We had not, however, been requested to report on S. 155, a bill which would amend section 203 (j) of the act so as to permit donations of surplus property to libraries which are tax supported or publicly owned and operated. At the hearing held on July 30, while Mr. J. Wendell Gray, Chief of our Surplus Property Utilization Division, was testifying on behalf of the Department, the chairman of the subcommittee, Senator Gruening, requested that the Department submit, for inclusion in the record, a statement of its position on the proposal to extend the program to libraries. Our adverse report on S. 1018 and other bills, while recognizing the worthiness of the organizations and activities involved, set forth at length the considerations underlying our opposition to these proposals, especially the difficulty of drawing a defensible line against further extensions if the law were opened up at all. We have, however, for some time, been increasingly troubled by the anomaly of the fact that, under section 203 (j) (3) of the present law, schools, colleges, and universities are eligible to receive property donated for purposes of education, while libraries not operated by these institutions but open to the public are not eligible. This anomaly is made more obvious by the fact that libraries are recognized as eligible "educational institutions" under the surplus real property disposal program (sec. 203 (k) (1)). As you know, public and other nonprofit libraries, while incidentally serving recreational purposes, are in a very real sense an adjunct to and resource for the schools whose students they serve as well as highly useful instrumentalities for adult education generally. We would, therefore, be agreeable to an amendment which would do away with the present anomaly, with respect to both public and other nonprofit libraries. While not objecting to a properly drafted amendment which would bring libraries as such into the personal property donation program, we would consider it more appropriate to extend clauses (A) and (B) of section 203 (j) (3) of the act to other educational institutions, a phrase intended to have the same meaning as the term "educational institutions" has in section 203 (k)(1) of the act, and, moreover, not to be confused with the special meaning accorded to the term "educational activities" in section 203 (j) (2) of the act by the Department of Defense. (Specifically, this would be accomplished by inserting the phrase "and other educational institutions" after "universities," in clause (A), and after "universities" in clause (B), of sec. 203 (j) (3) of the act.) S. 155, in its present form, would be objectionable because limited to libraries which are tax supported or publicly owned or operated, and because it would insert "public information" in section 203 (j) (1) as in itself a permissible purpose for which surplus personal property could be donated, in addition to education, public health, and civil defense. If, however, S. 155 were amended in accordance with the above suggestions, we would recommend its enactment. The Bureau of the Budget advises that while there is no objection to the submission of this report the Bureau is opposed to amendment of the law along the lines above suggested at this time. Sincerely yours, ARTHUR S. FLEMMING, Secretary. Senator GRUENING. We have next Mr. C. H. Smith, Assistant Chief, Division of Finance, Bureau of Public Roads, and Mr. Morley Christensen, Chief, Construction and Maintenance Division, Office of Engineering, Bureau of Public Roads. Will you gentlemen come forward at this time? Have you gentlemen statements, or are you just here to answer questions? STATEMENTS OF C. H. SMITH, ASSISTANT CHIEF, DIVISION OF FINANCE, BUREAU OF PUBLIC ROADS, AND MORLEY CHRISTENSEN, CHIEF, CONSTRUCTION AND MAINTENANCE DIVISION, OFFICE OF ENGINEERING, BUREAU OF PUBLIC ROADS Mr. SMITH. The Bureau of Public Roads, Mr. Chairman, has filed a statement with the committee. We have a copy available for the record. 44978-59- 14 Senator GRUENING. We would like very much to have it. Have you additional copies for those to follow it and read it? Mr. SMITH. We turned in about 20 or 25 copies Friday, Mr. Chairman. Senator GRUENING. All right. Go right ahead. Mr. SMITH. The statement is a short statement giving a brief history of our interest in this distribution of excess equipment to State highway departments. The exhibits consist of exhibit A, an inquiry from the General Services Administration, under date of November 28, 1956, addressed to the then Commissioner of the Bureau of Public Roads, Mr. Charles D. Curtis, in which they approved the Bureau in this programrather, they ask our interest, and that culminated in an administrative procedural, memorandum 2-12, dated January 24, 1958, entitled "Utilization of Excess Materials and Equipment," a copy of which is attached, together with an exhibit identifying various types of equipment that have been transferred. The statement includes the value of equipment as transferred initially in the fiscal year 1957, when very little was done on this program, $5,000; in fiscal year 1958, $785,000; and fiscal year 1959, $779,000. Mr. Christensen was the person responsible for the negotiations with the General Services Administration, and perhaps he will give you some of the details of the operation. Senator GRUENING. Now, you get excess supplies, do you not, before they become surplus? Mr. CHRISTENSEN. Yes, sir. We obtain it in the excess category, but only after the General Services Administration has determined that no other Federal agency wants it for Federal purposes. Senator GRUENING. Why are you last? Mr. CHRISTENSEN. If we want it for our own purposes, we can get it under regular procedures, but if we want to turn it over to a State highway department, a ruling from the General Accounting Office provides that such transfer should be made only after determining that no other Government agency is in need of it. A Federal agency has priority over a State highway department in such situations. Senator GRUENING. Why do you make a distinction between your own needs and State needs? I mean, we have a Federal-State highway program now, which is really so essentially Federal, I don't know whether there should be a distinction. You distinguished between the equipment you are going to use just on Federal highways and highways that are not Federal or have nothing to do with the Federal highway program, is that it? Mr. CHRISTENSEN. Not particularly, but the Comptroller General, in answer to an inquiry, advised us that only the Federal agencies ought to be able to obtain this equipment ahead of any State agency. You see, we actually transfer title to the State, and it then becomes State property. The theory behind it, as I understand it, is that the Government has an interest in it, and it has value to the Government, and only when it has no value to the Government or a Government agency should it be turned over to a non-Federal agency. Senator GRUENING. Was this a fairly recent decision? Mr. CHRISTENSEN. In July of 1957. Mr. SMITH. I have the reference, B-132356, July 29, 1957. If you wish, I can read the last paragraph. Senator GRUENING. I wish you would. Therefore, the proposed procedure should be modified to insure that the Bureau will not acquire for transfer to a State agency any excess property needed by another Federal agency for its own use; that is, to give other Federal agencies priority over the Bureau of Public Roads in the acquisition of excess property when the Bureau desires the property not for its own use but for transfer to State cooperating agencies. Senator GRUENING. Was that a decision of the Comptroller General? Mr. SMITH. A decision of the Comptroller General, dated July 29, 1957, B-132356. And it is in response to a letter to the Comptroller General from the Secretary of Commerce, under date of June 25. Senator GRUENING. Would you be kind enough to present that whole correspondence for the record? Mr. SMITH. Certainly, sir. Mr. CHRISTENSEN. It is included in the material we are passing to you now. Senator GRUENING. All right, thank you. It will be included in the record at this point. (The material referred to follows:) ACTIVITIES OF BUREAU OF PUBLIC ROADS UNDER PROGRAM THROUGH WHICH ExCESS GOVERNMENT PROPERTY IS ACQUIRED AND TRANSFERRED TO STATE HIGHWAY DEPARTMENT FOR USE FOR HIGHWAY PURPOSES The General Services Administration, in a letter dated November 28, 1956, (exhibit A attached) approached the Bureau of Public Roads with respect to whether certain types of Government-owned equipment and materials expected to become excess to needs of Federal agencies could be used advantageously in the highway program. It was stated by the General Services Administration that much of the equipment and materials expected to become excess would undoubtedly still have considerable useful life and that substantial savings in highway construction costs could probably be effected by use of such equipment and materials. The Bureau of Public Roads pointed out that it does not itself engage directly in highway construction or maintenance, except to a very minor extent in special cases, but that construction and maintenance on the Federalaid highway systems are almost exclusively under direct supervision of the State highway departments. An After exploring the matter, it was found that a provision that had been regularly included in Department of Commerce appropriation acts for many years would permit the Bureau of Public Roads to transfer excess Government property to cooperating State agencies. This provision is now included as section 308(b) of title 23, United States Code, approved August 27, 1958. operating program was established in early 1957 and the applicable policies, controls, procedures, and implementing instructions are set forth in Bureau of Public Roads Administrative Memorandum 2-12 (exhibit B attached), which includes the method for paying the holding agency and securing reimbursement from the States. The amounts recorded as necessary to acquire property for transfer to the States under the procedures outlined in Administrative Memorandum 2-12 were: fiscal year 1957, $5,000; fiscal year 1958, $785,000; and fiscal year 1959, $779,000. There is attached as exhibit C a statement of the types of equipment and materials transferred. EXHIBIT A GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, Washington, D.C., November 28, 1956. Re utilization of excess. Mr. CHARLES D. CURTIS, Commissioner, Bureau of Public Roads, DEAR MR. CURTIS: This Administration is interested in assisting your Bureau in carrying out its responsibility under the Federal-Aid Highway Act of 1956. In this connection, as you know, General Services Administration is responsible for utilizing, to the maximum extent possible, that property which the Government already owns. Under this program, considerable quantities of good usable earth-moving and construction equipment are reported as excess for possible use by other Federal agencies, in carrying out their responsibilities. In addition to the equipment, construction materials such as reinforcing bars, structural steel, lumber and steel pipe are also available in excess stocks. In view of this tremendous roadbuilding program, you may be interested in working out arrangements whereby this Government-owned equipment could be utilized in the construction of roadways under this recent legislation. This excess equipment and material is distributed over the entire United States, Alaska, Hawaii, and Puerto Rico, and its use close to the areas in which it is reported could save the Government worthwhile transportation costs. In addition, the scope of this roadbuilding program might develop a backlog of orders for the production of equipment which would result in unusual leadtimes for the purchase of such items. However, in the case of excess property, it is available as soon as reported and leadtimes are never a problem. We are aware that the actual construction of the highways under the new program will not be the direct responsibility of your Bureau; however, we believe that some arrangements could be worked out, similar to methods used in the past, of the Government furnishing equipment, under certain conditions, which would result in reduced construction costs. We would appreciate your assigning someone in your Bureau to work with our Utilization and Sales Division to the end that jointly we might be able to utilize this property in which the Government already has an investment. The Director of this Division, Mr. L. C. Tuttle, will be happy to meet with one of your staff members to further consider this idea. Mr. Tuttle may be reached on code 156, extension 5341. Sincerely yours, CLIFTON E. MACK, Associate Commissioner. EXHIBIT B U.S. DEPARTMENT OF COMMERCE Bureau of Public Roads ADMINISTRATIVE MEMORANDUM 2-12 Date of issuance: January 24, 1958 ADMINISTRATION AND MANAGEMENT Subject: UTILIZATION OF EXCESS MATERIALS AND EQUIPMENT. 1. PURPOSE The purpose of this memorandum is to set forth the procedures in the Bureau of Public Roads for effecting the transfer to the State highway departments for highway purposes of materials and equipment declared excess to the needs of Federal agencies. 2. DEFINITIONS a. The term "excess property" as used herein refers to property which has been reported to the General Services Administration by a Federal agency as being excess to its needs and which is being held by the General Services Administration pending a canvass of other Federal agencies for possible need. b. The term "surplus" property as used herein refers to Federal property for which the General Services Administration has determined there is no need by any Federal agency. 3. AUTHORITY The transfers which would be made to the State highway departments under this procedure are based on the following provisions which has regularly appeared in Department of Commerce Appropriation Acts: "During the current fiscal year appropriations for the work of the Bureau of Public Roads shall be available for expenses of warehouse maintenance and the procurement, care, and handling of supplies, materials, and equipment for distribution to projects under the supervision of the Bureau of Public Roads, or for sale or distribution to other government activities, cooperating foreign countries, and State cooperating agencies, and the cost of such supplies and materials or the value of such equipment (including the cost of transportation and handling) may be reimbursed to current applicable appropriations." [Italic supplied.] 4. PROCEDURES a. Equipment and materials declared excess by any agency of the Government are listed in circulars issued by the General Services Administration. Arrangements have been made by the General Services Administration to have its regional offices furnish copies of such circulars as contain items of highway interest to regional and division offices of Public Roads, with copies for the State highway departments, in the general area of the available property. A list of General Services Administration regional offices will be distributed separately. b. Upon receipt from a State of an expression of interest in any items reported excess by the General Services Administration, the regional engineers should review the list and if it is concurred in, should immediately contact the appropriate regional office of the General Services Administration with a request that the equipment be temporarily held, pending inspection, for transfer to Public Roads for retransfer to the State. c. If the State requests transfer after it has inspected the items, the regional office should then prepare a purchase order on Form CD-45, made out to the holding agency, as prescribed in the "Excess Personal Property Circular," describing the property. (1) Distribution of the numbered copies should be as follows: Copy number 1, 4, 8, 9 2, 3, 7 Disposition To regional office of General Services Administration. To State highway department for execution of (2) In the block on Form CD-45 designated "Shipped To," change the printed words to "Deliver To" and insert the name of the State highway department. After the articles have been described in the body of the purchase order, insert the following statement on the purchase order: "No expenses for shipping and no expenses for handling other than itemized herein shall be incurred for the account of Public Roads and no amounts other than as indicated on this purchase order are payable from the appropriation indicated." Any shipments required shall be made on "collect" commercial bills of lading. (3) The purchase orders should show the value plus maximum estimated handling costs as determined from the holding agency, and the coding symbol will be 100-Region-State-30-0000 (for example, Region 3, Alabama, would be coded 100-0301-30-0000). All purchase orders should be entered to the allotment ledger sheet. The equipment will not be taken up in the equipment account of the region. Form CD-50 or CD-52, as required by the property manual prescribed by Administrative Memorandum 2–11, will not be prepared. The region should bill the State for the cost of the material or equipment and the amounts received should be deposited to the credit of the appropriation. The General Services Administration has determined administratively that the fair value for property transferred to Public Roads for retransfer to a State highway depart |