March 3, 2020 - Issue: Vol. 166, No. 42 — Daily Edition116th Congress (2019 - 2020) - 2nd Session

[Pages S1443-S1444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SECURE FEDERAL LEASES FROM ESPIONAGE AND SUSPICIOUS ENTANGLEMENTS ACT

  Ms. MURKOWSKI. Madam President, I ask unanimous consent that the 
Senate proceed to the immediate consideration of Calendar No. 196, S. 
1869.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The senior assistant legislative clerk read as follows:

       A bill (S. 1869) to require the disclosure of ownership of 
     high-security space leased to accommodate a Federal agency, 
     and for other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Homeland Security and 
Governmental Affairs, with an amendment to strike all after the 
enacting clause and insert in lieu thereof the following:

     SECTION 1. SHORT TITLE; FINDINGS.

       (a) Short Title.--This Act may be cited as the ``Secure 
     Federal Leases from Espionage and Suspicious Entanglements 
     Act'' or the ``Secure Federal LEASEs Act''.
       (b) Findings.--Congress finds that--
       (1) the Government Accountability Office has reported that 
     the Federal Government often leases high-security space from 
     private sector landlords;
       (2) the General Services Administration collects highest-
     level and immediate ownership information through the System 
     of Award Management, but it is not currently required to 
     collect beneficial ownership information and lacks an 
     adequate system for doing so;
       (3) the General Services Administration and Federal 
     agencies with leasing authority may not know if foreign 
     owners have a stake in the buildings leased by the agencies, 
     either through foreign-incorporated legal entities or through 
     ownership in United States-incorporated legal entities, even 
     when the leased space is used for classified operations or to 
     store sensitive data; and
       (4) according to a report of the Government Accountability 
     Office, dated January 2017, that examined the risks of 
     foreign ownership of Government-leased real estate, ``leasing 
     space in foreign-owned buildings could present security risks 
     such as espionage and unauthorized cyber and physical 
     access''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Beneficial owner.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``beneficial owner'' means, with respect to a 
     covered entity, each natural person who, directly or 
     indirectly, through any contract, arrangement, understanding, 
     relationship, or otherwise--
       (i) exercises control over the covered entity; or
       (ii) has a substantial interest in or receives substantial 
     economic benefits from the assets of the covered entity.
       (B) Exceptions.--The term ``beneficial owner'' does not 
     include, with respect to a covered entity--
       (i) a minor child;
       (ii) a person acting as a nominee, intermediary, custodian, 
     or agent on behalf of another person;
       (iii) a person acting solely as an employee of the covered 
     entity and whose control over or economic benefits from the 
     covered entity derives solely from the employment status of 
     the person;
       (iv) a person whose only interest in the covered entity is 
     through a right of inheritance, unless the person also meets 
     the requirements of subparagraph (A); or
       (v) a creditor of the covered entity, unless the creditor 
     also meets the requirements of subparagraph (A).
       (C) Anti-abuse rule.--The exceptions under subparagraph (B) 
     shall not apply if used for the purpose of evading, 
     circumventing, or abusing the requirements of this Act.
       (2) Control.--The term ``control'' means, with respect to a 
     covered entity--
       (A) having the authority or ability to determine how a 
     covered entity is utilized; or
       (B) having some decision-making power for the use of a 
     covered entity.
       (3) Covered entity.--The term ``covered entity'' means--
       (A) a person, corporation, company, business association, 
     partnership, society, trust, or any other nongovernmental 
     entity, organization, or group; or
       (B) any governmental entity or instrumentality of a 
     government.
       (4) Executive agency.--The term ``Executive agency'' has 
     the meaning given the term in section 105 of title 5, United 
     States Code.
       (5) Federal agency.--The term ``Federal agency'' means any 
     Executive agency or any establishment in the legislative or 
     judicial branch of the Government.
       (6) Federal lessee.--The term ``Federal lessee'' means the 
     Administrator of General Services, the Architect of the 
     Capitol, or the head of any Federal agency, other than the 
     Department of Defense, that has independent statutory leasing 
     authority.
       (7) Federal tenant.--The term ``Federal tenant'' means a 
     Federal agency that is occupying or will occupy a high-
     security leased space for which a lease agreement has been 
     secured on behalf of the Federal agency.
       (8) Foreign entity.--The term ``foreign entity'' means a 
     covered entity that is headquartered or incorporated in a 
     country that is not the United States.
       (9) Foreign person.--The term ``foreign person'' means an 
     individual who is not a United States person.
       (10) High-security leased space.--The term ``high-security 
     leased space'' means a space leased by a Federal lessee 
     that--
       (A) will be occupied by Federal employees for nonmilitary 
     activities; and
       (B) has a facility security level of III, IV, or V, as 
     determined by the Federal tenant in consultation with the 
     Interagency Security Committee, the Department of Homeland 
     Security, and the General Services Administration.
       (11) Highest-level owner.--The term ``highest level owner'' 
     means the entity that owns or controls an immediate owner of 
     the offeror of a lease, or that owns or controls 1 or more 
     entities that control an immediate owner of the offeror.
       (12) Immediate owner.--The term ``immediate owner'' means 
     an entity, other than the offeror of a lease, that has direct 
     control of the offeror, including ownership or interlocking 
     management, identity of interests among family members, 
     shared facilities and equipment, and the common use of 
     employees.

[[Page S1444]]

       (13) Substantial economic benefits.--The term ``substantial 
     economic benefits'' means, with respect to a natural person 
     described in paragraph (1)(A)(ii), having an entitlement to 
     the funds or assets of a covered entity that, as a practical 
     matter, enables the person, directly or indirectly, to 
     control, manage, or direct the covered entity.
       (14) United states person.--The term ``United States 
     person'' means an individual who--
       (A) is a citizen of the United States; or
       (B) is an alien lawfully admitted for permanent residence 
     in the United States.
       (15) Widely-held.--The term ``widely-held'' means a fund 
     that has not less than 100 natural persons as direct or 
     indirect investors.

     SEC. 3. DISCLOSURE OF OWNERSHIP OF HIGH-SECURITY SPACE LEASED 
                   FOR FEDERAL AGENCIES.

       (a) Required Disclosures.--Before entering into a lease 
     agreement with a covered entity or approving a novation 
     agreement with a covered entity involving a change of 
     ownership under a lease that will be used for high-security 
     leased space, a Federal lessee shall require the covered 
     entity to identify and disclose whether the immediate or 
     highest-level owner of the leased space, including an entity 
     involved in the financing thereof, is a foreign person or a 
     foreign entity, including the country associated with the 
     ownership entity.
       (b) Notification.--If a disclosure is made under subsection 
     (a), the Federal lessee shall notify the Federal tenant of 
     the building or other improvement that will be used for high-
     security space in writing, and consult with the Federal 
     tenant, regarding security concerns and necessary mitigation 
     measures, if any, prior to award of the lease or approval of 
     the novation agreement.
       (c) Timing.--
       (1) In general.--A Federal lessee shall require a covered 
     entity to provide the information described in subsection (a) 
     to a covered entity when first submitting a proposal in 
     response to a solicitation for offers issued by the Federal 
     lessee.
       (2) Updates.--A Federal lessee shall require a covered 
     entity to submit an update of the information described in 
     subsection (a) annually, beginning on the date that is 1 year 
     after the date on which the Federal tenant began occupancy, 
     with information including--
       (A) the list of immediate or highest-level owners of the 
     covered entity during the preceding 1-year period of Federal 
     occupancy; or
       (B) the information required to be provided relating to 
     each such immediate or highest-level owner.

     SEC. 4. IMMEDIATE, HIGHEST-LEVEL, AND BENEFICIAL OWNERS.

       (a) Plan.--The General Services Administration shall 
     develop a Government-wide plan for identifying all immediate, 
     highest-level, or beneficial owners of high-security leased 
     spaces before entering into a lease agreement with a covered 
     entity for the accommodation of a Federal tenant in a high-
     security leased space.
       (b) Requirements.--
       (1) Contents.--The plan described in subsection (a) shall 
     include a process for collecting and utilizing the following 
     information on each immediate, highest-level, or beneficial 
     owner of a high-security leased space:
       (A) Name.
       (B) Current residential or business street address.
       (C) An identifying number or document that verifies 
     identity as a United States person, foreign person, or 
     foreign entity.
       (2) Disclosures and notifications.--The plan described in 
     subsection (a) shall--
       (A) require the disclosure of any immediate, highest-level, 
     or beneficial owner that is a foreign person;
       (B) require that, if the Federal lessee is assigning the 
     building or other improvement that will be used for high-
     security space to a Federal tenant, the Federal tenant shall 
     be notified of the disclosure described in subparagraph (A); 
     and
       (C) exclude collecting ownership information on widely-held 
     pooled investment vehicles, mutual funds, trusts, or other 
     pooled-investment vehicles.
       (c) Report and Implementation.--The General Services 
     Administration shall--
       (1) not later than 1 year after the date of enactment of 
     this Act, submit the plan described in subsection (a) to the 
     Committee on Homeland Security and Governmental Affairs of 
     the Senate and the Committee on Oversight and Reform of the 
     House of Representatives;
       (2) not later than 2 years after the date of enactment of 
     this Act, implement the plan described in subsection (a); and
       (3) not later than 1 year after the implementation of the 
     plan described in subsection (a), and each year thereafter 
     for 9 years, submit a report to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Oversight and Reform of the House of 
     Representatives on the status of the implementation of the 
     plan, including the number of disclosures made under 
     subsection (b)(2).

     SEC. 5. OTHER SECURITY AGREEMENTS FOR LEASED SPACE.

       A lease agreement between a Federal lessee and a covered 
     entity for the accommodation of a Federal agency in a 
     building or other improvement that will be used for high-
     security leased space shall include language that provides 
     that--
       (1) the covered entity and any member of the property 
     management company who may be responsible for oversight or 
     maintenance of the high-security leased space shall not--
       (A) maintain access to the high-security leased space; or
       (B) have access to the high-security leased space without 
     prior approval from the Federal tenant;
       (2) access to the high-security leased space or any 
     property or information located within that space will only 
     be granted by the Federal tenant if the Federal tenant 
     determines that the access is clearly consistent with the 
     mission and responsibilities of the Federal tenant; and
       (3) the Federal lessee shall have written procedures in 
     place, signed by the Federal lessee and the covered entity, 
     governing access to the high-security leased space in case of 
     emergencies that may damage the leased property.

     SEC. 6. APPLICABILITY.

       Except where otherwise provided, this Act shall apply with 
     respect to any lease or novation agreement entered into on or 
     after the date of the enactment of this Act.
  Ms. MURKOWSKI. Madam President, I ask unanimous consent that the 
committee-reported substitute amendment be withdrawn; that the Peters 
substitute amendment, which is at the desk, be considered and agreed 
to; that the bill, as amended, be considered read a third time and 
passed; and that the motion to reconsider be considered made and laid 
upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee-reported amendment in the nature of a substitute was 
withdrawn.
  The amendment (No. 1459), in the nature of a substitute, was agreed 
to, as follows:
  (Purpose: In the nature of a substitute.)
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The bill (S. 1869), as amended, was ordered to be engrossed for a 
third reading, was read the third time, and passed.

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