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Real property

When advised by the General Services Administration, or a Federal hold ng agency, that real and related personal property is surplus to Federal needs, onr regional representatives endeavor to make physical inspections of the property to determine health or education utilization potential, and the condition of it2provements, utilities, etc. Notices of availability are circularized to all poten tially interested parties; applications are reviewed and evaluated to determine eligibility of the organzation and program, continuing need, and suitability of the facility for the proposed use. Recommendations of need for the property are then made to the General Services Administration, or the holding agency, and assignment of the property to the Department, for its conveyance to the trans feree, is requested.

Conveyances are made at a price based on appraised fair market value to which is applied a public benefit allowance discount. This discount ranges from 40 to 100 percent of the sale price, depending upon the program for which the property is to be used. Annual credits against this discount are earned through use of the property for the purpose for which it was conveyed.

Conveyance of lands with or without improvements (onsite conveyances are made by quitclaim deed and conveyances of improvements for removal from the site (off-site conveyances) are made by agreements of sale. Deeds contain conditions requiring use of the onsite property for a maximum of 20 years for the purpose for which it is conveyed. They prohibit sale or encumbrance in any way during this period without prior consent of the Government. Off-site property is subject to 5-year restrictions. Transferees may, with consent of the Government, remove all restrictions, by paying in cash the unearned balance of the public benefit allowance discount.

Workload accomplishments and plans

A. Transfers.-In fiscal year 1964 real property with an acquisition cost of $35,400,000 was transferred to eligible recipients. In fiscal year 1965 real prop erty transfers had an acquisition cost of $40,200,000. Because of the number of major military establishments being phased out there is every reason to expect the number, and dollar amount of real property transfers will increase to ap proximately $48 million in fiscal year 1966, and possibly to $55 million in fisua! year 1967. To make the best utilization to meet health, educational, and other eligible community needs, there must be careful and coordinated disposal planning for each of these major military facilities. Their importance to the communities in which they are located is such that planning for their disposition requires many more hours of time than other kinds of real property. With the additional staff authorized for fiscal year 1966 we expect our real property transfers to be approximately $48 million (an increase of 20 percent over fiscal year 1965) and in fiscal year 1967 to be approximately $55 million.

B. Compliance, utilization, and servicing.—In addition to determining ne««l< and evaluating proposed program for using real property, the Department is also responsible for subsequent servicing and compliance enforcement throughout the period of restrictions imposed in each case. Inasmuch as the real property pro gram began in 1948, utilization survey and compliance workload on property having 20 years of restrictions continue to mount and will not begin to level off until 1968, the year within which the first 20-year restrictive period will begir to expire.

At the close of fiscal year 1965, our on-site workload increased a net of 93 cases, from 849 to 942. The off-site case workload was 688,

Physical surveys by our regional staffs are required to carry out our ut.l.zation and compliance responsibilities. Subsequent to conveyance, many actions are required in connection with servicing real property cases. These range från. granting consent to the interim leasing of a portion of property, to the complete revestment of title in the United States. In between are such actions are granting easements, authorizing removal of buildings no longer needed, review, eval. ation, and approval of revisions to use programs, consent to partial or couplete abrogation of deed restrictions, consent to partial sales, and other matters inherent in real estate transactions. Physical utilization surveys are required for each on-site case at least once every 3 years. However, the majority of cases are surveyed each year. In fiscal year 1965, 460 such surveys were completed.

Many properties now being conveyed have higher fair market values in relation to their acquisition costs. This is because many of the properties were acquired by the Government some years ago and are now surrounded by new and valuable developments. Consequently, the ratio of fair value to acquisition cost since the beginning of the program has continued to increase. These increased values require that more time, care, and effort must be put into the evaluation of every proposed program for property usage to be certain that the best interests of the Nation will be served.

From a fiscal standpoint, it is significant to note that during fiscal year 1965, a total of $868,004 was deposited in the U.S. Treasury as a result of our real property activities.

Standards and reviews

It is the responsibility of the Department to establish minimum standards of operations for State agencies for surplus property. During fiscal year 1964, new minimum standards were developed which necessitated a complete rewriting of all State agency plans of operations. The new minimum standards have resulted in upgrading the operation of many State agencies. During fiscal year 1965 new plans of operation were reviewed and approved for all 53 State agencies. During fiscal year 1965 we started an intensified program to accelerate the processing of audits and reviews of State agency operations and to expedite settlement of deficiencies or violations. These cases are now being processed through the central office within 3 weeks after receipt from the field. Regional representatives work with State agencies to secure any corrective action which may be necessary. Whenever these actions are not secured in reasonable time by the field, the case is referred to the central office for further action. Frequently such action involves meetings with officials of the State, investigations, and contacts with the executive departments of State and the Federal Government. Cash collections

In carrying out the responsibilities of the surplus property program funds are derived from many activities, such as sales of excess properties, transfers, abrogation of restrictions, various compliance actions such as leasing easements, etc., and reimbursement of out-of-pocket expenses incurred in connection with As as result of these total program activities, real property conveyances. $1,183,321 was collected in fiscal year 1965.

In this connection, it is significant to note that during the period 1950 through 1965, $12,950,749 has been collected from the operation of this program and placed in the U.S. Treasury. The total funds appropriated by the Congress during this same period for administration of the program was $8,683,250, or 67 percent of the cumulative amount received from program operations.

Miscellaneous increases

In fiscal year 1965 GSA reported the generation of Federal excess personal property having an acquisition cost of $3,456 million; 29.5 percent of this was reused by Federal agencies, 2 percent donated to Department of Defense serviceeducational activities, and 12.6 percent was allocated to this Department for health, educational, and civil defense donation. The balance was disposed of primarily by public sale. Much of this latter property could have been used in the Department's donation program resulting in greater national benefits. Last year, we instituted a program of review and evaluation of screening activities at the many points where property became surplus. To do this job effectively without increased staffing, will require additional travel and communications between our regional offices and the generating installations. Consequently, we have asked for an increase of $1,690 in travel and $830 in communications. Annualization of four positions, 1966 budget

Seven thousand dollars is requested to annualize the two professional and two clerical positions approved in the 1966 budget. The budget contained sufficient funds to pay only three-fourths of the salaries, as it was not expected the incumbents would be employed until after the first quarter.

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Personal property made aavilable to and received by State agencies for surplus property for distribution to public health and educational institutions and civil defense organizations and real property disposed of to public health and educational institutions (acquisition cost), fiscal year 1965

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