Securities and Exchange Commission Real Estate Leasing Authority Revocation Act

Mr. Speaker, I thank the gentleman for yielding, and I thank Chair Graves and Ranking Member Larsen for bringing this important bill to the floor.

This bill would 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. The House passed this bill last Congress.

While a number of Federal agencies have independent real estate 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 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 GSA to secure a new 15-year lease.

In December 2016, GSA, with the approval of SEC, submitted a prospectus to Congress for approximately 1.3 million square feet, which Congress approved in 2018.

Mr. Speaker, I thank the gentleman for yielding me more time.

By July 2019, 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 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 GSA's involvement.

Finally, after much back and forth between the two agencies, GSA entered into a lease agreement for a new SEC headquarters in September 2021. The SEC says it will continue to have 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 GSA and the Federal Government among developers and building owners who participate in Federal lease procurements. The threat of uncertainty ultimately drives up the cost of all GSA real estate procurements.

It is time for Congress to return the SEC's leasing authority to 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 GSA exists for that very reason.

Like other Federal agencies, the SEC will continue to have input with the GSA and involvement in the real estate decision-making process, but GSA would have the ultimate authority.

Mr. Speaker, I urge my colleagues to support the bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 388, the Securities and Exchange Commission Real Estate Leasing Authority Revocation Act.

This legislation, introduced by Delegate Eleanor Holmes Norton of the District of Columbia revokes the independent real estate leasing authority of the SEC and directs the Government Accountability Office to update its 2016 report on Federal entities with independent real estate leasing authority.

While some Federal agencies have independent real estate leasing authority and have used it responsibly, the SEC has a history of egregious real estate practices.

Congress granted the SEC independent leasing authority in 1990, which means the SEC does not need to use the General Services Administration for its real estate needs like most other government agencies do.

In 2010, anticipating the agency would expand in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC leased 900,000 square feet of space in the Constitution Center building in Washington, D.C.

Then, a year later, in 2011, the SEC's Office of Inspector General issued a report which found that the SEC Office of Administrative Services conducted a flawed analysis to justify the need for this leased space and potentially committed Anti-Deficiency Act violations.

SEC's Office of Inspector General found that OAS grossly overestimated the amount of space needed at SEC headquarters for the SEC's projected expansion and prepared a faulty Justification and Approval to support eliminating competition.

Thankfully, Delegate Norton introduced identical legislation to repeal this authority during the 117th Congress, and that bill, H.R. 1468, passed both the Committee on Transportation and Infrastructure and the House of Representatives with bipartisan support. Unfortunately, H.R. 1468 was not considered by the Senate. Today, we are trying one more time to approve this commonsense legislation.

Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentlewoman from the District of Columbia (Ms. Norton).

Mr. Speaker, I yield an additional 2 minutes to the gentlewoman.

Mr. Speaker, it is time for Congress to return the SEC's leasing authority to the GSA, the Federal Government's civilian real estate arm. This legislation would do just that.

Mr. Speaker, I urge my colleagues to support this legislation, and I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 388) to amend title 40, United States Code, to eliminate the leasing authority of the Securities and Exchange Commission, and for other purposes.

Mr. Speaker, I ask unanimous consent that all

Members have 5 legislative days in which to revise and extend their remarks and insert extraneous material in the Record on H.R. 388.

Mr. Speaker, I yield myself such time as I may consume.

H.R. 388 revokes the Securities and Exchange Commission's, or the SEC's, leasing authority for general office space and brings them in line with current leasing practices through the General Services Administration, or the GSA.

In 2012, the SEC violated Federal law by signing a lease for 1.4 million square feet that cost taxpayers $566 million. This resulted in investigations by the Transportation and Infrastructure Committee and the SEC's Inspector General.

The conclusions of these investigations indicated that not only did the SEC exceed its authority with this lease, but also that the SEC had a history of mismanaging its leasing authority.

Recent actions by the SEC during GSA's procurement of leased space for the SEC seem to indicate that the agency may be turning back to its old ways.

This bill ensures that the SEC, like other Federal agencies, continues to use the GSA for its space needs and provides more safeguards for the taxpayers' money.

Mr. Speaker, I urge support for the legislation, and I reserve the balance of my time.

Mr. Speaker, I have no additional speakers, and I reserve the balance of my time.

Mr. Speaker, I am prepared to close, and I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time to close.

H.R. 388 ensures that the SEC is going to work with the GSA on leasing to improve oversight, reduce costs, protect taxpayers against wasteful spending, and minimize Anti-Deficiency Act violations in the future.

Mr. Speaker, I urge support of this legislation, and I yield back the balance of my time.

Mr. Speaker, I rise today in support of H.R. 388-- the Securities and Exchange Commission Real Estate Leasing Authority Revocation Act.

This bill would amend Title 40 of the United States Code and would limit the Securities and Exchange Commission's ability to lease general purpose office space.

The authority to lease general purpose office space should be under the General Services Administration.

Involving the SEC in real estate leasing is useless, excessive, and redundant when GSA was created for that very reason.

This bill was first introduced in 2011 after the SEC engaged in improper sole-source procurement of nearly one million square feet of leased space.

In 2021, the SEC said that GSA will be used in the future for real estate procurements, but this bill would ensure that going forward.

This bill would also mandate the Comptroller General of the United States to submit reports on Independent Leasing Authorities to both House and Senate committees.

H.R. 388 would ensure that Congress is able to accomplish its constitutional obligations and enhance the efficiency and accountability of the federal government for the overall good of the American people.

Furthermore, due to the Comptroller Generals reports measuring the effectiveness of spending policies, it is crucial that these independent leasing reports are updated without fault.

The government itself cannot operate effectively without such essential information being updated annually and being communicated to other committees and federal agencies that profit from such insight.

It is pertinent that the American public's tax dollars are being utilized efficiently and this bill will ensure that.

I urge my colleagues to join me in support of this important legislation that will ensure that the General Services Administration would be in charge of leasing office space for governmental agencies.

We must utilize federal funds properly and this legislation will be one step closer to that.