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Revitalizing Base Closure Communities and Addressing Impacts of Realignment
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: February 28, 2006 (Volume 71, Number 39)]
[Rules and Regulations]
[Page 9910-9927]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe06-8]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Parts 174, 175, and 176
DOD-2006-OS-0020
[RIN 0790-AH91]
Revitalizing Base Closure Communities and Addressing Impacts of Realignment
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: The Department of Defense (DoD) is amending its regulations
governing the disposal of property at installations being closed and
realigned and how to address the impacts of realignment at receiving
installations. This final rule contains amendments to address changes
in the laws governing base closure and realignment (BRAC) made since
the current regulations were promulgated. This final rule also amends
DoD policy and addresses various environmental requirements not
previously addressed in the regulations.
DATES: Effective Date: This final rule is effective on February 28, 2006.
FOR FURTHER INFORMATION CONTACT: Mr. Steven N. Kleiman at (703) 571-9085.
SUPPLEMENTARY INFORMATION:
Preamble Outline
I. Authority
II. Background
III. Summary of Significant Changes to the Final Rule
IV. Response to Comments
A. General
B. Definitions
C. Policy
D. Responsibilities
E. LRA and the Redevelopment Plan
F. Retention for DoD Component Use and Transfer to Other Federal
Agencies
G. Screening Properties After Declaration of Surplus
H. Economic Development Conveyances
I. Leasing of Real Property to Non-Federal Entities
J. Leasing of Transferred Real Property by Federal Agencies
K. Personal Property
L. Maintenance and Repair
M. Indemnification Under Section 330 of the National Defense
Authorization Act for Fiscal Year 1993
N. Real Property Containing Explosive or Chemical Agent Hazards
O. NEPA
P. Historic Preservation
V. Administrative Requirements
A. Regulatory Impact Analysis Pursuant to Executive Order 12866
B. Regulatory Flexibility Act
C. Unfunded Mandates
D. Paperwork Reduction Act
E. National Technology Transfer and Advancement Act
F. Environmental Justice Requirements Under Executive Order 12898
G. Federalism Considerations Under Executive Order 13132
I. Authority
This action is authorized by the Defense Base Closure and
Realignment Act of 1990, Title XXIX of the National Defense
Authorization Act for Fiscal Year 1991, Pub. L. 101-510; the Base
Closure Community Redevelopment and Homeless Assistance Act of 1994,
Pub. L. 103-421; the Military Construction Authorization Act for Fiscal
Year 1994, Division B of Pub. L. 103-160; and 10 U.S.C. Sec. 113.
II. Background
The Department of Defense (hereinafter the Department) developed
the original rule, which this rule would amend, in conjunction with
prior rounds of base closures and realignments. The Department
published this amendment in the Federal Register as a proposed rule on
August 9, 2005, at 70 FR 46116.
In the preamble for the proposed rule, the Department explained
that the rule was a counterpart to two Department issuances: DoD
Directive 4165.66, Revitalizing Base Closure Communities and Community
Assistance, and DoD Instruction 4165.67, Revitalizing Base Closure
Communities--Base Closure Community Assistance. The Department further
advised that these two issuances were being revised in conjunction with
the proposed rule. During the public comment period, the Department
further considered the need for such counterpart issuances and
determined that there was no need for either the DoD Directive or the
DoD Instruction. Consequently, DoD Directive 4165.66 and DoD
Instruction 4165.67 have been canceled. For purposes of ensuring the
necessary and appropriate delegations of authority, DoD Directive
5134.01, Under Secretary of Defense for Acquisition, Technology, and
Logistics (USD (AT&L)), has been revised to include delegation language
specific to the base closure process. The cancellations of DoD
Directive 4165.66 and DoD Instruction 4165.67 do not affect in any way
the validity, applicability, or enforceability of the rule but merely
reduces the number of additional internal publications issued by the
Department.
The public comment period for the proposed rule ended October 11,
2005. Thirty-one commenters submitted comments on the proposed rule.
Several commenters submitted comments after the close of the public
comment period; to the extent the Department was able to respond to
these comments without significantly interfering with the timely
publication of this final rule, those comments were also considered.
The preamble to this final rule consists mainly of an explanation of
the Department's responses to these comments. Therefore, both this
preamble and the preamble to the proposed rule should be reviewed
should a question arise as to the meaning or intent of the final rule.
The preamble to the final rule provides a discussion of each
proposed rule section on which comments were received. Where changes in
the rule are being made, specific reference is made to those changes in
the discussion. Where no such specific reference is made in the
discussion, no change to the rule is being made. Revisions to the
proposed rule that are simply editorial or that do not reflect
substantive changes are not addressed in this preamble.
All comments the Department received are presented in a document
available at either http://www.defenselink.mil/brac/ 
or http://www.oea.gov.
III. Summary of Significant Changes to the Final Rule
The Department made a number of changes to the proposed rule that
are reflected in this final rule. A detailed explanation of
modifications is provided in the preamble.
IV. Response to Comments
This section contains the Department's responses to the comments
received on the proposed rule, organized by the structure of the
proposed and final rules.
The primary purpose of the rule is to bring the Department's
regulatory framework into line with statutory enactments made
subsequent to the promulgation of the existing regulation. Many of the
items of concern noted by commenters are, in fact, changes made to
comply with the base closure laws as they have been amended, and such
changes have been incorporated into the rule whenever applicable and
appropriate. The Department does not see the disposal process as a
``zero-sum'' arrangement. The purpose of the implementation provisions
of the base closure laws and associated provisions of law are to
provide an ordered process to achieve a number of Congressional goals.
Among these goals (and not in any order of importance) is to ensure a
meaningful role for local communities in planning the reuse of the
installation, ensure efficient use of excess Federal property, provide
support to homeless
[[Page 9911]]
providers, promote job generation at closing facilities, require
appropriate and timely environmental remediation, and recoup the
taxpayers' investment in installations. Some of the goals may well be
better accomplished if the local redevelopment authority (LRA) is not
the transferee but focuses on planning redevelopment. Many of the most
contentious provisions in the rule, judging from the comments, actually
represent language taken almost verbatim from the base closure laws.
The Department has carefully considered the many comments it has
received. Its responses follow:
A. General
Several commenters asked the Department to commit to a specific
date for publication of the Base Redevelopment and Realignment Manual
(BRRM). As a subordinate document to this rule, the BRRM cannot be
published in final form until after this rule is published in final
form. The Department intends to publish the BRRM as soon as reasonably
possible after the publication of this final rule.
Several commenters stated that the rule was directed at maximizing
the Department's monetary return, as opposed to promoting economic
recovery by transfer of properties to local communities. The Department
disagrees. Promoting monetary return to the Department for use either
at the particular location or at other locations and rapid property
transfer to encourage job generation are not mutually exclusive. The
rule conforms with the base closure laws and with other applicable
statutes and regulations such as those of the General Services
Administration (GSA). Unlike the current regulation which it would
replace, the rule does not give any particular preference to one form
of disposal over another. It conforms to the base closure laws in its
order of actions; i.e., screening with the DoD Components and the U.S.
Coast Guard and with other Federal agencies, followed by disposal
actions heavily influenced by the local redevelopment plan. Some
commenters have observed that, e.g., requiring Federal agencies to pay
fair market value for property received is an example of trying to
maximize the Department's monetary return. The GSA regulations
governing transfers between Federal agencies require such payments
unless waived, and the rule complies with this standard. The Department
believes that the most likely effect of conforming to this requirement
is that more property will be available for transfer to non-Federal
entities for redevelopment than would otherwise be available. The rule
also provides, as do the base closure laws, for economic development
conveyances (EDCs), either at fair market value or at no cost. The
decision regarding making an EDC will normally occur before a property
is considered for public sale, and, although this does not represent a
preference of one type of disposal over another, it does represent the
rules' conformance to the order of disposal actions provided for in the
base closure laws. The rule does conform to statutory changes that
eliminated the stated preference for no-cost or reduced-cost EDCs; but
conforming to those statutory changes does not represent an effort by
the Department to seek greater monetary return. It simply represents
the Department's effort to conform its rule to the statute.
Several commenters suggested that the Department contract with
local entities to take advantage of their special expertise in closing
or realigning an installation. The Department's authority to contract
is provided for and qualified, as appropriate, in the laws governing
the Department's procurement actions and in the Federal Acquisition
Regulation. In addition, the Congress has provided a preference for
local and small businesses in section 2912 of Pub. L. 103-160. Such
preferences are properly addressed in those regulations governing
procurement, as opposed to this rule.
Several commenters recommended that the Department commit to adopt
or conform to any cleanup standards or levels provided by the local
redevelopment plan, even though they might be greater than those
required by current use or required by law. Cleanup standards are
established pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA) and its implementing
regulation, the National Contingency Plan (NCP). Those legal
requirements provide for a thorough list of factors to be considered in
determining the cleanup standard at each location and include, among
many others, the reasonably anticipated future uses of the property. As
with any private party, the Department must comply with these
requirements in establishing a cleanup level. This process is overseen
by Federal and state environmental regulators. Consequently, the
cleanup levels established for any particular site will be in complete
conformance with all legal requirements. The Congress has clearly
directed the Department to conform to the requirements of CERCLA and
the NCP, and the Department will do so in its cleanup program.
Several commenters believe that the local redevelopment plan should
be given greater weight in either the environmental analysis process or
in the disposal plan. Some would like the local redevelopment plan to
be a preferred alternative or the primary factor in developing the
proposed Federal action in the National Environmental Policy Act (NEPA)
process. The base closure laws are clear on the role of the local
redevelopment plan in the NEPA process. The plan is part of the
proposed Federal action. This means it is a basis for developing the
action to be analyzed. In other words, it is what is being analyzed, so
it plays a far greater role than it would if it were merely a preferred
alternative (one way to achieve the proposed action) or the primary
factor in developing the proposed action. These suggestions would have
the unintended consequence of actually diluting the role of the local
redevelopment plan, while the governing statute clearly and explicitly
states the role that the plan has in the NEPA process.
Several commenters recommended that the rule describe the roles of
environmental regulators, the LRA, and others in the restoration
program. The roles of these entities in the restoration program are
established in the various environmental laws, primarily CERCLA and the
NCP. It is outside of the Department's authority to specify the roles
of these entities under those laws.
One commenter suggested the desirability of using fixed price
remediation agreements with privatized financial assumption, including
liability assumption. Agreements to have the property recipient assume
responsibility for environmental matters are provided for in section
2905(e) of Pub. L. 101-510. Such agreements would be fixed price with
privatized financial assumption, including liability assumption, but
would also be subject to the other requirements of that subsection. The
rule does not specifically address this matter because the Department
has no requirements to add beyond those of the statute.
Several commenters have observed that the rule does not integrate
environmental cleanup with property disposal and reuse planning. The
Department recognizes the importance of integrating environmental
cleanup with property disposal and redevelopment planning. Cleanup
standards are tied to future land use and established pursuant to
CERCLA and the NCP. Future land use is informed by the property
disposal plan. As stated earlier, the local redevelopment plan is a
basis for any proposed Federal action.
[[Page 9912]]
Therefore, the redevelopment planning, property disposal, and
environmental cleanup are integrated. The cleanup process is overseen
by Federal and state environmental regulators. Consequently, the
cleanup levels established for any particular site will be in complete
conformance with all legal requirements. In addition, the public has a
chance to comment on proposed cleanup standards in the public
participation venues required by CERCLA.
Several commenters suggested that the rule address timely release
of environmental information. The Department does not believe that
specific regulatory requirements can or should be imposed to create
timelines for these activities. The BRRM does provide guidance to the
Military Departments and other interested parties as to when and how to
release environmental information.
One commenter suggested that the Department schedule a meeting with
``stakeholders'' to discuss the Department's environmental policies
before issuing final regulations. The Department has been meeting with
various interested parties with regard to its environmental policies,
and will continue to do so. However, it cannot delay the realignment
and closure implementation process for this purpose.
One commenter complained that the rule only requires the Department
to consult with the LRA and others such as the Governor, not obtain
their agreement, over future land uses, environmental restoration
decisions, etc. Neither the base closure laws nor the various
environmental statutes require obtaining agreement from the LRA.
Likewise, section 2905(b)(2)(D) of the base closure law explicitly
states that the Secretary shall ``consult with the Governor of the
State and the heads of the local governments'' as opposed to obtaining
their agreement. The Department will continue to consult with the LRA
and other appropriate officials over future land uses, environmental
restoration decisions, etc.
One commenter suggested that an additional section be added to
clarify the Department's responsibilities regarding environmental
contamination under CERCLA. The recommendation was to add language that
addressed the Department's continuing liability for contamination on
the property. The Department disagrees with the suggestion to add
language. The Department's liability under CERCLA (and other applicable
environmental laws) will be established for each location depending on
the law and facts of the site. This could include not only numerous
Federal laws, but state and local laws as well. The process used to
determine liability under CERCLA, including as between the Department
and its contractors, is highly complex and virtually impossible to
accurately describe in the context of this rule. Furthermore, the rules
governing such liability are found in statutes and regulations for
which the Department does not exercise primary authority. It would be
inappropriate and likely to create confusion for the Department to
attempt to define its CERCLA liability in this rule.
One commenter observed that the rule does not address how the
Department will mitigate or resolve effects on base closures and
realignments on tribal nations affected by such actions. The Department
believes the rule is consistent with the law. We have added text in
response to another similar comment to paragraph 174.4(f). Under
current law, an Indian tribe may acquire closed real property only
through a request for excess property in accordance with section
105(f)(3) of the Indian Self-Determination and Education Assistance Act
(which must be made by the Secretary of the Interior on behalf of the
tribe) or through the purchase of real property at a public sale. In
addition, a tribe may seek to participate in the redevelopment planning
process as a member of the LRA, which is primarily a local matter.
B. Definitions
Several commenters suggested that those definitions contained in
section 174.3 that are incorporated by reference to other sources be
written out in full text. To ensure complete consistency, the rule will
continue to incorporate those definitions by reference. However, the
BRRM will contain the full text of the sources to facilitate ease of use.
One commenter suggested that a definition for the National Historic
Preservation Act be included in the rule. The National Historic
Preservation Act is not referred to directly in the rule. The reference
in section 174.18 is to the Act's implementing regulations in the Code
of Federal Regulations and includes the specific citation to the
regulations. Because the Act is not directly referred to in the rule
and the only indirect reference is to its implementing regulations for
which the citation is provided, there is no need to include a specific
definition.
One commenter requested that the term ``disposal plan'' be defined.
The Department does not believe such a definition is necessary or
desirable. The disposal plan can take many forms and will reflect the
manner of implementation by each Military Department at each location.
The term is not readily susceptible to a meaningful definition because
of the wide variety of forms it may take.
C. Policy
Several commenters suggested that the rule may change the focus of
disposal actions by not placing paramount importance on economic
recovery. The base closure law does not mention economic recovery as
one of its goals, but does refer to ``job generation'' in the case of
EDCs. The primary reason for proposing this revision of the rule is to
bring it into line with amendments made to the base closure laws. Those
amendments reflect a desire by Congress to encourage economic recovery
by expediting the transfer (and subsequent redevelopment) of
installations. The Department believes the current policy statements in
section 174.4, which are taken from the Secretary of Defense's
recommendations to the Defense Base Closure and Realignment Commission,
accurately reflect both the statutory direction provided by Congress
and the policy determinations made by the Secretary of Defense.
One commenter expressed concern that the statements of policy in
section 174.4 do not adequately recognize the importance of public
benefit conveyances. The Department does not agree. Paragraph 174.4(b)
explicitly refers to public benefit conveyances as one of the
appropriate means to transfer property. The need for consideration of
public benefit conveyances is not overcome by the policy statement of
paragraph 174.4(c) relating to reliance on market forces, which,
incidentally, refers to ``any anticipated demand for surplus military
land and facilities.'' [Emphasis added.]
One commenter suggested that section 174.4(d) reflect a more
accurate list of the entities with whom the Department must collaborate
for successful redevelopment to occur. The Department notes that the
intent of this paragraph is to emphasize collaboration with affected
local communities regarding the redevelopment of the installation.
While the Department does collaborate with the other entities, their
role is established in other parts of the rule. The focus of this
paragraph of the rule is on the redevelopment planning process and most
of our collaboration in this area is with the local community.
One commenter noted that reference to substantial growth in section
174.4(f) is difficult to define and could lead to confusion. The
Department agrees and
[[Page 9913]]
has struck the beginning clause of the sentence consisting of ``If
installation growth is substantial, * * *''.
One commenter observed that in many places an installation's growth
due to realignment may not only affect the immediate locality but may
also increase infrastructure demands regionally, requiring coordination
with regional as well as local officials. The Department agrees and has
further modified paragraph 174.4(f) to refer to regional officials,
including, e.g., State and tribal officials, and to regional planning.
D. Responsibilities
Several commenters suggested that the rule delegates too much
authority to the Secretaries of the Military Departments, leaves the
Office of the Secretary of Defense (OSD) out of the process, and
undermines the policy to ``speak with one voice.'' It is essential to
the effective implementation of the process that appropriate
delegations of authority be provided to the Military Departments, as
the implementing agencies, and this is done in the rule. This rule is
consistent with other delegations to the Military Departments as
installation and real property managers within DoD. The current
regulation that is being revised by this rule also delegates, and much
more generally, implementation authority to the Military Departments.
The delegation language in the rule is actually somewhat less broad
than the language it will be replacing. The delegation to the
Secretaries of the Military Departments in the rule is subject to the
superior delegations to the Under Secretary of Defense for Acquisition,
Technology, and Logistics and the Deputy Under Secretary of Defense
(Installations and Environment). These OSD officials will retain their
oversight roles and, when needed, review disputed matters and enforce
uniformity among the Military Departments in their implementing activities.
Several commenters suggested that if an LRA qualifies for a no-cost
EDC, the Federal Government should shoulder the cost of recording deeds
and other transfer documents as well as associated surveys. The rule in
paragraph 174.5(e) only addresses the cost of recording deeds and other
transfer documents, which is normally the responsibility of the
property recipient in real estate transactions. It does not address the
responsibility of paying for any needed surveys. The cost of surveys,
in the case of an EDC, will be subject to agreement between the parties.
One commenter suggested that the requirement of paragraph 174.5(e)
explicitly include reference to recordation of land use restrictions
that are part of an environmental remedy. The Department notes that the
paragraph only addresses the cost of recording deeds and other transfer
documents; it does not address in detail all the documents that might
be included in that category. What documents must be recorded will be
determined by State law and local rule and will vary accordingly. To
the extent land use restrictions are included in a deed, which would be
necessary for them to have meaningful effect, they will be part of the
recorded instruments.
E. LRA and the Redevelopment Plan
Several commenters inquired as to what would constitute
``appropriate environmental documentation'' in section 174.6(c). This
reference would include any NEPA environmental analyses, as well as
associated documentation that might be required to formulate a disposal
plan. Since we cannot predict at this time the entire universe of
potential documents, particularly given the great variety of locations
where they might be required, the Department chose to use as broad a
term as possible.
Several commenters suggested that the 12 months allotted for
completion of an environmental impact statement may prove inadequate.
Section 174.6(c) qualifies the 12 month requirement with the words ``to
the extent practicable'', taken from the underlying statutory provision
of section 2911 of Pub. L. 103-160.
Several commenters observed that the timeframe for the production
of the local redevelopment plan is likely to be too short. The language
in the rule is in strict compliance and consistent with the base
closure laws, section 2905(b)(7)(F)(iv) of Pub. L. 101-510, which also
allows an extension of time to be granted by the Deputy Under Secretary
of Defense (Installations & Environment), section 2905(b)(7)(N). In all
instances, the date arrived at from section 2905(b)(7)(F)(iv) will be
after the screening of property by Federal agencies. The Department
notes that many, if not most, LRAs begin their planning process shortly
after the closure decisions become final, which allows for a much more
lengthy period of time than would be available if no advance effort is
made.
Several commenters noted that the requirement that there be a
single LRA for each installation may be problematic for some
installations that have large parcels located in other jurisdictions.
The language in the proposed rule uses the term ``generally,'' which
provides flexibility for exceptions where geographic situations
warrant, such as distinct, non-contiguous parcels in separate
jurisdictions.
Several commenters recommended that the base cleanup team
specifically include the LRA as a member. The base cleanup team is not
addressed by the rule, nor is it based in statute. Information on
environmental cleanup may be found in the BRRM.
F. Retention for DoD Component Use and Transfer to Other Federal Agencies
Several commenters noted that some locations such as Fort Monroe,
Virginia, are subject to a reversionary interest in the state or local
government and recommended specific language be inserted addressing
this situation. The Department cannot dispose of a property interest it
does not own. To the extent a location is subject to a reversionary
interest, any screening or disposal action can only occur to the extent
they are consistent with the reversionary language of the original
deed. For instance, screening might be limited to only DoD Components
after which the property might then have to be offered back to the
reversionary interest holder. Because this will vary at each location
depending on the specific provisions of the reversionary interest, it
is neither practicable nor necessary to provide specific language
dealing with this situation. The Military Departments are expected to
know the nature of the real property interests they hold and to act
accordingly with regard to any disposal actions.
One commenter suggested that early and widespread communication
would be beneficial and specifically objected to language in paragraph
174.7(b) that conditioned release of some information ``upon request''.
The Department determined that it was not going to provide to other
Federal agencies a notice of potential availability of property upon
submission by the President of his recommendations to the Congress.
Consequently, those provisions of section 174.7, and particularly its
former paragraph (b), addressing this subject have been deleted from
the rule.
One commenter recommended that a firm time period of 6 months be
set for the identification of Federal property interests in real
property. Section 174.7(m) of the proposed rule does provide a time
period of six months from the date of approval of closure or
realignment within which a surplus determination should be made, which
means that Federal agency interests in
[[Page 9914]]
property must be identified prior to that time.
Several commenters suggested that other Federal agencies seeking to
obtain excess real property should be required, as opposed to being
encouraged, to consult with the LRA. The statute that required
consultation has expired [Section 2905(b)(5)(C) of Pub. L. 101-510].
However, because the Department believes it is to everyone's benefit,
it encourages consultation. It is to the benefit of a Federal agency to
consult with the LRA and any other interested entity when seeking
excess real property. The Department believes it unnecessary to require
such consultation. In addition, such a requirement could generate legal
conflicts as to what constituted consultation in particular cases and
at what specific time periods consultation was performed.
Several commenters objected to the requirement that other Federal
agencies accept any excess property in its existing condition, viewing
this as a burden on their resources or an attempt by Department to
avoid its cleanup responsibilities. This is in conformance with the
Interdepartmental Waiver Doctrine which notes that all Federal property
belongs to the United States and it is the determination of Congress as
to the adequacy of funding for individual agencies to perform their
missions. See Matter of: Use of One Agency's Real Property by Another--
Liability for Damage, B-194861, Comptroller General of the United
States, 59 Comp. Gen. 93, November 20, 1979. The general rule is that
an agency must have the resources to accept property it is voluntarily
seeking or forego the opportunity. This is also indicated in other
requirements of section 174.7(h) such as the requirement that the
request does not establish a new program, current real property
holdings cannot satisfy the agency's needs, and that the request be
economically viable. The receiving agency must also pay fair market
value, unless waived, which would potentially include a reduction of
value because of contamination (see the discussion on appraisals and
fair market value). Nothing in the requirement that a receiving Federal
agency take the property in its existing condition changes the
liability of the United States for cleanup.
One commenter asserted that, in transfers between Federal agencies,
in order to accurately reflect section 120 of CERCLA, a statement
should be added in both subparagraphs (9) and (10) of paragraph
174.7(h) that would exclude the costs for remedies needed to address
environmental contamination present on the property at the time of
transfer, unless an agreement has been reached with the other agency to
take responsibility for such actions and costs. The commenter further
asserted that a Federal agency's ultimate environmental liability
cannot be transferred to other agencies of the Federal Government. The
Department disagrees. The Department does not believe that section
120(h) of CERCLA has any application to the question of responsibility
as between Federal agencies for contamination on Federal real property
transferred between them. There is no provision of applicable law or
regulation preventing the Department from requiring another agency to
accept property transferred ``as-is,'' as a mutually agreed condition
of the transfer. If the receiving agency is unwilling to accept
responsibility for any needed cleanup, it has no obligation to take the
property and Department can proceed to other means of property disposal.
G. Screening Properties After Declaration of Surplus
One commenter suggested specific language be added to the rule
relating to the process after a declaration of surplus, and
specifically relating to the process for public benefit conveyances and
to consultation with the LRA and communities. These aspects of the
property disposal process are governed by 32 CFR part 176, which is not
being amended by this rulemaking (other than a ministerial change). The
Department anticipates that it will propose amendments to part 176 in
the future to ensure its conformance to changes in the law. At that
time, it would be appropriate for the commenter to raise issues that
are relevant to that regulation.
H. Economic Development Conveyances
Several commenters are concerned that the rule requires the
Secretary concerned to seek fair market value in an EDC. This is a
clear change from the existing regulation which the rule would replace.
The requirement to seek to obtain fair market value is clearly stated
in section 2905(b)(4)(B) of Pub. L. 101-510. This is a change made by
Congress to the law since the publication of the existing regulation.
The changes made in the rule are in strict conformance with the statute.
Several commenters noted that the rule does not provide for below-
cost EDCs (other than no-cost EDCs). Section 2905(b)(4) of Pub. L. 101-
510 addresses the nature of EDCs that can be offered by Department.
There is no provision for a ``below-cost'' EDC. Consequently, the rule
does not provide for such an EDC.
Several commenters objected to the requirements imposed by the rule
on those submitting EDC applications, and the Department's
consideration of those applications. These, largely information,
requirements are necessary to allow the Department to make an informed
judgment as to whether the application can meet the statutory
requirements for an EDC as well as whether a no-cost EDC, if sought, is
appropriate under the circumstances. Given the potentially significant
financial impact of EDCs on both the Department and the LRA, it is
appropriate to require a reasonable submission of information to ensure
the EDC's success. It is understood by the Department that some of the
information requested may not be available or available in adequate
time and accuracy, but the LRA should attempt to submit as much and as
accurate information as it can to address the factors for consideration
of an EDC. The Department will use the best information available to
evaluate EDC applications according to the statute and rule. This is
consistent with prior practice of the Department.
Several commenters objected to the provisions relating to an
appraisal of fair market value. Commenters objected to the use of the
Uniform Appraisal Standards, to appraisals conducted under criteria set
by the Military Department without the LRA's agreement, and to the
application of highest and best use criteria. Additionally, it was
suggested that an independent entity conduct the appraisal, that the
appraisal include liabilities associated with, e.g., environmental
contamination or demolition of buildings, that all appraisal
information be shared with the LRA, that special consideration be given
to rural areas, and that multiple appraisals be accomplished for EDCs
based on differing assumptions. Although the Uniform Appraisal
Standards were drafted primarily for the acquisition of property by the
Federal Government, no cogent reasons have been advanced as to why they
would not apply with equal validity to appraising lands being disposed
of. The rule does require the Secretary concerned to consult with the
LRA about valuation assumptions and other factors, but the base closure
laws explicitly provide that the fair market value will be as
determined by the Secretary, not by the LRA or an independent entity.
The law does not provide, for instance, for multiple appraisals of fair
market value, although an entity seeking property is certainly
[[Page 9915]]
free to conduct its own appraisal. The rule does seek an appraisal
based on the highest and best use, as provided in the Uniform Appraisal
Standards and the governing GSA regulations. The Uniform Appraisal
Standards include consideration of all relevant valuation factors such
as reduction in value due to contamination, existing land use controls
that limit potential development, and location.
Several commenters asserted that only by obtaining the property
through an EDC can the LRA maintain control to provide job generation.
According to the statute, an LRA is 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 or for directing the
implementation of such plan. In some instances, taking possession of
the property may be one way of furthering this goal, but it is not the
only means, or even necessarily the most likely to succeed. Jobs can
often be generated by rapid conveyance to private parties at least as
effectively as by transfer to the LRA. The statutory framework clearly
envisions that the LRA's primary function is the redevelopment planning
process. Seeking EDCs is a function to be performed at the LRA's
discretion and certainly does not foreclose the LRA or other
appropriate local agencies from exercising any necessary controls to
ensure job generation.
One commenter noted that subparagraph (7) of paragraph 174.9(e)
could be interpreted as requiring an LRA to exercise more authority
than it would normally have, e.g., zoning or other approval powers. The
Department agrees and has added language to this subparagraph to
clarify that the LRA need only demonstrate that it has the necessary
approvals for items such as zoning, as opposed to actually having the
authority to grant such approvals.
I. Leasing of Real Property to Non-Federal Entities
Several commenters were concerned that the rule would discourage
long-term leasing at closed installations, thereby reducing the
likelihood of promoting new employment. As with the other provisions of
the rule, section 174.11 is designed to expedite property transfer in
order to encourage rapid job generation. In the past, long-term leases
were primarily the result of difficulty in transferring property that
still had environmental contamination. With statutory authority to
engage in ``early transfers'' under CERCLA, it should be possible to
avoid the need for long-term leases in most if not all situations.
J. Leasing of Transferred Real Property by Federal Agencies
Several commenters were concerned that a ``lease-back'' would be at
no rental cost to the Federal agency occupying the leased facility,
thereby removing any incentive to engage in this type of transaction.
The requirement for a no cost lease is a provision of the statute,
section 2905(b)(4)(e)(iii) of Pub. L. 101-510.
One commenter inquired as to how real property will be declared as
surplus when a ``lease-back'' cannot be successfully concluded. The
authority to lease to a Federal agency, at no cost, real property that
has been transferred to an LRA is a unique alternative form of property
disposal. If the process fails to result in agreement, the Department
presumes, until shown otherwise, that the requesting Federal agency
still requires the property, in which case it is not surplus. If the
requesting Federal agency is only willing to accept the use of the real
property under a lease and an agreement cannot be reached, the real
property would be considered as surplus.
K. Personal Property
One commenter noted the use of ``community redevelopment plan'' in
section 174.13(a). This reference will be changed to ``redevelopment
plan'' to conform to the usage elsewhere in the rule.
One commenter inquired whether the personal property inventory will
occur 6 months after the closure decision or 6 months after the actual
closure of the installation. Section 174.13(b) provides that the
inventory will be compiled 6 months after the date of approval of
closure or realignment. The term ``date of approval'' is defined in
section 174.3 and refers to the date the Commission's recommendations
become final, as opposed to the date of actual closure of the installation.
One commenter inquired as to the timelines for an LRA's submittal
of a request for a personal property EDC as opposed to a real property
EDC that includes personal property. The commenter was concerned that
the local redevelopment plan might be submitted prior to the completion
of the inventory. Since the inventory is required to be completed
within 6 months of the date of approval of the closure, and the local
redevelopment plan is not required until quite some time later, it
would be very unlikely for an LRA to submit the local redevelopment
plan prior to completion of the personal property inventory. This is in
part due to the screening period for other Federal uses during the
first 6 months after the date of approval.
L. Maintenance and Repair
One commenter inquired as to the citation for the Federal
Management Regulations of the GSA, referred to in section 174.14. The
regulations can be found at chapter 102 of title 41, Code of Federal
Regulations. Additional information on these regulations will be
provided in the BRRM. The citation will be added to the rule.
Several commenters expressed concern that the level of maintenance
might not be adequate in relation to various locations, e.g., humidity
levels left uncontrolled could result in damaging mold. Section
174.14(b)(3) provides that the initial levels of maintenance cannot be
``less than the minimum levels required to support the use of such
facilities or equipment for nonmilitary purposes; * * *''. The
Department believes this provision addresses the concern noted by the
commenters.
Several commenters noted that maintenance levels provided by
section 174.14 should conform to appropriate requirements of the
National Historic Preservation Act and any agreements thereunder with,
e.g., the state historic preservation officer. Section 174.14 provides
maintenance procedures to preserve and protect facilities located on
closing installations needed for economical reuse. Nothing in that
section should be interpreted as supplanting any requirement of the
National Historic Preservation Act or its implementing regulations. The
Department expects actions relating to historic preservation to be
fully vetted with the interested agencies and organizations in line
with both the requirements of the Act and its implementing regulations
and the direction of the rule to, e.g., consult with the LRA. As noted
in previous responses to comments, it is not the purpose of this rule
to replace other statutory or regulatory requirements. Given the
limited purpose of section 174.14, the Department is satisfied that it
has addressed the issue that needs to be addressed in the context of
this rule.
Several commenters asserted that the Department should properly
maintain all installation assets until the time of transfer. The rule
strictly complies with the statutory requirements for maintenance.
Those statutory requirements include specific time limits governing the
initial levels of maintenance. The rule provides flexibility in
allowing the Secretary
[[Page 9916]]
concerned to extend the time period for the initial levels of
maintenance and repair for property still under military control if the
LRA is actively implementing its redevelopment plan.
Several commenters objected that maintenance requirements would be
shifted to the local community even before the installation was closed.
This is incorrect. Section 174.14(e) provides that reductions in
maintenance levels will not apply to facilities still being used for
Department missions, i.e., pre-closure. After facilities are no longer
required for Department missions, the minimum standard prescribed by
GSA requires that the Government's value be preserved. The community
would not be expected to maintain facilities until they have possession
through either a deed or lease. The statutory timelines reflected in
the rule are designed to encourage rapid transfer to effect productive
civilian reuse.
Several commenters suggested that the level of maintenance and
repair be linked to the local redevelopment plan. The Department
disagrees. Such a requirement would be contrary to the base closure
laws' time limitations on maintenance and repair. The rule already
provides for an appropriate level of maintenance and repair which will
consider, to the extent it is known, the proposed reuses in the local
redevelopment plan. The period of maintenance and repair, however, is
set by statute.
One commenter expressed concern that any limitations on maintenance
and repair might apply to environmental remediation efforts underway on
the installation. The Department categorically states that
``Maintenance and repair'' as used in this section has no application
to environmental remedies. An interpretation to the contrary would be
entirely inconsistent with the base closure laws and with CERCLA.
M. Indemnification Under Section 330 of the National Defense
Authorization Act for Fiscal Year 1993
Several commenters observed that requiring any documents referring
to section 330 of Pub. L. 102-484 to be reviewed by the DoD Office of
General Counsel would cause delay and, instead, model language should
be provided with only deviations being reviewed by the General
Counsel's Office. The Department disagrees. The insertion of language
even mentioning section 330 in a deed or other transfer document
creates a contract right that otherwise would not exist and for which
section 330 does not provide.
One commenter asserted that the Department does not have discretion
with regard to insertion of language dealing with section 330 of Pub.
L. 102-484 and suggested changes that would require ``* * * Section 330
indemnification language under every instance specified by * * *''
section 330. Review of section 330 readily demonstrates that it does
not require or even hint at the need to include language relating to
its provisions in any document. In fact, section 330 is self-executing
and stands alone without the need for additional discussion or
exposition in transfer documents. It is even questionable whether such
further discussion or exposition has any legal basis since it must,
virtually by definition, either expand or contract the rights of a
potential claimant under the statute and the Department has authority
to do neither.
N. Real Property Containing Explosive or Chemical Agent Hazards
Several commenters recommended that the requirement for review of
explosive safety plans under section 174.16 be extended to private
entities conducting a remediation in place of the Department. The
Department is prepared to review, on a case-by-case basis, those
locations where such a safety plan is likely to be required and
determine whether the circumstances of that location should require
plan review and approval. Such requirements, if found to be necessary,
can be included in any contract with the entity conducting the remedial
action.
One commenter expressed concern that the language of the rule could
allow the submission of an explosives safety plan but not actually
require approval of the plan by the DoD Explosives Safety Board prior
to transfer of the property. Although the language of the rule could be
interpreted as requiring submission but not actual approval of the plan
before real property transfer, the uniform practice of the Military
Departments has been to wait on actual approval of the plan before
proceeding to transfer property. The language of this section has been
modified to more accurately refer to the governing DoD Directive as
well as the documents being submitted.
O. NEPA
One commenter suggested that the LRA be given the opportunity to
serve as a ``cooperating agency'' during the NEPA analysis. The
Department interprets this as a request that the LRA be guaranteed the
right to be a cooperating agency if it so desires. (This assumption is
based on the fact that an LRA may already qualify as a cooperating
agency under the Council on Environmental Quality regulations
implementing NEPA; 32 CFR 1508.5.) Being a cooperating agency in a NEPA
analysis carries with it certain obligations and requires certain
expertise. The Department does not believe it appropriate to mandate in
all circumstances that an LRA be a cooperating agency and believes it
more appropriate to allow each situation to be judged on its own merits
under existing regulations implementing NEPA.
Several commenters suggested that the NEPA process allow an LRA, if
it was not satisfied with the schedule of the Military Department, to
enter into an agreement with the Government to conduct the analysis
itself but consistent with the Military Department's NEPA regulation.
The cost expended by the LRA would qualify as a credit in any future
EDC, or, in the case of a no-cost EDC, be attributable to economic
redevelopment. This suggestion is premised on the availability, or lack
thereof, of funds to pay for the NEPA analysis. There has been no
demonstration that such funding has been unavailable in the past, nor
is there any indication it will be unavailable in the future. By
statute, the Military Departments are required to complete NEPA
analysis within 12 months, if possible. The NEPA regulations of the
Military Departments have sufficient flexibility to allow those
departments to ensure prompt and compliant NEPA analyses.
P. Historic Preservation
Several commenters raised concerns with the lack of more extensive
discussion of historic preservation. The provisions in section 174.18
are solely intended to clarify that the Military Departments have
authority to engage in the types of preservation activities discussed.
Nothing in that section should be interpreted as supplanting any
requirement of the National Historic Preservation Act or its
implementing regulations. The Department expects actions relating to
historic preservation to be fully vetted with the interested agencies
and organizations in line with both the requirements of the Act and its
implementing regulations and the direction of the rule to, e.g.,
consult with the LRA. As noted in previous responses to comments, it is
not the purpose of this rule to replace other statutory or regulatory
requirements. Given the limited purpose of section 174.18, the
Department is satisfied that it has addressed the issue that needs to
be addressed in the context of this rule.
[[Page 9917]]
V. Administrative Requirements
A. Regulatory Impact Analysis Pursuant to Executive Order 12866
Executive Order 12866 (58 FR 51735 [October 4, 1993]) requires each
agency taking regulatory action to determine whether that action is
``significant.'' The agency must submit any regulatory actions that
qualify as ``significant'' to the Office of Management and Budget (OMB)
for review, assess the costs and benefits anticipated as a result of
the proposed action, and otherwise ensure that the action meets the
requirements of the Executive Order. The Order defines ``significant
regulatory action'' as one that is likely to result in a rule that may
(1) Have an annual effect on the economy of $ 100 million or more or
adversely effect 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; (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; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive Order.
The Department has determined that the rule is not a significant
rule under Executive Order 12866 because it is not likely to result in
a rule that will meet any of the four prerequisites.
(1) The rule will not 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. The major effects of base closure and
realignment actions is the result of the decisions to close and realign
installations. This rule does not affect those decisions to the extent
they were made by the Defense Base Closure and Realignment Commission,
approved by the President, and not disapproved by the Congress. This
rule only implements those decisions in accordance with applicable law.
As such, its requirements do not create a significant economic impact.
For these reasons, the Department has determined that the rule will
not 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.
(2) The rule will not create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency.
Implementation of the rule will not create a serious inconsistency
or otherwise interfere with another agency's action because the
Department has lead authority for implementing the base closure
statutes and because the rule's requirements do not override, but are
in addition to, legal requirements established by other agencies. As
discussed in more detail in the response to comments, the rule does
not, e.g., establish requirements in place of the Historic Preservation
Act, but provides additional authority to the Military Departments to
implement that Act in accordance with its terms and with its
implementing regulations. Similarly, the rule does not override or
provide inconsistent requirements for environmental restoration, but,
as discussed in more detail in the response to comments, is premised on
applicability of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 and the National Contingency
Plan. Several subjects raised by commenters are not addressed in the
rule in order to avoid the possibility of inconsistency with the
authorities and actions of other agencies.
(3) The rule will not materially alter the budgetary impact of
entitlements, grants, user fees, or loan programs or the rights and
obligations of recipients thereof.
The rule will not materially alter the budgetary impact of
entitlements, grants, user fees, or loan programs, or the rights and
obligations of recipients thereof because no entitlements, grants, user
fees, or loan programs are invoked in the rule.
(4) The rule will not raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.
Finally, the rule does not raise novel legal or policy issues
arising out of legal mandates, the President's priorities, or the
principles set forth in the Executive Order. Congress has provided
extensive and detailed guidance for implementation of the base closure
and realignment process. The rule is merely a means for the Department
to address some areas not addressed by Congress and provide some
clarity in procedures to enable potential property recipients and
others interested in the base closure and realignment process to
harmonize their actions with those of the Department. The Department
has identified no novel legal or policy issues that this rule will
create on either a base closure and realignment basis or overall. Nor
has the Department identified any novel legal or policy issues arising
out of the President's priorities or principles set forth in the
Regulatory Impact Analysis.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory Enforcement Fairness Act [SBREFA]
of
1996), requires that an agency conduct a regulatory flexibility
analysis when publishing a notice of rulemaking for any proposed or
final rule. The regulatory flexibility analysis determines the impact
of the rule on small entities (i.e., small businesses, small
organizations, and small governmental jurisdictions). SBREFA amended
the Regulatory Flexibility Act to require federal agencies to state the
factual basis for certifying that a rule will not have a significant
economic impact on a substantial number of small entities.
The Department hereby certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The nature of the rule provides the factual basis for a determination
that no regulatory flexibility analysis is required. The potential for
a significant impact on a substantial number of small entities would
result, if at all, because of the decision to close or realign an
installation. This rule does not address those decisions. No costs are
directly imposed on small entities nor is any action directly required
of small entities through this rule. Since the Department will apply
this rule for the purpose of disposing of real and personal property,
the rule does not impose any requirements on small entities. For the
foregoing reasons, the Department believes that the rule, if
promulgated, would not have a significant economic impact on a
substantial number of small entities.
C. Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, requires Federal agencies to assess the effects of their
regulatory actions on state, local, and tribal governments and the
private sector. Section 202 of the UMRA requires that, prior to
promulgating proposed and final rules with ``federal mandates'' that
may result in expenditures by state, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year, the agency must prepare a written
[[Page 9918]]
statement, including a cost-benefit analysis of the rule. Under Section
205 of the UMRA, the Department must also identify and consider a
reasonable number of regulatory alternatives to the rule and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. Certain exceptions to Section 205
exist. For example, when the requirements of Section 205 are
inconsistent with applicable law, Section 205 does not apply. In
addition, an agency may adopt an alternative other than the least
costly, most cost-effective, or least burdensome in those cases where
the agency publishes with the final rule an explanation of why such
alternative was not adopted. Section 203 of the UMRA requires that the
agency develop a small government agency plan before establishing any
regulatory requirements that may significantly or uniquely affect small
governments, including tribal governments. The small government agency
plan must include procedures for notifying potentially affected small
governments, providing officials of affected small governments with the
opportunity for meaningful and timely input in the development of
regulatory proposals with significant federal intergovernmental
mandates, and informing, educating, and advising small governments on
compliance with the regulatory requirements.
The Department has determined that the rule does not contain a
Federal mandate that may result in expenditures of $100 million or more
for State, local, and tribal governments in the aggregate, or by the
private sector in any one year. The term ``federal mandate'' means any
provision in statute or regulation or any Federal court ruling that
imposes ``an enforceable duty'' upon State, local, or tribal
governments, and includes any condition of federal assistance or a duty
arising from participation in a voluntary federal program that imposes
such a duty. The rule does not contain a Federal mandate because it
imposes no enforceable duty upon state, tribal, or local governments.
The base closure laws provide local governments the opportunity to
participate in the implementation of the base closure and realignment
process by establishing a LRA. There is no statutory requirement that
an LRA be established; it is simply a means to allow the maximum local
participation in the planning process for installations being closed.
Since the establishment of an LRA and any actions taken by the LRA are
entirely within the discretion of the local governments in the vicinity
of a closing installation, there is no mandate involved in this rule,
funded or unfunded. The Department does note that virtually all LRAs
are provided planning assistance funds by the Department of Defense
Office of Economic Adjustment to assist them in establishing and
operating the LRA. To the extent that environmental restoration actions
taken by the Department at an installation being closed or realigned
are subject to state regulatory oversight, that oversight is due to
statutory requirements outside of the base closure and realignment
process. This rule, itself, does not require such oversight. To the
degree such oversight is required, it is required by preexisting law on
which the rule has no effect.
D. Paperwork Reduction Act
The Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq.,
prohibits a Federal agency from conducting or sponsoring a collection
of information that requires OMB approval, unless such approval has
been obtained and the collection request displays a currently valid OMB
control number. Nor is any person required to respond to an information
collection request that has not complied with the PRA. The term
``collection of information'' includes collection of information from
ten or more persons. The Department has determined that the PRA does
not apply to this rule because the Department will not be seeking
information from the public under the rule. The information that would
be collected will be in the form of applications for EDCs and similar
property transfers and will, in all instances, be entirely voluntary
and be the result of members of the public seeking real or personal
property under the disposal process. Therefore, the PRA does not apply
to the rule.
E. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, Section 12(d) (15 U.S.C. 272
note), directs Federal agencies to use technical standards developed by
voluntary consensus standards bodies in its regulatory activities,
except in those cases in which using such standards would be
inconsistent with applicable law or otherwise impractical. ``Technical
standards'' means performance-based or design-specific technical
specifications and related management systems practices. Voluntary
consensus means that the technical standards are developed or adopted
by voluntary consensus standards organizations. In those cases in which
a Federal agency does not use voluntary consensus standards that are
available and applicable, the agency must provide OMB with an explanation.
The rule does not involve performance-based or design-specific
technical specifications or related management systems practices. The
rule is therefore in compliance with the NTTAA.
F. Environmental Justice Requirements Under Executive Order 12898
Under Executive Order 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations,'' a Federal agency must, where practicable and
appropriate, collect, maintain, and analyze information assessing and
comparing environmental and human health risks borne by populations
identified by race, national origin, or income. To the extent practical
and appropriate, Federal agencies must then use this information to
determine whether their activities have disproportionately high and
adverse human health or environmental effects on minority populations
and low-income populations.
The Department believes that implementation of the rule does not
implicate environmental justice concerns. As noted earlier, the
significant impact of base closure and realignment is the decision to
close or realign, which this rule does not address. This rule does not
mandate environmental restoration, which is controlled by other laws
outside of the base closure and realignment process, nor does it
involve decisions dealing with human health. It may be that during the
planning process for disposal and reuse, issues relating to environment
and human health may arise, but they would do so in the context of any
required analysis under the National Environmental Policy Act and would
be fully considered in that document.
At this time, the Department believes that no action will directly
result from the rule that will have a disproportionately high and adverse
human health and environmental effect on any segment of the population.
G. Federalism Considerations Under Executive Order 13132
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), establishes certain requirements for Federal agencies
issuing regulations, legislative comments, proposed legislation, or
other policy statements or
[[Page 9919]]
actions that have ``federal implications.'' Under the Executive Order,
any of these agency documents or actions have ``federal implications''
when they have ``substantial direct effects on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government.'' Section 6 of the Executive Order prohibits any agency
from issuing a regulation that has federal implications, imposes
substantial direct compliance costs on state and local governments, and
is not required by statute. Such a regulation may be issued only if the
Federal Government provides the funds necessary to pay the direct
compliance costs incurred by state and local governments, or the agency
consults with state and local officials early in the process of
developing the proposed regulation. Further, a Federal agency may issue
a regulation that has federalism implications and preempts state law
only if the agency consults with state and local officials early in the
process of developing the proposed regulation.
The rule does not have federalism implications because it will not
have substantial direct effects on the states, on the relationship
between the national government and the states, or on the distribution
of power and responsibilities among the various levels of government.
The only role the rule assigns to state or local government is for the
establishment of an LRA and that action is entirely voluntary on the
part of local government and explicitly provided for in the base
closure laws. This rule does not change the relationship between the
Federal Government and state or local government nor does it change the
distribution of power between those entities. To the extent changes in
the rule relate to the role of an LRA, those changes are mandated by
statute and the rule only reflects the statutory provisions. The rule
does not impose direct compliance costs on state or local governments
and the Department actually provides grants to state and local
governments to support their voluntary participation in the base
closure and realignment planning process. Therefore, the requirements
of the Executive Order, Section 6, do not apply to the rule.
List of Subjects in 32 CFR Parts 174, 175, and 176
Community development, Surplus Government property.
? Accordingly, 32 CFR part 174 is revised, part 175 is removed, and part
176 is amended to read as follows:
? 1. Part 174 is revised to read as follows:
PART 174--REVITALIZING BASE CLOSURE COMMUNITIES AND ADDRESSING
IMPACTS OF REALIGNMENT
Subpart A--General
Sec.
174.1 Purpose.
174.2 Applicability.
174.3 Definitions.
Subpart B--Policy
174.4 Policy.
174.5 Responsibilities.
Subpart C--Working with Communities and States
174.6 LRA and the redevelopment plan.
Subpart D--Real Property
174.7 Retention for DoD Component use and transfers to other Federal
agencies.
174.8 Screening for properties covered by the Base Closure Community
Redevelopment and Homeless Assistance Act of 1994, cross-reference.
174.9 Economic development conveyances.
174.10 Consideration for economic development conveyances.
174.11 Leasing of real property to non-Federal entities.
174.12 Leasing of transferred real property by Federal agencies.
Subpart E--Personal Property
174.13 Personal property.
Subpart F--Maintenance and Repair
174.14 Maintenance and repair.
Subpart G--Environmental Matters
174.15 Indemnification under Section 330 of the National Defense
Authorization Act for Fiscal Year 1993.
174.16 Real property containing explosive or chemical agent hazards.
174.17 NEPA.
174.18 Historic preservation.
Authority: 10 U.S.C. 113 and 10 U.S.C. 2687 note.
Subpart A--General
Sec. 174.1 Purpose.
This part:
(a) Establishes policy, assigns responsibilities, and implements
base closure laws and associated provisions of law relating to the
closure and the realignment of installations. It does not address the
process for selecting installations for closure or realignment.
(b) Authorizes the publication of DoD 4165.66-M, ``Base
Redevelopment and Realignment Manual,'' in accordance with DoD 5025.1-
M\1\, ``DoD Directive System Procedures,'' March 2003.
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\1\ Copies may be obtained at
http://www.dtic.mil/whs/directives/corres/publ.html.
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Sec. 174.2 Applicability.
This part applies to:
(a) The Office of the Secretary of Defense, the Military
Departments, the Chairman of the Joint Chiefs of Staff and the Joint
Staff, the Combatant Commands, the Office of the Inspector General of
the Department of Defense, the Defense Agencies, the DoD Field
Activities, and all other organizational entities in the Department of
Defense (hereafter referred to collectively as the ``DoD Components'').
(b) Installations in the United States selected for closure or
realignment under a base closure law.
(c) Federal agencies and non-Federal entities that seek to obtain
real or personal property on installations selected for closure or
realignment.
Sec. 174.3 Definitions.
(a) Base closure law. This term has the same meaning as provided in
10 U.S.C. Sec. 101(a)(17)(B) and (C).
(b) Closure. An action that ceases or relocates all current
missions of an installation and eliminates or relocates all current
personnel positions (military, civilian, and contractor), except for
personnel required for caretaking, conducting any ongoing environmental
cleanup, or property disposal. Retention of a small enclave, not
associated with the main mission of the base, is still a closure.
(c) Consultation. Explaining and discussing an issue, considering
objections, modifications, and alternatives; but without a requirement
to reach agreement.
(d) Date of approval. This term has the same meaning as provided in
section 2910(8) of the Defense Base Closure and Realignment Act of
1990, Pub. L. 101-510.
(e) Excess property. This term has the same meaning as provided in
40 U.S.C. Sec. 102(3).
(f) Installation. This term has the same meaning as provided in the
definition for ``military installation'' in section 2910(4) of the
Defense Base Closure and Realignment Act of 1990, Pub. L. 101-510.
(g) Local Redevelopment Authority (LRA). This term has the same
meaning as provided in the definition for ``redevelopment authority''
in section 2910(9) of the Defense Base Closure and Realignment Act of
1990, Pub. L. 101-510.
[[Page 9920]]
(h) Military Department. This term has the same meaning as provided
in 10 U.S.C. 101(a)(8).
(i) National Environmental Policy Act (NEPA). The National
Environmental Policy Act of 1969, Pub. L. 91-190, 42 U.S.C. 4321 et
seq., as amended.
(j) Realignment. This term has the same meaning as provided in
section 2910(5) of the Defense Base Closure and Realignment Act of
1990, Pub. L. 101-510.
(k) Secretary concerned. This term has the same meaning as provided
in 10 U.S.C. 101(a)(9)(A), (B), and (C).
(l) Surplus property. This term has the same meaning as provided in
40 U.S.C. 102(10).
(m) Transition coordinator. This term has the same meaning as used
in section 2915 of the National Defense Authorization Act for Fiscal
Year 1994, Public Law 103-160.
Subpart B--Policy
Sec. 174.4 Policy.
It is DoD policy to:
(a) Act expeditiously whether closing or realigning. Relocating
activities from installations designated for closure will, when
feasible, be accelerated to facilitate the transfer of real property
for community reuse. In the case of realignments, the Department will
pursue aggressive planning and scheduling of related facility
improvements at the receiving location.
(b) Fully utilize all appropriate means to transfer property.
Federal law provides the Department with an array of legal authorities,
including public benefit transfers, economic development conveyances at
cost and no cost, negotiated sales to state or local government,
conservation conveyances, and public sales, by which to transfer
property on closed or realigned installations. Recognizing that the
variety of types of facilities available for civilian reuse and the
unique circumstances of the surrounding communities does not lend
itself to a single universal solution, the Department will use this
array of authorities in a way that considers individual circumstances.
(c) Rely on and leverage market forces. Community redevelopment
plans and military conveyance plans should be integrated to the extent
practical and should take account of any anticipated demand for surplus
military land and facilities.
(d) Collaborate effectively. Experience suggests that collaboration
is the linchpin to successful installation redevelopment. Only by
collaborating with the local community can the Department close and
transfer property in a timely manner and provide a foundation for solid
economic redevelopment.
(e) Speak with one voice. The Department of Defense, acting through
the DoD Components, will provide clear and timely information and will
encourage affected communities to do the same.
(f) Work with communities to address growth. The Department will
work with the surrounding community so that the public and private
sectors can provide the services and facilities needed to accommodate
new personnel and their families. The Department recognizes that
installation commanders and local officials, as appropriate (e.g.,
State, county, and tribal), need to integrate and coordinate elements
of their local and regional growth planning so that appropriate off-
base facilities and services are available for arriving personnel and
their families.
Sec. 174.5 Responsibilities.
(a) The Under Secretary of Defense for Acquisition, Technology, and
Logistics shall issue DoD Instructions as necessary to further
implement applicable public laws affecting installation closure and
realignment implementation and shall monitor compliance with this part.
All authorities and responsibilities of the Secretary of Defense--
(1) Vested in the Secretary of Defense by a base closure law, but
excluding those provisions relating to the process for selecting
installations for closure or realignment;
(2) Delegated from the Administrator of General Services relating
to base closure and realignment matters;
(3) Vested in the Secretary of Defense by any other provision
relating to base closure and realignment in a national defense
authorization act, a Department of Defense appropriations act, or a
military construction appropriations act, but excluding section 330 of
the National Defense Authorization Act for Fiscal Year 1993; or
(4) Vested in the Secretary of Defense by Executive Order or
regulation and relating to base closure and realignment, are hereby
delegated to the Under Secretary of Defense for Acquisition,
Technology, and Logistics.
(b) The authorities and responsibilities of the Secretary of
Defense delegated to the Under Secretary of Defense for Acquisition,
Technology, and Logistics under paragraph (a) of this section are
hereby re-delegated to the Deputy Under Secretary of Defense
(Installations and Environment).
(c) The Heads of the DoD Components shall ensure compliance with
this part and any implementing guidance.
(d) Subject to the delegations in paragraphs (a) and (b) of this
section, the Secretaries concerned shall exercise those authorities and
responsibilities specified in subparts C through G of this part.
(e) The cost of recording deeds and other transfer documents is the
responsibility of the transferee.
Subpart C--Working with Communities and States
Sec. 174.6 LRA and the redevelopment plan.
(a) The LRA should have broad-based membership, including, but not
limited to, representatives from those jurisdictions with zoning
authority over the property. Generally, there will be one recognized
LRA per installation.
(b) The LRA should focus primarily on developing a comprehensive
redevelopment plan based upon local needs. The plan should recommend
land uses based upon an exploration of feasible reuse alternatives. If
applicable, the plan should consider notices of interest received under
a base closure law. This section shall not be construed to require a
plan that is enforceable under state and local land use laws, nor is it
intended to create any exemption from such laws.
(c)(1) The Secretary concerned will develop a disposal plan and, to
the extent practicable, complete the appropriate environmental
documentation no later than 12 months after receipt of the
redevelopment plan. The redevelopment plan will be used as part of the
proposed Federal action in conducting environmental analyses required
under NEPA.
(2) In the event there is no LRA recognized by DoD or if a
redevelopment plan is not received from the LRA within 9 months from
the date referred to in section 2905(b)(7)(F)(iv) of Pub. L. 101-510,
(unless an extension of time has been granted by the Deputy Under
Secretary of Defense (Installations and Environment)), the Secretary
concerned shall, after required consultation with the governor and
heads of local governments, proceed with the disposal of property under
applicable property disposal and environmental laws and regulations.
Subpart D--Real Property
Sec. 174.7 Retention for DoD Component use and transfer to other
Federal agencies.
(a) To speed the economic recovery of communities affected by
closures and realignments, the Department of Defense will identify DoD
and Federal interests
[[Page 9921]]
in real property at closing and realigning installations as quickly as
possible. The Secretary concerned shall identify such interests. The
Secretary concerned will keep the LRA informed of these interests. This
section establishes a uniform process, with specified timelines, for
identifying real property that is available for use by DoD Components
(which for purposes of this section includes the United States Coast
Guard) or is excess to the needs of the Department of Defense and
available for use by other Federal agencies, and for the disposal of
surplus property for various purposes.
(b) The Secretary concerned should consider LRA input, if provided,
in making determinations on the retention of property (location and
size of cantonment area).
(c) Within one week of the date of approval of the closure or
realignment, the Secretary concerned shall issue a notice of
availability to the DoD Components and other Federal agencies covering
closing and realigning installation buildings and property available
for transfer to the DoD Components and other Federal agencies. The
notice of availability should describe the property and buildings
available for transfer. Withdrawn public domain lands which the
Secretary of the Interior has determined are suitable for return to the
jurisdiction of the Department of the Interior (DoI) will not be
included in the notice of availability.
(d) To obtain consideration of a requirement for such available
buildings and property, a DoD Component or Federal agency is required
to provide a written, firm expression of interest for buildings and
property within 30 days of the date of the notice of availability. An
expression of interest must explain the intended use and the
corresponding requirement for the buildings and property.
(e)(1) Within 60 days of the date of the notice of availability,
the DoD Component or Federal agency expressing interest in buildings or
property must submit an application for transfer of such property to a
Military Department or Federal agency. In the case of a DoD Component
that would normally, under the circumstances, obtain its real property
needs from the Military Department disposing of the real property, the
application should indicate the property would not transfer to another
Military Department but should be retained by the current Military
Department for the use of the DoD Component. To the extent a different
Military Department provides real property support for the requesting
DoD Component, the application must indicate the concurrence of the
supporting Military Department.
(2) Within 90 days of the notice of availability, the Federal
Aviation Administration (FAA) should survey the air traffic control and
air navigation equipment at the installation to determine what is
needed to support the air traffic control, surveillance, and
communications functions supported by the Military Department, and to
identify the facilities needed to support the National Airspace System.
FAA requests for property to manage the National Airspace System will
not be governed by paragraph (h) of this section. Instead, the FAA
shall work directly with the Military Department to prepare an
agreement to assume custody of the property necessary for control of
the airspace being relinquished by the Military Department.
(f) The Secretary concerned will keep the LRA informed of the
progress in identifying interests. At the same time, the LRA is
encouraged to contact Federal agencies which sponsor public benefit
conveyances for information and technical assistance. The Secretary
concerned will provide to the LRA points of contact at the Federal
agencies.
(g) DoD Components and Federal agencies are encouraged to discuss
their plans and needs with the LRA, if an LRA exists. If an LRA does
not exist, the consultation should be pursued with the governor or the
heads of the local governments in whose jurisdiction the property is
located. DoD Components and Federal agencies are encouraged to notify
the Secretary concerned of the results of this consultation. The
Secretary concerned, the Transition Coordinator, and the DoD Office of
Economic Adjustment Project Manager are available to help facilitate
communication between the DoD Components and Federal agencies, and the
LRA, governor, and heads of local governments.
(h) An application for property from a DoD Component or Federal
agency must contain the following information:
(1) A completed GSA Form 1334, Request for Transfer (for requests
from DoD Components, a DD Form 1354 will be used). This must be signed
by the head of the Component or agency requesting the property. If the
authority to acquire property has been delegated, a copy of the
delegation must accompany the form;
(2) A statement from the head of the requesting Component or agency
that the request does not establish a new program (i.e., one that has
never been reflected in a previous budget submission or Congressional
action);
(3) A statement that the requesting Component or agency has
reviewed its real property holdings and cannot satisfy its requirement
with existing property. This review must include all property under the
requester's accountability, including permits to other Federal agencies
and outleases to other organizations;
(4) A statement that the requested property would provide greater
long-term economic benefits for the program than acquisition of a new
facility or other property;
(5) A statement that the program for which the property is
requested has long-term viability;
(6) A statement that considerations of design, layout, geographic
location, age, state of repair, and expected maintenance costs of the
requested property clearly demonstrate that the transfer will prove
more economical over a sustained period of time than acquiring a new
facility;
(7) A statement that the size of the property requested is
consistent with the actual requirement;
(8) A statement that fair market value reimbursement to the
Military Department will be made at the later of January of 2008, or at
the time of transfer, unless this obligation is waived by the Office of
Management and Budget and the Secretary concerned, or a public law
specifically provides for a non-reimbursable transfer (this requirement
does not apply to requests from DoD Components);
(9) A statement that the requesting DoD Component or Federal agency
agrees to accept the care and custody costs for the property on the
date the property is available for transfer, as determined by the
Secretary concerned; and
(10) A statement that the requesting agency agrees to accept
transfer of the property in its existing condition, unless this
obligation is waived by the Secretary concerned.
(i) The Secretary concerned will make a decision on an application
from a DoD Component or Federal agency based upon the following factors:
(1) The requirement must be valid and appropriate;
(2) The proposed use is consistent with the highest and best use of
the property;
(3) The proposed transfer will not have an adverse impact on the
transfer of any remaining portion of the installation;
(4) The proposed transfer will not establish a new program or
substantially increase the level of a Component's or agency's existing
programs;
[[Page 9922]]
(5) The application offers fair market value for the property,
unless waived;
(6) The proposed transfer addresses applicable environmental
responsibilities to the satisfaction of the Secretary concerned; and
(7) The proposed transfer is in the best interest of the Government.
(j) When there is more than one acceptable application for the same
building or property, the Secretary concerned shall consider, in the
following order--
(1) The need to perform the national defense missions of the
Department of Defense and the Coast Guard;
(2) The need to support the homeland defense mission; and
(3) The LRA's comments as well as other factors in the
determination of highest and best use.
(k) If the Federal agency does not meet its commitment under
paragraph (h)(8) of this section to provide the required reimbursement,
and the requested property has not yet been transferred to the agency,
the requested property will be declared surplus and disposed of in
accordance with the provisions of this part.
(l) Closing or realigning installations may contain ``public domain
lands'' which have been withdrawn by the Secretary of the Interior from
operation of the public land laws and reserved for use by the
Department of Defense. Lands deemed suitable for return to the public
domain are not real property governed by title 40, United States Code,
and are not governed by the property management and disposal provisions
of a base closure law. Public domain lands are under the jurisdiction
of the Secretary of the Interior and administered by the Bureau of Land
Management (BLM) unless the Secretary of the Interior has withdrawn the
lands and reserved them for another Federal agency's use.
(1) The Secretary concerned will provide the BLM with information
about which, if any, public domain lands will be affected by the
installation's closure or realignment.
(2) The BLM will review the information to determine if any
installations contain withdrawn public domain lands. The BLM will
review its land records to identify any withdrawn public domain lands
at the closing installations. Any records discrepancies between the BLM
and Military Departments should be resolved. The BLM will notify the
Secretary concerned as to the final agreed upon withdrawn and reserved
public domain lands at an installation.
(3) Upon agreement as to what withdrawn and reserved public domain
lands are affected at closing installations, the BLM will initiate a
screening of DoI agencies to determine if these lands are suitable for
programs of the Secretary of the Interior.
(4) The Secretary concerned will transmit a Notice of Intent to
Relinquish (see 43 CFR Part 2370) to the BLM as soon as it is known
that there is no DoD Component interest in reusing the public domain
lands. The BLM will complete the suitability determination screening
process within 30 days of receipt of the Secretary's Notice of Intent
to Relinquish. If a DoD Component is approved to reuse the public
domain lands, the BLM will be notified and BLM will determine if the
current authority for military use of these lands needs to be modified
or amended.
(5) If BLM determines the land is suitable for return, it shall
notify the Secretary concerned that the intent of the Secretary of the
Interior is to accept the relinquishment of the land by the Secretary
concerned.
(6) If BLM determines the land is not suitable for return to the
DoI, the land should be disposed of pursuant to base closure law.
(m) The Secretary concerned should make a surplus determination
within six (6) months of the date of approval of closure or
realignment, and shall inform the LRA of the determination. If
requested by the LRA, the Secretary may postpone the surplus
determination for a period of no more than six (6) additional months
after the date of approval if the Secretary determines that such
postponement is in the best interests of the communities affected by
the closure or realignment.
(1) In unusual circumstances, extensions beyond six months can be
granted by the Deputy Under Secretary of Defense (Installations and
Environment).
(2) Extensions of the surplus determination should be limited to
the portions of the installation where there is an outstanding
interest, and every effort should be made to make decisions on as much
of the installation as possible, within the specified timeframes.
(n) Once the surplus determination has been made, the Secretary
concerned shall follow the procedures in part 176 of this title.
(o) Following the surplus determination, but prior to the disposal
of property, the Secretary concerned may, at the Secretary's
discretion, withdraw the surplus determination and evaluate a Federal
agency's late request for excess property.
(1) Transfers under this paragraph shall be limited to special
cases, as determined by the Secretary concerned.
(2) Requests shall be made to the Secretary concerned, as specified
under paragraphs (h) and (i) of this section, and the Secretary shall
notify the LRA of such late request.
(3) Comments received from the LRA and the time and effort invested
by the LRA in the planning process should be considered when the
Secretary concerned is reviewing a late request.
Sec. 174.8 Screening for properties covered by the Base Closure
Community Redevelopment and Homeless Assistance Act of 1994, cross-
reference.
The Departments of Defense and Housing and Urban Development have
promulgated regulations to address state and local screening and
approval of redevelopment plans for installations covered by the Base
Closure Community Redevelopment and Homeless Assistance Act of 1994
(Pub. L. 103-421). The Department of Defense regulations can be found
at part 176 of this title. The Department of Housing and Urban
Development regulations can be found at 24 CFR part 586.
Sec. 174.9 Economic development conveyances.
(a) The Secretary concerned may transfer real property and personal
property to the LRA for purposes of job generation on the installation.
Such a transfer is an Economic Development Conveyance (EDC).
(b) For installations having a date of approval for closure after
January 1, 2005, the Secretary concerned shall seek to obtain
consideration in connection with any transfer under this section in an
amount equal to the fair market value of the property.
(c) An LRA is the only entity able to receive property under an EDC.
(d) A properly completed application will be used to decide whether
an LRA will be eligible for an EDC. An LRA may submit an EDC
application only after it adopts a redevelopment plan. The Secretary
concerned shall establish a reasonable time period for submission of an
EDC application after consultation with the LRA. The Secretary will
review the application and make a decision whether to make an EDC based
on the criteria specified in paragraph (g) of this section; such
decision will only be made after the Secretary has notified and
obtained the concurrence of the Deputy Under Secretary of Defense
(Installations & Environment) of the proposed decision. The terms and
conditions of the EDC will be negotiated between the Secretary and the LRA.
[[Page 9923]]
(e) The application should explain why an EDC is necessary for job
generation on the installation. In addition to the following elements,
after the Secretary concerned reviews the application, additional
information may be requested to allow for a better evaluation of the
application:
(1) A copy of the adopted redevelopment plan.
(2) A project narrative including the following:
(A) A general description of the property requested.
(B) A description of the intended uses.
(C) A description of the economic impact of closure or realignment
on the local community.
(D) A description of the financial condition of the community and
the prospects for redevelopment of the property.
(E) A statement of how the EDC is consistent with the overall
redevelopment plan.
(3) A description of how the EDC will contribute to short- and
long-term job generation on the installation, including the projected
number and type of new jobs it will assist in generating.
(4) A business/operational plan for the EDC parcel, including such
elements as:
(A) A development timetable, phasing schedule, and cash flow analysis.
(B) A market and financial feasibility analysis describing the
economic viability of the project, including an estimate of net
proceeds over a fifteen-year period, the proposed consideration or
payment to the Department of Defense, and the estimated present fair
market value of the property.
(C) A cost estimate and justification for infrastructure and other
investments needed for the development of the EDC parcel.
(D) Local investment and proposed financing strategies for the
development.
(5) A statement describing why other authorities, such as public or
negotiated sales and public benefit conveyances for education, parks,
public health, aviation, historic monuments, prisons, and wildlife
conservation, cannot be used to accomplish the job generation goals.
(6) Evidence of the LRA's legal authority to acquire and dispose of
the property.
(7) Evidence that the LRA has full authority to perform all of the
actions required of it pursuant to the terms of the EDC, can
demonstrate through agreements or assurances that the LRA has the
appropriate local government approvals to implement the approved reuse
plan, and that the officers executing the EDC documents on behalf of
the LRA have full authority to do so.
(8) Proof the LRA has obtained sufficient financing for acquiring
the EDC property and carrying out the LRA's redevelopment objectives.
(f) Upon receipt of an application for an EDC, the Secretary
concerned will determine whether an EDC is needed for purposes of job
generation and examine whether the terms and conditions proposed are
fair and reasonable. The Secretary may also consider information
independent of the application, such as views of other Federal
agencies, appraisals, caretaker costs, and other relevant material. The
Secretary may propose and negotiate any alternative terms or conditions
that the Secretary considers necessary seeking always to obtain an
amount equal to the fair market value.
(g) The following factors will be considered, as appropriate, in
evaluating the application and the terms and conditions of the proposed
transfer, including price, time of payment, and other relevant methods
of compensation to the Federal government.
(1) Adverse economic impact of closure or realignment on the region
and potential for economic recovery through an EDC.
(2) Extent of short- and long-term job generation.
(3) Consistency with the entire redevelopment plan.
(4) Financial feasibility of the development, including market analysis
and need and extent of proposed infrastructure and other investments.
(5) Extent of state and local investment, level of risk incurred,
and the LRA's ability to implement the plan.
(6) Current local and regional real estate market conditions.
(7) Incorporation of other Federal agency interests and concerns,
and applicability of, and conflicts with, other Federal surplus
property disposal authorities.
(8) Relationship to the overall Military Department disposal plan
for the installation.
(9) Economic benefit to the Federal Government, including
protection and maintenance cost savings and anticipated consideration
from the transfer.
(10) Compliance with applicable Federal, state, interstate, and
local laws and regulations.
(h) Before making an EDC, the Secretary concerned shall prepare an
estimate of the fair market value of the property.
(1) In preparing the estimate of fair market value, the Secretary
concerned shall use the most recent edition of the Uniform Appraisal
Standards for Federal Land Acquisitions, published by the Appraisal
Institute in cooperation with the U.S. Department of Justice.
(2) The Secretary concerned shall consult with the LRA on valuation
assumptions, guidelines, and on instructions given to the appraiser.
(3) The Secretary concerned is fully responsible for completion of
the valuation. The Secretary, in preparing the estimate of fair market
value shall consider the proposed uses identified in the redevelopment
plan to the extent that they are not inconsistent with the highest and
best use.
Sec. 174.10 Consideration for economic development conveyances.
(a) For conveyances made pursuant to Sec. 174.9 of this part, the
Secretary concerned will review the application for an EDC and
negotiate the terms and conditions of each transaction with the LRA.
The Secretary will have the discretion and flexibility to enter into
agreements that specify the form of payment and the schedule. The
consideration may be in cash or in-kind and may be paid over time.
(b) The Secretary concerned shall seek to obtain consideration at
least equal to the fair market value, as determined by the Secretary.
(c) Any amount paid in the future should take into account the time
value of money and include repayment of interest.
(d) Additional provisions may be incorporated in the conveyance
documents to protect the Department's interest in obtaining the agreed
upon consideration, including such items as predetermined release
prices, or other appropriate clauses designed to ensure payment and
protect against fraudulent transactions.
(e)(1) An EDC without consideration may only be made if--
(i) The LRA agrees that the proceeds from any sale or lease of the
property (or any portion thereof) received by the LRA during at least
the first seven years after the date of the initial transfer of
property shall be used to support economic redevelopment of, or related
to, the installation; and
(ii) The LRA executes the agreement for transfer of the property
and accepts control of the property within a reasonable time after the
date of the property disposal record of decision.
(2) The following purposes shall be considered a use to support
economic redevelopment of, or related to, the installation--
(i) Road construction;
(ii) Transportation management facilities;
[[Page 9924]]
(iii) Storm and sanitary sewer construction;
(iv) Police and fire protection facilities and other public facilities;
(v) Utility construction;
(vi) Building rehabilitation;
(vii) Historic property preservation;
(viii) Pollution prevention equipment or facilities;
(ix) Demolition;
(x) Disposal of hazardous materials generated by demolition;
(xi) Landscaping, grading, and other site or public improvements;
and
(xii) Planning for or the marketing of the development and reuse of
the installation.
(f) Every agreement for an EDC without consideration shall contain
provisions allowing the Secretary concerned to recoup from the LRA such
portion of the proceeds from its sale or lease as the Secretary
determines appropriate if the LRA does not use the proceeds to support
economic redevelopment of, or related to, the installation for the
period specified in paragraph (e)(1) of this section.
Sec. 174.11 Leasing of real property to non-Federal entities.
(a) Leasing of real property to non-Federal entities prior to the
final disposition of closing and realigning installations may
facilitate state and local economic adjustment efforts and encourage
economic redevelopment, but the Secretary concerned will always
concentrate on the final disposition of real and personal property.
(b) In addition to leasing property at fair market value, to assist
local redevelopment efforts the Secretary concerned may also lease real
and personal property, pending final disposition, for less than fair
market value if the Secretary determines that:
(1) A public interest will be served as a result of the lease; and,
(2) The fair market value of the lease is unobtainable or not
compatible with such public benefit.
(c) Pending final disposition of an installation, the Secretary
concerned may grant interim leases which are short-term leases that
make no commitment for future use or ultimate disposal. When granting
an interim lease, the Secretary will generally lease to the LRA but can
lease property directly to other entities. If the interim lease (after
complying with NEPA) is entered into prior to completion of the final
disposal decisions, the term may be for up to five years, including
options to renew, and may contain restrictions on use. Leasing should
not delay the final disposal of the property. After completion of the
final disposal decisions, the term of the lease may be longer than five
years.
(d) If the property is leased for less than fair market value to
the LRA and the interim lease permits the property to be subleased, the
interim lease shall provide that rents from the subleases will be
applied by the lessee to the protection, maintenance, repair,
improvement, and costs related to the property at the installation
consistent with 10 U.S.C. 2667.
Sec. 174.12 Leasing of transferred real property by Federal agencies.
(a) The Secretary concerned may transfer real property that is
still needed by a Federal agency (which for purposes of this section
includes DoD Components) to an LRA provided the LRA agrees to lease the
property to the Federal agency in accordance with all statutory and
regulatory guidance.
(b) The decision whether to transfer property pursuant to such a
leasing arrangement rests with the Secretary concerned. However, a
Secretary shall only transfer property subject to such a leasing
arrangement if the Federal agency that needs the property agrees to the
leasing arrangement.
(c) If the subject property cannot be transferred pursuant to such
a leasing arrangement (e.g., the relevant Federal agency prefers
ownership, the LRA and the Federal agency cannot agree on terms of the
lease, or the Secretary concerned determines that such a lease would
not be in the Federal interest), such property shall remain in Federal
ownership unless and until the Secretary concerned determines that it
is surplus.
(d) If a building or structure is proposed for transfer pursuant to
this section, that which is leased by the Federal agency may be all or
a portion of that building or structure.
(e) Transfers pursuant to this section must be to an LRA.
(f) Either existing Federal tenants or Federal agencies desiring to
locate onto the property after operational closure may make use of such
a leasing arrangement. The Secretary concerned may not enter into such
a leasing arrangement unless:
(1) In the case of a Defense Agency, the Secretary concerned is
acting in an Executive Agent capacity on behalf of the Agency that
certifies that such a leasing arrangement is in the interest of that
Agency; or,
(2) In the case of a Military Department, the Secretary concerned
certifies that such a leasing arrangement is in the best interest of
the Military Department and that use of the property by the Military
Department is consistent with the obligation to close or realign the
installation in accordance with the recommendations of the Defense Base
Closure and Realignment Commission.
(g) Property eligible for such a leasing arrangement is not surplus
because it is still needed by the Federal Government. Even though the
LRA would not otherwise have to include such property in its
redevelopment plan, it should include the property in its redevelopment
plan anyway to take into account the planned Federal use of such property.
(h) The terms of the LRA's lease to the Federal Government should
afford the Federal agency rights as close to those associated with
ownership of the property as is practicable. The requirements of the
General Services Administration (GSA) Federal Acquisition Regulation
(48 CFR Part 570) are not applicable to the lease, but provisions in
that regulation may be used to the extent they are consistent with this
part. The terms of the lease are negotiable subject to the following:
(1) The lease shall be for a term of no more than 50 years, but may
provide for options for renewal or extension of the term at the request
of the Federal Government. The lease term should be based on the needs
of the Federal agency.
(2) The lease, or any renewals or extensions thereof, shall not
require rental payments.
(3) Notwithstanding paragraph (h)(2) of this section, if the lease
involves a substantial portion of the installation, the Secretary
concerned may obtain facility services for the leased property and
common area maintenance from the LRA or the LRA's assignee as a
provision of the lease.
(A) Such services and common area maintenance shall be provided at
a rate no higher than the rate charged to non-Federal tenants of the
transferred property.
(B) Such services and common area maintenance shall not include--
(i) Municipal services that a State or local government is required
by law to provide to all landowners in its jurisdiction without direct
charge, including police protection; or
(ii) Firefighting or security-guard functions.
(C) The Federal agency may be responsible for services such as
janitorial, grounds keeping, utilities, capital maintenance, and other
services normally provided by a landlord. Acquisition of such services
by the Federal agency is to be accomplished through the use of Federal
Acquisition Regulation procedures or otherwise in
[[Page 9925]]
accordance with applicable statutory and regulatory requirements.
(4) The lease shall include a provision prohibiting the LRA from
transferring fee title to another entity during the term of the lease,
other than one of the political jurisdictions that comprise the LRA,
without the written consent of the Federal agency occupying the leased
property.
(5)(i) The lease shall include an option specifying that if the
Federal agency no longer needs the property before the expiration of
the term of the lease, the remainder of the lease term may be satisfied
by the same or another Federal agency that needs property for a similar
use. (``Similar use'' is a use that is comparable to or essentially the
same as the use under the original lease, as determined by the
Secretary concerned.)
(ii)(B) If the tenant is a DoD Component, before notifying GSA of
the availability of the leasehold, it shall determine whether any other
DoD Component has a requirement for the leasehold; in doing so, it
shall consult with the LRA. If another DoD Component has a requirement
for the leasehold, that DoD Component shall be allowed to assume the
leasehold for the remainder of its term. If no DoD Component has a
requirement for the leasehold, the tenant shall notify GSA in
accordance with paragraph (h)(5)(ii)(A) of this section.
(A) The Federal tenant shall notify the GSA of the availability of
the leasehold. GSA will then decide whether to exercise this option
after consulting with the LRA or other property owner. The GSA shall
have 60 days from the date of notification in which to identify a
Federal agency to serve out the term of the lease and to notify the LRA
or other property owner of the new tenant. If the GSA does not notify
the LRA or other property owner of a new tenant within such 60 days,
the leasehold shall terminate on a date agreed to by the Federal tenant
and the LRA or other property owner.
(B) If the GSA decides not to exercise this option after consulting
with the LRA or other property owner, the leasehold shall terminate on
a date agreed to by the Federal tenant and the LRA or other property owner.
(6) The terms of the lease shall provide that the Federal agency
may repair and improve the property at its expense after consultation
with the LRA.
(i) Property subject to such a leasing arrangement shall be
conveyed in accordance with the existing EDC procedures. The LRA shall
submit the following in addition to the application requirements
outlined in Sec. 174.9(e) of this part:
(1) A description of the parcel or parcels the LRA proposes to have
transferred to it and then to lease to a Federal agency;
(2) A written statement signed by an authorized representative of
the Federal agency that it agrees to accept the lease of the property;
and,
(3) A statement explaining why such a leasing arrangement is
necessary for the long-term economic redevelopment of the installation
property.
(j) The exact amount of consideration, or the formula to be used to
determine that consideration, as well as the schedule for payment of
consideration must be agreed upon in writing before transfer pursuant
to this section.
Subpart E--Personal Property
Sec. 174.13 Personal property.
(a) This section outlines procedures to allow transfer of personal
property to the LRA for the effective implementation of a redevelopment
plan. Personal property does not include fixtures.
(b) The Secretary concerned, supported by DoD Components with
personal property on the installation, will take an inventory of the
personal property, including its condition, within 6 months after the
date of approval of closure or realignment. This inventory will be
limited to the personal property located on the real property to be
disposed of by the Military Department. The inventory will be taken in
consultation with LRA officials. If there is no LRA, the Secretary
concerned shall consult with the local government in whose jurisdiction
the installation is wholly located, or a local government agency or a
State government agency designated for that purpose by the Governor of
the State. Based on these consultations, the installation commander
will determine the items or category of items that have the potential
to enhance the reuse of the real property.
(c) Except for property subject to the exemptions in paragraph (e)
of this section, personal property with potential to enhance the reuse
of the real property shall remain at an installation being closed or
realigned until the earlier of:
(1) One week after the Secretary concerned receives the
redevelopment plan;
(2) The date notified by the LRA that there will be no
redevelopment plan;
(3) 24 months after the date of approval of the closure or
realignment of the installation; or
(4) 90 days before the date of the closure or realignment of the
installation.
(d) National Guard property under the control of the United States
Property and Fiscal Officer is subject to inventory and may be made
available for redevelopment planning purposes.
(e) Personal property may be removed upon approval of the
installation commander or higher authority, as prescribed by the
Secretary concerned, after the inventory required in paragraph (b) of
this section has been sent to the LRA, when:
(1) The property is required for the operation of a unit, function,
component, weapon, or weapons system at another installation;
(2) The property is uniquely military in character and is likely to
have no civilian use (other than use for its material content or as a
source of commonly used components). This property consists of
classified items; nuclear, biological, and chemical items; weapons and
munitions; museum property or items of significant historic value that
are maintained or displayed on loan; and similar military items;
(3) The property is not required for the reutilization or
redevelopment of the installation (as jointly determined by the
Secretary concerned and the LRA);
(4) The property is stored at the installation for purposes of
distribution (including spare parts or stock items) or redistribution
and sale (DoD excess/surplus personal property). This property includes
materials or parts used in a manufacturing or repair function but does
not include maintenance spares for equipment to be left in place;
(5) The property meets known requirements of an authorized program
of a DoD Component or another Federal agency that would have to
purchase similar items, and is the subject of a written request by the
head of the DoD Component or other Federal agency. If the authority to
acquire personal property has been delegated, a copy of the delegation
must accompany the request. (For purposes of this paragraph,
``purchase'' means the DoD Component or Federal agency intends to
obligate funds in the current quarter or next six fiscal quarters.) The
DoD Component or Federal agency must pay packing, crating, handling,
and transportation charges associated with such transfers of personal
property;
(6) The property belongs to a nonappropriated fund instrumentality
(NAFI) of the Department of Defense; separate arrangements for
communities to purchase such property are possible
[[Page 9926]]
and may be negotiated with the Secretary concerned;
(7) The property is not owned by the Department of Defense, i.e.,
it is owned by a Federal agency outside the Department of Defense or by
non-Federal persons or entities such as a State, a private corporation,
or an individual; or,
(8) The property is needed elsewhere in the national security
interest of the United States as determined by the Secretary concerned.
This authority may not be re-delegated below the level of an Assistant
Secretary. In exercising this authority, the Secretary may transfer the
property to any DoD Component or other Federal agency.
(f) Personal property not subject to the exemptions in paragraph
(e) of this section may be conveyed to the LRA as part of an EDC for
the real property if the Secretary concerned makes a finding that the
personal property is necessary for the effective implementation of the
redevelopment plan.
(g) Personal property may also be conveyed separately to the LRA
under an EDC for personal property. This type of EDC can be made if the
Secretary concerned determines that the transfer is necessary for the
effective implementation of a redevelopment plan with respect to the
installation. Such determination shall be based on the LRA's timely
application for the property, which should be submitted to the
Secretary upon completion of the redevelopment plan. The application
must include the LRA's agreement to accept the personal property after
a reasonable period and will otherwise comply with the requirements of
Sec. Sec. 174.9 and 174.10 of this part. The transfer will be subject
to reasonable limitations and conditions on use.
(h) Personal property that is not needed by a DoD Component or a
tenant Federal agency or conveyed to an LRA (or a state or local
jurisdiction in lieu of an LRA), or conveyed as related personal
property together with the real property, will be transferred to the
Defense Reutilization and Marketing Office for disposal in accordance
with applicable regulations.
(i) Useful personal property not needed by the Federal Government
and not qualifying for transfer to the LRA under an EDC may be donated
to the community or LRA through the appropriate State Agency for
Surplus Property (SASP) under 41 CFR part 102-37 surplus program
guidelines. Personal property donated under this procedure must meet
the usage and control requirements of the applicable SASP.
Subpart F--Maintenance and Repair
Sec. 174.14 Maintenance and repair.
(a) Facilities and equipment located on installations being closed
are often important to the eventual reuse of the installation. This
section provides maintenance procedures to preserve and protect those
facilities and items of equipment needed for reuse in an economical
manner that facilitates installation redevelopment.
(b) In order to ensure quick reuse, the Secretary concerned, in
consultation with the LRA, will establish initial levels of maintenance
and repair needed to aid redevelopment and to protect the property for
the time periods set forth in paragraph (c) of this section. Where
agreement between the Secretary and the LRA cannot be reached, the
Secretary will determine the required levels of maintenance and repair
and its duration. In no case will these initial levels of maintenance:
(1) Exceed the standard of maintenance and repair in effect on the
date of approval of closure or realignment;
(2) Be less than maintenance and repair required to be consistent
with Federal Government standards for excess and surplus properties as
provided in the Federal Management Regulations of the GSA, 41 CFR part 102;
(3) Be less than the minimum levels required to support the use of
such facilities or equipment for nonmilitary purposes; or,
(4) Require any property improvements, including construction,
alteration, or demolition, except when the demolition is required for
health, safety, or environmental purposes, or is economically justified
in lieu of continued maintenance expenditures.
(c) Unless the Secretary concerned determines that it is in the
national security interest of the United States, the levels of
maintenance and repair specified in paragraph (b) of this section shall
not be changed until the earlier of:
(1) One week after the Secretary concerned receives the
redevelopment plan;
(2) The date notified by the LRA that there will be no
redevelopment plan;
(3) 24 months after the date of approval of the closure or
realignment of the installation; or
(4) 90 days before the date of the closure or realignment of the
installation.
(d) The Secretary concerned may extend the time period for the
initial levels of maintenance and repair for property still under the
Secretary's control for an additional period, if the Secretary
determines that the LRA is actively implementing its redevelopment
plan, and such levels of maintenance are justified.
(e) Once the time period for the initial or extended levels of
maintenance and repair expires, the Secretary concerned will reduce the
levels of maintenance and repair to levels consistent with Federal
Government standards for excess and surplus properties as provided in
the Federal Management Regulations of the GSA, except in the case of
facilities still being used to perform a DoD mission.
Subpart G--Environmental Matters
Sec. 174.15 Indemnification under Section 330 of the National Defense
Authorization Act for Fiscal Year 1993.
Section 330 of the National Defense Authorization Act for Fiscal
Year 1993, Pub. L. 102-484, as amended, provides for indemnification of
transferees of closing Department of Defense properties under
circumstances specified in that statute. The authority to implement
this provision of law has been delegated by the Secretary of Defense to
the General Counsel of the Department of Defense; therefore, this
provision of law shall only be referred to or recited in any deed,
sales agreement, bill of sale, lease, license, easement, right-of-way,
or transfer document for real or personal property after obtaining the
written concurrence of the Deputy General Counsel (Environment and
Installations), Office of the General Counsel, Department of Defense.
Sec. 174.16 Real property containing explosive or chemical agent hazards.
The DoD Component controlling real property known to contain or
suspected of containing explosive or chemical agent hazards from past
DoD military munitions-related or chemical warfare-related activities
shall, prior to transfer of the property out of Department of Defense
control, obtain the DoD Explosives Safety Board's approval of measures
planned to ensure protectiveness from such hazards, in accordance with
DoD Directive 6055.9E, Explosives Safety Management and the DoD
Explosives Safety Board.
Sec. 174.17 NEPA.
At installations subject to this part, NEPA analysis shall comply
with the promulgated NEPA regulations of the Military Department
exercising real property accountability for the installation, including
any requirements relating to responsibility for funding the analysis.
See 32 CFR parts 651 (for the Army), 775 (for the Navy), and 989 (for
[[Page 9927]]
the Air Force). Nothing in this section shall be interpreted as releasing
a Military Department from complying with its own NEPA regulation.
Sec. 174.18 Historic preservation.
(a) The transfer, lease, or sale of National Register-eligible
historic property to a non-Federal entity at installations subject to
this part may constitute an ``adverse effect'' under the regulations
implementing the National Historic Preservation Act (36 CFR
800.5(a)(2)(vii)). One way of resolving this adverse effect is to
restrict the use that may be made of the property subsequent to its
transfer out of Federal ownership or control through the imposition of
legally enforceable restrictions or conditions. The Secretary concerned
may include such restrictions or conditions (typically a real property
interest in the form of a restrictive covenant or preservation
easement) in any deed or lease conveying an interest in historic
property to a non-Federal entity. Before doing so, the Secretary should
first consider whether the historic character of the property can be
protected effectively through planning and zoning actions undertaken by
units of State or local government; if so, working with such units of
State or local government to protect the property through these means
is preferable to encumbering the property with such a covenant or easement.
(b) Before including such a covenant or easement in a deed or
lease, the Secretary concerned shall consider--
(1) Whether the jurisdiction that encompasses the property
authorizes such a covenant or easement; and
(2) Whether the Secretary can give or assign to a third party the
responsibility for monitoring and enforcing such a covenant or easement.
PART 175--[REMOVED AND RESERVED]
? 2. Part 175 is removed and reserved.
PART 176--REVITALIZING BASE CLOSURE COMMUNITIES AND COMMUNITY
ASSISTANCE--COMMUNITY REDEVELOPMENT AND HOMELESS ASSISTANCE
? 3. The authority citation for part 176 continues to read as follows:
Authority: 10 U.S.C. 2687 note.
Sec. 176.20 [AMENDED]
? 4. Section 176.20(b) is amended by revising ``32 CFR part 175'' to read
``32 CFR part 174''.
Dated: February 24, 2006.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, DoD.
[FR Doc. 06-1902 Filed 2-24-06; 12:08 pm]
BILLING CODE 5001-06-P