I think that you can see the concern that we have in this connection because of the possiblity that there would be a substantial reduction in the property that would be available for donation and that it would be going presumably in many cases to secondhand dealers and others in competition with educational and charitable institutions that would otherwise get it under the program as it has been administered in the past.

Mr. RILEY. Mr. Chairman, I might say on this point, for the record, that it was your interest that stimulated us to request the Military Services not to implement this procedure immediately but to wait until our review of this problem is completed.

Mr. MONAGAN. I am very happy to hear that and I have great confidence in the good sense of the Department of Defense.

Mr. Schweiker?

Mr. SCHWEIKER. I am not quite clear on this exchange sales item. You say this analysis may lead us to the conclusion that the greatest potential for savings lie in using exchange sales procedures for equipment.

Is that what you are doing now or not doing now?

Mr. RILEY. We are not doing that now but we are analyzing this to see if this would make a sensible approach for us to follow. Mr. SCHWEIKER. I see.

That is all I have, Mr. Chairman.

Mr. MONAGAN. Mr. Secretary, I just want to be clear on this: Do you feel that with reference to the allocation of the property under the control of the Department of Defense that the General Services Administration has the authority now to allocate that property to special service activities, or do you think that legislation is necessary? Mr. RILEY. I believe the legislation now provides for the Department of Defense to do this, Mr. Chairman. We have approved lists of property, for example, for the Boy Scouts, that are eligible for transfer to them.

Mr. MONAGAN. You could disapprove the transfers?

Mr. RILEY. Yes, sir, we could.

Mr. MONAGAN. Do you have any further questions, Mr. Schweiker? Mr. SCHWEIKER. No, sir.

Mr. MONAGAN. Since we have nothing further, Mr. Secretary, you are excused.

Mr. RILEY. Thank you, Mr. Chairman.

Mr. MONAGAN. We will suspend for just a minute, gentlemen. (Thereupon, a short recess was taken.)

STATEMENT OF BERNARD L. BOUTIN, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY JOSEPH

MOODY, COMMISSIONER, UTILIZATION AND DISPOSAL SERVICE

Mr. MONAGAN. The hearing will come to order.

We are very happy to have with us this afternoon Mr. Bernard L. Boutin, who is the Administrator of General Services.

Mr. Boutin, we are happy to have you here, and shall be glad to hear your statement.

Mr. BOUTIN. Mr. Chairman and members of the subcommittee, I wish to thank you for this opportunity to appear before you today.

I hope that our testimony will assist your subcommittee in its evaluation of the donable surplus property program.

This program, provided for in the Federal Property and Administrative Services Act of 1949, as amended, involves the donation of surplus Government-owned personal property to eligible claimants without cost, except for costs of care and handling. Surplus property is defined in the 1949 act as any excess property not required for the needs and discharge of responsibilities of all Federal agencies, as determined by the Administrator of General Services.

As you know, the Federal Property and Administrative Services Act of 1949 establishes three major facets of the donation program: First, the donation of property to be used for purposes of education, public health, or civil defense. This activity is carried on through the Department of Health, Education, and Welfare.

Second, the donation of property to be used by educational activities of special interest to the Armed Services, as determined by the Secretary of Defense. This activity is carried on through the Department of Defense.

Third, the donation of property to be used in the development, improvement, operation, or maintenance of a public airport. This activity is carried on through the Federal Aviation Agency.

These activities are described in a recent informational pamphlet issued by GSA, which, with your permission, I would like to submit for the record.

Mr. MONAGAN. We shall be glad to have it. This pamphlet may be made a part of the record at this point, if there is no objection. Mr. BOUTIN. Thank you, Mr. Chairman.

(The document referred to follows:)

GSA INFORMATION-DONATION OF FEDERAL SURPLUS PERSONAL PROPERTY

CONTENTS

Foreword.

Definition of mportant terms.

Donations to education, public health, or civil defense.

Donations to service educational activities.

Donations to public airport purposes.

Donations to American National Red Cross.

Donations to public bodies.

Exhibit No. 1: Addresses of the regional directors, Utilization and Disposal Service, General Services Administration.

Exhibit No. 2: Addresses of the State agencies for surplus property.

Exhibit No. 3: Addresses of the regional surplus property representatives, U.S. Department of Health, Education, and Welfare.

FOREWORD

This pamphlet provides information concerning the donation of Federal surplus personal property. Such property may be made available for donation to certain institutions and organizations.

Items of property can become surplus for any one of a variety of reasons including obsolescence, deterioration, and changes in Federal programs. The Federal Property and Administrative Services Act of 1949 authorizes the Administrator of General Services to donate surplus personal property as follows:

(1) For use in any State for purposes of education, public health, or civil defense, or for research for any such purpose;

(2) To educational activities of special interest to the Armed Services; and (3) To any State, political subdivision, municipality, or tax-supported institution for use in the development, improvement, operation, or maintenance of a public airport.

The act also authorizes the donation of certain types of property to the American National Red Cross and to public bodies.

More than 90 percent of the total volume of personal property donated annually by the Federal Government for the above indicated purposes is acquired by in

stitutions and organizations eligible to receive property for purposes of education, public health, and civil defense.

This folder describes the principles governing these programs and outlines briefly the manner in which they are carried out.

J. E. MOODY,

Commissioner, Utilization and Disposal Service,
General Services Administration.

DEFINITION OF IMPORTANT TERMS

"Personal property" includes all types and categories of property except interest in real estate, combat naval vessels, and Federal records. Included are such items as hand tools, machine tools, furniture, motor vehicles, electronic equipment, construction equipment, X-ray machines, aircraft, small boats, hardware, office machines and supplies, textiles, etc.

Surplus personal property is that personal property which the Administrator of General Services determines is not required for the needs and the discharge of the responsibilities of all Federal agencies.

DONATIONS FOR EDUCATION, PUBLIC HEALTH, OR CIVIL DEFENSE

Personal property to which applicable

The Federal Property and Administrative Services Act of 1949 authorizes the Secretary of Health, Education, and Welfare to determine the particular items of surplus personal property, which are usable and necessary for education or public health purposes, including research.

Insofar as donations of surplus personal property for civil defense purposes are concerned, the act and Executive Order 10952 authorize the Secretary of Defense to determine the particular items of surplus personal property which are usable and necessary for civil defense purposes. For operating convenience allocating authority has been delegated to the Secretary of Health, Education, and Welfare.

The act authorizes the Administrator of General Services in his discretion to donate such property without cost (except for costs of care and handling) when it is allocated by the Secretary of Health, Education, and Welfare.

Activities which are eligible

The Federal Property and Administrative Services Act of 1949 specifically identifies those public health and educational activities eligible to obtain donated property, as tax-supported medical institutions, hospitals, clinics, health centers, school systems, schools, colleges, and universities; and other nonprofit medical institutions, hospitals, clinics, health centers, schools, colleges, and universities which are exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1954. The eligibility of individual institutions or organizations is a matter for determination by the Secretary of Health, Education, and Welfare. However, institutions desiring to establish eligibility should initially contact the appropriate State agent for surplus property. He will refer cases of questionable eligibility to the Department of Health, Education, and Welfare.

The Secretary of Defense determines the civil defense organizations eligible to obtain property by donation. In general, eligibility is limited to those civil defense organizations established pursuant to State law. Activities desiring to establish eligibility should do so through State civil defense channels and the appropriate State agent for surplus property. Questions concerning the eligibility of civil defense organizations will be referred to the Office of Civil Defense, Department of Defense.

Certain types of institutions and organizations are not eligible under the act to obtain surplus personal property by donation. These include welfare organizations; eleemosynary and purely domiciliary institutions such as old people's homes or orphanages; summer camps or clubs or playgrounds not a part of a school; Sunday schools; veterans' organizations; and municipal, county, or State activities, where these are other than eligible educational, public health, or civil defense activities.

Approval of the Federal Government

The Administrator of General Services approves donations for education, public health, and civil defense purposes.

The approval of individual transactions, except those of high dollar acquisition cost, has been delegated to officials in the 10 GSA regions. The address of each of these regional offices is set forth in exhibit 1 of this folder.

State organization for the donation program

Pursuant to the act, each State has established a State agency for distributing surplus personal property under this program. Representatives of eligible donees within the State deal with the State agent for surplus property for the individual items of property they require. Addresses of the State agencies are provided in exhibit 2.

The availability of surplus personal property is made known to the State agencies. Moreover, each State employs screeners who visit U.S. Government installations for the purpose of reviewing documentation on available property or the property itself. These individuals select surplus property and submit donation applications to the General Services Administration through the Department of Health, Education, and Welfare.

To insure equity in surplus property distributed among the States it is allocated by the Department of Health, Education, and Welfare based on a number of factors including demonstrated need, State population, quantity of similar property already available to the State, etc. This is done by DHEW regional surplus property representatives, the addresses of whom are listed in exhibit 3. Practically all State agencies for surplus property operate on a self-sustaining basis. They recover costs incurred, generally by assessing a nominal service charge to cover handling, transportation costs and overhead expenses. Conditions and restrictions on individual donation transactions

When property is acquired by eligible education, public health, or civil defense donees in the States, an authorized representative of the institution or organization must certify by signature that the property is usable and necessary; that it is being acquired for the purpose stated; that costs of transportation and handling will be paid; and that the donee will abide by the terms, conditions, and restrictions imposed by the Federal or State Government.

The Federal Government requires that single items of personal property with an acquisition cost of $2,500 or more acquired for education or public health purposes be used within 12 months and that the property be used for the donable purpose for a period of 4 years (2 years in the case of motor vehicles, 10 years for aircraft). During this period the donee may not dispose of or encumber the property without the permission of the Department of Health, Education, and Welfare. In the case of property acquired for civil defense purposes, there is no requirement that single items of personal property with an acquisition cost of $2,500 or more be placed in use within a specified period of time. However, sale or other disposal by donees of such property is prohibited for 4 years (2 years for motor vehicles, 6 years for certain other specified items, and 10 years for aircraft) beginning with the date such property is placed into use. During the period of restriction, donated property is required to be maintained in good operating condition. Department of Defense regulations and manuals prescribe use standards for this property.

With respect to single items of property with an acquisition cost of less than $2,500, no further conditious, other than the certification made by the donee representative at the time he obtains the property, are imposed by the Federal Government. However, State agencies generally impose restrictions on the use and disposal of such property. These conditions and restrictions are a part of the certification subscribed to by the donee on the issue document.

Additional information

For specific information concerning this donation program inquiry may be made of the appropriate State agency for surplus property; of the appropriate regional office of the Department of Health, Education, and Welfare; or of the appropriate regional office of the General Services Administration. The address of each of these is supplied in the exhibits.

DONATIONS TO SERVICE EDUCATIONAL ACTIVITIES

Pursuant to the authority vested in him by the Federal Property and Administrative Services Act of 1949, the Secretary of Defense has determined the categories of surplus personal property of the Department of Defense which are available for donation to service educational activities.

He has, moreover, designated the specific educational activities which are of special interest to the armed services. These include the Boy Scouts, the Boys Clubs of America, the Girl Scouts, the Campfire Girls, and the Civil Air Patrol, in addition to designated military, naval, and various maritime academies and schools.

Under the act, surplus property of the Department of Defense is allocated by the Secretary of Defense for direct transfer by the Administrator of General Services to the specific service educational activity. For additional information pertaining to this donation program, application may be made to the Department of Defense, Washington 25, D.C., or to the appropriate General Services Administration regional office, Individual units of the national organizations mentioned above, such as Boy or Girl Scout Troops, Boys Clubs, etc., should contact their national or regional headquarters about the program.

DONATIONS FOR PUBLIC AIRPORT PURPOSES

The Federal Property and Administrative Services Act of 1949 continues in effect the provisions of section 13(g) of the Surplus Property Act of 1944.

The latter provision authorizes the Administrator of General Services to donate surplus personal property when it is determined by the Administrator of the Federal Aviation Agency to be essential, suitable, or desirable in the development, improvement, operation, or maintenance of a public airport.

For additional information pertaining to this donation program, application may be made to the Federal Aviation Agency, Washington 25, D.C., or to the appropriate General Services Administration regional office at the address shown in exhibit 1.

DONATIONS TO AMERICAN NATIONAL RED CROSS

Donations to the American National Red Cross for charitable purposes are limited to surplus personal property which has been identified as having been processed, produced, or donated to the Federal Government by the American National Red Cross.

For additional information pertaining to this donation program, application may be made to the appropriate General Services Administration regional office as indicated.

DONATIONS TO PUBLIC BODIES

With respect to any personal property which has been determined to have no commercial value or of which the estimated cost of continued care and handling would exceed the estimated proceeds from its sale, the Administrator of General Services may authorize its abandonment, destruction, or donation to public bodies. A public body is defined to include any State, territory, or possession of the United States, any political subdivision thereof, the District of Columbia, any agency or instrumentality of the foregoing, or any agency of the Federal Government.

Additional information concerning this donation program will be furnished by the appropriate General Services Administration regional office.

EXHIBIT No. 1

ADDRESSES OF REGIONAL DIRECTORS, UTILIZATION AND DISPOSAL SERVICE, GENERAL SERVICES ADMINISTRATION

Region 1

Maine, New Hampshire, Vermont, Connecticut, Massachusetts and Rhode Island: Post Office and Courthouse, Boston 9, Mass. Phone Capitol 32-100.

Region 2

New York, New Jersey, Pennsylvania, Delaware, Puerto Rico, and Virgin Islands: 250 Hudson Street, New York 13, N.Y. Phone Algonquin 5-4300.

Region 3

District of Columbia, Maryland, Virginia, and West Virginia: Seventh and D Streets SW., Washington 25, D.C. Phone Worth 3-1110.

Region 4

Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee: 1776 Peachtree Street NW., Atlanta 9, Ga. Phone Trinity 6-3311.