94-8114. Revitalizing Base Closure Communities and Community Assistance

[Federal Register Volume 59, Number 66 (Wednesday, April 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8114]

[[Page Unknown]]

[Federal Register: April 6, 1994]

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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: Department of Defense.

ACTION: Interim final rule.

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SUMMARY: The interim final rule promulgates guidance required by
section 2903 of the National Defense Authorization Act for Fiscal Year
1994, and provides interpretive guidance concerning other changes to
the base realignment and closure process generated by Title XXIX of the
Act. This document also establishes policy and procedure, assigns
responsibilities, and delegates authority under the President's Five-
Part Plan, ``A Program to Revitalize Base Closure Communities'', July
2, 1993. Because such guidance must be issued and effective to enable
the Department to perform various acts required by the law to be
accomplished by May 30, 1994, such guidance is being issued as an
interim final rule and is effective upon publication.

EFFECTIVE DATE: This document is effective April 6, 1994. Comments must
be received by July 5, 1994.

ADDRESSES: Comments must be forwarded to the Office of the Assistant
Secretary of Defense for Economic Security, Room 3D854, The Pentagon,
Washington, DC 20301.

FOR FURTHER INFORMATION CONTACT:
Steven Kleiman or Frank Savat, telephone (703) 614-5356.

SUPPLEMENTARY INFORMATION: The Department of Defense is engaged in a
major downsizing, resulting in less land and buildings needed to
support defense missions. Congressional legislation in 1988 (Pub. L.
100-526) and 1990 (Pub. L. 101-510) provided for non-partisan
Commissions to assess the closure recommendations of the Secretary of
Defense, and make base closure and realignment recommendations to the
President and the Congress. The bases recommended for closure and
realignment by the 1988, 1991, 1993 Commissions were all approved under
this process. Another Commission will meet in 1995. As a result of the
1988, 1991 and 1993 actions, the Department of Defense is now in the
process of closing 70 major installations throughout the United States.
Even in large cities a military base often represents a major
employment center and a significant economic stimulus for the local
economy. With its multimillion dollar payrolls a base closure can be a
serious blow to the local community. The Department of Defense
recognizes that the manner in which real and personal property at
closing bases is disposed of can have a dramatic impact on the local
community's prospects for economic recovery. In the past, the
traditional property disposal methods focused on maximizing proceeds
from the sale of real and personal property with little regard for
enhancing the prospects for economic recovery in the community.
Recognizing that the old way of doing business was not designed to
dispose of major military installations in a way that would revitalize
base closure communities, President Clinton announced, on July 2, 1993,
a major new program to speed the economic recovery of communities where
military bases are slated to close. In a sharp departure from the past,
the Clinton Administration pledged to give top priority to early reuse
of the base's valuable assets. Rapid redevelopment and the creation of
new jobs in base closure communities are the goals of the new
initiative.
In announcing the program, the President outlined the following
five parts of his community reinvestment program:
Jobs-centered property disposal that puts local economic
redevelopment first.
Fast-track environmental cleanup that removes needless
delays while protecting human health and the environment.
Transition coordinators at major bases slated for closure.
Easy access to transition and redevelopment help for
workers and communities.
Larger economic development planning grants to base
closure communities.
While the task of remaking the economic foundation of a community
is never easy, a closed military base can be a community's single
greatest asset in charting a new future. An airfield, a port, or the
land, buildings, furniture and equipment on a base can be a catalyst
for new economic activity. The Administration's plan to make base
property more affordable to communities for the purpose of job creation
is a fundamental change. It allows communities that have viable plans
for economic redevelopment to obtain property at prices within their
means. The President's Five-Part Plan was an important step in steering
the base closure and reuse process toward rapid job creation.
In announcing the community revitalization program, President
Clinton recognized that existing Federal law required the Department of
Defense to charge full price when closed bases will be used for job-
creating economic development, yet it can transfer bases for free for a
variety of ``public'' uses, including recreation, aviation, education
and health. President Clinton stated that the Administration would seek
to change the law, to enable the Department of Defense to transfer
property for free or at a discount for economic development purposes,
when community development plans meet a strict test for economic
viability and job creation. Accordingly, the President asked the
National Economic Council (NEC) an interagency coordinating arm of the
White House and the Department of Defense to draft a proposal that puts
economic development at the center of base closure asset disposition.
The NEC convened an interagency working group that created the
following framework for base disposal:

--Where a ready market exists, sell properties quickly for public or
private development to speed up job creation.
--Where a ready market does not exist, make property available to the
local redevelopment authority, without initial cost, for economic
development.
--Share the net profits between the Department of Defense and the local
redevelopment authority if a property conveyed without initial cost for
economic development is subsequently sold.

The Congress, mindful of the need to reform this process, endorsed
the President's plan by authorizing Title XXIX of Public Law 103-160,
Base Closure Communities Assistance, the so-called ``Pryor Amendment''.
Based largely on legislation sponsored by Senator Pryor, the provisions
of Title XXIX provide the legal authority to carry out the President's
plan by, among other things, authorizing conveyances of real and
personal property at or below fair market value to local redevelopment
authorities, and sharing of profits on subsequent sales and leases.
Public Law 103-160 required the Secretary of Defense to prescribe
regulations to implement the provisions of the law. This is being
accomplished under the Administrative Procedures Act which allows for
the public to comment on the regulations. Due to the need to begin
acting on the proposed regulations, the Department of Defense has
issued them as interim final rules which allow actions at closing bases
to begin before the regulations are made final after the public comment
period. The section related to the conveyance of property in
consideration of environmental restoration costs, is issued as a
proposed rule and cannot be exercised until a final rule is published
following public comment.
The following is a summary of the major elements of the rules.
1. Real Property Screening
When the Department of Defense no longer needs to retain real
property at a closing base, the Department is required to dispose of
the property in accordance with the prescribed screening process in the
General Services Administration property disposal regulations and the
new expedited process authorized in Title XXIX. This process permits
DoD entities, other Federal Agencies and homeless providers to identify
property they would like to acquire when the base closes.
The screening process for real property requires the Department of
Defense to identify first what it needs to retain. Any property excess
to the Department of Defense is then made available to other Federal
Agencies. Property not needed by other Federal Agencies is then
identified as surplus and reported to the Department of Housing and
Urban Development (HUD) for a determination of suitability for homeless
use and publication of such properties in the Federal Register.
Property that has no homeless interest, as determined by the Department
of Health and Human Services (HHS), will then be available for transfer
by either direct sale to the public, negotiated conveyance to the local
redevelopment authority, public benefit conveyances for airports,
schools, ports, etc., or the new economic development conveyance
discussed in paragraph 5. of this summary. The Military Departments
will work with the other Department of Defense Components, Federal
Agencies, homeless providers and reuse planners, early in the closure
process, to sort out these requests. This new process will provide for
the early identification of property which will become available for
reuse. This information is critical to the local redevelopment
authority's ability to design a realistic redevelopment plan. Agreement
with proposed uses, other than for McKinney Act homeless use, is at the
discretion of the Military Departments who have been delegated disposal
authority.
2. McKinney Act Screening
The Stewart B. McKinney Homeless Assistance Act is a statute
designed to permit recognized providers of assistance to the homeless
to receive a high priority in acquiring unneeded land and buildings on
Federal properties. Buildings and land on closing bases provide
excellent opportunities for homeless providers to acquire the
infrastructure they need to establish their programs. This section of
the interim final rule describes the new process, specifically tailored
for base closure properties, that will expedite the screening process
with homeless providers and will result in the early identification of
their needs. The expedited screening process will be pursued in a
proactive manner. The Military Departments will work with communities
to identify eligible entities and conduct timely outreach seminars to
educate homeless providers with respect to the land and buildings that
will be made available and the process for making a formal application
to HHS to acquire such land and buildings. The early identification of
homeless assistance requirements will permit communities to develop
reuse plans that fully accommodate homeless needs, while permitting
early identification of the remaining property for quick sale to create
jobs, a Federally-sponsored public benefit conveyance, or conveyance to
a local redevelopment authority for economic development purposes.
3. Local Redevelopment Plan
The early formation of a local redevelopment authority is critical
to the successful reuse of the base. The primary focus of the local
redevelopment authority should be developing a comprehensive local
redevelopment plan. This plan should embrace the range of feasible
reuse options that will result in rapid job creation. The local
redevelopment plan will generally be used as the proposed action when
the disposing Military Department conducts the environmental analyses
required by the National Environmental Policy Act (NEPA).
4. Jobs-Centered Property Disposal
The new property disposal process described in this section and in
paragraphs 5. and 6. of this summary, is designed to rapidly create new
jobs. In most cases, that will occur through conveyances for economic
development, without initial cost, as described in paragraph 5.
However, in a few cases, an entire base or a substantial portion of it
will have a high value and hence a ready market for development. In
such cases, market sale of the property may be the most effective way
to rapidly create new jobs.
The Military Department will identify properties having a ready
market and begin the appraisal process as soon as possible but not
later than 6 months after completion of the new expedited McKinney Act
screening process in paragraph 2. of this summary. The appraisals
should take into consideration uncertainties and the associated risks
in property development as well as the impact of the base closure on
market conditions. Moreover, the appraisal will reflect the most likely
range of uses consistent with local interests rather than highest and
best use.
To assist in determining the estimated fair market value, the
Military Departments will solicit for expressions of interest for the
entire or a substantial portion of the base for a period no longer than
6 months. The results will be shared with the local redevelopment
authority. Expressions of interest will be solicited simultaneously
with other screening and disposal actions and will not cause a delay in
the disposal process. The Military Departments will analyze each
expression of interest and determine if it represents a reasonable
proposal that is likely to lead to rapid development and job creation.
If after consulting extensively with the local community, the Military
Department makes a favorable determination, the Department may decide
to offer the property for sale. The local redevelopment authority will
be promptly notified of the decision and may challange the decision. If
the Military Department nevertheless decides to proceed with the sale,
potential bidders will be strongly encouraged to work with the local
redevelopment authority so that their proposals are compatible with the
local redevelopment plan. Identifying a substantial portion of the base
for sale, however, does not preclude the community's acquisition of the
property through a negotiated sale with the Department of Defense.
In the event that a base or substantial portion thereof, is
identified as potentially valuable but does not sell due to the absence
of a ready market, the property will then be available for conveyance
for public benefit or, economic development purposes.
Throughout this process, the Military Departments will make maximum
effort to give community considerations a high priority.
5. Economic Development Conveyances
Closing military bases often have a great deal of land that may not
be readily developable or marketable due to its location. Additionally,
closing bases often have buildings that may need to be demolished in
order to encourage redevelopment and economic revitalization.
Historically, the process of selling bases, or parts thereof, for fair
market value has been time consuming and the proceeds from the few
sales of base closure properties have been less than originally
anticipated. In the past, the law permitted the Department of Defense
to convey property at a discount of up to 100 percent (free of charge)
for specific public purposes such as health, aviation, recreation, and
education--but not for economic development. The new authority permits
the DoD to convey land and buildings to redevelopment authorities
initially for free, after it is determined that the base, or
significant portions thereof, cannot be sold in accordance with the
rapid job creation concept. Such conveyances may help induce a market
for the property, thereby, enhancing economic recovery. Redevelopment
authorities requesting an economic development conveyance, shall submit
a simple written request containing four basic elements as described in
the interim rule. Generally, installations will be conveyed at no
initial cost with a recoupment provision that will permit the
Department of Defense to share in any future profits should the base be
later leased or sold. Bases in rural areas shall be conveyed under this
authority at no cost and with no recoupment if they meet the standards
as detailed in the interim rule. The conveyance for economic
development should be used by local redevelopment authorities to gain
control of large areas of the base, not just individual buildings. The
income received from some of the higher value property should help
offset the maintenance and marketing costs of the less desirable
parcels. In order for this conveyance to spur redevelopment, large
parcels must be used to provide an income stream to assist the long
term development of the property.
6. Profit Sharing
When real property is conveyed as described in paragraph 5. of this
summary, DoD shall generally share in the division of future profits
should the property be subsequently sold or leased. The division of
profits shall be based on net profits and the share shall generally
favor the local redevelopment authority. There shall be a 15-year time
limit on the share of the profits. The government's portion of the
receipts from the profit shall not exceed the estimated fair market
value of the property at the time of conveyance to the local
redevelopment authority.
7. Leasing of Real Property
Leasing of real property early in the reuse process is an effective
way to quickly attract new jobs to replace those that have been lost by
the base closing. In the past, the requirement to lease at fair market
value discouraged the creation of new jobs. The new leasing process, at
less than fair market value, will provide new incentives for
redevelopment authorities and businesses alike to spur job creation and
speed economic redevelopment. Inasmuch as the Department cannot convey
contaminated property until clean-up measures are in place, leasing is
often the only means to allow suitable economic reuse to occur on
substantial portions of closing bases.
8. Personal Property
Personal property located on closing bases is often very useful to
the redevelopment of the real property. This section of the interim
final rule outlines procedures to allow transfer of personal property
with the real property in many cases. It provides for completing an
inventory soon after the base is approved for closure and consultation
with local officials. This consultation may include a walkthrough of
the base to familiarize local officials with potentially available
property. The community can then identify the personal property it
wishes to retain in its redevelopment plan. The Department of Defense
will keep a great deal of the personal property at the base while the
redevelopment plan is being put together. Only valid exemptions will be
made to this freeze, usually involving specific military requirements
or property which the base does not own. Emissions trading procedures
will be issued separately and are not covered by the interim final
rule.
9. Minimum Level of Maintenance and Repair To Support Non-Military
Purposes
Facilities and equipment located on closing bases are often
important to the eventual reuse. This section of the interim rule below
provides procedures to protect their condition while the redevelopment
plan is being put together. The level of maintenance will be determined
in consultation with the redevelopment authority.
DoD Directive 4165.aa\1\ (32 CFR Part 90) establishes basic
policies to carry out the President's plan and the Base Closure
Community Assistance Act. DoD Instruction 4165.bb\2\ (32 CFR Part 91)
provides procedural guidance for implementation. In addition to
property disposal, the document addresses fast-track environmental
cleanup and increased economic development planning support for
communities. It provides for on-site transition coordinators,
responsible directly to the Secretary of Defense, at major closing
bases in order to minimize red tape and keep environmental cleanup and
base disposal activities on a fast track.
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\1\Draft document. When signed, this document will be available
from the National Technical Information Service, 5285 Port Royal
Road, Springfield, VA 22161.
\2\See footnote 1.
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The Department of Defense has determined that this interim rule is
not a significant regulatory action, as defined by Executive Order
12866. The rule does not:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities. It provides for transfer of paid-for federal installations
no longer needed for economic development purposes. This will benefit
the economy and the communities in which the closing bases are located.
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof;
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
Executive Order 12886.
It has been certified that this interim final rule is not subject
to the Regulatory Flexibility Act (5 U.S.C. 601) because the interim
final rule will not have a significant economic impact on a substantial
number of small entities. The primary effect of the interim final rule
will be to reduce the burden on local communities of the Government's
property disposal process at closing military installations and to
accelerate the economic recovery of the relatively small number of
communities that will be affected by the closure of nearby military
installations.
The rule is not subject to the Paperwork Reduction Act because it
imposes no obligatory information requirements beyond internal DoD use.

List of Subjects in 32 CFR Parts 90 and 91

Community development, Government employees, Military personnel,
Surplus Government property.

Accordingly, Title 32, Chapter I, Subchapter C, is amended as
follows:
1. Part 90 is added to read as follows:

PART 90--REVITALIZING BASE CLOSURE COMMUNITIES

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

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'',\1\ July 2, 1993, to speed the economic recovery of
communities where military bases are slated to close.
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\1\Document available from the Office of the Assistant Secretary
of Defense (Economic Security), Pentagon, Washington, DC 20301.
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(b) Implements the National Defense Authorization Act for fiscal
year 1994, Title XXIX, 107 Stat. 1909.

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 base have ceased or have been
relocated. All personnel (military, civilian and contractor) have
either been eliminated or relocated, except for personnel required for
caretaking and disposal of the base or personnel remaining in
authorized enclaves.
(b) Base realignment and closure cleanup plan. A plan for the
expeditious environmental cleanup necessary to facilitate conveyance of
the property to communities for economic redevelopment.
(c) Base realignment and closure cleanup team. A team established
for each DoD closing or realigning base where property is available for
transfer to the community. The team has the authority, responsibility,
and accountability for environmental cleanup programs at these
installations, emphasizing those actions which are necessary to
facilitate reuse and redevelopment.
(d) 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 purposes of this part.
(e) Redevelopment authority. Any entity, including an entity
established by a State or local government, recognized by the Secretary
of Defense as the entity responsible for developing the redevelopment
plan with respect to the installation and for directing implementation
of the plan.

Sec. 90.4 Policy.

It is DoD policy to:
(a) Help communities impacted by base closures achieve rapid
economic recovery through effective reuse of the assets of closing
bases--more quickly, more effectively and in ways based on local market
conditions and locally developed reuse plans--by implementing the
President's Five-Part Plan that encourages:
(1) Transferring real and personal property expeditiously to local
redevelopment authorities and in ways that enhance economic development
and job creation or other public benefits. This can best be
accomplished by:
(i) Making transfers of property to a redevelopment authority for
economic development affordable, when necessary to foster community
redevelopment plans. The use of existing public benefit conveyances
should be considered, where appropriate, before the use of a public
benefit conveyance for economic development.
(ii) Accelerating the property screening process early in the
disposal process to determine other potential Federal uses of the
property, including the identification of the needs of homeless
providers. This will determine how much of the property is available
for early economic development and/or other community reuse.
(iii) Informing communities, as early as possible after the base
closure decision is final, if an installation will be considered for
``economic development'' conveyances under Pub. L. No. 103-160, Title
XXIX and will not be offered for sale, instead. Such decisions shall be
based on a determination that the existence of a ready market for the
property indicates that public or private developers can not be relied
upon as the preferable mechanism to spur economic redevelopment and the
creation of new jobs.
(iv) Encouraging interim leases at less than the estimated fair
market value in order to facilitate State or local economic
redevelopment efforts.
(v) Delegating authority to approve interim leases and simple land
transfers.
(vi) Considering the personal property requirements of the
community redevelopment plan when making decisions on the disposition
of base equipment.
(2) Ensuring fast-track environmental cleanup of closing bases to
permit earlier determination of property suitable for either conveyance
or lease. The key elements of this initiative are to:
(i) Establish a base realignment and closure cleanup team composed
of members from the Department of Defense, the Environmental Protection
Agency and State regulatory agencies, at every base where property is
available for transfer and reuse. The team shall prepare the base
realignment and closure cleanup plan and make decisions to expedite the
process.
(ii) Quickly identify and document uncontaminated real property
parcels to permit timely reuse.
(iii) Identify opportunities to convey property quickly to those
willing to pay the cost of cleaning up the contaminated property.
(iv) Ensure analyses required by the National Environmental Policy
Act (Pub. L. 91-190; 10 U.S.C. 4332 et. seq.) process are produced in a
timely manner.
(v) Establish procedures for identifying and documenting parcels of
real property that are environmentally suitable for lease, even if
needed mitigation precludes conveyance.
(vi) Improve public involvement in the environmental cleanup by
establishing and seeking public participation in Restoration Advisory
Boards.
(3) Providing full time base transition coordinators at major
installations slated for closure or substantial realignment. The
principal functions of the coordinators shall be to:
(i) Assist in cutting through red tape on property disposal.
(ii) Assist in keeping the environmental cleanup on a fast track.
(iii) Assist the DoD Office of Economic Adjustment (OEA) in helping
communities identify sources of Federal assistance for developing and
implementing economic redevelopment plans.
(4) Providing easy access to transition and redevelopment help for
workers and communities by targeting major sources of Federal funding
assistance to base closure communities.
(5) Providing larger economic development planning grants to base
closure communities. Planning grants should be approved quickly. The
Department of Defense's Office of Economic Adjustment will move beyond
the traditional role of providing grants for planning to helping
communities transition from planning to implementation by funding a
portion of the staff required for implementation of the local
redevelopment plan.
(b) Follow the following framework in implementing Title XXIX of
Pub. L. 103-160:
(1) Where a ready market exists, complete screening and then sell
properties quickly for public or private development to speed up job
creation.
(2) Where a ready market does not exist, make property available to
the local redevelopment authority without initial consideration, for
economic development.
(3) Share the net profits between the Department of Defense and the
local redevelopment authority if a property conveyed without initial
consideration for economic development is subsequently leased or sold.
(c) 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
Pub. L. 103-160, Title XXIX.

Sec. 90.5 Responsibilities.

(a) The Under Secretary of Defense for Acquisition and Technology
shall issue DoD Instructions as necessary, to further implement the
President's Five-Part Plan and applicable public law, and shall monitor
compliance with this part. All authorities of the Secretary of Defense
in Pub. L. 103-160, Title XXIX, in section 2905 of Pub. L. 100-526,
Title II, and in section 204 of Pub. L. 101-510, Title XXIX are hereby
delegated to the Under Secretary of Defense for Acquisition and
Technology and may be redelegated.
(b) The Heads of the DoD Components shall advise personnel with
responsibilities related to base closures of the policies set forth in
this directive.
2. Part 91 is added to read as follows:

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.

Appendix A to Part 91--Flow Chart for Base Closure Community Assistance

Appendix B to Part 91--Closure and Transition Timeline for a Notional
BRAC 1993 Base That Closes on September 30, 1997

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

Sec. 91.1 Purpose.

This part prescribes procedures to implement ``Revitalizing Base
Closure Communities'' (Part 90), the President's five-part community
reinvestment program,\1\ and real and personal property disposal to
assist the economic recovery of communities impacted by base closures.
The expeditious disposal of real and personal property will help
communities get started with reuse early and is therefore critical to
timely economic recovery.
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Sec. 91.2 Applicability.

Sec. 91.3 Definitions.

(a) Base Closure Law. The provisions of Title II of the Defense
Authorization Amendments and Base Closure and Realignment Act (Pub. L.
100-526; 10 U.S.C. 2687 note), or The Defense Base Closure and
Realignment Act of 1990 (Part A of Title XXIX of the Pub. L. 101-510;
10 U.S.C. 2687 note).
(b) Closure. All missions of the base have ceased or have been
relocated. All personnel (military, civilian, and contractor) have
either been eliminated or relocated except for personnel required for
caretaking and disposal of the base or personnel remaining in
authorized enclaves.
(c) Consultation. Fully explaining and discussing an issue and
carefully 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
under Title XXIX of P.L. 101-510, 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. Authority to make this
determination rests with the Military Departments after screening the
property with the other Military Departments.
(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) Redevelopment authority. Any entity, including an entity
established by a State or local government, recognized by the Secretary
of Defense as the entity responsible for developing the redevelopment
plan with respect to the installation and 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) Vicinity. The county in which the installation is located and
the adjacent counties. An incorporated municipality shall be deemed to
be a county for this purpose, when, under State law, it is not part of
a county.

Sec. 91.4 Policy.

It is DoD policy to help communities affected by base closures
achieve rapid economic recovery through effective reuse of the assets
of closing bases--more quickly, more effectively and in ways based on
local market conditions and locally developed reuse plans. This will be
accomplished by:
(a) Selling properties quickly for public or private development to
speed up job creation where a ready market exists.
(b) Making property available without initial consideration for
economic development where a ready market does not exist.
(c) Sharing the net profits between the DoD and the local
redevelopment authority if a property conveyed without initial
consideration for economic development is subsequently sold or leased.

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 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 et seq.) for disposal of 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 redelegated to the Secretaries of the Military Departments,
who may redelegate further.
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\2\These documents available from the Office of the Assistant
Secretary of Defense (Economic Security), Pentagon, Washington, DC
20301.
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(b) Authorities delegated to the Under Secretary of Defense for
Acquisition and Technology by 32 CFR 90.5 are hereby redelegated to the
Secretaries of the Military Departments, unless otherwise provided
within this part. These authorities may be redelegated further.

Sec. 91.7 Procedures.

(a) Real property screening.
(1) When the Department of Defense no longer needs to retain real
property, the Department is required to dispose of the property in
accordance with the prescribed screening process in the General
Services Administration property disposal regulations and the expedited
process described in this part. This process permits DoD entities,
other Federal Agencies and homeless providers to identify property they
would like to acquire when the base closes. The Secretary concerned
will work with the other DoD Components, Federal Agencies, homeless
providers and reuse planners, early in the closure process, to sort out
these requests. This process will provide for the early identification
of property which will become available for reuse that is critical to
the local redevelopment authority's ability to develop a realistic
reuse plan.
(2) The Military Departments should complete the internal DoD real
property screening of closing and realigning base property:
(i) By April 1, 1994, for 1988, 1991 and 1993 closures and
realignments.
(ii) Within 4 months of the date of approval of the 1995 closures
and realignments.
(3) Military Departments should seek local redevelopment authority
input in making determinations on the retention of property and should
consider their input, if provided. Transfer of real property at closing
and realigning bases between any of the Military Departments, or
retention of real property at a closing base by a Military Department,
must be approved by the Assistant Secretary of Defense for Economic
Security, unless such a transfer has already been approved by the
Secretary of the Military Department concerned.
(4) Formal screening of real property excess to the DoD with other
Federal Agencies must be completed:
(i) By June 1, 1994, for 1988, 1991, and 1993 closures and
realignments unless the community requests a postponement of the
surplus determination as provided in paragraph (a)(7) of this section.
(ii) Within 6 months of the date of approval of the 1995 closures
and realignments unless the community requests a postponement as
provided in paragraph (a)(7) of this section.
(5) These timeframes afford Federal Agencies sufficient time to
assess their needs, submit initial expressions of interest to the
Department of Defense, and apply for the property. During this period,
Agencies sponsoring public benefit conveyances should also consider the
suitability for such purposes. The Military Departments should provide
other Federal Agencies as full and complete information as practicable
on the property in the Notice of Availability. Requests for transfers
of property submitted by other Federal Agencies will normally be
accommodated. Decisions on the transfer of property to other Federal
Agencies shall be made by the Military Department concerned in
consultation with the local redevelopment authority.
(6) Military Departments should make the notices of availability
available to the local redevelopment authorities, State and local
governments.
(7) Within the 6 month screening period in paragraph (a)(4) of this
section, the Military Departments shall consult with the local
redevelopment authority and make appropriate final determinations
whether a Federal Agency has identified a use for, or shall accept
transfer of, any portion of the property. If no Federal Agency requests
the property, the property shall be declared surplus. However, the
local redevelopment authority may request the Military Department
concerned to delay this final surplus declaration. All requests for
delay must be in writing and made before May 1, 1994 for 1988, 1991 and
1993 closures and realignments and within 5 months of the approval of
the 1995 base closures and realignments. If there is a Federal Agency
request for transfer, the Secretary concerned may postpone the
determination to transfer and the Secretary may also postpone the
determination of surplus for all or any part of the property at the
installation for such period as the Secretary concerned determines is
in the best interest of the communities affected by the closure of the
installation.
(8) Screening of real property with State and local government
agencies shall take place concurrently with McKinney Act screening. The
screening notice should state:
Uses to assist the homeless shall take precedence unless the
Secretary concerned or the Secretary of Health and Human Services (HHS)
determines that a competing request under 40 U.S.C. 484(k) is so
meritorious and compelling as to outweigh the needs of the homeless.
(9) Withdrawn public domain lands are those lands which have been
transferred from the Department of Interior to a Military Department
for its temporary use.
(i) These lands on closing or realigning bases are to be returned
to the Secretary of Interior when the Secretary of the Military
Department concerned no longer has need for these lands, if they are
still suitable for the programs of the Secretary of Interior.
(ii) The Military Department concerned will notify the Secretary of
Interior, normally through the Bureau of Land Management (BLM), when
withdrawn public domain lands are included within an installation to be
closed.
(iii) The Bureau of Land Management will screen these lands within
the Department of Interior to determine if these lands are suitable for
return to the Department of Interior.
(iv) If the lands are not suitable for the programs of the
Secretary of Interior, the Bureau of Land Management will so notify the
Military Department and state that these lands should be processed as
the other real property on the base.
(v) The Military Department will notify the Bureau of Land
Management that it concurs with the determination and will proceed in
accordance with the real property screening procedures described in
this section.
(b) McKinney Act Screening.
(1) The Stewart B. McKinney Homeless Assistance Act, as amended (42
U.S.C. 11301), is a statute designed to permit HHS-approved providers
of assistance to the homeless to receive a high priority in acquiring
unneeded land and buildings on Federal properties. Buildings and land
on closing bases provide excellent opportunities for homeless providers
to acquire the land and buildings they need to establish their
programs. This section describes the new process specifically tailored
for base closure properties that will expedite the screening process
with homeless providers and will result in the early identification of
their needs. The Military Departments will work with communities to
identify eligible entities and conduct timely outreach seminars to
educate homeless providers with respect to the land and buildings that
will be made available and the process for making a formal application
to the Department of Health and Human Services (HHS). The early
identification of homeless assistance requirements for land and
buildings at closing bases will permit communities to develop reuse
plans that fully accommodate homeless needs, while permitting early
identification of the remaining property for either quick sale for job
creation, a federally sponsored public benefit conveyance or conveyance
to a local redevelopment authority for economic development purposes.
(2) The Department of Housing and Urban Development (HUD) is
required to publish by February 15 of each year a list of all the
properties which were published in accordance with the McKinney Act in
the previous calendar year. For the purpose of reporting properties to
HUD pursuant to the new expedited McKinney screening process described
in this section, the Military Departments should report only those
properties which remain available as of the reporting date. For the
purposes of the new expedited McKinney Act screening process:
(i) Properties listed by HUD in the annual report for which an
expression of interest has been received by HHS from a homeless
provider, but a final HHS determination has not yet been made, shall be
reported for screening under the new procedures in paragraphs (b) (3)
through (11) of this section.
(ii) Properties listed by HUD in the annual report for which no
expression of interest has been received by HHS from a homeless
provider and for which the Department of Defense has received no
expression of interest or bona fide offer in accordance with the
provisions of section 501(c)(4)(C) of the McKinney Act, shall be
reported in accordance with the procedures in paragraphs (b) (3)
through (11) of this section.
(iii) Properties listed by HUD in the annual report for which no
expression of interest has been received by HHS from a homeless
provider and for which the Department of Defense has received an
expression of interest or bona fide offer in accordance with the
provisions of section 501(c)(4)(C) of the McKinney Act, shall not be
reported in accordance with the procedures in paragraphs (b) (3)
through (11) of this section.
(iv) 1988 and 1991 base closure and realignment properties which
remain available shall be reported to HUD in accordance with the new
expedited procedures in paragraphs (b) (3) through (11) of this
section.
(3) Under the new expedited McKinney Act screening process, the
Military Departments shall sponsor a workshop or seminar in communities
having closing or realigning bases before reporting to HUD. All
available property at closing and realigning bases that will become
surplus to Federal Agency needs will be reported to HUD:
(i) By June 1, 1994, for the 1988, 1991, and 1993 closures and
realignments, unless the community requests a postponement of the
declaration of surplus under paragraph (a)(7) of this section.
(ii) Within 6 months of the date of approval of the 1995 base
closures and realignments unless the community requests a postponement
of the declaration of surplus under paragraph (a)(7) of this section.
(4) HUD shall make a determination of the suitability of each
property to assist the homeless in accordance with 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.
(5) Providers of assistance to the homeless shall then have 60 days
in which to submit to HHS expressions of interest 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
notice 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.
(6) During the new expedited McKinney Act property screening
process (from 60 to 175 days following 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.
(iii) HHS rejects all applications received for a specific
property.
(7) If no provider expresses an interest to HHS in a property
within the allotted 60 days, the Military Department should promptly
inform the affected local redevelopment authority, the Governor of the
State, the local governments, and Federal Agencies that support
authorized public benefit conveyances, of the date the surplus property
will be available for community reuse. The local redevelopment
authority shall then have 1 year to submit a written expression of
interest to incorporate the remainder of the property into its
redevelopment plan.
(8) If there are expressions of interest by homeless assistance
providers, but no application is received by HHS from such a provider
within the subsequent 90-day application period (or within the longer
application period if HHS has granted an extension), the Military
Department should promptly inform the local redevelopment authority,
the Governor of the State, and Federal Agencies that support authorized
public benefit conveyances, of the date the surplus property will be
available for community reuse. The local redevelopment authority shall
then have 1 year to submit a written expression of interest to
incorporate the remainder of the property into its redevelopment plan
for the base.
(9) If at any time during the 25 day HHS review period HHS rejects
all applications for a specific property, the Military Department
should promptly inform the local redevelopment authority, the Governor
of the State, and Federal Agencies that support authorized public
benefit conveyances, of the date the surplus property will be available
for community reuse. The local redevelopment authority shall then have
1 year to submit a written expression of interest to incorporate the
remainder of the property into its redevelopment plan for the base.
(10) During the allotted 1-year period for the local redevelopment
authority 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, unless such homeless assistance is
included in the local redevelopment authority's plan. 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 to any entity, including local redevelopment authorities as
deemed appropriate by the Secretary of the Military Department
concerned.
(11) If the local redevelopment authority does not express in
writing its interest in a specific property during the allotted 1-year
period, 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 previous McKinney Act procedures.
(12) The listing of base closure property from the 1991 and
subsequent rounds of base closures reported to HUD shall contain the
following statement:
The properties contained in this listing are closing or realigning
military installations. This report is being accomplished pursuant to
Pub. L. 103-160, section 2905(b). In accordance with section 2905(b),
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.
(13) The list of 1988 base closure properties that will be reported
to HUD shall contain the same statement as paragraph (b)(12) of this
section, and shall refer to section 2905(a) of the Act (107 Stat.
1916).
(c) Local redevelopment plan.
(1) The early formation of a redevelopment authority is critical to
the successful reuse of the base. The primary focus of the
redevelopment authority should be developing a comprehensive local
redevelopment plan. This plan should embrace the range of feasible
reuse options that will result in rapid job creation. The local
redevelopment plan will generally be used as the proposed action in
conducting environmental analyses required by the National
Environmental Policy Act of 1969 (NEPA), (42 U.S.C. 4332 et seq.).
(2) Although the statute only requires the local redevelopment
authority to submit a written expression of interest within 1 year
after the date the property is released from McKinney Act screening,
the local redevelopment plan should be prepared within that 1 year
period. The plan should at a minimum identify:
(i) Parcels recommended to be transferred to other Federal Agencies
(whether or not a specific request for such transfer was made by the
Agency during the screening period) and their intended uses.
(ii) Parcels recommended to be transferred or conveyed for uses
such as homeless assistance, public benefit purposes, or other
qualifying public purpose conveyance programs and their intended uses.
(iii) Parcels, and their intended uses, recommended to be conveyed
by:
(A) Negotiated sale at estimated fair market value.
(B) Conveyance without initial consideration to local redevelopment
authorities, with or without recoupment, as provided in this part.
(iv) The plan should discuss how it will enhance the prospects for
economic development and job creation, if the redevelopment authority
intends to request an economic development conveyance.
(d) Jobs-centered property disposal.
(1) The new property disposal process described in this section and
in paragraphs (e) and (f) of this section which follow, is designed to
rapidly create new jobs, either by taking advantage of a ready market
for development of valuable property or by inducing a market through
conveyances for economic development, initially without consideration.
The procedures described below generally apply to 1993 and 1995 base
closures and may not apply to 1988 and 1991 closures which may be well
along in the disposal process.
(2) The Military Departments should identify properties with
potential for rapid job creation and begin, as soon as possible, but
not later than completion of the new expedited McKinney Act screening
(paragraph (b) of this section), an appraisal or other estimate of the
property's fair market value. Such appraisals or estimates should
address a range of likely market values taking into account: feasible
uses for the property; the uncertainties in property development; and,
current market conditions (i.e., recognizing the state of the market
after a closure announcement). The appraisals should not be based on
the replacement cost of the properties, since they may not be readily
adaptable for civilian use. Additionally, the appraisal should not be
based on the highest and best use, but the most likely range of uses
consistent with local interests. The above appraisal may be
accomplished for 1988 and 1991 closures if it is determined that it
would be beneficial to do so and will not delay the disposal process.
(3) To assist in the appraisal/estimation of fair market value of
properties with a potential for rapid job creation, and to determine if
interests exist in properties not originally identified for rapid job
creation, the Military Departments shall, for 1993 and 1995 closures,
advertise for expressions of interest in all or any substantial part of
each closing installation. For the 1993 and 1995 closures, the Military
Departments shall advertise at the completion of the new expedited
McKinney Act screening process (see paragraph (b) of this section). The
Military Departments may advertise for expressions of interest in all
or any substantial part of each closing installation on the 1988 or
1991 closure lists if it is determined that it would be beneficial to
do so and will not delay the disposal process.
(i) Advertisements for expressions of interest shall be open for 6
months. Expressions of interest received should detail the intended
use, the site plan, the jobs estimated to be created, the schedule for
development and hiring, and an evaluation of the worth of the land and
buildings. Expressions of interest will be shared with the local
redevelopment authority. Advertisements for expressions of interest
will be conducted simultaneously with all other disposal actions and
are not an additional step in the disposal process.
(ii) The Military Departments shall analyze each expression of
interest and determine within 30 days of receipt if it is made in good
faith and represents a reasonable development proposal. If the Military
Department decides that an expression of interest received demonstrates
the existence of a ready market, the prospect of job creation, and
offers proceeds consistent with the range of estimated fair market
value, it may decide to offer the property for sale. The property
proposed for sale shall promptly be publicly identified, and the
redevelopment authority shall be notified. The redevelopment authority
may request reconsideration of this decision under paragraph (d)(5) of
this section. Potential offerors will be encouraged to work with the
redevelopment authority so that their development goals will be
compatible with the local redevelopment plan.
(iii) If a redevelopment plan has not been completed, the
redevelopment authority will be encouraged to include the potential for
sale of the property identified by the Military Department under
paragraph (d)(3) of this section, in the plan. The DoD Component will
evaluate whether the potential sale of the identified property is
covered by any ongoing environmental analyses required by the National
Environmental Policy Act (NEPA). Based on this evaluation,
consideration can be given to integrating the potential sale into the
existing analyses or preparing additional analyses required by law or
otherwise deemed appropriate. The environmental impact statement shall,
to the extent practicable, be completed within 12 months, or a Finding
of No Significant Impact issued within 6 months, of the public
announcement identifying the property proposed for sale.
(4) A few high value installations for which a ready market
apparently exists may, nevertheless, not have generated any expressions
of interest during the allotted 6 month period. Regardless, such
installations provide an opportunity for private sector rapid job
creation which should be pursued. In these cases, the Military
Departments, based on completed appraisals or other estimates of the
fair market value, shall inform redevelopment authorities that the
property is expected to be offered for sale and an economic development
conveyance should not be anticipated. Redevelopment authorities shall
be so informed as soon as possible, but not later than 6 months after
completion of the McKinney Act screening process. In making these
determinations, airport, port, and school property may be excluded if
it appears that they are likely to be converted to public airports,
ports or schools under existing public benefit conveyance programs. The
determination that an installation will be sold under paragraph (d)(4)
of this section has 2 components:
(i) The property must have a high value.
(ii) There must be a ready market. Ready market means that offers
to purchase at or near the estimated range of fair market value from
the private sector covering all or most of the installation could be
expected within 6 months of advertising the base for public sale.
(5) Within 60 days of the announcement by the Secretary of the
Military Department concerned of the intention to sell property in
accordance with paragraph (d)(3) or (d)(4) of this section, the
authorized local redevelopment authority may request, in writing, that
this determination be reconsidered. The Secretary shall consider the
request, provide a final determination in writing to the local
redevelopment authority and announce this determination publicly.
(6) Identification of an installation or property for sale under
this section does not preclude a community's acquisition of property
for the estimated fair market value.
(7) The provisions of this section may not be appropriate for some
of the 1988 and 1991 base closures and realignments because these bases
are so far along in the property disposal process that certain actions
have been taken or agreed to that are inconsistent with the new
procedures. In cases of 1988 and 1991 closures where this new property
disposal process is considered not appropriate, the Secretary concerned
shall request a waiver from the ASD(ES) before proceeding with the
disposition of the property.
(e) Economic development conveyances.
(1) Closing military bases often have a great deal of land that may
not be readily developable or marketable due to its location.
Additionally, closing bases often have buildings that may need to be
demolished in order to encourage redevelopment and economic
revitalization. Historically, the process of selling bases, or parts
thereof, for fair market value has been time consuming and the proceeds
from the sales of base closure properties have been less than
originally anticipated. In the past, the law permitted the Department
of Defense to convey property at a discount of up to 100% (free of
charge) for specific public purposes such as health, aviation,
recreation, and education--but not for economic development. The new
process that follows permits the DoD to convey land and buildings to
redevelopment authorities with no consideration, subject to recoupment,
after it is determined that the base, or significant portions thereof,
cannot be sold in accordance with the rapid job creation concept. Such
conveyances may help induce a market for the property, thereby,
enhancing economic recovery. Redevelopment authorities shall submit a
simple written request containing four basic elements as described in
paragraphs (e)(5)(i) through (e)(5)(iv) of this section. Generally,
installations will be conveyed at no initial cost with a recoupment
provision that shall permit DoD to share in any future profits should
the base be later leased or sold. Bases in rural areas shall be
conveyed under this authority with no recoupment if they meet the
standards in paragraph (e)(6) of this section. The conveyance for
economic development should be used by local redevelopment authorities
to gain control of large areas of the base, not just individual
buildings. The income received from some of the higher value property
should help offset the maintenance and marketing costs of the less
desirable parcels. In order for this conveyance to spur redevelopment,
large parcels must be used to provide an income stream to assist the
long term development of the property.
(2) The Secretary of Defense is authorized by Pub. L. 103-160,
Section 2903 to convey real property at an installation to be closed to
the local redevelopment authority for economic development (an economic
development conveyance). The conveyance of property may be for
consideration at or below the estimated fair market value, or without
consideration. The consideration, if any, can be paid in cash or in
kind. Property to be transferred pursuant to Public Law 103-160,
section 2903, will be conveyed with no consideration, subject to
recoupment as described in paragraph (f) of this section.
(3) The economic development conveyance authority is an addition to
existing public benefit authorities and, generally, should not be used
when these public benefit authorities would apply. The Military
Departments shall prepare a written explanation why a transfer was made
using this economic development conveyance authority for what appears
to be a purpose covered by an existing public benefit authority.
(4) Before making an economic development conveyance of real
property, an appraisal or other estimate of the property's fair market
value shall be made, based on the proposed reuse of the property. The
Military Department shall consult with the local redevelopment
authority on appraisal assumptions, guidelines and on instructions
given to the appraiser, but shall be fully responsible for completion
of the appraisal. When a property is conveyed for economic development
with no initial consideration, the Military Department shall prepare a
written explanation why the estimated fair market value was not
received and retain it in their real property files.
(5) Property may be conveyed under Pub. L. No. 103-160 to an
authorized local redevelopment authority for economic development
following submission of a written request to the Secretary of the
Military Department concerned disposing of the property. The requests
should contain the following elements:
(i) Description of the property to be conveyed.
(ii) Statement of the local redevelopment authority's legal
authority to acquire and dispose of property under the laws of the
governing State.
(iii) A redevelopment plan that includes economic development and
job creation.
(iv) A statement explaining why existing public benefit conveyance
authorities are not appropriate.
(6) Installations located in rural areas are of particular concern.
An economic development conveyance may be made without consideration
and without recoupment in a rural area when the base closure will have
a substantial adverse impact on the economy of the local community and
on the prospect of its economic recovery from the closure. To determine
whether a rural community is eligible for transfer under this section,
the Secretary concerned shall first determine whether the closure will
have a substantial adverse impact on the prospect for economic recovery
by determining whether there is a market for the property. The closure
may be determined to have substantial adverse impact if after
advertising for expressions of interest pursuant to paragraph (d) of
this section, no expressions of interest are received. No expressions
of interest to purchase the property signifies that public or private
developers will not be able to provide jobs and economic growth
sufficient to provide timely recovery from closure without assistance.
The second step requires the Secretary concerned to make a
determination that the base closure will have a substantial adverse
impact on the economy of the communities in the vicinity of the
installation. In these cases, the base shall be offered to the local
redevelopment authority for conveyance without consideration and
without recoupment (subject to paragraph (f)(5) of this section).
(7) The provisions of this section may not be appropriate for some
of the 1988 and 1991 base closures and realignments, because these
bases are so far along in the property disposal process that certain
actions have been taken or agreed to that are inconsistent with the new
procedures. In cases where the new property disposal process is not
appropriate, the Secretary concerned shall request a waiver from the
ASD(ES) before proceeding with the disposition of the property.
(f) Profit sharing.
(1) When real property is conveyed as described in paragraph (e) of
this section, the Department of Defense shall generally share in the
division of future profits should the property be subsequently sold or
leased. The division of profits shall be based on net profits and the
share shall generally favor the local redevelopment authority. There
shall be a 15-year time limit on the share of the profits. The
government's portion of the receipts from the profit shall not exceed
the fair market value of the property at the time it was conveyed to
the local redevelopment authority.
(2) Properties conveyed under the authority of Pub.L. 103-160,
section 2903, to local redevelopment authorities under an economic
development conveyance that are subsequently sold or leased shall be
subject to recoupment (profit sharing) by the Department of Defense,
except as provided in paragraph (e)(6) of this section. In the absence
of a determination by the Secretary of the Military Department
concerned that a different division of the net profits is appropriate
because of special circumstances, the net profits shall be shared on a
basis of 60 percent to the local redevelopment authority and 40 percent
to the Department of Defense. The purpose of this recoupment policy is
to allow the local redevelopment authority to benefit from the success
of its efforts and from value created from zoning. Eliminating the
requirement for initial consideration also frees the local
redevelopment authority's income stream for use in funding
infrastructure improvements needed to develop the property and increase
its value. Sharing the profits, when they occur, will provide a return
to the taxpayers for the property they originally paid for, without
unduly burdening the community.
(3) The total recoupment by the Government shall not exceed the
fair market value of the property (or the top end of the range of
values) calculated at the time of conveyance to the local redevelopment
authority.
(4) The standard excess profits covenant promulgated by the General
Services Administration (GSA) at 41 CFR 101-47.4908 shall be used as a
model deed provision to implement this recoupment policy, recognizing
that the GSA provision will require tailoring for each parcel. The
following changes and additions are required:
(i) The deed provision will express the profit sharing established
under paragraph (f)(2) of this section, unless explicitly modified by
the Secretary of the Military Department concerned.
(ii) The term of this deed provision in economic development
conveyances will be 15 years unless released earlier by the government
upon satisfaction of the recoupment requirement. The disposing Military
Department will provide a statement, for use at any settlement, on the
local redevelopment authority's compliance with the deed provision. The
Military Department will formally release the provision when the
government has received its share of the sale proceeds.
(iii) The deed provision will forbid ``straw'' transactions (sales
or leases to a cooperating party at a nominal price), transactions at
other than arm's length, and other devices designed to circumvent the
Government's recovery of its share of the net profits. The purpose of
this clause of the deed provision is to provide a basis for the
government to intervene if it appears that a transaction may adversely
affect its interests.
(iv) In calculating the amount of any net profit from a sale or
lease, the local redevelopment authority may include:
(A) Capital costs, as provided in 41 CFR 101-47.4908(b).
(B) Direct and indirect costs related to the particular property
and transaction that are otherwise allowable under 48 CFR part 31
including the allocable costs of operation of the local redevelopment
authority with regard to that property.
(v) The annual report required by the GSA provision will be
deleted, and a clause requiring notification to the disposing Military
Department of sales or leases will be substituted. The notice of sale
or lease will be accompanied by an accounting or financial analysis
indicating the net profit, if any, from a sale, or the estimated annual
profit from a lease. The accounting or financial analysis, and any
other aspect of a transaction by the local redevelopment authority with
respect to property transferred under this part, is subject to
Department of Defense audit.
(5) The Military Department concerned is authorized to negotiate an
up-front settlement of projected recoupment revenues from a conveyance
under this section when such settlement is requested by the
redevelopment authority.
(6) The provisions of this section may not be appropriate for some
of the 1988 and 1991 base closures and realignments, because these
bases are so far along in the property disposal process that certain
actions have been taken or agreed to that are inconsistent with the new
procedures. In cases where the new property disposal process is not
appropriate, the Secretary concerned shall request a waiver from the
ASD(ES) before proceeding with the disposition of the property.
(g) Leasing of real property.
(1) Leasing of real property is an effective way to quickly attract
new jobs to replace those that have been lost by the base closing. In
the past, the requirement to lease at fair market value discouraged the
creation of new jobs. The new process of leasing, at less than fair
market value, where appropriate, will provide new incentives for
redevelopment authorities and businesses alike to spur job creation and
speed economic redevelopment.
(2) The Secretaries of the Military Departments are authorized by
Pub. L. 103-160, section 2906 to lease real and personal property at
closing or realigning bases for consideration of less than the
estimated fair market value, if the Secretary concerned determines:
(i) That a public interest will be served as a result of the lease.
(ii) That securing the estimated fair market rental value from the
lease is not compatible with such public interest.
(3) The Military Departments shall determine the environmental
suitability of property to be leased using the procedures in the DoD
policy entitled ``Procedures for Finding of Suitability to Lease
(FOSL)'' contained in the Deputy Secretary of Defense Memorandum,\2\
``Fast Track Cleanup at Closing Installations'', September 9, 1993, and
any amendments thereto. Regulatory consultation (Environmental
Protection Agency (EPA) and State government) must be completed before
entering into any leases, as specified in the FOSL guidance and when
approved, the Memorandum of Understanding between DoD and EPA will
confirm the FOSL process.
---------------------------------------------------------------------------

\2\Document available from the Office of the Deputy Under
Secretary of Defense (Environmental Security), Pentagon, Washington,
DC 20301.
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(4) The Military Departments are encouraged to redelegate leasing
authority to the level that can best respond to local redevelopment
needs and still exercise prudent and consistent stewardship over these
public assets.
(h) Personal property.
(1) Personal property located on closing bases is often very useful
to the redevelopment of the real property. This section outlines
procedures to allow transfer of personal property with the real
property in many cases. It provides for completing an inventory soon
after the base is approved for closure, consulting with local
officials, and a walkthrough of the base. The community can then
identify the personal property it wishes to retain in its redevelopment
plan. The Department of Defense will keep a great deal of the personal
property at the base while the redevelopment plan is being put
together. Only valid exemptions will be made to this freeze, usually
involving specific military requirements or property which the base
does not own. Emissions trading procedures will be issued separately
and are not covered by the part.
(2) Each Military Department and Defense Agency, as appropriate,
shall take an inventory of the personal property, to include its
condition, at closing or realigning bases as early in the closure
process as possible. At realigning bases, the inventory shall be
limited to the personal property located on the real property to be
disposed of by the Military Department or Defense Agency. The purpose
of the inventory is to identify personal property--any property except
land, fixed-in-place buildings, ships, and Federal records--that could
enhance the reuse potential of real property that may be conveyed to
the local redevelopment authority for supporting the economic
redevelopment of the base. The exempted categories of personal property
listed in paragraph (h)(5) of this section shall not be subject to
review by the community. The inventory must be completed by June 1,
1994, for 1988, 1991 and 1993 closures and realignments or within 6
months after the date of approval of 1995 closures.
(3) The inventory shall be taken in consultation with local
redevelopment authority officials. If no local redevelopment authority
exists, consultation shall be offered to the local government in whose
jurisdiction the installation is wholly located, or a local government
agency or State government agency designated for the purpose of such
consultation by the chief executive officer of the State. Based on
these consultations, the base commander is responsible for determining
the items or category of items potentially enhancing the reuse of the
real property and needed to support the redevelopment plan. When the
inventory is completed, base personnel shall offer a ``walkthrough''
with representatives of the local redevelopment authority so that they
can see the type and condition of the property available for reuse.
Disagreements should be resolved within the chain-of-command, with
final authority on resolving personal property issues resting with the
Secretary of the Military Department or Defense Agency Director
responsible for the real property. This authority may be further
delegated.
(4) The Military Departments should make every reasonable effort to
assist affected communities in obtaining the personal property needed
to convert the bases into economically-viable enterprises. Personal
property not subject to the exemptions in paragraph (h)(5) of this
section shall remain at a closing or realigning base until one of the
following time periods expire (whichever comes first):
(i) One week after the date on which the redevelopment plan is
submitted to the applicable Military Department.
(ii) The date on which the local redevelopment authority notifies
the applicable Military Department that a plan will not be submitted.
(iii) Twenty-four months after the dates referred to in paragraph
(h)(2) of this section which for 1988, 1991 and 1993 base closures and
realignments is November 30, 1995, or 24 months after the date of
approval of the 1995 closures and realignments.
(iv) Ninety days before the date of the closure or realignment of
the installation.
(5) Personal property may be removed without regard to these time
periods upon approval of the base commander, or higher authority within
the Military Department, and after notice to the local redevelopment
authority, if the property:
(i) Is required for the operation of a unit, function, component,
weapon, or weapon system transferring to another installation. A
transferring unit or function may take with it any property needed to
function properly as soon as it arrives, provided that suitable
replacement equipment will not be readily obtainable there and moving
it is cost-effective. In addition to this authority for the
transferring unit or function to remove personal property, the major
command having jurisdiction over the installation (e.g., the Army's
Forces Command or the Air Force's Air Combat Command), or the major
claimant having jurisdiction over the installation (e.g., the Navy's
U.S. Atlantic Fleet) also may remove property that is needed
immediately and is indispensable to an organization under its
jurisdiction at another installation for carrying out the
organization's primary mission.
(ii) 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). 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 fit this exception.
(iii) Is not required for the reutilization or redevelopment of the
installation (as jointly determined by the Military Department
concerned and the redevelopment authority).
(iv) Is stored at the installation for distribution (including
spare parts or stock items). This exception includes materials or parts
used in a manufacturing or repair function but does not include
maintenance spares for equipment to be left in place.
(v) Meets known requirements of an authorized program of another
Federal Department or Agency for which expenditures for similar
property would be necessary, and is the subject of a written request
received from the head of the Department or Agency. In this context,
``expenditures'' 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.
(vi) Belongs to nonappropriated fund instrumentalities (NAFI). NAFI
property may be removed at the Military Departments' discretion,
because NAFI property belongs to the Service members collectively and
is not government property. Therefore, it may not be transferred to the
local redevelopment authority under this section. Separate arrangements
for communities to purchase NAFI property are possible and may be
negotiated with the Military Department concerned.
(vii) 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.
(6) Personal property to be transferred to the local redevelopment
authority in support of its redevelopment plan is not subject to
sections 202 and 203 of Public Law 81-152, ``Federal Property and
Administrative Services Act of 1949, as amended'' of June 30, 1949, 40
U.S.C. 483-484. If the real property is transferred without
consideration, the personal property shall also be transferred without
consideration. If the real property is transferred at or near estimated
fair market value, the value of the personal property shall be included
in the estimated fair market value of the real property. If the
property is conveyed separately from the real property, the value of
the personal property shall be that at which it is carried on the
installation's property account or estimated fair market value as
agreed to between the parties at the time of transfer.
(7) In addition to the exemptions in paragraph (h)(5) of this
section, the Military Department or Defense Agency is authorized to
substitute an item similar to one requested by the redevelopment
authority. The substitute items may be drawn from another installation
or from the Defense Reutilization and Marketing Service. It is the
responsibility of the Military Department or Defense Agency that owns
the property to find a similar item that may be suitable as a
substitute. In this context, ``similar'' means the original and the
proposed substitute item are designed and constructed for the same
specific purpose. However, before substituting another item for the one
being requested, the base commander shall consult with the
redevelopment authority.
(8) Personal property that is not needed by a major command (or its
subordinates), a Federal Agency, or a local redevelopment authority (or
a State or local jurisdiction in lieu of a local redevelopment
authority) shall be transferred to a Defense Reutilization and
Marketing Office for processing in accordance with the Federal Property
and Administrative Services Act of 1949, as amended, 40 U.S.C. 483 et
seq.
(i) Minimum level of maintenance and repair to support nonmilitary
purposes.
(1) Facilities and equipment located on closing bases are often
important to the eventual reuse. This section provides procedures to
protect their condition while the redevelopment plan is being put
together. The level of maintenance will be determined in consultation
with the redevelopment authority.
(2) Public Law 103-160, section 2902 states that the Secretary may
not reduce the level of maintenance and repair of facilities or
equipment at the installation below the minimum levels required to
support the use of such facilities or equipment for nonmilitary
purposes, except when the Secretary of the Military Department
concerned determines that such reduction is in the National Security
interest of the United States. This requirement remains in effect until
one of the time periods in paragraph (h)(4) of this section has
expired.
(3) The initial minimum level of maintenance and repair to support
non-military purposes shall be determined during consultation between
the Military Department and the redevelopment authority. This level and
the property to which it applies shall be reviewed with the local
redevelopment authority when it presents its final development plan.
Where agreement cannot be reached, the Secretary of the Military
Department concerned shall determine the level of maintenance required.
In no case shall the level of maintenance and repair:
(i) Exceed the standard at the time of approval of the closure or
realignment.
(ii) Require any improvements to the property to include
construction, alteration, or demolition, except that required by
environmental restoration.
(4) The negotiated minimum maintenance agreement must be tailored
to the specific non-military uses, but shall include the following:
(i) Maintaining the facilities and equipment that are likely to be
utilized in the near term at a level that shall prevent undue
deterioration and allow transfer to the local redevelopment authority.
(ii) Not delaying the scheduled closure date of the installation.

Dated: March 31, 1994.

BILLING CODE 5000-04-M

Appendix A to Part 91

TR06AP94.003

BILLING CODE 5000-04-C

Appendix B to Part 91.--Closure and Transition Timeline for a Notional Brac 1993 Base That Closes on September 30, 1997
[Dates are completion dates--First of the month]
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1993 1994 1995 1996 1997 1998 1999
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1. Closure approved................................... Dec.........
2. Real property screening:
a. Within DoD..................................... ............ Apr.........
b. With other Federal Agenices.................... ............ June........
c. State and Local (public benefit conveyances)... ............ June........
3. McKinney Act screening:
a. MiDeps report surplus to HUD................... ............ June........
b. HUD publishes list of suitable prop............ ............ Aug.........
c. Providers express interest..................... ............ Oct.........
d. Applications submitted to HHS.................. ............ ............ Jan.........
e. HHS approves/disapproves application........... ............ ............ Feb.........
f. RDA expresses interest in unclaimed property ............ ............ ............ Feb.........
(remaining surplus property relisted by HUD).
4. Jobs-centered property disposal:
a. Begin appraisals of properties with job ............ June........
potential.
b. Advertise for expressions of interest.......... ............ Oct.........
c. MilDeps notify RDA of bases to be sold......... ............ ............ Apr.........
d. RDA ask MilDep to reconsider................... ............ ............ June........
5. Local redevelopment plan completed................. ............ ............ ............ Feb.........
6. Conveyance of real property:
a. Leases (FOSL), as available.................... ............ June........
b. Clean parcel (CERFA) identification............ ............ ............ Dec.........
c. EIS Completed (ROD)............................ ............ ............ ............ ............ Feb.........
d. Transfer/Sale (FOST)--parcels or whole, as ............ ............ ............ ............ ............ Mar......... (and
available. beyond).
7. Personal property:
a. Inventory complete............................. ............ June........
b. Longest personal property can be frozen........ ............ ............ ............ June........
8. Base Closes (missions leave)....................... ............ ............ ............ ............ ............ Sept .......
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[FR Doc. 94-8114 Filed 4-5-94; 8:45 am]
BILLING CODE 5000-04-M

Visit the Official Version

Document Information

Effective Date:: 4/6/1994
Published:: 04/06/1994
Department:: Defense Department
Entry Type:: Uncategorized Document
Action:: Interim final rule.
Document Number:: 94-8114
Dates:: This document is effective April 6, 1994. Comments must be received by July 5, 1994.
Pages:: 0-0 (1 pages)
Docket Numbers:: Federal Register: April 6, 1994, RINs 0790-AF61 and 0790-AF62
CFR: (12): 32 CFR 90.1; 32 CFR 90.2; 32 CFR 90.3; 32 CFR 90.4; 32 CFR 90.5; More ...