[Federal Register Volume 62, Number 35 (Friday, February 21, 1997)]
[Proposed Rules]
[Pages 7966-7969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4333]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 175
Revitalizing Base Closure Communities and Community Assistance
AGENCY: Department of Defense, Office of the Deputy Under Secretary of
Defense (Industrial Affairs and Installations).
ACTION: Proposed rule.
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SUMMARY: This part promulgates policies and procedures for implementing
section 2837 of the National Defense Authorization Act for FY96
concerning the Federal agency lease back of property transferred to
Local Redevelopment Authorities (LRAs) at installations approved for
closure or realignment.
DATES: Comments must be received by April 22, 1997.
ADDRESSES: Comments must be forwarded to the Base Closure and Community
Reinvestment Office, 400 Army-Navy Drive, Suite 200, Arlington,
[[Page 7967]]
VA 22202 (email: base--reuseacq.osd.mil).
FOR FURTHER INFORMATION CONTACT: Jennifer Atkin, Base Closure and
Community Reinvestment Office, 400 Army-Navy Drive, Suite 200,
Arlington, VA 22202, telephone (703) 604-2400.
SUPPLEMENTARY INFORMATION:
Background Information
Large parcels of surplus BRAC property are frequently conveyed to
an LRA for use in accordance with the LRA's redevelopment plan. Because
Federal users have priority claim on this property, small parcels or
even individual buildings within or adjacent to the large parcel may be
claimed by a Federal entity. These Federal uses are included as part of
the LRA's redevelopment plan and are compatible with the proposed use
of the surrounding property. Should the Federal entity depart at some
point in the future, however, the property would be disposed of by the
General Service Administration in accordance with the Federal Real
Property and Administrative Services Act. This subsequent Federal
action could disrupt local economic recovery efforts by requiring the
community to go through another lengthy Federal real property disposal
process, and could result in uses that are incompatible with the
community's redevelopment plans.
Congress recognized that this piecemeal approach could be harmful
to long-range planning and development opportunities and changed the
law to enable more community control over redevelopment while still
allowing the Federal government the ability to utilize government
property without additional costs. Section 2837 of the National Defense
Authorization Act for FY 1996 (Pub. L. 104-106) amends the Defense Base
Closure and Realignment Act of 1990 (Pub. L. 101-510, 10 U.S.C. 2687
note) to allow base closure property that is still needed by the
Department of Defense or another Federal agency to be transferred to an
LRA, provided the LRA leases the property back to the Federal entity.
The lease cannot require rental payments.
Applicability
The ``leaseback'' is a new authority, not a new requirement.
Ultimately, the decision whether to transfer property under this
authority rests with the military department keeping in mind that the
Department of Defense cannot require Federal agencies to give up right
of ownership in order for the LRA to take advantage of a leaseback of
the property. If a leaseback is requested by the LRA, however, Federal
agencies are urged to give full consideration to leasing instead of
owning the property.
This authority can be used to transfer property at BRAC 91, 93, and
95 sites. In addition, it can be used to transfer property needed by
existing Federal tenants or Federal departments or agencies desiring to
locate onto the property. Military Departments can only transfer
property and then lease it back if they are acting as an executive
agent on behalf of a Defense Agency or if the Secretary of the Military
Department certifies that the transaction is in the best interest of
the Military Department and consistent with the recommendations of the
Base Closure Commission.
Lease Arrangements
If an LRA desires a leaseback of property, it will be the
responsibility of the LRA to offer the Federal department or agency
lease arrangements that encourage choosing the leaseback option. The
goal should be offer terms that afford the Federal department or agency
rights as close to those associated with ownership of the property as
is practicable. Subject to the requirements outlined in this rule
(including a prohibition against charging rental payments), the LRA and
Federal entity have significant latitude to negotiate a lease that is
beneficial to both parties and are encouraged to be creative in
establishing the lease parameters.
Conveyance Process
This rule establishes two options for conveyance of leaseback
property to an LRA: (1) Conveyance as part of an Economic Development
Conveyance (EDC) using the existing EDC procedures, and (2) conveyance
of property not associated with an EDC using procedures established in
this rule. In this case, the LRA will be required to show how a
leaseback is necessary for the long-term economic redevelopment of the
installation property.
Statement of Determination and Certifications
Executive Order 12866, ``Regulatory Planning and Review''
It has been determined that this rule is not a significant
regulatory action as defined under section 3(f)(1) through 3(f)(4) of
Executive Order 12866.
Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
It has been determined that this rule will not have a significant
economic impact on a substantial number of small entities.
Public Law 104-13, ``Paperwork Reduction Act of 1995'' (44 U.S.C.
Chapter 35)
It has been certified that this rule does not impose any reporting
or recordkeeping requirements.
List of Subjects in 32 CFR Part 175
Community development, Government employees, Military personnel,
Surplus government property.
Accordingly, 32 CFR part 175 is proposed to be amended to read as
follows:
PART 175--[AMENDED]
1. The authority citation for 32 CFR part 175 continues to read as
follows:
Authority: 10 U.S.C. 2687 note.
2. Section 175.3 is proposed to be amended by adding a new
paragraph (l) to read as follows:
Sec. 175.3 Definitions.
* * * * *
(1) Similar use. A use that is comparable to or essentially the
same as the use under the original lease.
* * * * *
3. Sections 175.4, 175.5, and 175.6 are proposed to be revised to
read as follows:
Sec. 175.4 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 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, Pub. L. 103-421, or
Title XXVIII of Pub. L. 104-106.
Sec. 175.5 Responsibilities.
(a) The Deputy Under Secretary of Defense (Industrial Affairs and
Installations), after coordination with the General Counsel of the
Department of Defense and other officials as appropriate, may issue
guidance
[[Page 7968]]
through the publication of a manual or other such document 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 and the Deputy Under Secretary of Defense (Industrial
Affairs and Installations) on revitalizing base closure communities.
Sec. 175.6 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; September 13, 1991; and, September 1,
1995.\1\ Authority under these delegations has been previously
delegated to the Secretaries of the Military Departments, who may
delegate this authority further.
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\1\1 Available from the Base Closure and Community Reinvestment
Office, 400 Army Navy Drive, Suite 200, Arlington, VA 22202, email:
``[email protected]''
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(b) Authorities delegated to the Deputy Under Secretary of Defense
(Industrial Affairs and Installations) \2\ by Sec. 174.5 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.
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\2\ A Deputy Secretary of Defense memorandum of May 15, 1996,
``OUSD (Acquisition and Technology Reorganization'' disestablished
the office of the Assistant Secretary of Defense for Economic
Security and established the office of the Deputy Under Secretary of
Defense (Industrial Affairs and Installations). Copies are available
from the Base Closure and Community Reinvestment Office, 400 Army
Navy Drive, Suite 200, Arlington, VA 22202, email: ``base_
[email protected]''
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4. Section 175.7 is proposed to be amended by revising paragraphs
(a)(13)(i), (d)(3)(i), and by adding paragraph (k) to read as follows:
Sec. 175.7 Procedures.
* * * * *
(a) * * *
(13) * * *
(i) In unusual circumstances, extensions beyond six months can be
granted by the Deputy Under Secretary of Defense (Industrial Affairs
and Installations).
* * * * *
(d) * * *
(3) * * *
(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 Deputy Under
Secretary of Defense (Industrial Affairs and Installations)), the
applicable Military Department shall proceed with the disposal of
property under applicable property disposal and environmental laws and
regulations.
* * * * *
(k) Leaseback of property at base closure and realignment sites.
(1) 10 U.S.C. 2687 note (BRAC 1990), as added by section 2837 of Pub.
L. 104-106, gives the Secretary of Defense the authority to transfer
property that is still needed by a Federal Department or Agency to an
LRA provided the LRA agrees to lease the property back to the Federal
Department or Agency in accordance with all statutory and regulatory
guidance. The purpose of this authority, hereinafter referred to as a
``leaseback'', is to enable the LRA to obtain ownership of the property
pursuant to the BRAC process while still ensuring that the Federal need
for use of the property is accommodated.
(2) Subject to BRAC 1990 and this part, the decision whether to
transfer property pursuant to a leaseback rests with the relevant
military department. However, a military department may only transfer
property via a leaseback if the Federal entity that needs the property
agrees to the leaseback arrangement.
(3) If for any reason property cannot be transferred pursuant to a
leaseback (e.g., the relevant Federal Agency prefers ownership, the LRA
and the Federal entity cannot agree on terms of the lease, or the
military department determines that a leaseback would not be in the
Federal interest), such property shall remain in Federal ownership
unless and until the relevant landholding entity determines that it is
surplus pursuant to the Federal Property Management Regulations.
(4) If a building or structure is proposed for transfer under this
authority, that which is leased back to the Federal Department or
Agency may be all or a portion of that building or structure.
(5) The leaseback authority may be used at all installations
approved for closure or realignment under BRAC 1990.
(6) Transfers under this authority must be to an LRA.
(7) Transfers under this authority may be by lease in furtherance
of conveyance or deed. A lease in furtherance of conveyance is
appropriate only in those circumstances where deed transfer cannot be
accomplished because the requirements of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) (42
U.S.C. 9601, et seq.) for such transfer have not been met. The lease in
furtherance of conveyance or accompanying contract shall include a
provision stating that the LRA agrees to take title to the property
when requirements for the transfer have been satisfied.
(8) The leaseback authority can be used to transfer property that
is needed either by existing Federal tenants or by Federal Departments
or Agencies desiring to locate onto the property after operational
closure. The Military Department that is closing or realigning the
installation may not transfer property to an LRA under this authority
and lease it back unless:
(i) The Military Department is acting in an Executive Agent
capacity on behalf of a Defense Agency that certifies that a leaseback
is in the interest of that Defense Agency; or,
(ii) The Secretary of the Military Department certifies that a
leaseback is in the best interest of the Military Department and that
use of the property by the Military Department is consistent with the
obligation to close or realign the installation in accordance with the
recommendations of the Defense Base Closure and Realignment Commission.
(9) Property eligible for a leaseback is not surplus because it is
still needed by a Federal entity. However, notwithstanding that the
property is not surplus and that the LRA would not otherwise have to
include such property in its redevelopment plan, the LRA should include
the proposed leaseback of property in its redevelopment plan, taking
into account the planned Federal use of such property.
(10) The terms of the LRA's lease to the Federal entity should
afford the Federal Department or Agency rights as close to those
associated with ownership of the property as is practicable. The
requirements of the General Services Acquisition Regulation (GSAR) (48
CFR part 570) are not applicable to the lease, but provisions in the
GSAR may be used to the extent they are consistent with this Part. The
terms of the lease are negotiable subject to the following:
(i) The lease shall be for a term of no more than 50 years, but may
provide for options for renewal or extension of the term at the request
of the Federal
[[Page 7969]]
Department or Agency concerned. The lease term should be based on the
needs of the Federal entity.
(ii) The lease, or any renewals or extensions thereof, shall not
require rental payments.
(iii) The lease shall not require the Federal Government to pay the
LRA or other local government entity for municipal services including
fire and police protection.
(iv) The Federal Department or Agency concerned may be responsible
for services such as janitorial, grounds keeping, utilities, capital
maintenance, and other services normally provided by a landlord.
Acquisition of such services by the Federal Department or Agency is to
be accomplished through the use of Federal Acquisition Regulation
procedures or otherwise in accordance with applicable statutory and
regulatory requirements.
(v) The lease shall include a provision prohibiting the LRA from
transferring ownership rights to another entity during the term of the
lease, other than one of the political jurisdictions that comprise the
LRA, without the written consent of the Federal Department or Agency
occupying the leaseback property.
(vi) The lease shall include a provision specifying that if the
Federal Department or Agency concerned no longer needs the property
before the expiration of the term of the lease, the remainder of the
lease term may be satisfied by the same or another Federal Department
or Agency using the leased property for a use similar to the use under
the lease.
(A) The General Services Administration shall assist with
identifying other Federal interest in leasing the property.
(B) Prior to exercising such provision, the Federal Department or
Agency shall consult with the LRA concerned, or the elected body with
jurisdiction over the property if the LRA no longer exists.
(vii) The terms of the lease shall provide that the Federal
Department or Agency may repair, improve, and maintain the property at
its expense without the approval of the LRA.
(11) Conveyance to an LRA under this authority shall be in one of
the following ways:
(i) Lease back property that is to be conveyed under an Economic
Development Conveyance (EDC) shall be conveyed as part of the EDC in
accordance with the existing EDC procedures and
Sec. 175.7(k)(11)(ii)(B)(4). The LRA shall submit the following in
addition to the application requirements outlined in Sec. 175.7(e)(5):
(A) A description of the parcel or parcels the LRA proposes to have
transferred to it and then to lease back to a Federal Department or
Agency;
(B) A written statement signed by an authorized representative of
the Federal entity that it agrees to accept a leaseback of the
property; and,
(C) A statement explaining why a leaseback is necessary for the
long-term economic redevelopment of the installation property.
(ii) Leaseback property not associated with property to be conveyed
under an EDC shall be conveyed in accordance with the following
procedures:
(A) As soon as possible after the LRA's submission of its
redevelopment plan to the DoD and HUD, the LRA shall submit a request
for a leaseback to the Military Department. The Military Department may
impose additional requirements as necessary, but at a minimum, the
request shall contain the following:
(1) A description of the parcel or parcels the LRA proposes to have
transferred to it and then to lease back to a Federal Department or
Agency;
(2) A written statement signed by an authorized representative of
the Federal entity that it agrees to accept a leaseback of the
property; and,
(3) A statement explaining why a leaseback is necessary for the
long-term economic redevelopment of the installation property.
(B) The transfer may be for consideration at or below the estimated
present fair market value. In those instances in which the property is
conveyed for consideration below the estimated present fair market
value, the Military Department shall prepare a written explanation of
why the estimated present fair market value was not obtained.
(1) In a rural area, the transfer shall comply with
Sec. 175.7(f)(5).
(2) Payment may be in cash or in-kind.
(3) The Military Department shall determine the estimated present
fair market value of the property before transfer under this authority.
(4) The exact amount of consideration, or the formula to be used to
determine that consideration, as well as the schedule for payment of
consideration must be agreed upon in writing before transfer under this
authority.
Dated: February 18, 1997.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 97-4333 Filed 2-20-97; 8:45 am]
BILLING CODE 5000-04-M