tary rental. The fair monetary rental will be determined on the basis of prevailing commercial rates or computed according to sound commercial accounting practices for the fixing of rental on such property. This will include a return on capital investment and administrative cost as well as depreciation. The delegation of authority to lease is SAOSA-71-6, paragraph 1-5103, ADARS, the prescribed lease agreement is at paragraph 16-553, ADARS.

(b) Loan agreements. (1) Upon approval of a loan request and before shipment or issue of the materiel, the approving authority will complete a written loan agreement, DA Form 4881-R. In all cases, the statutory basis for the loan will be cited. The approving authority is acting for the DOD on loans to other Federal agencies, and for the United States on loans to civil authorities and special activities. The agreement will be signed by the approving authority and the borrowing activity. When emergency loans have been made as authorized by this AR, follow-up action will be taken at once to formalize the loan by completing a loan agreement.

(2) Loan agreements are mutually developed by the approving authority and the chief of the borrowing activity (or their designees). The agreements identify the responsibilities of all parties. They include terms and conditions of the loan. Appendix C illustrates a sample loan agreement, DA Form 4881-R (Agreement for the Loan of US Army Materiel), and specifies what the loan agreements will stipulate and contain. Also illustrated at Appendix C is DA Form 4881-2-R, which will be completed and appended to the loan agreement as "Exhibit I." (3) Loan agreements will be held by the approving authority until termination and final settlement of each loan. (4) If the loan agreement is signed by someone other than the chief borrowing official, than a Certificate for Signature by an Alternate will be completed. (See Appendix D for DA Form 4881-1-R.) It will be attached to the signed (by the borrower) copy of the agreement that is retained by the approving authority. DA Forms 4881-R,

(i) A properly executed surety bond with a certified bank check, cash, or negotiable US Treasury bonds, or

(ii) Notice of bond by a reputable bonding company deposited with the approving authority for the loan. Bonds will equal the total price of the borrowed items as shown in exhibit I to the loan agreement (App C, DA Form 4881-R). A "double" bond (bond equal to twice the value of the borrowed item(s)) will be required—

(A) For Army materiel loaned to the Red Cross for instruction and practice to aid the Army, Navy, or Air Force in time of war (10 USC 2542).

(B) For ordnance and ordnance stores loaned to high schools in the District of Columbia (10 USC 4653).

(2) The bond need not be posted by the borrowing agency itself. The source or originating agency for the bond is immaterial if the bond is valid. For example, to secure a loan, a State may post bond on behalf of a city, county, or other governmental body or authority within the State.

(3) In an emergency, when posting a bond would delay approval of an urgent loan request and when the total price is less than $1,000, the approval authority may approve the request. The approval is on the condition that the bond be posted within 5 days.

(4) Bond forfeitures or exceptions to mandatory forfeitures can only be made with the concurrence of the Secretary of the Army. Forfeitures will be based on actual expense incurred. Forfeitures do not release the borrowing agency from returning borrowed materiel or affect ownership. Bonds are normally forfeited under the following conditions:

(i) Materiel is not returned at the termination of a loan period or when return has been directed by the Army.

(ii) The borrowing agent refuses to pay for damages or other Army expenses.

(5) Surety bonds will be held by the approving authority until the loan is terminated and final settlement is made. At that time, the bond will be returned to the borrower.

(6) If US treasury bonds are posted as surety bond, the borrower must execute a power of attorney (DA Form 4481-4-R, App F). This will enable cashing of the treasury bonds if some forfeiture is required. DA Form 48813-R (Surety Bond) and DA Form 4881-4-R (Power of Attorney) will be reproduced locally on 81⁄2 by 11-inch paper.

(d) Loan duration. (1) Loan periods and extensions will be shown in table 2-2.

(2) Materiel will be loaned only for the number of days needed for the specific purpose for which borrowed.

Loan extensions must be justified. The reason(s) why other means or other than Army materiel cannot be used must be included. Approval of loan extensions will be based on the merit of the reasons given.

(3) Loan extensions authorized beyond 1 year will not be approved unless the lender of the loaned materiel has inspected and inventoried the materiel to insure completeness and serviceability.

(e) Types of DA materiel available for loan. Examples of types of items that may be loaned, and examples of the types of organizations that may borrow Army materiel, are listed in table 2-1. Most loans will be nonexpendable items or expendable items not forecast to be consumed (durable items). Expendable items (e.g., expendability code X) will not be loaned unless approved as an exception.

42 U.S.C. 5121 et seq.; 10 U.S.C. 331; DODD Group One: DOD Executive Agent or designee. 3025.12; AR 500-50; AR 350-7; DACD Plan; Garden Plot.

Group Two: DOD Executive Agent or designee, or task force command at objective area during the civil disturbance.

42 U.S.C. 5121 et seq.; DODD 3025.1; AR 500- CG FORSCOM; CG DARCOM for DARCOM stocks; and 60 and AR 930-5; DODD 5100.46. CINC's, UCOM's, OCONUS. DODD 3025.10; AR 500-70 CG FORSCOM

a protective nature (masks, helmets, body armor vests) and use of Army facilities. Same as 6 above.

MACOM CG on behalf of CG DARCOM.

10 U.S.C. 4308, 4311, 4651, 4652, 4653, 4685; Secretary of the Army (or designee). AR 920-15; AR 920-20.

AR 28-19; AR 360-61; 42 U.S.C. 2701

DA DCSOPS, Director of Military Support, has responsibility for these staff functions. 2 DA DCSOPS, Director of Military Support, has responsibility for these executive agent functions. (See app. A for definition of this term.) 3 DA DCSLOG, Director of Supply and Maintenance, has responsibility for these staff functions.