Revitalizing Base Closure Communities and Addressing Impacts of Realignment

Section 2715 of the National Defense Authorization Act for Fiscal Year 2010, Public Law 111-84, amended the Defense Base Closure and Realignment Act of 1990 to change the authority of the Department of Defense to convey property to a local redevelopment authority (LRA) for purposes of job generation on a military installation closed or realigned under a base closure law. Such a conveyance is known as an Economic Development Conveyance (EDC). Economic Development Conveyances were created by amendments to the Base Closure and Realignment law in 1993, creating a new tool for communities experiencing negative economic effects caused by the elimination of a significant number of jobs in the community. Congress recognized that the existing authority under the Federal Property and Administrative Services Act of 1949 (as amended and otherwise known as the Real Property Act) was not structured to deal with the unique challenges of assisting base closure communities with economic recovery and job creation, many with decaying or obsolete infrastructure and other redevelopment challenges. Under this revised authority, the Department is no longer required to seek fair market value for an EDC. An EDC may be for consideration at or below the estimated fair market value, including without consideration. The amendment expands the flexibility of the Department regarding the form of consideration it may accept, including the authority to accept consideration in the form of revenue sharing or so-called "back-end" funding. Back-end funding is consideration consisting of a share of the revenues that the LRA receives from third- party buyers or lessees from sales and leases of the conveyed property, consideration in kind (including goods and services), real property and improvements, or such other consideration as the Secretary considers appropriate. The amendment also provides that the Department's determination of the consideration may account for the economic conditions of the local affected community and the estimated costs to redevelop the property. This final rule amends the existing regulation on reutilization of installations closed under the base closure process to conform to the amendment to the Defense Base Closure and Realignment Act of 1990 and makes other improvements that encourage expedited property transfers for job creation that allow for the Department to recover a share of the revenues obtained.