Securities and Exchange Commission Real Estate Leasing Authority Revocation Act
Floor Speech
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Ms. NORTON. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1468) to amend title 40, United States Code, to eliminate the leasing authority of the Securities and Exchange Commission, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 1468
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securities and Exchange Commission Real Estate Leasing Authority Revocation Act''. SEC. 2. LEASING OF SPACE FOR SECURITIES AND EXCHANGE COMMISSION.
(a) In General.--Section 3304 of title 40, United States Code, is amended by adding at the end the following:
``(e) Leasing of Space for Securities and Exchange Commission.--Notwithstanding any other provision of law, on and after the date of enactment of this subsection, the Securities and Exchange Commission may not lease general purpose office space. The Administrator may lease such space for the Securities and Exchange Commission under section 585 and this chapter.''.
(b) Limitation on Statutory Construction.--The amendment made by subsection (a) may not be construed to invalidate or otherwise affect a lease entered into by the Securities and Exchange Commission before the date of enactment of this Act. SEC. 3. INDEPENDENT LEASING AUTHORITIES.
(a) In General.--The Comptroller General of the United States shall submit to the Committee on Transportation and Infrastructure of the House of Representatives, the Committee on Environment and Public Works of the Senate, and the Committee on Homeland Security and Governmental Affairs of the Senate a report on the review described in subsection (b).
(b) Review.--The Comptroller General shall complete a review under which the Comptroller General shall update the 2016 report of the Comptroller General (GAO-16-648) with a specific focus on the following:
(1) Updating the information included in Appendix II: Federal Entities That Reported Having Independent Leasing Authority for Domestic Offices and Warehouses of such report.
(2) Determining to what extent Federal entities with independent leasing authorities have had such authorities rescinded or amended and the number and amount of office and warehouse space such entities lease.
(3) Determining to what extent have agencies with independent leasing authority utilized the General Services Administration for leasing, including utilization of delegation of authority.
(4) Identifying progress made on implementing the recommendations in such report.
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Ms. NORTON. 1468, as amended.
Mr. Speaker, the Securities and Exchange Commission Real Estate Leasing Authority Revocation Act, which I introduced, will revoke the independent real estate leasing authority of the Securities and Exchange Commission and direct the Government Accountability Office to update its 2016 report on independent real estate leasing authority in the Federal Government. While a number of Federal agencies have independent leasing authority, the SEC has a history of egregious real estate practices.
In 2005, the SEC disclosed that it had unbudgeted costs of approximately $48 million for the construction of its headquarters near Union Station. In 2007, after moving into the headquarters, the SEC shuffled its employees to different office space at a cost of over $3 million without any cost-benefit analysis or justifiable explanation.
In 2010, the SEC conducted a deeply flawed analysis to justify the need to lease 900,000 square feet and to commit over $500 million over 10 years, overestimating its space needs by over 300 percent. In addition, the SEC failed to provide complete and accurate information and prepared a faulty and backdated justification and approval after it had already signed the lease.
In August 2016, the General Services Administration and the SEC entered into an occupancy agreement to authorize the GSA to secure a new 15-year lease. In December 2016, the GSA, with the approval of the SEC, submitted a prospectus to Congress for approximately 1.3 million square feet, which Congress approved in 2018. By July 2019, the GSA had received final bids, resolved all protests, and even selected a final bidder. A month later, the SEC canceled the occupancy agreement, citing concerns about the value of the purchase option, which the SEC refused to document to Congress. The SEC effectively vetoed the entire 3-year procurement process, despite not having the authority or funding to exercise the purchase option without the GSA's involvement.
Finally, after much back and forth between the two agencies, the GSA entered into a lease for a new SEC headquarters in September 2021. The SEC says it will continue to have the GSA do its leasing in the future, but the SEC's history of egregious leasing conduct, having squandered hundreds of millions of dollars, makes this bill necessary.
These public blunders also risk undermining the reputation of the GSA and the Federal Government among the developers and building owners that participate in Federal lease procurements and ultimately driving up the costs of all GSA real estate procurement due to the threat of uncertainty.
It is time for Congress to return the SEC's leasing authority to the GSA, the Federal Government's civilian real estate arm. As the SEC has demonstrated over three decades, it is incredibly inefficient, wasteful, and redundant to have the SEC involved in real estate procurements when the GSA exists for that very reason. Like other Federal agencies, the SEC would continue to have input and involvement in the real estate decision-making process, but the GSA will have the ultimate authority.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.
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Ms. NORTON. Mr. Speaker, in closing, I urge my colleagues to support this legislation, and I yield back the balance of my time.
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