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110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-651

======================================================================



 
         FEDERAL REAL PROPERTY DISPOSAL ENHANCEMENT ACT OF 2008

                                _______
                                

  May 15, 2008.--Committee to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Waxman, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 5787]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Oversight and Government Reform, to whom was 
referred the bill (H.R. 5787) to amend title 40, United States 
Code, to enhance authorities with regard to real property that 
has yet to be reported excess, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     5
Legislative History..............................................     6
Section-by-Section...............................................     6
Explanation of Amendments........................................     6
Committee Consideration..........................................     7
Rollcall Votes...................................................     7
Application of Law to the Legislative Branch.....................     7
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     7
Statement of General Performance Goals and Objectives............     7
Constitutional Authority Statement...............................     7
Federal Advisory Committee Act...................................     8
Unfunded Mandates Statement......................................     8
Earmark Identification...........................................     8
Budget Authority and Congressional Budget Office Cost Estimate...     8
Changes in Existing Law Made by the Bill, as Reported............    10
Additional Views.................................................    17
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Federal Real Property Disposal 
Enhancement Act of 2008''.

SEC. 2. FINDINGS AND PURPOSES.

  (a) Findings.--Congress finds the following:
  (1) In January 2003, the Government Accountability Office identified 
Federal real property as a high-risk area, citing excess property as a 
long-standing problem.
  (2) The magnitude of the problem with excess Federal real property 
continues to put the government at risk for lost dollars and missed 
opportunities.
          (3) The Administration has stated its goal is to 
        reduce the size of the Federal real property inventory 
        by 5 percent, or $15 billion, by disposing of unneeded 
        assets by 2015.
          (4) The Federal inventory includes many properties 
        that are no longer relevant to agencies' missions and 
        agencies are spending billions of dollars to maintain 
        these unneeded properties.
          (5) The costs of preparing a property for transfer or 
        sale continue to hamper some agencies' efforts to 
        address their unneeded properties and serve as a 
        disincentive to disposal because, in the short-term, it 
        can be more beneficial economically to maintain a 
        property that is not being used than to dispose of it.
          (6) Agencies should give greater attention to 
        right-sizing their real property portfolios.
  (b) Purpose.--The purpose of this Act is to reduce the 
Federal inventory of unneeded and costly property.

SEC. 3. DUTIES OF THE GENERAL SERVICES ADMINISTRATION AND EXECUTIVE 
                    AGENCIES.

  (a) In General.--Section 524 of title 40, United States Code, 
is amended to read as follows:

``Sec. 524. Duties of the General Services Administration and executive 
                    agencies

  ``(a) Duties of the General Services Administration.--
          ``(1) Guidance.--The Administrator shall issue 
        guidance for the development and implementation of 
        agency real property plans. Such guidance shall include 
        recommendations on--
                  ``(A) how to identify excess properties;
                  ``(B) how to evaluate the costs and benefits 
                involved with disposing of real property;
                  ``(C) how to prioritize disposal decisions 
                based on agency missions and anticipated future 
                need for holdings; and
                  ``(D) how best to dispose of those properties 
                identified as excess to the needs of the 
                agency.
          ``(2) Annual report.--The Administrator shall submit 
        an annual report, for each of the first 5 years after 
        2008, to the Committee on Oversight and Government 
        Reform of the House of Representatives and the 
        Committee on Homeland Security and Governmental Affairs 
        of the Senate, based on data submitted from all 
        executive agencies, detailing executive agency efforts 
        to reduce their real property assets.
          ``(3) Assistance.--The Administrator shall assist 
        executive agencies in the identification and disposal 
        of excess real property.
  ``(b) Duties of Executive Agencies.--
          ``(1) In general.--Each executive agency shall--
                  ``(A) maintain adequate inventory controls 
                and accountability systems for property under 
                its control;
                  ``(B) continuously survey property under its 
                control to identify excess property;
                  ``(C) promptly report excess property to the 
                Administrator;
                  ``(D) perform the care and handling of excess 
                property; and
                  ``(E) transfer or dispose of excess property 
                as promptly as possible in accordance with 
                authority delegated and regulations prescribed 
                by the Administrator.
          ``(2) Specific requirements with respect to real 
        property.--With respect to real property, each 
        executive agency shall--
                  ``(A) develop and implement a real property 
                plan in order to identify properties to declare 
                as excess using the guidance issued under 
                subsection (a)(1);
                  ``(B) identify and categorize all real 
                property owned, leased, or otherwise managed by 
                the agency;
                  ``(C) establish adequate goals and incentives 
                that lead the agency to reduce excess real 
                property in its inventory;
                  ``(D) when appropriate, use the authorities 
                in section 572(a)(2)(B) of this title in order 
                to identify and prepare real property to be 
                reported as excess.
          ``(3) Additional requirements.--Each executive 
        agency, as far as practicable, shall--
                  ``(A) reassign property to another activity 
                within the agency when the property is no 
                longer required for the purposes of the 
                appropriation used to make the purchase;
                  ``(B) transfer excess property under its 
                control to other Federal agencies and to 
                organizations specified in section 321(c)(2) of 
                this title; and
                  ``(C) obtain excess properties from other 
                Federal agencies to meet mission needs before 
                acquiring non-Federal property.''.
  (b) Clerical Amendment.--The item relating to section 524 in 
the table of sections at the beginning of chapter 5 of such 
title is amended to read as follows:

``524. Duties of the General Services Administration and executive 
agencies.''.

SEC. 4. ENHANCED AUTHORITIES WITH REGARD TO PREPARING PROPERTIES TO BE 
                    REPORTED AS EXCESS.

  Section 572(a)(2) of title 40, United States Code, is amended--
          (1) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (C) and (D), respectively; and
          (2) by inserting after subparagraph (A) the following new 
        subparagraph:
                  ``(B) Additional authority.--(i) From the fund 
                described in paragraph (1), subject to clause (iv), the 
                Administrator may obligate an amount to pay the direct 
                and indirect costs related to identifying and preparing 
                properties to be reported excess by another agency.
                  ``(ii) The General Services Administration may be 
                reimbursed from the proceeds of the sale of such 
                properties for such costs.
                  ``(iii) Net proceeds shall be dispersed pursuant to 
                section 571 of this title.
                  ``(iv) The authority under clause (i) to obligate 
                funds to prepare properties to be reported excess does 
                not include the authority to convey such properties by 
                sale, lease, exchange, or otherwise, including through 
                leaseback arrangements.
                  ``(v) Nothing in this subparagraph is intended to 
                affect subparagraph (D).''.

SEC. 5. ENHANCED AUTHORITIES WITH REGARD TO REVERTED REAL PROPERTY.

  (a) Authority to Pay Expenses Related to Reverted Real Property.--
Section 572(a)(2)(A) of title 40, United States Code, is amended by 
adding at the end the following:
                          ``(iv) The direct and indirect costs 
                        associated with the reversion, custody, and 
                        disposal of reverted real property.''.
  (b) Requirements Related to Sales of Reverted Property Under Section 
550.--Section 550(b)(1) of title 40, United States Code, is amended--
          (1) by inserting ``(A)'' after ``(1) In general.--''; and
          (2) by adding at the end the following: ``If the official, in 
        consultation with the Administrator, recommends reversion of 
        the property, the Administrator shall take control of such 
        property, and, subject to subparagraph (B), sell it at fair 
        market value for cash and not by lease, exchange, or leaseback 
        arrangements.
          ``(B) Prior to sale, the Administrator shall make such 
        property available to State and local governments and certain 
        non-profit institutions or organizations pursuant to this 
        section and sections 553 and 554 of this title.''.
  (c) Requirements Related to Sales of Reverted Property Under Section 
553.--Section 553(e) of title 40, United States Code, is amended--
          (1) by inserting ``(1)'' after ``This Section.--''; and
          (2) by adding at the end the following: ``If the 
        Administrator determines that reversion of the property is 
        necessary to enforce compliance with the terms of the 
        conveyance, the Administrator shall take control of such 
        property and, subject to paragraph (2), sell it at fair market 
        value for cash and not by lease, exchange, or leaseback 
        arrangements.
  ``(2) Prior to sale, the Administrator shall make such property 
available to State and local governments and certain non-profit 
institutions or organizations pursuant to this section and sections 550 
and 554 of this title.''.
  (d) Requirements Related to Sales of Reverted Property Under Section 
554.--Section 554(f) of title 40, United States Code, is amended--
          (1) by inserting ``(1)'' after ``This Section.--''; and
          (2) by adding at the end the following: ``If the Secretary, 
        in consultation with the Administrator, recommends reversion of 
        the property, the Administrator shall take control of such 
        property and, subject to paragraph (2), sell it at fair market 
        value for cash and not by lease, exchange, or leaseback 
        arrangements.
  ``(2) Prior to sale, the Administrator shall make such property 
available to State and local governments and certain non-profit 
institutions or organizations pursuant to this section and sections 550 
and 553 of this title.''.

SEC. 6. AGENCY RETENTION OF PROCEEDS.

  The text of section 571 of title 40, United States Code, is amended 
to read as follows:
  ``(a) Deposit of Proceeds.--Proceeds described in subsection (d) 
shall be deposited into the appropriate real property account of the 
agency that had custody and accountability for the real property. Such 
funds shall be expended only as authorized in annual appropriations 
Acts and only for activities as described in section 524(b) of this 
title and disposal activities, including paying costs incurred by the 
General Services Administration for any disposal-related activity 
authorized by this title. Proceeds shall not be expended for activities 
or projects subject to the requirements of section 3307 of this title.
  ``(b) Effect on Other Sections.--Nothing in this section is intended 
to affect section 572(b) or 574 of this title.
  ``(c) Disposal Agency for Reverted Property.--For the purposes of 
this section, the General Services Administration, as the disposal 
agency, shall be treated as the agency with custody and accountability 
for properties which revert to the United States under sections 550, 
553, and 554 of this title.
  ``(d) Proceeds.--The proceeds referred to in subsection (a) are 
proceeds under this chapter from a--
          ``(1) transfer of excess property to a federal agency for 
        agency use; or
          ``(2) sale, lease, or other disposition of surplus 
        property.''.

                          Purpose and Summary

    H.R. 5787, the Federal Real Property Disposal Act, was 
introduced by Reps. Dennis Moore and John J. Duncan, Jr., on 
April 14, 2008. The bill allows all agencies to retain net 
proceeds from the sale of surplus property, authorizes the 
General Services Administration (GSA) to assist agencies in 
preparing properties to be reported excess, and provides 
additional authority to GSA to dispose of property that has 
reverted back to the federal government from previous sales.

                  Background and Need for Legislation

    Under existing law, funds from the sale of surplus real and 
related personal property by GSA are placed in a fund within 
the Treasury. From this fund, the Administrator for General 
Services deducts payments for some of the costs associated with 
selling the property, including appraisal, auctioning, 
surveying, advertising, and environmental inspection. In a 
fiscal year, these costs cannot exceed 12% of the proceeds from 
the sales of the property.\1\
---------------------------------------------------------------------------
    \1\40 U.S.C. Sec. 572(a). Section 572(b) governs real property 
under the control of a military department, which follows different 
procedures.
---------------------------------------------------------------------------
    The agencies controlling the property must pay the costs of 
actually preparing the property for sale, including 
environmental cleanup, demolition, and historical preservation. 
General Accounting Office has reported that these costs 
discourage agencies from disposing of surplus property.\2\ The 
Office of Management and Budget (OMB) agrees with this 
assessment. In testimony before the Subcommittee on Government 
Management, Organization, and Procurement, Deputy Comptroller 
Daniel Werfel stated:
---------------------------------------------------------------------------
    \2\U.S. Government Accountability Office, Statement of Mark L. 
Goldstein, Director, Physical Infrastructure, Federal Real Property: An 
Update on High-Risk Issues (May 24, 2007) (GAO-07-895T).

          Many agencies do not have authority to retain 
        proceeds from the sale of real property assets, nor do 
        they receive reimbursement for cost incurred to sell a 
        property, such as advertising and cleanup. 
        Consequently, agencies often lack the resources needed 
        to sell or dispose of properties and are unable to 
        avoid annual costs that are incurred when properties 
        are maintained past their point of usefulness. Allowing 
        agencies to be reimbursed for selling costs and to 
        retain sale proceeds would provide agencies with the 
        funds necessary to cover upfront costs associated with 
---------------------------------------------------------------------------
        disposing of unneeded assets.\3\

    \3\Subcommittee on Government Management, Organization, and 
Procurement, Testimony of Acting Comptroller Daniel Werfel, Hearing on 
Pending Legislation, 110th Cong. (Apr. 15, 2008).
---------------------------------------------------------------------------
    According to OMB, federal agencies ``reported 18,393 excess 
assets with a replacement value of approximately $13.8 billion. 
Agencies also reported 3,409 assets as surplus with a 
replacement value of approximately $3.9 billion.''\4\
---------------------------------------------------------------------------
    \4\Executive Office of the President, Office of Management and 
Budget, Response to Sectio 408 of Public Law 109-396 (June 15, 2007) 
(originally cited in Congressional Research Service, Surplus Federal 
Property (Nov. 14, 2007)).
---------------------------------------------------------------------------
    H.R. 5787, the Federal Real Property Disposal Enhancement 
Act, allows agencies to retain all of the proceeds from the 
sale of surplus property instead of depositing them in the 
Treasury. The agencies may only use these funds for real 
property disposal activities, subject to appropriations. The 
bill also allows GSA to use its funds to prepare properties to 
be reported excess. The bill does not make any changes to 
existing authorities to transfer unused property to other 
federal agencies or make surplus property available to other 
entities for designated public uses.

                          Legislative History

    H.R. 5787, the Federal Real Property Disposal Act, was 
introduced by Reps. Dennis Moore and John J. Duncan, Jr., on 
April 14, 2008, and was referred to the Committee on Oversight 
and Government Reform.
    The Subcommittee on Government Management, Organization, 
and Procurement held a hearing on H.R. 5787 on April 15, 2008. 
The witnesses were Daniel Werfel, Acting Comptroller, Federal 
Financial Management, Office of Management and Budget; and Stan 
Kaczmarczyk, Acting Deputy Associate Administrator, Office of 
Governmentwide Policy, General Services Administration.
    The Committee held a business meeting to consider H.R. 5787 
on May 1, 2008, and ordered the bill, as amended, to be 
favorably reported by voice vote.

                           Section-by-Section


Section 1: Short title

    The short title of the bill is the Federal Real Property 
Disposal Enhancement Act of 2008.

Section 2: Enhanced authorities with regard to preparing properties to 
        be reported as excess

    This section authorizes the Administrator of GSA to 
obligate funds to pay the direct and indirect costs of 
preparing properties controlled by other federal agencies to be 
declared excess. It also allows GSA to be reimbursed for such 
costs from the proceeds of the sale of the property.

Section 3: Enhanced authorities with regard to reverted real property

    This section modifies provisions of existing law to make 
clear that when a property has been transferred to a nonprofit 
organization or a state or local government for a public 
purpose, and that public purpose is no longer being met, the 
property must revert to the federal government, which must 
dispose of it.

Sec. 4: Agency retention of proceeds

    This section permits federal agencies to retain the 
proceeds from the sale of federal surplus properties. These 
proceeds will be used for disposal activities such as 
developing and implementing a plan to identify and declare 
properties excess, appraisals, utilization studies, and 
lifecycle planning. These proceeds will not be used for any 
project subject to section 3307 of title 40.

                       Explanation of Amendments

    Three amendments to the bill were offered during the 
Committee's consideration of the bill. Rep. Waxman offered an 
amendment in the nature of a substitute to the bill that added 
findings and purposes to the bill. It also added a requirement 
that the Administrator issue guidance for the development and 
implementation of agency real property plans and for agencies 
to maintain adequate inventory controls for property, promptly 
report excess property to the Administrator, and develop real 
property plans. The amendment was adopted by the Committee.
    Rep. Davis offered two amendments to the bill, neither of 
which was adopted. The first would have established a pilot 
program at OMB for an expedited property disposal process. The 
second, which was offered and withdrawn, would have permitted 
GSA to use its funds to renovate property it is currently using 
to make changes to meet needs of the Department of Defense, and 
to transfer that property to the Department of Defense.

                        Committee Consideration

    On Thursday, May 1, 2008, the Committee met in open session 
and favorably ordered H.R. 5787 to be reported, as amended, to 
the House by a voice vote.

                             Rollcall Votes

    No rollcall votes were held.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to terms and conditions of 
employment or access to public services and accommodations. The 
bill does not relate to employment or access to public services 
and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report including the finding that unneeded buildings are 
in the federal inventory.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report, including improving the efficient disposal of 
surplus federal property.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 5787. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                      Unfunded Mandates Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement on 
whether the provisions of the report include unfunded mandates. 
In compliance with this requirement the Committee has received 
a letter from the Congressional Budget Office included herein.

                         Earmark Identification

    H.R. 5787 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 5787. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 5787 from the Director of 
the Congressional Budget Office:

                                                       May 8, 2008.
Hon. Henry A. Waxman,
Chairman, Committee on Oversight and Government Reform, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5787, the Federal 
Real Property Disposal Enhancement Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 5787--Federal Real Property Disposal Enhancement Act of 2008

    Summary: H.R. 5787 would amend the Federal Property and 
Administrative Services Act (Property Act) to give the General 
Services Administration (GSA) new authorities to help 
facilitate the disposal of federal property. CBO estimates that 
enacting the bill would reduce net direct spending by $15 
million over the 2009-2018 period. The bill would not affect 
revenues.
    H.R. 5787 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5787 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2009    2010    2011    2012    2013    2014    2015    2016    2017    2018   2009-2013  2009-2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     DIRECT SPENDING

Estimated Budget Authority........................       *      -1      -1      -1      -2      -2      -2      -2      -2      -2         -5        -15
Estimated Outlays.................................       *      -1      -1      -1      -2      -2      -2      -2      -2      -2         -5        -15
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000.

    Basis of estimate: Enacting H.R. 5787 would increase both 
direct spending and offsetting receipts (a credit against 
direct spending) by making it easier for federal agencies to 
dispose of federal property. For this estimate, CBO assumes 
that the bill will be enacted near the end of 2008.

Property disposal under current law

    Under the Property Act, GSA manages the disposal of surplus 
federal property for most agencies. That act requires GSA to 
first offer excess property to other federal agencies, then, at 
discounts of up to 100 percent, to state or local governments 
and nonprofit organizations before selling the property through 
a competitive bidding process. The act also allows GSA to 
retain 12 percent of the proceeds from such sales to cover its 
direct costs, such as auction fees and appraisals. (In fiscal 
year 2007, GSA used about $4 million for those purposes.) The 
remaining net proceeds (currently about $20 million per year) 
are deposited in the Treasury as offsetting receipts.
    The current federal property program generates only modest 
proceeds for several reasons. First, much of the surplus 
property disposed of under current law is conveyed without 
reimbursement (under authorities such as homeless conveyances). 
Second, property sales, and thus receipts, are limited because 
many federal agencies lack appropriated funds to initiate the 
disposal process. In addition, some agencies have little 
incentive to maximize the income they receive from property 
sales because they cannot retain any of those receipts to 
expedite such transactions or for other activities. (Some 
agencies, however, can retain the proceeds of enhanced-use 
leases for property improvements.)

Property disposal under H.R. 5787

    H.R. 5787 would address some of the problems with the 
current disposal process for federal property by allowing GSA 
to retain and use additional proceeds from property sales to 
help pay for the direct and indirect costs of other agencies' 
disposal activities. Activities include additional market 
research, cost/benefit analyses, and other activities to 
identify and prepare properties for disposal that have not yet 
been declared excess. Net proceeds from sales under the bill 
would be available, subject to future appropriation, for other 
property management activities.
    Estimated impact on the Federal Government: Based on 
information from GSA and some landholding agencies, CBO 
estimates that enacting H.R. 5787 would increase direct 
spending, beginning in 2009, by about $2 million annually as 
GSA uses proceeds from existing property sales to help other 
agencies identify and prepare new properties for disposal. 
Additional receipts would be generated as those new properties 
are sold, and those receipts (estimated to total about $4 
million annually) would eventually offset the additional costs. 
Because proceeds from the new sales would lag spending by 
several months, the net impact of the bill in 2009 would be 
negligible. CBO estimates that offsetting receipts earned from 
additional sales under the legislation would total about $35 
million over the 2009-2018 period, additional spending would 
total an estimated $20 million.
    CBO expects that GSA would work with agencies using the new 
authorities provided in this bill to make more properties 
available for disposal than they could under existing law. The 
impact would be modest, however, because we assume that many of 
the largest federal agencies that manage significant numbers of 
properties would likely opt to continue using their 
enhanced-use leasing authorities rather than GSA's services to 
leverage value from underused real property. In addition, any 
new properties that would be made available for disposal under 
the bill would still have to be evaluated for possible public 
benefit conveyances--for shelter for the homeless, or for 
educational or recreational uses--before those properties could 
be offered for sale. Consequently, CBO expects that the number 
of properties sold for cash under this bill would be relatively 
small.
    Intergovernmental and private-sector impact: H.R. 5787 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. The bill would benefit state, local, and 
tribal governments by requiring federal agencies to make 
additional property available to those entities before they 
offer it for sale.
    Estimate prepared by: Federal costs: Matthew Pickford; 
impact on state, local, and tribal governments: Elizabeth Cove; 
impact on the private sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 40, UNITED STATES CODE

           *       *       *       *       *       *       *



                     CHAPTER 5--PROPERTY MANAGEMENT


                SUBCHAPTER I--PROCUREMENT AND WAREHOUSING

Sec.
501.  Services for executive agencies.
     * * * * * * *
[524.  Duties of executive agencies.]
524.  Duties of the General Services Administration and executive 
          agencies.

           *       *       *       *       *       *       *


SUBCHAPTER II--USE OF PROPERTY

           *       *       *       *       *       *       *


[Sec. 524. Duties of executive agencies

  [(a) Required.--Each executive agency shall--
          [(1) maintain adequate inventory controls and 
        accountability systems for property under its control;
          [(2) continuously survey property under its control 
        to identify excess property;
          [(3) promptly report excess property to the 
        Administrator of General Services;
          [(4) perform the care and handling of excess 
        property; and
          [(5) transfer or dispose of excess property as 
        promptly as possible in accordance with authority 
        delegated and regulations prescribed by the 
        Administrator.
  [(b) Required as Far as Practicable.--Each executive agency, 
as far as practicable, shall--
          [(1) reassign property to another activity within the 
        agency when the property is no longer required for the 
        purposes of the appropriation used to make the 
        purchase;
          [(2) transfer excess property under its control to 
        other federal agencies and to organizations specified 
        in section 321(c)(2) of this title; and
          [(3) obtain excess property from other federal 
        agencies.]

Sec. 524. Duties of the General Services Administration and executive 
                    agencies

  (a) Duties of the General Services Administration.--
          (1) Guidance.--The Administrator shall issue guidance 
        for the development and implementation of agency real 
        property plans. Such guidance shall include 
        recommendations on--
                  (A) how to identify excess properties;
                  (B) how to evaluate the costs and benefits 
                involved with disposing of real property;
                  (C) how to prioritize disposal decisions 
                based on agency missions and anticipated future 
                need for holdings; and
                  (D) how best to dispose of those properties 
                identified as excess to the needs of the 
                agency.
          (2) Annual report.--The Administrator shall submit an 
        annual report, for each of the first 5 years after 
        2008, to the Committee on Oversight and Government 
        Reform of the House of Representatives and the 
        Committee on Homeland Security and Governmental Affairs 
        of the Senate, based on data submitted from all 
        executive agencies, detailing executive agency efforts 
        to reduce their real property assets.
          (3) Assistance.--The Administrator shall assist 
        executive agencies in the identification and disposal 
        of excess real property.
  (b) Duties of Executive Agencies.--
          (1) In general.--Each executive agency shall--
                  (A) maintain adequate inventory controls and 
                accountability systems for property under its 
                control;
                  (B) continuously survey property under its 
                control to identify excess property;
                  (C) promptly report excess property to the 
                Administrator;
                  (D) perform the care and handling of excess 
                property; and
                  (E) transfer or dispose of excess property as 
                promptly as possible in accordance with 
                authority delegated and regulations prescribed 
                by the Administrator.
          (2) Specific requirements with respect to real 
        property.--With respect to real property, each 
        executive agency shall--
                  (A) develop and implement a real property 
                plan in order to identify properties to declare 
                as excess using the guidance issued under 
                subsection (a)(1);
                  (B) identify and categorize all real property 
                owned, leased, or otherwise managed by the 
                agency;
                  (C) establish adequate goals and incentives 
                that lead the agency to reduce excess real 
                property in its inventory;
                  (D) when appropriate, use the authorities in 
                section 572(a)(2)(B) of this title in order to 
                identify and prepare real property to be 
                reported as excess.
          (3) Additional requirements.--Each executive agency, 
        as far as practicable, shall--
                  (A) reassign property to another activity 
                within the agency when the property is no 
                longer required for the purposes of the 
                appropriation used to make the purchase;
                  (B) transfer excess property under its 
                control to other Federal agencies and to 
                organizations specified in section 321(c)(2) of 
                this title; and
                  (C) obtain excess properties from other 
                Federal agencies to meet mission needs before 
                acquiring non-Federal property.

           *       *       *       *       *       *       *


SUBCHAPTER III--DISPOSING OF PROPERTY

           *       *       *       *       *       *       *


Sec. 550. Disposal of real property for certain purposes

  (a) * * *
  (b) Enforcement and Revision of Instruments Transferring 
Property Under This Section.--
          (1) In general.--(A) Subject to disapproval by the 
        Administrator of General Services within 30 days after 
        notice of a proposed action to be taken under this 
        section, except for personal property transferred 
        pursuant to section 549 of this title, the official 
        specified in paragraph (2) shall determine and enforce 
        compliance with the terms, conditions, reservations, 
        and restrictions contained in an instrument by which a 
        transfer under this section is made. The official shall 
        reform, correct, or amend the instrument if necessary 
        to correct the instrument or to conform the transfer to 
        the requirements of law. The official shall grant a 
        release from any term, condition, reservation or 
        restriction contained in the instrument, and shall 
        convey, quitclaim, or release to the transferee (or 
        other eligible user) any right or interest reserved to 
        the Federal Government by the instrument, if the 
        official determines that the property no longer serves 
        the purpose for which it was transferred or that a 
        release, conveyance, or quitclaim deed will not prevent 
        accomplishment of that purpose. The release, 
        conveyance, or quitclaim deed may be made subject to 
        terms and conditions that the official considers 
        necessary to protect or advance the interests of the 
        Government. If the official, in consultation with the 
        Administrator, recommends reversion of the property, 
        the Administrator shall take control of such property, 
        and, subject to subparagraph (B), sell it at fair 
        market value for cash and not by lease, exchange, or 
        leaseback arrangements.
          (B) Prior to sale, the Administrator shall make such 
        property available to State and local governments and 
        certain non-profit institutions or organizations 
        pursuant to this section and sections 553 and 554 of 
        this title.

           *       *       *       *       *       *       *


Sec. 553. Property for correctional facility, law enforcement, and 
                    emergency management response purposes

  (a) * * *

           *       *       *       *       *       *       *

  (e) Enforcement and Revision of Instruments Transferring 
Property Under This Section.--(1) The Administrator shall 
determine and enforce compliance with the terms, conditions, 
reservations, and restrictions contained in an instrument by 
which a transfer or conveyance under this section is made. The 
Administrator shall reform, correct, or amend the instrument if 
necessary to correct the instrument or to conform the transfer 
to the requirements of law. The Administrator shall grant a 
release from any term, condition, reservation or restriction 
contained in the instrument, and shall convey, quitclaim, or 
release to the transferee (or other eligible user) any right or 
interest reserved to the Government by the instrument, if the 
Administrator determines that the property no longer serves the 
purpose for which it was transferred or that a release, 
conveyance, or quitclaim deed will not prevent accomplishment 
of that purpose. The release, conveyance, or quitclaim deed may 
be made subject to terms and conditions that the Administrator 
considers necessary to protect or advance the interests of the 
Government. If the Administrator determines that reversion of 
the property is necessary to enforce compliance with the terms 
of the conveyance, the Administrator shall take control of such 
property and, subject to paragraph (2), sell it at fair market 
value for cash and not by lease, exchange, or leaseback 
arrangements.
  (2) Prior to sale, the Administrator shall make such property 
available to State and local governments and certain non-profit 
institutions or organizations pursuant to this section and 
sections 550 and 554 of this title.

Sec. 554. Property for development or operation of a port facility

  (a) * * *

           *       *       *       *       *       *       *

  (f) Enforcement and Revision of Instruments Transferring 
Property Under This Section.--(1) The Secretary of 
Transportation shall determine and enforce compliance with the 
terms, conditions, reservations, and restrictions contained in 
an instrument by which a transfer or conveyance under this 
section is made. The Secretary shall reform, correct, or amend 
the instrument if necessary to correct the instrument or to 
conform the transfer to the requirements of law. The Secretary 
shall grant a release from any term, condition, reservation or 
restriction contained in the instrument, and shall convey, 
quitclaim, or release to the grantee any right or interest 
reserved to the Government by the instrument, if the Secretary 
determines that the property no longer serves the purpose for 
which it was transferred or that a release, conveyance, or 
quitclaim deed will not prevent accomplishment of that purpose. 
The release, conveyance, or quitclaim deed may be made subject 
to terms and conditions that the Secretary considers necessary 
to protect or advance the interests of the Government. If the 
Secretary, in consultation with the Administrator, recommends 
reversion of the property, the Administrator shall take control 
of such property and, subject to paragraph (2), sell it at fair 
market value for cash and not by lease, exchange, or leaseback 
arrangements.
  (2) Prior to sale, the Administrator shall make such property 
available to State and local governments and certain non-profit 
institutions or organizations pursuant to this section and 
sections 550 and 553 of this title.

           *       *       *       *       *       *       *


             SUBCHAPTER IV--PROCEEDS FROM SALE OR TRANSFER

Sec. 571. General rules for deposit and use of proceeds

  [(a) Deposit in Treasury as Miscellaneous Receipts.--
          [(1) In general.--Except as otherwise provided in 
        this subchapter, proceeds described in paragraph (2) 
        shall be deposited in the Treasury as miscellaneous 
        receipts.
          [(2) Proceeds.--The proceeds referred to in paragraph 
        (1) are proceeds under this chapter from a--
                  [(A) transfer of excess property to a federal 
                agency for agency use; or
                  [(B) sale, lease, or other disposition of 
                surplus property.
  [(b) Payment of Expenses of Sale Before Deposit.--Subject to 
regulations under this subtitle, the expenses of the sale of 
old material, condemned stores, supplies, or other public 
property may be paid from the proceeds of sale so that only the 
net proceeds are deposited in the Treasury. This subsection 
applies whether proceeds are deposited as miscellaneous 
receipts or to the credit of an appropriation as authorized by 
law.]
  (a) Deposit of Proceeds.--Proceeds described in subsection 
(d) shall be deposited into the appropriate real property 
account of the agency that had custody and accountability for 
the real property. Such funds shall be expended only as 
authorized in annual appropriations Acts and only for 
activities as described in section 524(b) of this title and 
disposal activities, including paying costs incurred by the 
General Services Administration for any disposal-related 
activity authorized by this title. Proceeds shall not be 
expended for activities or projects subject to the requirements 
of section 3307 of this title.
  (b) Effect on Other Sections.--Nothing in this section is 
intended to affect section 572(b) or 574 of this title.
  (c) Disposal Agency for Reverted Property.--For the purposes 
of this section, the General Services Administration, as the 
disposal agency, shall be treated as the agency with custody 
and accountability for properties which revert to the United 
States under sections 550, 553, and 554 of this title.
  (d) Proceeds.--The proceeds referred to in subsection (a) are 
proceeds under this chapter from a--
          (1) transfer of excess property to a federal agency 
        for agency use; or
          (2) sale, lease, or other disposition of surplus 
        property.

Sec. 572. Real property

  (a) In General.--
          (1) * * *
          (2) Payment of expenses from the fund.--
                  (A) Authority.--From the fund described in 
                paragraph (1), the Administrator may obligate 
                an amount to pay the following direct expenses 
                incurred for the use of excess property and the 
                disposal of surplus property under this 
                subtitle:
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) The direct and indirect costs 
                        associated with the reversion, custody, 
                        and disposal of reverted real property.
                  (B) Additional authority.--(i) From the fund 
                described in paragraph (1), subject to clause 
                (iv), the Administrator may obligate an amount 
                to pay the direct and indirect costs related to 
                identifying and preparing properties to be 
                reported excess by another agency.
                  (ii) The General Services Administration may 
                be reimbursed from the proceeds of the sale of 
                such properties for such costs.
                  (iii) Net proceeds shall be dispersed 
                pursuant to section 571 of this title.
                  (iv) The authority under clause (i) to 
                obligate funds to prepare properties to be 
                reported excess does not include the authority 
                to convey such properties by sale, lease, 
                exchange, or otherwise, including through 
                leaseback arrangements.
                  (v) Nothing in this subparagraph is intended 
                to affect subparagraph (D).
                  [(B)] (C) Limitations.--
                          (i) * * *

           *       *       *       *       *       *       *

                  [(C)] (D) Direct payment or reimbursement.--
                An amount obligated under this paragraph may be 
                used to pay an expense directly or to reimburse 
                a fund or appropriation that initially paid the 
                expense.

           *       *       *       *       *       *       *


              ADDITIONAL VIEWS OF RANKING MEMBER TOM DAVIS

    The federal government is the largest landholder in the 
country. As such, it is essential for the federal government to 
manage its properties as efficiently and effectively as 
possible.
    More importantly, property which is no longer of use to the 
federal government should be removed from the inventory. 
Unfortunately over the years, federal property disposal 
processes have become increasingly cumbersome and unwieldy, and 
agencies often decide it's easier to sit on a property than try 
to get rid of it.
    In fact, OMB estimates a backlog of more than 21,000 in 
properties in need of maintenance and repair, carrying a price 
tag of more than $18 billion.
    When I chaired this Committee I spent a considerable amount 
of time working to reform the federal real property disposal 
system. The proposals we put forth--which were approved by this 
Committee--were substantive proposals aimed at providing real 
reform.
    While I appreciate Representative Moore's efforts in this 
legislation, I am concerned this proposal does not go far 
enough in reforming our federal property laws.
    I offered two amendments during Committee consideration of 
this legislation, neither of which was included in the reported 
version of the bill.
    The first amendment would have added to Representative 
Moore's proposal the Federal Real Property Disposal Pilot 
Program which this Committee approved by unanimous consent in 
2005.
    The second amendment I offered would have given GSA some 
additional authority with regard to underutilized federal 
properties which could be better put to use by the Department 
of Defense to help local communities who are trying to absorb 
an increase in federal presence resulting from a BRAC-related 
realignment.
    I believe both of these amendments would have strengthened 
the underlying proposal and I look forward to working with the 
majority to include these provisions as the legislation moves 
forward.

                                                         Tom Davis.