10 U.S.C. § 2688 : US Code - Section 2688: Utility systems: conveyance authority

Search 10 U.S.C. § 2688 : US Code - Section 2688: Utility systems: conveyance authority

(a) Conveyance Authority. - (1) The Secretary of a military
department may convey a utility system, or part of a utility
system, under the jurisdiction of the Secretary to a municipal,
private, regional, district, or cooperative utility company or
other entity. The conveyance may consist of all right, title, and
interest of the United States in the utility system or such lesser
estate as the Secretary considers appropriate to serve the
interests of the United States.
(2) The Secretary concerned may not enter into a contract to
convey a utility system, or part of a utility system, under this
subsection until -
(A) the Secretary submits to the congressional defense
committees an economic analysis, based upon accepted life-cycle
costing procedures approved by the Secretary of Defense, that
demonstrates that -
(i) the long-term economic benefit to the United States of
the conveyance of the utility system, or part thereof, exceeds
the long-term economic cost to the United States of the
conveyance;
(ii) the conveyance of the utility system, or part thereof,
will reduce the long-term cost to the United States of utility
services provided by the utility system; and
(iii) the economic benefit analysis under clause (i) and the
cost reduction analysis under clause (ii) incorporate margins
of error in the estimates, based upon guidance approved by the
Secretary of Defense that minimize any underestimation of the
costs resulting from privatization of the utility system, or
part thereof, or any overestimation of the costs resulting from
continued Government ownership and management of the utility
system, or part thereof; and
(B) the end of the 21-day period beginning on the date on which
the economic analysis prepared under subparagraph (A) with
respect to the conveyance of the utility system, or part thereof,
is received by the congressional defense committees or, if over
earlier, the end of the 14-day period beginning on the date on
which a copy of the economic analysis is provided in an
electronic medium pursuant to section 480 of this title.
(b) Selection of Conveyee. - (1) If more than one utility or
entity referred to in subsection (a) notifies the Secretary
concerned of an interest in a conveyance under such subsection, the
Secretary shall carry out the conveyance through the use of
competitive procedures.
(2) Notwithstanding paragraph (1), the Secretary concerned may
use procedures other than competitive procedures, but only in
accordance with subsections (c) through (f) of section 2304 of this
title, to select the conveyee of a utility system (or part of a
utility system) under subsection (a).
(3) With respect to the solicitation process used in connection
with the conveyance of a utility system (or part of a utility
system) under subsection (a), the Secretary concerned shall ensure
that the process is conducted in a manner consistent with the laws
and regulations of the State in which the utility system is located
to the extent necessary to ensure that all interested regulated and
unregulated utility companies and other interested entities receive
an opportunity to acquire and operate the utility system to be
conveyed.
(c) Consideration. - (1) The Secretary concerned may require as
consideration for a conveyance under subsection (a) an amount equal
to the fair market value (as determined by the Secretary) of the
right, title, or interest of the United States conveyed. The
consideration may take the form of -
(A) a lump sum payment; or
(B) a reduction in charges for utility services provided by the
utility or entity concerned to the military installation at which
the utility system is located.
(2) If the utility services proposed to be provided as
consideration under paragraph (1) are subject to regulation by a
Federal or State agency, any reduction in the rate charged for the
utility services shall be subject to establishment or approval by
that agency.
(d) Contracts for Utility Services. - (1) Except as provided in
paragraph (2), a contract for the receipt of utility services as
consideration under subsection (c), or any other contract for
utility services entered into by the Secretary concerned in
connection with the conveyance of a utility system under this
section, may be for a period not to exceed 10 years.
(2) The Secretary of Defense, or the designee of the Secretary,
may authorize a contract for utility services described in
paragraph (1) to have a term in excess of 10 years, but not to
exceed 50 years, if the Secretary determines that a contract for a
longer term will be cost effective. The economic analysis submitted
to the congressional defense committees under subsection (a)(2) for
the conveyance of the utility system, or part thereof, with regard
to which the utility services contract will be entered into by the
Secretary concerned shall include the determination required by
this paragraph, an explanation of the need for the longer term
contract, and a comparison of costs between a 10-year contract and
the longer-term contract.
(e) Treatment of Payments. - (1) A lump sum payment received
under subsection (c) shall be credited, at the election of the
Secretary concerned -
(A) to an appropriation of the military department concerned
available for the procurement of the same utility services as are
provided by the utility system conveyed under this section;
(B) to an appropriation of the military department available
for carrying out energy savings projects or water conservation
projects; or
(C) to an appropriation of the military department available
for improvements to other utility systems.
(2) Amounts so credited shall be merged with funds in the
appropriation to which credited and shall be available for the same
purposes, and subject to the same conditions and limitations, as
the appropriation with which merged.
(f) Quarterly Report. - Not later than 30 days after the end of
each quarter of a fiscal year, the Secretary shall submit to the
congressional defense committees a report on the conveyances made
under subsection (a) during such fiscal quarter.
(g) Additional Terms and Conditions. - (1) The Secretary
concerned may require such additional terms and conditions in
connection with a conveyance under subsection (a) as the Secretary
considers appropriate to protect the interests of the United
States.
(2) The Secretary concerned shall require in any contract for the
conveyance of a utility system (or part of a utility system) under
subsection (a) that the conveyee manage and operate the utility
system in a manner consistent with applicable Federal and State
regulations pertaining to health, safety, fire, and environmental
requirements.
(h) Assistance for Construction, Repair, or Replacement of
Utility Systems. - In lieu of carrying out a military construction
project to construct, repair, or replace a utility system, the
Secretary concerned may use funds authorized and appropriated for
the project to facilitate the conveyance of the utility system
under this section by making a contribution toward the cost of
construction, repair, or replacement of the utility system by the
entity to which the utility system is being conveyed. The Secretary
concerned shall consider any such contribution in the economic
analysis required under subsection (a)(2).
(i) Utility System Defined. - (1) In this section, the term
"utility system" means any of the following:
(A) A system for the generation and supply of electric power.
(B) A system for the treatment or supply of water.
(C) A system for the collection or treatment of wastewater.
(D) A system for the generation or supply of steam, hot water,
and chilled water.
(E) A system for the supply of natural gas.
(F) A system for the transmission of telecommunications.
(2) The term "utility system" includes the following:
(A) Equipment, fixtures, structures, and other improvements
utilized in connection with a system referred to in paragraph
(1).
(B) Real property, easements, and rights-of-way associated with
a system referred to in that paragraph.
(j) Limitation. - This section shall not apply to projects
constructed or operated by the Army Corps of Engineers under its
civil works authorities.