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S. 1210 (Humphrey), to amend the Federal Property and Administrative Services Act of 1949 to permit donations of surplus property to volunteer firefighting organizations and for other purposes.

S. 1365 (Keating and others), to amend the Federal Property and Administrative Services Act of 1949 to authorize the disposal of surplus property to certain welfare agencies.

S. 1766 (Clark), 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.

Senator John Stennis stated in the Senate on behalf of S. 1018, February 9, 1959, that:

"The bill I have introduced would place the Cooperative Extension Service on the same basis as the Department of Health, Education, and Welfare, Civil Defense, and other agencies now receiving surplus property. The Secretary of Agriculture would be required to issue regulations and determine the type of property which would be usable and necessary for extension work, and such property would be allocated on the basis of need. Under this procedure the State and county extension services would request, through the authorized State agency office equipment and other items needed for carrying out their educational programs."

Senator Keating stated in part, on behalf of S. 1365, that:

"The present law, which limits eligibility for surplus Government property to education and health organizations, should be expanded to include worthy welfare and recreational agencies. These include settlement houses, homes for the aged, youth centers, character-building agencies, and adoption centers."

In considering the extension of the act in previous Congresses, the committee conceded that the objectives of these proposals and those which would include other similar agencies, organizations, or publicly supported activities were meritorious and worthwhile public activities. The most important question for the committee to decide, however, is: How many users can be made eligible without destroying the donable program for health, education, and civil defense? This question was considered by the committee in 1949, 1954, 1956, and in executive session in August 1958. At each meeting the committee members concluded that, if additional donees were made eligible, there would not be enough surplus property available to meet the minimum needs of education, health, and civil defense activities, and that if additional organizations and institutions were made eligible, it would result in the establishment of a long list of priorities and preferences. As reported by the Hoover Commission, a similar program operated under the War Assets Administration caused such competition among the donees that the distribution of surplus was delayed, and such confusion resulted that none of the participants benefited to the extent that is now possible, in addition to substantially increasing the cost of administration.

The first Hoover Commission made an extensive study of the departments and agencies of the Government responsible for the procurement, custody, and disposition of Federal property, and recommended that a central office be established to which should be transferred the authority to procure, stock, and issue common-use items of supply, the control and management over real and personal property and other related functions. The Commission specifically recommended that the statutes, rules, and regulations governing the administration and utilization of Government property be repealed in order to make possible greater economy and efficiency in this activity as follows:

"Enact legislation which will repeal the conglomeration of existing statutes, clear the books of present restrictive and often conflicting decisions and regulations***."

The task force recommended that "There should be wholesale repeal of the statutes governing the disposal of surplus personal property. Nearly 400 are now listed in Public Affairs Bulletin No. 29 of the Library of Congress, entitled 'Disposal of Government-Owned Personal Property'."

AGENCY COMMENTS AND RECOMMENDATIONS

The staff made an extensive analysis of the bills and agency comments on the proposed extension of this program during 1957. At that time all of the agencies which were engaged in the disposal of surplus property were consulted to ascertain the need, purpose, objectives, and administrative problems involved in the program. (See staff memorandum No. 85-1-16). The affected agencies

objected to amending the Federal Property and Administrative Services Act of 1949, so as to permit more agencies to become eligible for the following reasons: (1) It would increase the cost of administration and delay the orderly disposition of surplus property to the using agencies or activities.

(2) It would lead to the establishment of priorities and preferences which were in existence under the Surplus Property Act of 1944 and which caused so much criticism and confusion.

(3) It would create competition among the eligible donees, and, as a result, would increase the practice of hoarding surplus property in agency warehouses. (4) Inclusion of additional donees under the act would be an open invitation for literally hundreds of other worthwhile organizations to seek recognition, and thereby defeat the orderly disposition of surplus for educational, health, and civil defense purposes.

Pursuant to a request from Senator Lyndon B. Johnson for information on a complaint received from the president of vocational education of the National Education Association, alleging that vocational schools were not receiving enough surplus property, the committee made another study of the program in June 1958. (Staff memorandum No. 85-2-23, dated June 11, 1958).

OTHER BILLS RELATED TO THE SURPLUS PROPERTY PROGRAM

In addition to the bills listed above a number of other bills have been introduced in the Senate during this session of Congress which are related to the surplus property donation program. These bills provide for (a) giving prior owners of surplus real property a preference in the repurchase of such property from the Federal Government, (b) preference in the sale of surplus real property to individuals operating family-type farms, and (c) to facilitate and recover by the States of unclaimed personal property in the custody of Federal agencies.

CONCLUSION

Should the above listed bills be enacted into law, less property would be available for health, education, and civil defense use. If surplus property was donated to all of the users listed in these bills, the Federal Government would incur heavy administrative expenses. The addition of more eligible donees would, of necessity, require the establishment of a system of priorities. The Government would have to set up minimum standards for eligibility and one or more agencies would be required to allocate the property and enforce the restrictions or limitations placed on the use thereof. This would be a tremendous task because of the variety of users and variation in properties donated. For these, and other reasons cited by the affected agencies, serious consideration should be given to the formidable problems of equity in deciding which, if any, new organization and activities should be made eligible to receive surplus property under the donable property program.

The staff recommends that the committee, or a special subcommittee thereof, schedule hearings on all of these proposals, with a view of developing information and full details as to the need for further extension of the donable program, and to afford the sponsors of the respective bills an opportunity to submit their views for committee consideration. Officials responsible for administering the program should also be given an opportunity to outline the present program and the extent of donations under existing law and regulations, and their views regarding these bills and related measures proposing amendments to the Federal Property and Administrative Services Act.

Approved:

GLENN K. SHRIVER, Professional Staff Member.

WALTER L. REYNOLDS, Staff Director.

SENATE COMMITTEE ON GOVERNMENT OPERATIONS,

May 18, 1959.

Staff memorandum 86-1-25. Subject: Second Hoover Commission recommendations on the surplus property donation program-Supplement to staff memorandum 86-1-23.

On May 23, 1959, staff memorandum 86-1-23 was issued summarizing the information available on five bills pending before this committee which provide for the donation of surplus property to various types of tax-supported or pub

licly owned organizations or agencies. This memorandum includes additional information relative to the recommendations of the Hoover Commission and the Bureau of the Budget on this subject, for the information of members of the committee.

HOOVER COMMISSION RECOMMENDATIONS

The Commission on Organization of the Executive Branch of the Government made the following recommendation and comment in its report on surplus property, with respect to broadening the donable property program, submitted to the Congress on April 18, 1955 (pp. 44, 45).

PROPOSALS TO BROADEN THE DONATION PROGRAM

"The Department of Health, Education, and Welfare has proposed that the donation program for public health purposes be broadened to include nursing homes, sanitation systems, scientific laboratories, treatment centers for physwithout cost except for costs of care, handling, and transportation."

"The American Municipal Association appealed to the task force to include in its recommendations a change in the law to make local governments eligible for donations of Federal surplus personal property. The mayor of the city of New York wrote to the task force chairman in a similar vein.

"The Federal Civil Defense Administration has advocated legislation which would permit donation of Federal surplus personal property for civil defense purposes to States and local governments, and to Territories and possessions, without cost except for costs of care, handling, and transportation."

"While some proposed extensions of the donable program seem irrelevant or trivial, others have considerable merit. However, the Commission observes that the inclusion of other donees, such as cities and counties, would pose complex problems of determining priorities * *

Recommendation No. 9

"That the Congress reexamine the provisions of the Federal Property and Administrative Services Act of 1949, as amended, relating to the donation of Federal Surplus property, and clarify congressional intent to transfer such property without cost to State educational and public health institutions, notwithstanding Department of Defense requirements for reimbursement of stock funds for transfers of property from such funds."

13

The task force report on use and disposal of Federal surplus property upon which the above recommendation was based, commented, in part, as follows: "The principal donees under the current program are schools, colleges, universities, medical institutions, hospitals, clinics and health centers. To qualify, institutions must be tax-supported or must have been held exempt from taxation under section 101 (6) of the Internal Revenue Code. The transfers may also me made to State departments of education or health, or to another agency designated by State law for distribution to eligible institutions within the State ***"

Current pressure for broadening the donation program

"Congress is under continual pressure to expand the classes of eligible donees. There were introduced in the 83d Congress several bills which, if enacted, would have extended the donation program to State public health departments, county mosquito control districts, and State publicly owned water districts. The Department of Health, Education, and Welfare recommended to the Harden Subcommittee of the House Committee on Government Operations, at its hearing on April 21, 1953, that the donation program for public health purposes be broadened to include nursing homes, sanitation systems, scientific laboratories, treatment centers for physically handicapped, and malaria control institutions. If it is to be the continuing policy of the Congress to donate Federal surplus personal property for public health purposes, it would not seem amiss to broaden the program in these suggested directions.

12 Public Law 152 was further amended on July 3, 1956, to provide for the donation of surplus property to State and local civil defense activities (Public Law 688, 84th Cong.), 13 As indicated in par. 3, p. 2 of staff memorandum 86-1-23, the committee has reviewed this program several times since 1949, and the House Committee on Government Operations, or a subcommittee thereof, held hearings in stock fund reimbursement proposals of the Department of Defense and other phases of the program.

"On the other hand, there is pressure upon the Congress, and upon the executive agencies responsible for administering this program to extend it in what is deemed to be irrelevant directions. There was introduced, for example, in the 83d Congress a bill (H.R. 7237) intended to make 4-H clubs eligible as donees to receive property for the construction, equipment, and operation of camps and centers and a further bill which would include volunteer fire departments and rescue squads as eligible donees.

"Furthermore, one of the national organizations of American cities, the American Municipal Association, by letter and in staff conference, has appealed to this task force to include in its recommendations a change in the law to make local governments eligible for donations of Federal surplus personal property. The mayor of the city of New York has also written the task force chairman in similar vein. The adoption of this proposal would require the establishment of a priority system and would greatly complicate the administration of the program. The various systems of priority established by the Congress in the Surplus Property Act of 1944 proved to be an almost insuperable impediment to an orderly disposal program by War Assets Administration and the predecessor disposal agencies. They resulted in long delays, vast paperwork and procedures, and administrative costs which in many cases exceed the disposal revenues. If the cities and counties were eligible for donations, it would be necessary to determine whether the State or the local government has the first priority. Since the cities and counties are numerous within each State, there would also be required some formula, difficult to administer and impossible of achievement, whereby the allocations could equitably and satisfactorily be made. "It is believed that the program should continue to be confined to State educational and public health activities, and that other branches of the State government, and the cities and counties through their national organization, should arrange to get on the bidders' list when items in which they are in need are available for disposal; and that they should be accepted as competitive bidders along with private interests * * *."

Task force recommendation

"That the Congress continue to confine the program to State educational and public health institutions and to educational oragnizations of special interest to the Department of Defense."

Bureau of the Budget

The following letter has been received by the Chairman of the Committeee, from the Bureau of the Budget, which sets forth the views of the Federal Government on these proposals, specifically on the bill, S. 1210, since Staff Memorandum No. 86-1-23 was released.

EXECUTIVE OFFICE OF THE PRESIDENT,
BUREAU OF THE BUDGET,
May 14, 1959.

MY DEAR MR. CHAIRMAN: This is in reply to your request for report on S. 1210, a bill "To amend the Federal Property and Administrative Services Act of 1949 to permit donations of surplus property to volunteer firefighting organizations, and for other purposes."

We believe it inadvisable to enlarge the number of organizations or purposes for which surplus property may be donated. You may recall that the Government has had very unsatisfactory experience in the past under statutes authorizing donations for many different purposes. In 1949 those statutes were repealed because it had been found that the numerous claimants caused surplus property to remain in warehouses at Government expense for long periods, sometimes even for years, while first one group and then another examined the lists of available surplus. In the end, most of the property was not wanted by any group and had to be sold. In such instances the losses due to damage and deterioration of stock and the added costs of warehouse space, care and handling, and administration seemed unjustified. The laws were repealed in order to speed up, simplify and make less costly the task of surplus property disposall. We have, therefore, generally opposed bills proposing to expand the donation program to include such purposes and institutions as mosquito control districts, municipal water and gas systems, 4-H clubs, municipal governments and scientific and research organizations. For the same reasons we oppose extending the program to firefighting organizations as proposed in S. 1210.

We have not questioned the worthiness of these purposes but have recommended to your committee and to the House Committee on Government Operations that, in view of the serious administrative difficulties involved, any further expansion of the donation program should be supported only for major purposes which are compelling in the national interest and which are not primarily local responsibilities.

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Staff memorandum No. 86-1-42. Subject: Bills providing for expansion of the surplus property donation program-Supplement to staff memorandum 86-1-23, dated May 13, 1959. Since the release of staff memorandum 86-1-23 the chairman of the committee has received several communications containing views, comments and recommendations on the bills providing for expansion of the surplus property donation programs. All such measures were referred to a special subcommittee (Senators Gruening, chairman, Muskie, and Capehart) at an executive session of the committee held on June 18, 1959.

For the information of members of the committee, there is submitted herewith a report received from the Department of Health, Education, and Welfare (which administers the donable property program for health and education), on four of the bills now pending before the special subcommittee created for consideration of these and certain other related bills:

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

Hon. JOHN L. MCCLELLAN,

Chairman, Committee on Government Operations, U.S. Senate,
Washington, D.C.

July 17, 1959.

DEAR MR. CHAIRMAN: This letter is in response to your requests for reports on the following bills:

S. 1018, to authorize the donation of surplus property to certain agencies engaged in cooperative agricultural extension work, and for other purposes, S. 1210, to amend the Federal Property and Administrative Services Act of 1949 to permit donations of surplus property to volunteer firefighting organizations, and for other purposes,

S. 1365, to amend the Federal Property and Administrative Services Act of 1949 to authorize the disposal of surplus property to certain welfare agencies,

S. 1766, 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 provide for the donation of Federal surplus personal property to specified classes of organizations and activities in addition to those now specified in the law. They would do so by extending to additional categories of organizations and activities-most of which are not in the field of health or education— the present donation program under section 203 (j) (3) of the Federal Property and Administrative Services Act of 1949, under which such property is allocated by this Department for donation to specified categories of organizations in the fields of health and education. S. 1018 would establish a donation program side by side with, and independent of, the section 203 (j) (3) program, and would for that purpose confer on the Secretary of Agriculture the same allocation function as is vested in this Department for the purposes of the section 203 (j) (3)

program.

S. 1766 would also amend section 203 (k) (1) of the Federal Property and Administrative Services Act of 1949 so as to authorize the transfer of surplus real property by this Department for certain purposes and organizations not now specified in the act.

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