10 U.S.C. § 2688 | Utility systems: conveyance authority

(a)

Conveyance Authority .—

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.

(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)

section 3204 of this title Notwithstanding paragraph (1), the Secretary concerned may use procedures other than competitive procedures, but only in accordance with subsections (a), (b), (d), and (e) of , 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 concerned may authorize a contract for utility services described in paragraph (1) or the renewal of such a contract to have a term in excess of 10 years, but not to exceed 50 years, if the Secretary concerned determines that a contract for a longer term will be cost effective. The determination of cost effectiveness shall be made using a business case analysis that includes an independent estimate of the level of investment that should be required to maintain adequate operation of the utility system over the proposed term of the contract or contract renewal. The business case analysis must also demonstrate how a privatized system will operate in a manner consistent with subsection (g)(3). A renewal of a contract pursuant to this paragraph may be entered into only within the last five years of the existing contract term.

(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)

Pub. L. 112–81, div. A, title X, § 1061(21)(C)Dec. 31, 2011125 Stat. 1584 Repealed. , , .]

(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.

(3)

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 energy resilience and cybersecurity requirements and associated metrics provided to the conveyee to ensure that the reliability of the utility system meets mission requirements.

(4)

1 See References in Text note below.

The Secretary of Defense, in consultation with the Secretaries of the military departments, shall include in the report submitted under section 2925(a)  of this title a description of progress in meeting energy resilience metrics for all conveyance contracts entered into pursuant to this section.

(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.

(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)

Conveyance of Additional Utility Infrastructure After Conveyance of a Utility System .—

(1)

Upon conveyance of a utility system, the Secretary of a military department may convey additional utility infrastructure under the jurisdiction of the Secretary on a military installation to a utility or entity to which a utility system for the installation has been conveyed under subsection (a) if the Secretary determines that—

(A)

the additional utility infrastructure cannot operate without being a part of the conveyed utility system or operation of the additional utility infrastructure by the utility or entity would be in the best interest of the Government; and

(B)

the military department receives as consideration an amount for the utility infrastructure determined in the same manner as the consideration the Secretary could require under subsection (c) for a conveyance under subsection (a).

(2)

The conveyance under this paragraph may consist of all right, title, and interest of the United States or such lesser estate as the Secretary considers appropriate to serve the interests of the United States.

(k)

Improvement of Conveyed Utility System .—

(1)

In lieu of carrying out a military construction project for an infrastructure improvement that enhances the reliability, resilience, efficiency, physical security, or cybersecurity of a utility system conveyed under subsection (a), the Secretary concerned may use funds authorized and appropriated for the project to make a monetary contribution equal to the total amount for the completed project to the conveyee of the utility system to carry out the project using a contract for utility services entered into under subsection (d).

(2)

All right, title, and interest to infrastructure improvements constructed by the conveyee pursuant to paragraph (1) shall vest in the conveyee.

(3)

The Secretary concerned shall provide to the conveyee the necessary real property interests to access and use lands under the jurisdiction and control of the Secretary for construction of the project under paragraph (1) and for ongoing use, operations, and maintenance.

(4)

If the Secretary concerned exercises a repurchase option under a contract entered into under subsection (d) for a system conveyed under subsection (a), the Secretary shall receive an offset in the amount of the contribution to the conveyee under paragraph (1) against the payment made by the Secretary as consideration for the repurchase, except that the maximum offset may not exceed the full amount of the consideration for the repurchase.

(5)

The Secretary concerned may make a monetary contribution authorized by paragraph (1) notwithstanding the following provisions of law:

(A)

Sections 7540, 8612, and 9540 of this title.

(B)

Subchapters I and III of chapter 169 of this title.

(C)

Chapters 221 and 223 of this title.

(l)

Limitation .—

This section shall not apply to projects constructed or operated by the Army Corps of Engineers under its civil works authorities.

Editorial Notes

References in Text

Section 2925(a) of this title section 2925 of this title Pub. L. 117–263, div. A, title III, § 314(b)(1)(B)Dec. 23, 2022136 Stat. 2504, referred to in subsec. (g)(4), was struck out, and a new subsec. (a) of relating to annual reports on energy performance, resilience, and readiness of Department of Defense was added, by , , .

Prior Provisions

Pub. L. 96–125, title VIII, § 804(a)(1)Nov. 26, 197993 Stat. 948 Pub. L. 96–418, title VIII, § 804Oct. 10, 198094 Stat. 1777 Pub. L. 97–22, § 11(a)(9)July 10, 198195 Stat. 138 Pub. L. 97–99, title IX, § 901Dec. 23, 198195 Stat. 1381 Pub. L. 97–214July 12, 198296 Stat. 173Oct. 1, 1982section 2915 of this titleA prior section 2688, added , , ; amended , , ; , , ; , , , related to use of solar energy systems in new facilities, prior to repeal by , §§ 7(1), 12(a), , , 176, effective , and applicable to military construction projects, and to construction and acquisition of military family housing authorized before, on, or after such date. See .

Amendments

Pub. L. 119–602025—Subsec. (k). amended subsec. (k) generally. Prior to amendment, subsec. (k) related to military construction projects to carry out improvements of conveyed utility systems.

Pub. L. 118–1592024—Subsec. (g)(4). struck out “installation energy” before “report submitted”.

Pub. L. 118–312023—Subsec. (k). amended subsec. (k) generally. Prior to amendment, text read as follows: “In the case of a utility system that is conveyed under this section and that only provides utility services to a military installation, the Secretary concerned may use amounts authorized to be appropriated for military construction to improve the reliability, resilience, efficiency, physical security, or cybersecurity of the utility system.”

Pub. L. 116–283, § 1883(b)(2)2021—Subsec. (b)(2). , substituted “subsections (a), (b), (d), and (e) of section 3204” for “subsections (c) through (f) of section 2304”.

Pub. L. 116–283, § 2824Subsec. (d)(2). , substituted “The Secretary concerned” for “The Secretary of Defense, or the designee of the Secretary,” and “if the Secretary concerned” for “if the Secretary”.

Pub. L. 116–283, § 2823(a), inserted “or the renewal of such a contract” after “paragraph (1)”, substituted “the contract or contract renewal.” for “the contract.”, and inserted at end “A renewal of a contract pursuant to this paragraph may be entered into only within the last five years of the existing contract term.”

lPub. L. 116–92l2019—Subsecs. (k), (). added subsec. (k) and redesignated former subsec. (k) as ().

Pub. L. 115–232, § 312(e)(1)2018—Subsec. (d)(2). , inserted at end “The business case analysis must also demonstrate how a privatized system will operate in a manner consistent with subsection (g)(3).”

Pub. L. 115–232, § 312(e)(2)Subsec. (g)(3). , substituted “shall require” for “may require” and “consistent with energy resilience and cybersecurity requirements and associated metrics” for “consistent with energy resilience requirements and metrics”.

Pub. L. 115–912017—Subsec. (g)(3), (4). added pars. (3) and (4).

Pub. L. 114–92, § 2813(1)2015—Subsec. (j). , substituted “Conveyance of Additional” for “Construction of” in heading.

Pub. L. 114–92, § 2813(2)Subsec. (j)(1). , redesignated subpar. (B) as (A) and substituted “utility system or operation of the additional utility infrastructure by the utility or entity would be in the best interest of the Government; and” for “utility system;”, redesignated subpar. (D) as (B) and substituted “amount for” for “amount equal to the fair market value of”, and struck out former subpars. (A) and (C) which read as follows:

“(A) the additional utility infrastructure was constructed or installed after the date of the conveyance of the utility system;

“(C) the additional utility infrastructure was planned and coordinated with the entity operating the conveyed utility system; and”.

Pub. L. 113–662013—Subsec. (d)(2). inserted at end “The determination of cost effectiveness shall be made using a business case analysis that includes an independent estimate of the level of investment that should be required to maintain adequate operation of the utility system over the proposed term of the contract.”

Pub. L. 112–81, § 1061(21)(A)section 2461 of this title2011—Subsec. (a). , struck out par. (1) designation before “The Secretary of a military department” and struck out pars. (2) and (3) which related to conditions for entry into a contract to convey all or part of a utility system and conditions under which the Secretary concerned could not reconsider conversion to contractor operation under for a five-year period, respectively.

Pub. L. 112–81, § 1061(21)(B)Subsec. (d)(2). , struck out at end “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.”

Pub. L. 112–81, § 1061(21)(C)Subsec. (f). , struck out subsec. (f). Prior to amendment, text read as follows: “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.”

Pub. L. 112–81, § 1061(21)(D)Subsec. (h). , struck out at end “The Secretary concerned shall consider any such contribution in the economic analysis required under subsection (a)(2).”

Pub. L. 111–84, § 2821(a)2009—Subsec. (a)(2)(A)(ii). , substituted “system by 10 percent of the long-term cost for provision of those utility services in the agency tender; and” for “system; and”.

Pub. L. 111–84, § 2821(b)Subsec. (a)(3). , added par. (3).

Pub. L. 110–4172008—Subsecs. (j), (k). added subsec. (j) and redesignated former subsec. (j) as (k).

Pub. L. 109–163, § 2823(a)2006—Subsec. (a). , designated existing provisions as par. (1) and added par. (2).

Pub. L. 109–163, § 2823(b)Subsec. (c)(1). , substituted “may require” for “shall require” in introductory provisions.

Pub. L. 109–163, § 2823(c)(2)Subsec. (c)(3). , redesignated subsec. (c)(3) as (d).

Pub. L. 109–163, § 2823(c)(2)Contracts for Utility ServicesSubsec. (d). , redesignated subsec. (c)(3) as (d), substituted “.—(1) Except as provided in paragraph (2), a contract” for “A contract”, “subsection (c)” for “paragraph (1)”, and “10 years” for “50 years”, and added par. (2). Former subsec. (d) redesignated (e).

Pub. L. 109–163, § 2823(c)(1)Subsec. (e). , redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f).

Pub. L. 109–163, § 2823(d)(1)Subsec. (f). , struck out at end “The report shall include, for each such conveyance, an economic analysis (based upon accepted life-cycle costing procedures approved by the Secretary of Defense) demonstrating that—

“(1) the long-term economic benefit of the conveyance to the United States exceeds the long-term economic cost of the conveyance to the United States; and

“(2) the conveyance will reduce the long-term costs of the United States for utility services provided by the utility system concerned.”

Pub. L. 109–163, § 2823(c)(1), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).

Pub. L. 109–163, § 2823(c)(1)Subsec. (g). , redesignated subsec. (f) as (g). Former subsec. (g) redesignated (h).

Pub. L. 109–163, § 2823(d)(2)Subsec. (h). , substituted “subsection (a)(2)” for “subsection (e)”.

Pub. L. 109–163, § 2823(c)(1), redesignated subsec. (g) as (h). Former subsec. (h) redesignated (i).

Pub. L. 109–163, § 2823(c)(1)Subsecs. (i), (j). , redesignated subsecs. (h) and (i) as (i) and (j), respectively.

Pub. L. 108–1362003—Subsec. (e). amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: “The Secretary concerned may not make a conveyance under subsection (a) until—

“(1) the Secretary submits to the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on Armed Services and the Committee on Appropriations of the House of Representatives an economic analysis (based upon accepted life-cycle costing procedures approved by the Secretary of Defense) demonstrating that—

“(A) the long-term economic benefit of the conveyance to the United States exceeds the long-term economic cost of the conveyance to the United States; and

“(B) the conveyance will reduce the long-term costs of the United States for utility services provided by the utility system concerned; and

“(2) a period of 21 days has elapsed after the date on which the economic analysis is received by the committees.”

Pub. L. 106–398, § 1 [div. B, title XXVIII, § 2813(a)]2000—Subsec. (b). , designated existing provisions as par. (1) and added pars. (2) and (3).

Pub. L. 106–398, § 1 [div. B, title XXVIII, § 2813(b)]Subsec. (f). , designated existing provisions as par. (1) and added par. (2).

Pub. L. 106–398, § 1 [[div. A]Subsecs. (h) to (j). , title X, § 1087(a)(15)], redesignated subsecs. (i) and (j) as (h) and (i), respectively.

Pub. L. 106–65, § 2812(a)1999—Subsec. (c)(3). , added par. (3).

Pub. L. 106–65, § 1067(1)Subsec. (e)(1). , substituted “and the Committee on Armed Services” for “and the Committee on National Security” in introductory provisions.

Pub. L. 106–65, § 2812(c)(2)Subsec. (g). , added subsec. (g). Former subsec. (g) redesignated (i).

Pub. L. 106–65, § 2812(b)Subsec. (g)(2)(B). , substituted “Real property, easements,” for “Easements”.

Pub. L. 106–65, § 2812(c)(1)Subsecs. (h) to (j). , redesignated subsecs. (g) and (h) as (i) and (j), respectively.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

section 1883(b)(2) of Pub. L. 116–283Jan. 1, 2022section 1801(d) of Pub. L. 116–283 section 3001 of this titleAmendment by effective , with additional provisions for delayed implementation and applicability of existing law, see , set out as a note preceding .

Sense of Congress Regarding Inclusion of Stormwater Systems and Components Within the Meaning of “Wastewater System” Under the Department of Defense Authority for Conveyance of Utility Systems

Pub. L. 114–328, div. B, title XXVIII, § 2813Dec. 23, 2016130 Stat. 2717

section 2688 of title 10“It is the sense of Congress that the reference to a system for the collection or treatment of wastewater in the definition of ‘utility system’ in , United States Code, which authorizes the Department of Defense to convey utility systems, includes stormwater systems and components.”

, , , provided that: