Current Law Limits the State Department's Authority to Manage Certain Overseas Properties Cost Effectively

Section 738 in the fiscal year 2001 Agriculture Appropriation Act prohibits the Department of State from selling residences purchased to house agricultural attaches without approval from the Foreign Agricultural Service (FAS) and requires the department to use the proceeds from such sales to purchase residences for these attaches. Legislation currently before Congress would repeal section 738 since it limits the Department of State's authority to implement cost-effective decisions about sales of unneeded overseas property and the use of sales proceeds. Because of section 738's restrictions, State has delayed two property sales valued at nearly $4 million that appear to be in the government's best interests. FAS is concerned that if section 738 is repealed, selling these properties will result in increased costs since it would have to lease housing for attaches who previously lived rent-free in government-owned housing. Although section 738 applies only to residences purchased for agricultural attaches, the Office of Management and Budget and State are concerned that it could lead to fragmented and less cost-effective management of overseas property if other agencies seek similar treatment for their senior representatives. Section 738's restrictions do not appear to be in the government's best interests.