Definition of Military Installation and the List of Military Installations in the Regulations Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States

<RULE> DEPARTMENT OF THE TREASURY <SUBAGY>Office of Investment Security</SUBAGY> <CFR>31 CFR Part 802</CFR> <RIN>RIN 1505-AC88</RIN> <SUBJECT>Definition of Military Installation and the List of Military Installations in the Regulations Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Investment Security, Department of the Treasury. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule amends the regulations of the Committee on Foreign Investment in the United States pertaining to transactions involving the purchase or lease by, or concession to, a foreign person of certain real estate in the United States. Specifically, the final rule amends the regulations by adding, moving, and removing certain military installations on the appendix at parts 1 and 2; makes corresponding revisions to the definition of the term “military installation”; makes technical amendments to update the name or location information for certain military installations already listed on the appendix; and amends the applicability rule regarding changes to the regulations. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective on December 9, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Meena R. Sharma, Director, Office of Investment Security Policy and International Relations, at U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220; telephone: (202) 622-3425; email: <E T="03">CFIUS.Regulations@treasury.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> The regulations at part 802 to title 31 of the Code of Federal Regulations (part 802) implement the provisions in section 721 of the Defense Production Act (DPA) of 1950, as amended, which are codified at 50 U.S.C. 4565 (section 721), and establish the process and procedures of the Committee on Foreign Investment in the United States (CFIUS or the Committee) with respect to reviewing transactions involving the purchase or lease by, or concession to, a foreign person of certain real estate in the United States. Section 721 authorizes the president or his designee ( <E T="03">i.e.,</E> CFIUS) to review certain real estate transactions by foreign persons where the real estate at issue is located in the United States and (a) is located within, or will function as part of, an air or maritime port; or (b) is in close proximity to a United States military installation or another facility or property of the U.S. Government that is sensitive for reasons relating to national security; could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance. The appendix to the current regulations at part 802 (appendix A or the appendix) identifies certain military installations around which certain real estate transactions are subject to CFIUS's jurisdiction. As noted in the preamble to the final rule establishing part 802 in 2020 ( <E T="03">see</E> 85 FR 3158), the military installations listed in the appendix were identified by the U.S. Department of Defense (Department of Defense) based upon an evaluation of national security considerations. The specific military installations are listed in appendix A by name and location (or township/range), and section 802.227 sets forth the category descriptions of the military installations identified in appendix A. The locations listed in appendix A are intended to aid in the identification of the relevant installations only and do not represent specific boundaries of the installations for purposes of determining whether a transaction is a covered real estate transaction. The U.S. Department of the Treasury (Treasury Department) initially established part 802 through the final rule that became effective on February 13, 2020 (85 FR 3158). The Treasury Department subsequently made amendments to part 802 by adding eight military installations to appendix A and making technical changes that became effective on September 22, 2023 (September 2023 Rule) (88 FR 57348). Most recently, on July 19, 2024, the Treasury Department published a notice of proposed rulemaking (Proposed Rule) (89 FR 58653) that would: (1) add 59 military installations to the appendix at parts 1 and 2; (2) move eight military installations from part 1 to part 2; (3) remove one installation from part 1 and two installations from part 2; (4) revise the definition of the term “military installation”; (5) make technical amendments to the names of 14 installations already listed on the appendix; and (6) update the locations of seven installations already listed on the appendix. The public was given an opportunity to comment on the Proposed Rule, and comments were due by August 19, 2024. The comments received are available on the public rulemaking docket at <E T="03">https://www.regulations.gov</E> (Docket TREAS-DO-2024-0010-0001). <HD SOURCE="HD1">II. Summary of Comments</HD> During the public comment period, the Treasury Department received more than 40 comment submissions reflecting a range of views. The Treasury Department considered each comment before issuing this final rule (Final Rule). Discussed below are the comments received and the Treasury Department's responses in consideration of the comments. Several commenters expressed the view that certain other military installations should be included in appendix A due to the nature of their operations and one commenter noted that any military or sensitive location should be considered for inclusion. Multiple commenters stated that Camp Grayling in Michigan should be added to appendix A. One commenter suggested three additional installations in Michigan for inclusion: Selfridge Air National Guard Base, Fort Custer, and Kellogg Air National Guard Base. Other commenters expressed support for the proposed inclusion of Whiteman Air Force Base in Missouri and suggested also including Ebbing Air National Guard Base in Arkansas. One commenter requested that the one-mile boundary around installations on part 1 of appendix A be extended to 30 miles. The commenter also requested that Marine Corps Air Station Cherry Point in North Carolina be moved from part 1 to part 2 of appendix A given the nature of the military operations at the site and that the location of this facility in the regulations be updated to Havelock, NC since it is within the city limits. The Final Rule makes no changes in response to these comments. Consistent with the Proposed Rule, the Final Rule adds Camp Grayling and Whiteman Air Force Base to the list of military installations at part 2 of appendix A. The Department of Defense identified the military installations that are the subject of this Final Rule after a comprehensive assessment that it conducted including through coordination across all military services, considering factors such as the operations, assets, missions, and training at each installation and appropriateness for coverage under section 721. Regarding any military installations not included in the Final Rule, the Department of Defense will continue on an ongoing basis to assess its military installations and the geographic scope set under part 802 to ensure appropriate application in light of national security considerations. Consistent with the authority under section 721(a)(4)(B)(ii), CFIUS is authorized to review certain real estate transactions in close proximity to facilities or properties of the U.S. Government that are sensitive for reasons relating to national security. The list of installations provided in the Proposed Rule reflects the Department of Defense's recent comprehensive assessment of its military installations in light of national security considerations. In the future, CFIUS may add other U.S. Government facilities or properties to the list of sites identified in appendix A, as appropriate and in consultation with CFIUS member agencies and other relevant departments and agencies of the U.S. Government. In response to the comment regarding the location of Marine Corps Air Station Cherry Point, the location as listed in the Proposed Rule (Cherry Point, NC) is accurate. Multiple commenters referenced a particular company and some expressed the view that the company should not be permitted to build an electric vehicle battery facility in Michigan. Several commenters noted that the location for the facility is near Camp Grayling, which the Proposed Rule would have added to the list of military installations in part 2 of appendix A. Further, some commenters expressed concerns about the particular company and suggested CFIUS review a specific transaction involving the company. One commenter also suggested that the Proposed Rule should apply retroactively so that CFIUS can review the particular transaction noted. The Final Rule makes no changes in response to the comments regarding a particular company and a specific transaction. It would be inappropriate and outside the scope of the Committee's rulemaking authority to specify the application of the regulations to a particular entity or a specific transaction in the course of a rulemaking. Filing transactions with CFIUS under part 802 is a voluntary process. CFIUS reviews covered transactions to determine the effects of the transaction on the national security of the United States and conducts this review on a case-by-case basis in light of the specific facts and circumstances. If any risks to the national security of the United States arise as a result of a transaction within the jurisdiction of CFIUS, the Committee ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 59k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━