agency that made the initial decision.
    RESPONSE: While DoD struck the appeal provision from the rule, it 
will continue to direct the Military Departments to use the chain-of-
command to address complaints.
     Conveyances of personal property not related to real 
property. The remainder of the comments expressed concern over the 
apparent lack of guidance for conveying personal property that is not 
associated with a real property transfer to the redevelopment 
authority. In particular, they wanted to know if a community could 
obtain individual items of personal property directly from the closing 
base, and, if so, how.
    RESPONSE: DoD revised the rule to identify two procedures for 
conveying personal property (exclusive of real property) from a closing 
base to a Local Redevelopment Authority.

Maintenance, Utilities, and Services

    The public comments concerning the levels of maintenance and repair 
section of the Interim Final Rule concentrated primarily on how the 
Military Departments would determine initial levels of maintenance and 
repair and how long they would maintain those levels, and expressed a 
concern that the Military Departments would abandon the property if it 
was not disposed of before the period of initial maintenance and repair 
lapsed.
    RESPONSES:
     General response: DoD concluded that most of the public 
comments were based on misperceptions. For example, some feared that 
the levels of maintenance would be inadequate to preserve the property 
and that the Military Departments would discontinue maintaining the 
property after a specific date. To counter these misperceptions, DoD 
clarified the procedures for determining the initial levels of 
maintenance. DoD also encouraged the Military Departments to consult 
with the Local Redevelopment Authorities in making decisions on the 
initial levels of maintenance.
     Duration of initial levels of maintenance. The revised 
rule also identifies the time periods for which the Military 
Departments will sustain the initial levels of maintenance and repair. 
Not only may the Secretaries of the Military Departments extend the 
periods (under specific circumstances), but the time periods are now 
greater than those periods required by law.
     Abandonment. DoD specified in the rule that after the 
period of the initial levels of maintenance and repair lapses, the 
degree of maintenance and repair would revert to not less than those 
levels consistent with federal government standards for excess and 
surplus property. However, the levels of maintenance and repair may be 
lower than the initial levels.
     Historic preservation. Some submissions expressed concern 
that the regulation does not specifically require the Military 
Departments to consult with state historic preservation officers or the 
Advisory Council on Historic Preservation before determining the 
initial levels of maintenance and repair. DoD recognizes that Defense 
and federal regulations implementing Section 106 of the National 
Historic Preservation Act already require the Military Departments to 
consult with historic preservation activities about preserving historic 
property at closing military bases and so chose not to complicate the 
process by addressing the issue in this rule.

General Comments on April 6, 1994, Interim Final Rule

    The general comments offered advice on implementing the Interim 
Final Rule, rather than the content of the Interim Final Rule. In 
response to these general comments, the Office of the Secretary of 
Defense prepared a Department of Defense Base Reuse Implementation 
Manual to provide greater detail and offer examples of how this rule 
will be implemented.

Response to public comments on Economic Development Conveyances

    The Department received comments on the October 26, 1994, amendment 
to the Interim Final Rule (59 FR 53735). Many comments were supportive 
of the changes made, but did suggest some technical revisions. Other 
comments included:
     Standardize terms.
    RESPONSE: The term ``present fair market value'' has been used 
throughout to avoid confusion.
     Specify how much land should be applied for, and when.
    RESPONSE: Since the submissions did not provide a powerful 
justification for limiting the flexibility of implementors, the 
Department decided not to accept this recommendation.
     Require arbitration if an agreement on compensation cannot 
be reached.
    RESPONSE: The statute requires the Military Department, rather than 
an arbitrator, to decide what compensation will be. In addition, DoD 
does not believe such a provision is necessary because it is committed 
to working with communities to assist them with economic redevelopment.
     Change the definition of rural.
    RESPONSE: The Department did not feel it necessary to change the 
definition, because any community that shows a need for a discount can 
receive one under the new process. The possibility to receive property 
at no cost exists at urban and rural sites, if the property is 
determined not to have a positive present fair market value and/or if a 
100% discount is determined to be necessary for job creation.

Executive Order 12866

    It has been determined that this final rule is not a significant 
regulatory action. The final rule raises novel policy issues arising 
out of the President's priorities.

Regulatory Flexibility Act

    It has been determined that this rule will not have a significant 
economic impact on substantial number of small entities. The primary 
effect of this rule will be to help base closure communities by 
reducing the burden of the government's property disposal process on 
them and to accelerate the economic recovery of the relatively small 
number of communities that will be affected by the closure or 
realignment of a military installation.

[[Page 37341]]


Paperwork Reduction Act

    The rule is not subject to the Paperwork Reduction Act because it 
imposes no obligatory information requirements beyond internal 
Department of Defense use.

List of Subjects in 32 CFR Parts 90 and 91

    Community development, Government employees, Military personnel, 
Surplus government property.
    Accordingly, 32 CFR parts 90 and 91 are revised as follows:

PART 90--REVITALIZING BASE CLOSURE COMMUNITIES

Sec.
90.1  Purpose.
90.2  Applicability.
90.3  Definitions.
90.4  Policy.
90.5  Responsibilites.

    Authority: 10 U.S.C. 2687 note.


Sec. 90.1  Purpose.

    This part:
    (a) Establishes policy and assigns responsibilities under the 
President's Five-Part Plan, ``A Program to Revitalize Base Closure 
Communities,'' July 2, 1993,\1\ to speed the economic recovery of 
communities where military bases are slated to close.

    \1\ Available from the Office of the Assistant Secretary of 
Defense, The Pentagon, Room 1D760, Washington, DC 20301-3300; email: 
``[email protected]''
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    (b) Implements 107 Stat. 1909, National Defense Authorization Act 
for Fiscal Year 1994, Title XXIX and The Base Closure Community 
Redevelopment and Homeless Assistance Act of 1994 (Pub. L. 103-421).
    (c) Authorizes the publication of DoD 4165.66-M, ``Base Reuse 
Implementation Manual,'' in accordance with DoD 5025.1-M, ``DoD 
Directive System Procedures,'' August 1994.


Sec. 90.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Chairman of the Joint Chiefs of Staff, the 
Unified Combatant Commands, the Defense Agencies, and the DoD Field 
Activities (hereafter referred to collectively as ``the DoD 
Components'').


Sec. 90.3  Definitions.

    (a) Closure. All missions of the installation have ceased or have 
been relocated. All personnel positions (military, civilian and 
contractor) have either been eliminated or relocated, except for 
personnel required for caretaking, conducting any ongoing environmental 
cleanup, and disposal of the base, or personnel remaining in authorized 
enclaves.
    (b) Relaignment. Any action that both reduces and relocates 
functions and DoD civilian personnel positions, but does not include a 
reduction in force resulting from workload adjustments, reduced 
personnel or funding levels, skill imbalances, or other similar cause. 
A realignment may terminate the DoD requirement for the land and 
facilities on part of an installation. That part of the installation 
shall be treated as ``closed'' for purposes of this part.


Sec. 90.4  Policy.

    It is DoD policy to:
    (a) Help communities impacted by base closures and realignments 
achieve rapid economic recovery through effective reuse of the assets 
of closing and realigning bases--more quickly, more effectively and in 
ways based on local market conditions and locally developed reuse 
plans. This will be accomplished by quickly insuring that communities 
and the Military Departments communicate effectively and work together 
to accomplish mutual goals of quick property disposal and rapid job 
generation.
    (b) This part does not create any rights or remedies and may not be 
relied upon by any person, organization, or other entity to allege a 
denial of any rights or remedies other than those provided by Title 
XXIX of Pub. L. 103-160, or Pub. L. 103-421.


Sec. 90.5  Responsibilities.

    (a) The Under Secretary of Defense for Acquisition and Technology 
shall issue DoD Instructions as necessary, to further implement 
applicable public laws effecting base closure implementation, and shall 
monitor compliance with this part. All authorities of the Secretary of 
Defense in Public Law 103-421 (108 Stat. 4326 et. seq.); Public Law 
103-160, Title XXIX (107 Stat. 1909 et. seq.); Public Law 101-510, 
Section 2905 (104 Stat. 1813 et. seq.); and Public Law 100-526, Section 
204 (102 Stat. 2627 et. seq.), are hereby delegated to the Assistant 
Secretary of Defense for Economic Security and may be delegated 
further.
    (b) The Heads of the DoD Components shall advise their personnel 
with responsibilities related to base closures of the policies set 
forth in this part.
PART 91--REVITALIZING BASE CLOSURE COMMUNITIES--BASE CLOSURE 
COMMUNITY ASSISTANCE

Sec.
91.1  Purpose.
91.2  Applicability.
91.3  Definitions.
91.4  Policy.
91.5  Responsibilities.
91.6  Delegations of authority.
91.7  Procedures.

    Authority: 10 U.S.C. 2687 note.


Sec. 91.1  Purpose.

    This part prescribes procedures to implement ``Revitalizing Base 
Closure Communities'' (32 CFR part 90), the President's five-part 
community reinvestment program, and real and personal property disposal 
to assist the economic recovery of communities impacted by base 
closures and realignments. The expeditious disposal of real and 
personal property will help communities get started with reuse early 
and is therefore critical to timely economic recovery.


Sec. 91.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Chairman of the Joint Chiefs of Staff, the 
United Combatant Commands, the Defense Agencies, and the DoD Field 
Activities (hereafter referred to collectively as ``the DoD 
Components'').


Sec. 91.3  Definitions.

    (a) Base Closure Law. The provisions of Title II of the Defense 
Authorization Amendments and Base Closure Realignment Act (Pub. L. 100-
526, 102 Stat. 2623, 10 U.S.C. 2687 note), or the Defense Base Closure 
and Realignment Act of 1990 (Pub. L. 101-510, Part A of Title XXIX of 
104 Stat. 1808, 10 U.S.C. 2687 note).
    (b) Closure. All missions of the installation have ceased or have 
been relocated. All personnel positions (military, civilian, and 
contractor) have either been eliminated or relocated, except for 
personnel required for caretaking, conducting any ongoing environmental 
cleanup, and disposal of the base, or personnel remaining in authorized 
enclaves.
    (c) Consultation. Explaining and discussing an issue, considering 
objections, modifications, and alternatives; but without a requirement 
to reach agreement.
    (d) Date of approval. The date on which the authority of Congress 
to disapprove Defense Base Closure and Realignment Commission 
recommendations for closures or realignments of installations expires 

[[Page 37342]]
under Title XXIX of 104 Stat. 1808, as amended.
    (e) Excess property. Any property under the control of a Military 
Department that the Secretary concerned determines is not required for 
the needs of the Department of Defense.
    (f) Realignment. Any action that both reduces and relocates 
functions and DoD civilian personnel positions, but does not include a 
reduction in force resulting from workload adjustments, reduced 
personnel or funding levels, skill imbalances, or other similar cause. 
A realignment may terminate the DoD requirement for the land and 
facilities on part of an installation. That part of the installation 
shall be treated as ``closed'' for this document.
    (g) Local Redevelopment Authority (LRA). Any authority or 
instrumentality established by state or local government and recognized 
by the Secretary of Defense, through the Office of Economic Adjustment, 
as the entity responsible for developing the redevelopment plan with 
respect to the installation or for directing implementation of the 
plan.
    (h) Rural. An area outside a Metropolitan Statistical Area.
    (i) Surplus property. Any excess property not required for the 
needs and the discharge of the responsibilities of federal agencies. 
Authority to make this determination, after screening with all federal 
agencies, rests with the Military Departments.
    (j) Communities in the Vicinity of the Installation. The 
communities that constitute the political jurisdictions (other than the 
State in which the installation is located) that comprise the 
redevelopment authority for the installation.
    (k) Installation. A base, camp, post, station, yard, center, 
homeport facility for any ship, or other activity under the 
jurisdiction of the Department of Defense, including any leased 
facility. Such term does not include any facility used primarily for 
civil works, rivers, and harbors projects, flood control, or other 
project not under the primary jurisdiction or control of the Department 
of Defense.


Sec. 91.4  Policy.

    It is DoD policy to help communities impacted by base closures and 
realignments achieve rapid economic recovery through effective reuse of 
the assets of closing and realigning bases--more quickly, more 
effectively and in ways based on local market conditions and locally 
developed reuse plans. This will be accomplished by quickly ensuring 
that communities and the Military Departments communicate effectively 
and work together to accomplish mutual goals of quick property disposal 
and rapid job generation. This regulation does not create any rights or 
remedies and may not be relied upon by any person, organization, or 
other entity to allege a denial of any rights or remedies other than 
those provided by Title XXIX of Public Law 103-160, or Public Law 103-
421.
Sec. 91.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Economic Security, after 
coordination with the General Counsel of the Department of Defense and 
other officials as appropriate, may issue such guidance and 
instructions through the publication of a manual or other such guidance 
as may be necessary to implement Laws, Directives and Instructions on 
the retention or disposal of real and personal property at closing or 
realigning bases.
    (b) The Heads of the DoD Components shall ensure compliance with 
this part and guidance issued by the Assistant Secretary of Defense for 
Economic Security on revitalizing base closure communities.


Sec. 91.6  Delegations of authority.

    (a) The authority provided by sections 202 and 203 of the Federal 
Property and Administrative Services Act of 1949, as amended (40 U.S.C. 
483 and 484) for the utilization and disposal of excess and surplus 
property at closing and realigning bases has been delegated by the 
Administrator, GSA, to the Secretary of Defense by delegations dated 
March 1, 1989; October 9, 1990; and, September 13, 1991.\2\ Authority 
under these delegations has been previously delegated to the 
Secretaries of the Military Departments, who may delegate this 
authority further.

    \2\ Available from the Office of the Assistant Secretary of 
Defense (Economic Security), The Pentagon, Room 1D760, Washington, 
DC 20301-3300; e mail: [email protected]
---------------------------------------------------------------------------

    (b) Authorities delegated to the Assistant Secretary of Defense for 
Economic Security by Sec. 90.5 of this chapter are hereby redelegated 
to the Secretaries of the Military Departments, unless otherwise 
provided within this part or other DoD directive, instruction, manual 
or regulation. These authorities may be delegated further.


Sec. 91.7  Procedures.

    (a) Identification of interest in real property. (1) To speed the 
economy recovery of communities affected by closures and realignments, 
it is DoD policy to identify DoD and federal interests in real property 
at closing and realigning military bases as quickly as possible. The 
Military Department having responsibility for the closing or realigning 
base shall identify such interests. The Military Department will keep 
the Local Redevelopment Authority (LRA) informed of these interests. 
This section establishes a uniform process, with specified timelines, 
for identifying real property which is excess to the Military 
Department for use by other Departments of Defense (DoD) Components and 
other federal agencies, and for the disposal of surplus property for 
various purposes.
    (2) Upon the President's submission of the recommendations for base 
closures and realignments to the Congress in accordance with the 
Defense Base Closure and Realignment Act of 1990 (Pub. L. 101-510), the 
Military Department shall send out a notice of potential availability 
to the other DoD Components, and other federal agencies. The notice of 
potential availability is a public document and should be made 
available in a timely basis, upon request. Federal agencies are 
encouraged to review this list, and to evaluate whether they may have a 
requirement for the listed properties. The notice of potential 
availability should describe the property and buildings that may be 
available for transfer. Installations which wholly or in part are 
comprised of withdrawn and reserved public domain lands should 
implement paragraph (a)(12) of this section at the same time.
    (3) Military Departments should consider LRA input in making 
determinations on the retention of property (size of cantonment area), 
if provided. Generally, determinations on the retention of property (or 
size of the cantonment area) should be completed prior to the date of 
approval of the closure or realignment.
    (4) Within one week of the date of approval of the closure or 
realignment, the Military Department shall issue a formal notice of 
availability to other DoD Components and federal agencies covering 
closing and realigning installation buildings and property available 
for transfer to other DoD Components and federal agencies. Withdrawn 
public domain lands, which the Secretary of the Interior has determined 
are suitable for return to his jurisdiction, will not be included in 
the notice of availability.
    (5) Within 30 days of date of the notice of availability, any DoD 
Component or federal agency is required to provide a written, firm 
expression of interest for buildings and property. An expression of 
interest must explain the 

[[Page 37343]]
intended use and the corresponding requirement for the buildings and 
property.
    (6) Within 60 days of the date of the notice of availability, the 
DoD Component or federal agency expressing interest in buildings or 
property must submit an application for transfer of such property to 
the Military Department or federal agency.
    (i) Within 90 days of the notice of availability, the FAA should 
survey the air traffic control and air navigation equipment at the 
installation to determine what is needed to support the air traffic 
control, surveillance, and communications functions supported by the 
Military Department, and to identify the facilities needed to support 
the National Airspace System. FAA requests for property to manage the 
National Airspace System will not be governed by paragraph (a)(9) of 
this section. Instead, such requests will be governed by the 
requirements of 41 CFR 101-47.308-2, to determine the transfer of 
property necessary for control of the airspace being relinquished by 
the Military Department.
    (7) The Military Department will keep the LRA informed of the 
progress in identifying interests. At the same time, the LRA is 
encouraged to contact federal agencies which sponsor public benefit 
transfers for information and technical assistance. The Military 
Department will provide points of contact at the federal agencies to 
the LRA.
    (8) Federal agencies and DoD Components are encouraged to discuss 
their plans and needs with the LRA, if an LRA exists. DoD Components 
and federal agencies are encouraged to notify the Military Department 
of the results of this non-binding consultation. The Military 
Departments, the Base Transition Coordinator, and the Office of 
Economic Adjustment Project Manager are available to help facilitate 
communication between the federal agencies, DoD Components, and the 
LRA.
    (9) A request for property from a DoD Component or federal agency 
must contain the following information:
    (i) A completed GSA Form 1334, Request for Transfer (for requests 
from other DoD Components a DD Form 1354 is required). This must be 
signed by the head of the Component of the Department or Agency 
requesting the property. If the authority to acquire property has been 
delegation, a copy of the delegation must accompany the form;
    (ii) A statement from the head of the requesting Component or 
agency that the request does not establish a new program (i.e., one 
that has never been reflected in a previous budget submission or 
Congressional action);
    (iii) A statement that the requesting Component or agency has 
reviewed its real property holdings and cannot satisfy this requirement 
with existing property. This review must include all property under the 
requester's accountability, including permits to other federal agencies 
and outleases to other organizations;
    (iv) A statement that the requested property would provide greater 
long-term economic benefits than acquisition of a new facility or other 
property for the program;
    (v) A statement that the program for which the property is 
requested has long-term viability;
    (vi) A statement that considerations of design, layout, geographic 
location, age, state of repair, and expected maintenance costs of the 
requested property clearly demonstrate that the transfer will prove 
more economical over a sustained period of time than acquiring a new 
facility;
    (vii) A statement that the size of the property requested is 
consistent with the actual requirement;
    (viii) A statement that fair market value reimbursement to the 
Military Department will be made within two years of the initial 
request for the property, unless this obligation is waived by the 
Office of Management and Budget and the Secretary of the Military 
Department or a public law specifically provides for a non-reimbursable 
transfer. However, requests from the Military Departments or DoD 
Components do not need an Office of Management and Budget waiver; and
    (ix) A statement that the requesting DoD Component or federal 
agency agrees to accept the care and custody costs for the property on 
the date the property is available for transfer, as determined by the 
Military Department.
    (10) The Military Department will make it decision on a request 
from a federal agency, Military Department, or DoD Component based upon 
the following factors, from the Federal Property Management Regulations 
(41 CFR 101-47.201-2):
    (i) The paramount consideration shall be the validity and 
appropriateness of the requirement upon which the proposal is based;
    (ii) The proposed federal use is consistent with the highest and 
best use of the property;
    (iii) The requested transfer will not have an adverse impact on the 
transfer of any remaining portion of the base;
    (iv) The proposed transfer will not establish a new program or 
substantially increase the level of an agency's existing programs;
    (v) The application offers fair market value for the property, 
unless waived;
    (vi) The proposed transfer addresses applicable environmental 
responsibilities to the satisfaction of the Military Department; and
    (vii) The proposed transfer is in the best interest of the 
Government.
    (11) When there are more than one acceptable applications for the 
same building or property, the Military Department responsible for the 
installation should first consider the needs of the military to carry 
out its mission. The Military Department should then consider the 
proposal's economic development and job creation potential and the 
LRA's comments, as well as the other factors in the determination of 
highest and best use.
    (12) Closing or realigning installations may contain ``public 
domain lands'' which have been withdrawn by the Secretary of the 
Interior from operation of the public land laws and reserved for the 
Defense Department's use. Lands deemed suitable for return to the 
public domain are not real property governed by the Federal Property 
and Administrative Services Act of 1949, as amended (40 U.S.C. 472), 
and are not governed by the property management and disposal provisions 
of the Base Closure and Realignment Act of 1988 (Pub. L. 100-526) and 
Defense Base Closure and Realignment Act of 1990 (Pub. L. 101-510). 
Public domain lands are under the jurisdiction of the Secretary of the 
Interior and administered by the Bureau of Land Management (BLM) unless 
the Secretary of the Interior has withdrawn the lands and reserved them 
for another federal agency's use.
    (i) The Military Department responsible for a closing or realigning 
installation will provide the BLM with the notice of potential 
availability, as well as information about which, if any, public domain 
lands will be affected by the installation's closing.
    (ii) The BLM will review the notice of potential availability to 
determine if any installations contain withdrawn public domain lands. 
Before the date of approval of the closure or realignment, the BLM will 
review its land records to identify any withdrawn public domain lands 
at the closing installations. Any records discrepancies between the BLM 
and Military Departments should be resolved within this time period. 
The BLM will notify the Military Departments as to the final agreed 
upon withdrawn and reserved public domain lands at installations.

[[Page 37344]]

    (iii) Upon agreement as to what withdrawn and reserved public 
domain lands are affected at closing installations, the BLM will 
initiate a screening of DOI agencies to determine if these lands are 
suitable for programs of the Secretary of the Interior.
    (iv) Military Departments will transmit a Notice of Intent to 
Relinquish (see 43 CFR part 2372) to the BLM as soon as it is known 
that there is no DoD Component interest in reusing the public domain 
lands. The BLM will complete the suitability determination screening 
process within 30 days of receipt of the Military Department's Notice 
of Intent to Relinquish. If a DoD Component is approved to reuse the 
public domain lands, the BLM will be notified and BLM will determine if 
the current authority for military use of these lands needs to be 
modified/amended.
    (v) If BLM determines the land is suitable for return, they shall 
notify the Military Department that the intent of the Secretary of the 
Interior is to accept the relinquishment of the Military Department.
    (vi) If BLM determines the land is not suitable, the land should be 
disposed of pursuant to base closure law.
    (13) The Military Department should make its surplus determination 
within 100 days of the issuance of the notice of availability, and 
shall inform the LRA of the determination. If requested by the LRA, the 
Military Department may postpone the surplus determination for a period 
of no more than six months after the date of approval of the closure of 
realignment.
    (i) In unusual circumstances, extensions beyond six months can be 
granted by the Assistant Secretary of Defense of Economic Security.
    (ii) Extensions of the surplus determination should be limited to 
the portions of the installation where there is an outstanding 
interest, and every effort should be made to make decisions on as much 
of the installation as possible, within the specified timeframes.
    (14) Once the surplus determination has been made, the Military 
Department shall:
    (i) Follow the procedures outlined in paragraph (b) of this 
section, if applicable.
    (ii) Or, for installations approved for closure or realignment 
after October 25, 1994, and installations approved for closure or 
realignment prior to October 25, 1994, that have elected, prior to 
December 24, 1994, to come under the process outlined in the Base 
Closure Community Redevelopment and Homeless Assistance Act of 1994, 
follow the procedures outlined in paragraph (c) of this section.
    (15) Following the surplus determination, but prior to the disposal 
of property, the Military Department may, at its discretion, withdraw 
the surplus determination and evaluate a federal agency's late request 
for excess property.
    (i) Transfers under this paragraph shall be limited to special 
cases, as determined by the Secretary of the Military Department.
    (ii) Requests shall be made to the Military Department, as 
specified under paragraphs (a)(8) and (a)(9) of this section, and the 
Military Department shall notify the LRA of such late request.
    (iii) Comments received from the LRA and the time and effort 
invested by the LRA in the planning process should be considered when 
the Military Department is reviewing a late request.
    (b) Homeless screening for properties not covered by the Base 
Closure Community Redevelopment and Homeless Assistance Act of 1994. 
(1) This section outlines the procedure created for the identification 
of real property to fulfill the needs of the homeless by section 
2905(b)(6) of Pub. L. 101-510, as amended by Public Law 103-160 
(referred to as the Pryor Amendment). It applies to BRAC 88, 91 and 93 
bases if the LRA did not elect to be subject to the alternate homeless 
assistance screening procedure contained in the Base Closure Community 
Redevelopment and Homeless Assistance Act of 1994.
    (2) The Military Department shall sponsor a workshop or seminar in 
the communities which have closing or realigning bases, unless such a 
workshop or seminar has already been held. These workshops or seminars 
will be conducted prior to the Federal Register publication by HUD of 
available property to assist the homeless.
    (i) Not later than the date upon which the determination of surplus 
is made, the Military Department shall complete any determinations or 
surveys necessary to determine whether any building is available to 
assist the homeless. The Military Department shall then submit the list 
of properties available to assist the homeless to HUD.
    (ii) HUD shall make a determination of the suitability of each 
property to assist the homeless in accordance with the Stewart B. 
McKinney Homeless Assistance Act, 42 U.S.C. 11411, (the McKinney Act). 
Within 60 days from the date of receipt of the information from the 
Department of Defense, HUD shall publish a list of suitable properties 
that shall become available when the base closes or realigns.
    (iii) The listing of properties in the Federal Register under this 
procedure shall contain the following statement. (The listing of 1988 
base closure properties that will be reported to HUD shall refer to 
section 204(b)(6) of Public Law 100-526 instead of section 2905(b)(6) 
of Public Law 101-510):

    The properties contained in this listing are closing and 
realigning military installations. This report is being accomplished 
pursuant to section 2905(b)(6) of Public Law 101-510, as amended by 
Public Law 103-160. In accordance with section 2905(b)(6), this 
property is subject to a one-time publication under the McKinney Act 
after which property not provided to homeless assistance providers 
will not be published again unless there is no expression of 
interest submitted by the local redevelopment authority in the one-
year period following the end of the McKinney screening process 
pursuant to this publication.

    (3) Providers of assistance to the homeless shall then have 60 days 
in which to submit expressions of interest to HHS in any of the listed 
properties. If a provider indicates an interest in a listed property, 
it shall have an additional 90 days after submission of its written 
expression of interest to submit a formal application to HHS, a period 
which HHS can extend. HHS shall then have 25 days after receipt of a 
completed application to review and complete all actions on such 
applications.
    (4) During this screening process (from 60 to 175 days following 
the Federal Register publication, as appropriate), disposal agencies 
shall take no final disposal action or allow reuse of property that HUD 
has determined suitable and that may become available for homeless 
assistance unless and until:
    (i) No timely expressions of interest from providers are received 
by HHS;
    (ii) No timely applications from providers expressing interest are 
received by HHS; or,
    (iii) HHS rejects all applications received for a specific 
property.
    (5) The Military Department should promptly inform the affected 
LRA, the Governor of the State, local governments, and agencies which 
support public benefit conveyances of the date the surplus property 
will be available for community reuse if:
    (i) No provider expresses an interest to HHS in a property with the 
allotted 60 days;
    (ii) There are expressions of interest by homeless assistance 
providers, but no application is received by HHS from such a provider 
within the subsequent 

[[Page 37345]]
90-day application period (or within the longer application period if 
HHS has granted an extension); or
    (iii) HHS rejects all applications for a specific property at any 
time during the 25 day HHS review period.
    (6) The LRA shall have 1 year from the date of notification under 
paragraph (b)(5) of this section to submit a written expression of 
interest to incorporate the remainder of the property into a 
redevelopment plan.
    (7) During the allotted 1-year period for the LRA to submit a 
written expression of interest for the property, surplus properties not 
already approved for homeless reuse shall not be available for homeless 
assistance. The surplus properties will also not be advertised by HUD 
as suitable during these 1-year periods. The surplus property may be 
available for interim leases consistent with paragraph (g) of this 
section.
    (8) If the LRA does not express in writing its interest in a 
specific property during the allotted 1-year period or it notifies the 
Military Department it is not interested in the property, the disposal 
agency shall again notify HUD of the date of availability of the 
property for homeless assistance. HUD may then list the property in the 
Federal Register as suitable and available after the base closes 
following the procedures of the McKinney Act.
    (c) Reserved. Additional regulations will be promulgated in a 
publication of the Departments of Defense and Housing and Urban 
Development to address state and local screening and approval of 
redevelopment plans for installations covered by the Base Closure 
Community Redevelopment and Homeless Assistance Act of 1994 (Pub. L. 
103-421).
    (d) Local Redevelopment Authority and the Redevelopment Plan. (1) 
The LRA should have broad-based membership, including, but not limited 
to, representatives from those jurisdictions with zoning authority over 
the property. Generally, there will be one recognized LRA per 
installation.
    (2) The LRA should focus primarily on developing a comprehensive 
redevelopment plan based upon local needs. The plan should recommend 
land uses based upon an exploration of feasible reuse alternatives. If 
applicable, the plan should consider notices of interest received under 
the provisions of the Base Closure Community Redevelopment and Homeless 
Assistance Act of 1994 (Pub. L. 103-421). This section shall not be 
construed to require a plan that is enforceable under state and local 
land use laws, nor is it intended to create any exemption from such 
laws.
    (3) The Military Department will develop a disposal plan and 
complete the appropriate environmental documentation no later than 12 
months from receipt of the redevelopment plan. The local redevelopment 
plan will generally be used as the basis for the proposed action in 
conducting environmental analyses required by under the National 
Environmental Policy Act of 1969 (NEPA), (42 U.S.C. 4332 et seq.). The 
disposal plan will specifically address the methods for disposal of 
property at the installation, including conveyances for homeless 
assistance, public benefit transfers, public sales, Economic 
Development Conveyances and other disposal methods.
    (i) In the event there is no LRA recognized by DoD and/or if a 
redevelopment plan is not received from the LRA within 15 months from 
the determination of surplus under paragraph (a)(13) of this section, 
(unless an extension of time has been granted by the Assistant 
Secretary of Defense for Economic Security), the applicable Military 
Department shall proceed with the disposal of property under applicable 
property disposal and environmental laws and regulations.
    (e) Economic development conveyances. (1) Section 2903 of Public 
Law 103-160 gives the Secretary of Defense the authority to transfer 
property to local redevelopment authorities for consideration in cash 
or in kind, with or without initial payment, or with only partial 
payment at time of transfer, at or below the estimated present fair 
market value of the property. This authority creates an additional tool 
for local communities to help spur economic opportunity through a new 
real property conveyance method specifically designed for economic 
development, referred to as the ``Economic Development Conveyance'' 
(EDC).
    (2) The EDC can only be used when other surplus federal property 
disposal authorities for the intended land use cannot be used to 
accomplish the necessary economic redevelopment.
    (3) An LRA is the only entity able to receive property under an 
EDC.
    (4) A properly completed application will be the basis for a 
decision on whether an LRA will be eligible for an EDC. An application 
should be submitted by the LRA after a Redevelopment Plan is adopted by 
the LRA. The Secretary of the Military Departments shall establish a 
reasonable time period for submission of the EDC application after 
consultation with the LRA. The Military Departments will review the 
applications and make a decision whether to make an EDC based on the 
criteria specified in paragraph (e)(7) of this section. The terms and 
conditions of the EDC will be negotiated between the Military 
Departments and the LRA. Bases in rural areas shall be conveyed with no 
consideration if they meet the standards in paragraph (f)(5) of this 
section.
    (5) The application should explain why an EDC is necessary for 
economic redevelopment and job creation. In addition to the elements in 
paragraph (e)(5) of this section, after Military Department review of 
the application, additional information may be requested to allow for a 
better evaluation of the application. The application should also 
contain the following elements:
    (i) A copy of the adopted redevelopment plan.
    (ii) A project narrative including the following:
    (A) A general description of property requested.
    (B) A description of the intended uses.
    (C) A description of the economic impact of closure or realignment 
on the local communities.
    (D) A description of the financial condition of the community and 
the prospects for redevelopment of the property.
    (E) A statement of how the EDC is consistent with the overall 
Redevelopment Plan.
    (iii) A description of how the EDC will contribute to short- and 
long-term job creation and economic redevelopment of the base and 
community, including projected number, and type of new jobs it will 
assist in creating.
    (iv) A business/operational plan for the EDC parcel, including such 
elements as:
    (A) A development timetable, phasing schedule and cash flow 
analysis.
    (B) A market and financial feasibility analysis describing the 
economic viability of the project, including an estimate of net 
proceeds over a fifteen-year period, the proposed consideration or 
payment to the Department of Defense, and the estimated present fair 
market value of the property.
    (C) A cost estimate and justification for infrastructure and other 
investments needed for the development of the EDC parcel.
    (D) Local investment and proposed financing strategies for the 
development.
    (v) A statement describing why other authorities--such as public or 
negotiated sale and public benefit transfers for education, parks, 
public health, aviation, historic monuments, 

[[Page 37346]]
prisons, and wildlife conservation--cannot be used to accomplish the 
economic development and job creation goals.
    (vi) If a transfer is requested for less than the estimated present 
fair market value (``FMV''), with or without initial payment at the 
time of transfer, then a statement should be provided justifying the 
discount. The statement should include the amount and form of the 
proposed consideration, a payment schedule, the general terms and 
conditions for the conveyance, and projected date of conveyance.
    (vii) A statement of the LRA's legal authority to acquire and 
dispose of the property.
    (6) Upon receipt of an application for an EDC, the Secretary of the 
Military Department will determine whether an EDC is needed to spur 
economic development and job creation and examine whether the terms and 
conditions proposed are fair and reasonable. The Military Department 
may also consider information independent of the application, such as 
views of other federal agencies, appraisals, caretaker costs and other 
relevant material. The Military Department may propose and negotiate 
any alternative terms or conditions that it considers necessary.
    (7) The following factors will be considered, as appropriate, in 
evaluating the application and the terms and conditions of the proposed 
transfer, including price, time of payment and other relevant methods 
of compensation to the federal government.
    (i) Adverse economic impact of closure or realignment on the region 
and potential for economic recovery after an EDC.
    (ii) Extent of short- and long-term job generation.
    (iii) Consistency with overall Redevelopment Plan.
    (iv) Financial feasibility of the development, including market 
analysis and need and extent of proposed infrastructure and other 
investments.
    (v) Extent of state and local investment, level of risk incurred, 
and the LRA's ability to implement the plan.
    (vi) Current local and regional real estate market conditions.
    (vii) Incorporation of other federal agency interests and concerns, 
and applicability of, and conflicts with, other federal surplus 
property disposal authorities.
    (viii) Relationship to the overall Military Department disposal 
plan for the installation.
    (ix) Economic benefit to the federal government, including 
protection and maintenance cost savings and anticipated consideration 
from the transfer.
    (x) Compliance with applicable federal, state, and local laws and 
regulations.
    (8) Before making an EDC, the Military Department must prepare an 
estimate of the present fair market value of the property, which may be 
expressed as a range of values. The Military Department shall consult 
with the LRA on valuation assumptions, guidelines and on instructions 
given to the person(s) making the estimation of value. The Military 
Department is fully responsible for completion of the valuation. The 
Military Department, in preparing the estimate of present fair market 
value shall include, to the extent practicable, the uses identified in 
the local redevelopment plan.
    (f) Consideration for economic development conveyances. (1) For 
conveyances made pursuant to Sec. 91.7(e), Economic development 
conveyances, the Secretary of the Military Department will review the 
application for an EDC and negotiate the terms and conditions of each 
transaction with the LRA. The Military Departments will have the 
discretion and flexibility to enter into agreements that specify the 
form, amount, and payment schedule. The consideration may be at or 
below the estimated present fair market value, with or without initial 
payment, in cash or in-kind and paid over time.
    (2) An EDC must be one of the two following types of agreements:
    (i) Consideration within the estimated range of present fair market 
value, as determined by the Secretary of the Military Department.
    (ii) Consideration below the estimated range of present fair market 
value, when proper justification is provided and when the Secretary of 
the Military Department determines that a discount is necessary for 
economic redevelopment and job creation.
    (3) If the consideration under an EDC is within the range of value 
listed in paragraph (f)(2)(i) of this section, the amount paid in the 
future should take into account the time value of money and include 
repayment of interest. Any transaction that waives or delays interest 
payments will be considered as a transaction below the present fair 
market value under paragraph (f)(2)(ii) of this section, and as such 
must be justified as necessary for economic development and job 
creation.
    (4) Additional provisions may be incorporated in the conveyance 
documents to protect the Department's interest in obtaining the agreed 
upon compensation, including such items as predetermined release 
prices, or other appropriate clauses designed to ensure payment and 
protect against fraudulent transactions.
    (5) In a rural area, as defined by this rule, any EDC approved by 
the Secretary of the Military Department shall be made without 
consideration if the base closure will have a substantial adverse 
impact on the economy of the communities in the vicinity of the 
installation and on the prospect for their economic recovery.
    (6) In those instances in which an EDC is made for consideration 
below the range of the estimated present fair market value of the 
property--or if the estimated present fair market value is expressed as 
a range of values, below the lowest value in that range--the Military 
Department shall prepare a written explanation of why the estimated 
present fair market value was not obtained. Additionally, the Military 
Departments must prepare a written statement explaining why other 
federal property transfer authorities could not be used to generate 
economic redevelopment and job creation.
    (g) Leasing of real property. (1) Leasing of real property prior to 
the final disposition of closing and realigning bases may facilitate 
state and local economic adjustment efforts and encourage economic 
redevelopment.
    (2) In addition to leasing property at fair market value, to assist 
local redevelopment efforts the Secretaries of the Military Departments 
may also lease real and personal property located at a military 
installation to be closed or realigned under a base closure law, 
pending final disposition, for less than fair market value if the 
Secretary concerned determines that:
    (i) A public interest will be served as a result of the lease; and
    (ii) The fair market value of the lease is unobtainable, or not 
compatible with such public benefit.
    (3) Pending final disposition of an installation, the Military 
Departments may grant interim leases which are short-term leases that 
make no commitment for future use or ultimate disposal. When granting 
an interim lease, the Military Department will generally lease to the 
LRA but can lease property directly to other entities. If the interim 
lease is entered into prior to completion of the final disposal 
decisions under the National Environmental Policy Act (NEPA) process, 
the term may be for up to five years, including options to renew, and 
may contain restrictions on use. Leasing should not delay the final 
disposal of the property. After completion of the final disposal 
decisions, the term of the lease may be longer than five years.

[[Page 37347]]

    (4) If the property is leased for less than fair market value to 
the LRA and the interim lease permits the property to be subleased, the 
interim lease shall provide that rents from the subleases will be 
applied by the lessee to the protection, maintenance, repair, 
improvement and costs related to the property at the installation 
consistent with 10 U.S.C. 2667.
    (h) Personal property. (1) This section outlines procedures to 
allow transfer of personal property to the LRA for the effective 
implementation of a community reuse plan.
    (2) Each Military Department and DoD Component, as appropriate, 
will take an inventory of the personal property, including its 
condition, within 6 months after the date of approval of closure or 
realignment. This inventory will be limited to the personal property 
located on the real property to be disposed of by the Military 
Department or DoD Component. The inventory will be taken in 
consultation with LRA officials. If there is no LRA, the Military 
Department will offer to provide a consultation for the local 
government in whose jurisdiction the installation is wholly located or 
for a local government agency or a state government agency designated 
for that purpose by the chief executive officer of the state. Based on 
these consultations, the base commander will determine the items or 
category of items that have the potential to enhance the reuse of the 
real property.
    (3) Except for property subject to the exemptions in paragraph 
(h)(5) of this section, personal property with potential to enhance the 
reuse of the real estate shall remain at a base being closed or 
realigned until disposition is otherwise determined by the Military 
Department. This determination will be made no earlier than 90 days 
after the Military Department receives an adopted redevelopment plan or 
when notified by the LRA that there will be no redevelopment plan.
    (4) National Guard property demonstrably identified as being 
purchased with state funds is not available for reuse planning or 
subject to transfer for redevelopment purposes, unless so identified by 
the state property officer. National Guard property purchased with 
federal funds is subject to inventory and may be made available for 
redevelopment planning purposes.
    (5) Personal property may be removed upon approval of the base 
commander or higher authority, within and as prescribed by the Military 
Department, after the inventory required in paragraph (h)(2) of this 
section has been sent to the redevelopment authority, when:
    (i) The property, other than ordinary fixtures, is required for the 
operation of a transferring unit, function, component, weapon, or 
weapons system;
    (ii) The property is required for the operation of a unit, 
function, component, weapon, or weapon system at another installation 
within the Military Department, subject to the following conditions:
    (A) Ordinary fixtures, including but not limited to such items as 
blackboards, sprinklers, lighting fixtures, and electrical and plumbing 
systems, shall not be removed under paragraph (h)(5)(ii) of this 
section; and,
    (B) Other personal property may be removed under paragraph 
(h)(5)(ii) of this section only after the Military Department has 
consulted with the LRA and, with respect to disputed items, upon the 
approval of an Assistant Secretary of the Military Department.
    (iii) The property is uniquely military in character and is likely 
to have no civilian use (other than use for its material content or as 
a source of commonly used components). This property consists of 
classified items; nuclear, biological, chemical items; weapons and 
munitions; museum property or items of significant historic value that 
are maintained or displayed on loan; and similar military items;
    (iv) The property is not required for the reutilization or 
redevelopment of the installation (as jointly determined by the 
Military Department concerned and the redevelopment authority);
    (v) The property is stored at the installation for distribution 
(including spare parts or stock items). This property includes 
materials or parts used in a manufacturing or repair function but does 
not include maintenance spares for equipment to be left in place;
    (vi) The property meets known requirements of an authorized program 
of another federal department or agency that would have to purchase 
similar items, and the property is the subject of a written request 
received from the head of the other Department or Agency. If the 
authority to acquire personal property has been delegated, a copy of 
the delegation must accompany the request. In this context, purchase 
means the federal department or agency intends to obligate funds in the 
current quarter or next six fiscal quarters. The federal department or 
agency must pay packing, crating, handling, and transportation charges 
associated with such transfers of personal property;
    (vii) The property belongs to nonappropriated fund 
instrumentalities (NAFI) and other non-Defense Department activities. 
Such property may be removed at the Military Departments' discretion 
because it does not belong to the Defense Department and, therefore, it 
may not be transferred to the redevelopment authority under this 
section. For NAFI property, separate arrangements for communities to 
purchase such property are possible and may be negotiated with the 
Military Department concerned; and,
    (viii) The property is needed elsewhere in the national security 
interest of the United States as determined by the Secretary of the 
Military Department concerned. This authority may not be redelegated 
below the level of an Assistant Secretary. In exercising this 
authority, the Secretary may transfer the property to any entity of the 
Department of Defense or other federal agency.
    (6) In addition to the exemptions in paragraph (h)(5) of this 
section, the Military Department or DoD Component is authorized to 
substitute an item similar to one requested by the redevelopment 
authority.
    (7) Personal property not subject to the exemptions in paragraph 
(h)(5) of this section may be conveyed to the redevelopment authority 
as part of an economic development conveyance for the real property if 
the Military Department makes a finding that the personal property is 
necessary for the effective implementation of the redevelopment plan.
    (8) Personal property may also be conveyed separately to the LRA 
under an economic development conveyance for personal property. This 
type of economic development conveyance can be made if the Military 
Department determines that the transfer is necessary for the effective 
implementation of a redevelopment plan with respect to the 
installation. Such determination shall be based on the LRA's timely 
application for the property, which should be submitted to the Military 
Department upon completion of the redevelopment plan. The application 
must include the LRA's agreement to accept the personal property after 
a reasonable period. The transfer will be subject to reasonable 
limitations and conditions on use.
    (i) The Military Department will restrict the LRA's ability to 
acquire personal property at less than fair market value solely for the 
purpose of releasing or reselling it, unless the LRA will lease or sell 
the personal property to entities which will place it into productive 
use in accordance with the 

[[Page 37348]]
redevelopment plan. The LRA must retain personal property conveyed 
under an EDC for less than fair market value for at least one year if 
it is valued at less than $5,000, or at least two years if valued at 
more than $5,000. Any proceeds from such leases or sales must be used 
to pay for protection, maintenance, repair or redevelopment of the 
installation. The LRA will be required to certify its compliance with 
the provisions of this section at the end of each fiscal year for no 
more than two years after transfer. The certification may be subject to 
random audits by the Government.
    (9) Personal property that is not needed by the Military Department 
or a federal agency or conveyed to a redevelopment authority (or a 
state or local jurisdiction in lieu of a local redevelopment authority) 
will be transferred to the Defense Reutilization and Marketing Office 
for processing in accordance with 41 CFR parts 101-43 through 101-45, 
``Federal Property Management Regulations,'' and DoD 4160.21-M.\3\

    \3\ Copies may be obtained from the Defense Logistics Agency, 
Attn: DLA-XPD, Alexandria, VA 22304-6100.
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    (10) Useful personal property determined to be surplus to the needs 
of the federal government by the Defense Reutilization and Marketing 
Office and not qualifying for transfer to the redevelopment authority 
under an economic conveyance may be donated to the community or 
redevelopment authority through the appropriate State Agency for 
Surplus Property (SASP). Personal property donated under this procedure 
must meet the usage and control requirements of the applicable SASP. 
Property subsequently not needed by the community or redevelopment 
authority shall be disposed of as required by its SASP.
    (i) Maintenace, utilities, and services. (1) Facilities and 
equipment located on bases being closed are often important to the 
eventual reuse of the base. This section provides maintenance 
procedures to preserve and protect those facilities and items of 
equipment needed for reuse in an economical manner that facilitates 
based redevelopment.
    (2) In order to ensure quick reuse, the Military Department, in 
consultation with the LRA, will establish initial levels of maintenance 
and repair needed to aid redevelopment and to protect the property for 
the time periods set forth below. Where agreement between the Military 
Department and the LRA cannot be reached, the Secretary of the Military 
Department will determine the required levels of maintenance and repair 
and its duration. In no case will these initial levels of maintenance:
    (i) Exceed the standard of maintenance and repair in effect on the 
date of closure or realignment approval;
    (ii) Be less than maintenance and repair required to be consistent 
with federal government standards for excess and surplus properties 
(i.e., 41 CFR 101-47.402 and 41 CFR 101-47.4913); or,
    (iii) Require any property improvements, including construction, 
alteration, or demolition, except when the demolition is required for 
health, safety, or environmental purposes, or is economically justified 
in lieu of continued maintenance expenditures.
    (3) The initial levels of maintenance and repair shall be tailored 
to the redevelopment plan, and shall include the following provisions:
    (i) The facilities and equipment that are likely to be utilized in 
the near term will be maintained at levels that shall prevent undue 
deterioration and allow transfer to the LRA.
    (ii) The scheduled closure or realignment date of the installation 
will not be delayed.
    (4) The Military Department will not reduce the agreed upon initial 
maintenance and repair levels unless it establishes a new arrangement 
(e.g., termination of caretaking upon leasing of property) in 
consultation with the LRA.
    (5) The Military Department will determine the length of time it 
will maintain the initial levels of maintenance and repair for each 
closing or realigning base. This determination will be based on factors 
such as the closure/realignment date and the timing of the completion 
of the National Environmental Policy Act (NEPA) documentation on the 
proposed disposal (such as a finding of no significant impact and 
disposal decision following an environmental assessment or the record 
of decision following an environmental impact statement).
    (i) For a base that has not closed prior to the publication of this 
rule, and where the Military Department has completed the NEPA analysis 
on the proposed disposal before the operational closure of that base, 
the time period for the initial levels of maintenance and repair 
normally will extend no longer than one year after operational closure 
of the base.
    (ii) For a base that has not closed prior to the publication of 
this rule, and where the base's operational closure precedes the 
completion of the NEPA analysis on the proposed disposal, the time 
period for the initial levels of maintenance and repair will normally 
extend no longer than one year after operational closure or 180 days 
after the Secretary of the Military Department approves the NEPA 
analysis.
    (iii) For a based that closed prior to the publication of this 
rule, the time period for the existing levels of maintenance will 
normally extend no longer than one year from the date of the 
publication of this rule or six years after the date of approval of the 
closure or realignment (whichever comes first).
    (6) The Military Department may extend the time period for the 
initial levels of maintenance and repair for property still under its 
control for an additional period, if the Secretary of the Military 
Department determines that the Local Redevelopment Authority is 
actively implementing its redevelopment plan, and such levels of 
maintenance are justified.
    (7) Once the time period for the initial or extended levels of 
maintenance and repair elapses, the Military Department will reduce the 
levels of maintenance and repair to levels consistent with federal 
government standards for excess and surplus properties (i.e., 41 CFR 
101-47.402 and 41 CFR 101-47.4913).

    Dated: July 14, 1995.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 95-17737 Filed 7-19-95; 8:45 am]
BILLING CODE 5000-04-M