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of the above-mentioned bills, H. R. 2552, H. R. 3406, and H. R. 7929, relating to volunteer fire-fighting organizations, appear to be identical. (Such organizations are also specifically covered by H. R. 242, H. R. 4107, and H. R. 6316, bills which also cover certain other comparable types of organizations.)

For the reasons stated below, we do not favor enactment of any of these bills.

Under section 203 (j) of the act, Federal surplus personal property determined by this Department to be usable and necessary for educational or public-health purposes, including research, may be donated by the Administrator of General Services through State surplus property distribution agencies to tax-supported or nonprofit tax-exempt medical institutions, hospitals, clinics, health centers, school systems, schools, colleges and universities. Under a recent amendment (Public Law 655, 84th Cong.), surplus personal property usable and necessary for civil-defense purposes may in like manner be donated to civil-defense organizations of States or political subdivisions and instrumentalities thereof. With respect to both of these programs—by delegation from the Federal Civil Defense Administration in the latter case_such property is allocated among the several States by this Department, although within the several States distribution to eligible activities and organizations is made by the State distribution agencies subject to basic Federal regulations and standards.

Also, surplus personal property under the control of the Defense Department which is determined by the Secretary of Defense to be usable and necessary for "educational activities which are of special interest to the armed services”a phrase which has been very broadly interpreted--may be donated for such activities pursuant to allocation by the Secretary of Defense. Such defenserelated donations are given priority over donations under the other two programs.

The present bills would, respectively, add to the eligible list for donation of Federal personal surplus property such diverse organizations as 4-H Club camps and centers; volunteer fire-fighting organizations, volunteer rescue and lifesaving squads, and other organizations performing community services that in their absence would be performed by a State or its political subdivisions ; publicly owned water and sewer districts; and, finally, municipalities, for municipal purposes generally.

It may be noted at the outset that municipalities, as a practical matter, are already beneficiaries of the donation program under section 203 of the act in the fields of education, public health, and civil defense, and have received many millions of dollars of donated personal property for these purposes.

The mere enumeration of the activities and organizations now proposed to be added, by the nine bills covered by this report, to the eligible categories under the section 203 donation program-not to mention still other proposals heretofore made highlights two things.

In the first place, Congress in 1949 abolished the complex systems of priorities for surplus property disposal existing under the Surplus Property Act of 1944 and limited donations of surplus personal property to educational and public health activities carried on by certain types of organizations. (Apparently through inadvertence, the public health part was at first omitted from the personal property donation provisions of section 203 (j) of the 1949 act, although it was included in the real property disposal provisions of section 203 (k) and public health had been on an equal priority footing with education in the 1944 act. The omission was corrected the next year by Public Law 754, 81st Cong.) With respect to the abolished systems of priorities, the second Hoover Commission's Task Force on Surplus Property, in its report (p. 105), stated that they "proved to be an almost insurperable impediment to an orderly disposal program

They resulted in long delays, vast paperwork and procedures, and administrative costs which in many cases exceed the disposal revenues." Yet in both the task force's and the Commission's opinon, the extension of eligibility to municipalities for municipal purposes generally, let alone the additional adoption of the other proposals, would again require the establishment of a priority system and would greatly complicate the administration of the program.

In the second place, as is demonstrated by the present list and by various other past and present proposals for extension of eligibility under the donation program to new organizations and activities, any proposal for an extension immediately raises the question of extension to other activities and organizations equally deserving, not only to health and educational organizations not yet eligible-e. g., mosquito districts, nurseries, institutions engaged in scientific research, libraries, museums, etc.—but to activities of public or nonprofit organiza

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tions in the welfare field or in other public-purpose fields indicated by these and other bills. Thus, apart from an extension to purposes essential in the interest of national security, such as the recently established civil defense program, either the gates would have to be thrown wide open without limitation, thus diluting the program so as to be, perhaps, of little benefit to anyone, or new lines would have to be drawn which would be difficult to justify on grounds of equity and for that reason difficult to hold.

We have, in the past several months, earnestly explored the feasibility of extending eligibility under the surplus personal property donation program to a carefully limited and defined group of those activities and organizations in the welfare field, public or voluntary, which might be analogized, from the point of view of their nature and accountability, to those now eligible and hence least subject to abuse. However, any recommendations along that line would of necessity require a careful evaluation of the present and potential needs of the existing program and projected programs, in terms of the number of eligible organizations, the amount of property available for distribution, and the like. In view of the very recent enactment of the civil defense donation program, it became clear that no well-founded appraisal can be made at this time of the impact which the recent extension of eligibility to include civil-defense organizations will have on the program as a whole. For example, the civil defense director of Pennsylvania advises that at least 2,900 civil-defense organizations have been designated under Pennsylvania State law and are qualified to receive donations for civil-defense purposes. We have no figures as yet for the country as a whole, nor do we have experience which would make possible a reasonable estimate as to the amounts of property in the field of common-use items for which these organizations would compete.

Hence, either for the purposes of these bills or for the above-mentioned extension in the welfare field, forecasts could not reasonably be made at this time respecting the increased costs of administration, the extent of dilution of the amount and quality of the property available, and the dimensions of the conflict of interest for the same property which might result from any additional extension of eligibility. Under these circumstances, even apart from the formidable problems of equity in deciding which, if any, new organizations and activities (either of those enumerated in the bills to which this report is addressed or those referred to in other proposals) should be made eligible, we believe that even if otherwise advisable no further expansion of eligibility should be recommended at this time pending the accumulation of adequate experience as to the impact of the civil defense donation program. This will require at least a year or two in view of the newness of that program.

In conclusion, we recommend against enactment of any of the above-mentioned bills. We have therefore not analyzed these bills from the point of view of their technical adequacy, nor have we explored the question whether in the event of the enactment of these bills, a number of which involve activities outside the field of interest of the Department, administration of the donation and disposal program for surplus property by this Department would still be appropriate.

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. Sincerely yours,

M. B. FOLSOM, Secretary.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

Washington, August 1, 1958. Hon. John W. McCORMACK,

Chairman, Special Subcommittee on Donable Property, Committee on

Government Operations, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: In response to your letter of July 28, 1958, apprising us of hearings to be held by your subcommittee on Friday, August 1, on H. R. 543, 7067, 10789, 11324, 3406, 6316, 7929, 10010, 10118, 9522, 242, 2504, 5460, I am pleased to advise that we have now submitted reports to your committee on all of these bills.

There is still outstanding our report on H. R. 13085 not mentioned in your letter. We shall make every effort to submit a report on that bill to your committee by the scheduled hearing date, if at all possible.

In response to your kind invitation, the Department will be represented at the hearing by Mr. Chester B. Lund, Director, Office of Field Administration, accompanied by one or more other members of our staff, who will be available, if called upon, to respond to any questions that may arise at the hearing and may not already be covered by our reports on these bills. Sincerely yours,

ELLIOT L, RICHARDSON,

Assistant Secretary.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

Washington. Hon. WILLIAM L. DAWSON,

Chairman, Committee on Government Operations, House of Representa

tives, Washington, D. C. DEAR MR. CHAIRMAN: This letter is in response to your request for reports on the following bills :

H. R. 543, to amend the Federal Property and Administrative Services Act of 1949 to permit the donation and other disposal of property to taxsupported public recreation agencies.

H. R. 5448, to amend the Federal Property and Administrative Services Act of 1949 to make rehabilitation facilities and sheltered workshops eligible for donations of surplus real and personal property.

H. R. 5470, to amend the Federal Property and Administrative Services Act of 1949 to make municipalities eligible for donations for surplus real and personal property.

H. R. 7067, to amend the Federal Property and Administrative Services Act of 1949 to permit the donation and other disposal of property to tax

supported public recreation agencies. These bills would amend sections 203 (j) and (k) of the Federal Property and Administrative Services Act of 1949 so as to authorize donations of surplus personal property, and disposals of surplus real property with a public benefit allowance, for certain purposes and to certain organizations not now eligible. H. R. 543 and H. R. 7067, identical bills, would extend eligibility to tax-supported

iblic recreation agencies; H. R. 48, to public and other nonprofit rehabilitation facilities and workshops (the property to be used for the rehabilitation of physically or mentally handicapped persons); and H. R. 5470, to municipalities for municipal purposes, including research, generally.

1. PERSONAL PROPERTY

Insofar as these bills would extend eligibility under the surplus personal property donation program, the reasons against enactment given in our recent adverse report on H. R. 242 and eight other bills are equally applicable to the present bills. (For your convenience, a copy of the other report is enclosed herewith.)

We there pointed out that the extension of eligibility to municipalities for municipal purposes generally, let alone the additional adoption of other proposals, would require a return to the inordinately complex and expensive priority system prevailing under the Surplus Property Act of 1944, and that such proposals and others pending in the Congress posed the dilemma of either admitting to the program public and other nonprofit agencies of all types which were equally deserving, and thus diluting the program so as to be perhaps of little benefit to anyone, or, on the other hand, drawing new lines which would be difficult to justify on grounds of equity, and for that reason difficult to hold. We concluded that even to the extent that extension of the program might seem desirable and practicable at a future time the impact of the recent civil-defense donation amendment (Public Law 655, 84th Cong.) was not foreseeable at this time, and that, therefore, in any event, no recommendation for extension of the program should be made pending the accumulation of adequate experience under the civil-defense donation program. We estimated that this would require at least a year or two, in view of the newness of that program.

With respect to rehabilitation facilities, it should be noted, additionally, that these are now eligible for participation in the donation program if it is shown that they are of such a character as to qualify as "clinics” and, in some instances, as "schools." And municipalities, as a practical matter, are now beneficiaries of the donation programs for education, health, and civil defense.

2. REAL PROPERTY

The present act (sec. 203 (k)), in language derived from section 13 (a) (1) of the Surplus Property Act of 1944, permits us, with the approval of the Admin

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istrator of General Services, to dispose of surplus real property which is suitable for schools, classroom, or other educational use (including buildings, fixtures, and equipment situated thereon) to the States and their political subdivisions and instrumentalities and to tax-supported and other nonprofit tax-exempt educational instituions, and likewise to dispose of real property for public health use to the States and their political subdivisions and instrumentalities and to taxsupported and other nonprofit tax-exempt medical institutions, hospitals, and similar institutions. In fixing the disposal value of real property to be transferred under this provision, we are directed to "take into consideration any benefit which has accrued or may accrue to the United States from the use of such property by any such State, political subdivision, instrumentality, or institution." In practice, under our regulations, this public benefit allowance has ranged from 40 percent to 100 percent.

As above noted, these provisions and the organizations and purposes to which they apply are, as regards real property, essentially the same as they were in the Surplus Property Act of 1944. Under the earlier act, for purposes other than health or education, State and local public agencies and various tax-exempt nonprofit organizations had certain priorities, but had to pay fair value for realty, without public benefit allowance. It is significant that in enacting the 1949 act the Congress, in the light of experience had under the 1944 act, chose not to extend the public benefit allowance feature to purposes other than those of an educational or of a health character, but eliminated the priorities for other public and nonprofit activities which had been established under the 1944 act.

We cannot recommend the enlargement of the real property disposal provision recommended by the present bills.

In the first place, what we have said above with respect to the difficulty of drawing an appropriate line in attempting any extension of eligibility under the existing section 203 program applies to real property as well as to personal property. To single out these particular organizations and their activities for additional inclusion under section 203 (k) would not solve alleged inequities, but would create new claims of inequity as between them and other organizations equally worthy.

Moreover, it should be noted that rehabilitation facilities to a large extent can already qualify as eligible under the present provisions of section 203 (k) of the act. Municipalities benefit from this program in the field of education and public health. Moreover, under section 13 (g) of the Surplus Property Act of 1944, which was not repealed by the 1949 act, they continue to be eligible for the donation of property for airport purposes. Finally, tax-supported public recreation agencies, which are covered by H. R. 543 and H. R. 7067, are now eligible to receive, under section 13 (h) of the Surplus Property Act of 1944 which is still in force, conveyances of surplus land, including improvements and equipment located thereon, which the Secretary of the Interior finds to be suitable and desirable for use as a public recreational area, though such conveyances may be made only at a price equal to 50 percent of the fair value of the property.

In conclusion, for the reasons above stated, we recommend against enactment of any of the above-mentioned bills. We have therefore not analyzed these bills from the point of view of their technical adequacy; nor have we explored the question whether in the event of the enactment of bills such as H. R. 5470, which would permit transfers of real property under section 203 (k) to municipalities for municipal purposes generally and would thus involve activities outside the field of interest of this Department, administration of the donation and disposal program for surplus property by this Department would still be appropriate.

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. Sincerely yours,

Secretary.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

March 19, 1958. Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

House of Representatives, Washington, D.O. DEAR MR. CHAIRMAN: This letter is in response to your request of March 6, 1958, for a report on H. R. 11115, a bill to amend the Federal Property and Administrative Services Act of 1949 to permit the donation of surplus property to volunteer fire-fighting organizations.

This bill is identical with H. R. 2552, H. R. 3406, and H. R. 7929, on which we submitted a report to you on August 1, 1957. (That report also covered 6 other bills, i. e., H. R. 242, H. R. 2504, H. R. 4007, H. R. 4107, H. R. 5451, and H. R. 6316.)

For the reasons stated in our report of August 1, 1957, we recommend against enactment of H. R. 11115. Sincerely yours,

E. L. RICHARDSON, Acting Secretary.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

March 14, 1958. Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: This letter is in response to your request of March 4, 1957, for a report on H. R. 5460, a bill to amend section 203 (j) of the Federal Property and Administrative Services Act of 1949 to provide that surplus property which is not used in the donable property program shall be offered for sale to States and political subdivisions thereof.

The bill would provide that, in the case of surplus personal property which is not donated for purposes of education, public health, or civil defense, or for research for such purposes, the Administrator of General Services, before offering such property for sale to the public, shall provide that States and political subdivisions thereof (including municipalities) shall be afforded an opportunity to purchase such property at a price not in excess of that at which such property was made available to Federal agencies before it was declared surplus. The bill would also provide that the Administrator of General Services may impose reasonable terms, conditions, reservations, and restrictions upon the use of any single item of personal property sold under these provisions which has an acquisition cost of $2,500 or more.

Since the sale of surplus personal property not suitable for donation under section 203 (j) of the act is the primary responsibility of the General Services Administration, this Department defers to the views of that Administration.

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. Sincerely yours,

M. B. FOLSOM, Secretary.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

April 17, 1958. Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN : This letter is in response to your request of June 19, 1957, for a report on H. R. 6537, a bill to authorize the disposition of certain obsolete and excess property to the United States Volunteer Life Saving Corps.

Subject to regulations under section 205 of the Federal Property and Administrative Services Act of 1949, the bill would, under nonuniform provisions, authorize the Secretaries of the military departments and the Commandant of the Coast Guard to dispose of certain material to the United States Volunteer Life Saving Corps. In the case of the Army and Air Force Departments, the material referred to is "obsolete or excess material,” which they could sell to the corps at "fair value to the Department,” including the cost of packing, handling, and transportation. In the case of the Navy, "obsolete material not needed for naval purposes” could be donated to the corps, and “other material that may be spared” could be sold to it at "fair value," subject in each case to recovery of the cost of transportation and delivery. And, in the case of the Coast Guard, “all such obsolete or other material as may not be needed for the Coast Guard” could be "disposed of" to the corps "with or without charge."

While these diverse provisions are not free from ambiguity, they would seem to authorize the disposal of personal property by the military departments and the Coast Guard to the United States Volunteer Life Saving Corps if the property is not needed by the using agency, even though it might be usable and needed by the executive department of which the using agency is a part or by other Federal

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