State or to the transportation agent designated by the State; and that in the event of any loss of, or damage to any or all of the property, it will file such claim and/or institute and prosecute to conclusion such proceedings as may be necessary to receive, for the account of the United States of America, the fair value of any such property lost or damaged.

(d) No surplus property hereafter approved for donation by the Administrator of General Services shall be available to State Agencies for their own administrative purposes unless such property is approved for such use by the Secretary and the Administrator, and the State Agency shall have entered into a Cooperative Agreement with the Department providing for such use.

§ 13.8 Certifications and agreements respecting interstate distribution.

Where an applicant State Agency is acting (under an interstate distribution agreement approved by the Department) as an agent and authorized representative of an adjacent State with which it shares a common boundary, the certifications and agreements required by §§ 13.6 and 13.7 shall also be made by such applicant State Agency respecting the donees in such adjacent State to which distribution will be made and the property to be distributed in such adjacent State, and such certifications and agreements shall constitute the certifications and agreements of the adjacent State on whose behalf and as whose authorized representative the applicant State Agency is acting.

§ 13.9 Terms and conditions applicable to transfers or retransfers of donable property.

(a) Property acquired by a donee, regardless of acquisition cost, donated for public health or educational purposes, shall be on an "as is," "where is" basis without warranty of any kind.

(b) Property having a single item acquisition cost of $2,500 or more, donated for public health or educational purposes shall be subject to the following additional terms and conditions:

(1) Such property shall be used only for the public health or educational purpose for which acquired, including research for any such purpose, and for no other purpose.

(2) Such property shall be placed in use for the purpose for which acquired no later than 12 months after acquisi

tion thereof. In the event such property is not placed in use within 12 months of receipt, the donee, within 30 days after the expiration of the 12-month period, shall notify the Department in writing through the State Agency. Title and right to the possession of such property not so placed in use within the above mentioned period shall, at the option of the Department revert to the United States of America, and upon demand the donee shall release such property to such person as the Department or its designee shall direct.

(3) There shall be a period of restriction which will expire after such property has been used for the purpose for which acquired for a period of 4 years, except that the period of restriction on motor vehicles will expire after a period of 2 years of such use.

(4) During the period of restriction, the donee shall not sell, trade, lease, lend, bail, cannibalize or disassemble for secondary utilization purposes, encumber or otherwise dispose of such property or remove it for use outside the State without prior written approval of the Department. Any sale, trade, lease, loan, bailment, encumbrance, or other disposal of the property, when such action is authorized by the Department shall be for the benefit and account of the United States of America and the gross proceeds thereof shall be received and held in trust for the United States of America and be transmitted through the State Agency for Surplus Property promptly to the Department. Reimbursement to the donee will be made by the Department in accordance with the provisions of this part.

(5) In the event such property is sold, traded, leased, loaned, bailed, encumbered, or otherwise disposed of during the period of restriction without prior approval, all proceeds shall be deemed to have been received and held in trust for the United States and the donee shall promptly remit the same to the Department. When the fair market value of the property at the time of the unauthorized action is greater than the proceeds derived from such action, the donee shall, at the option of the Department, also be liable for and promptly remit the difference between such proceeds and the fair market value.

(6) If during the period of restriction, property is no longer suitable, usable, or further needed by the donee for the purpose for which acquired, the donee shall

promptly notify the Department through the State Agency, and shall, as directed by the Department or State Agency, either return the property to the State Agency for Surplus Property, retransfer the property to another donee, a department or agency of the United States, sell or otherwise dispose of the property. Any sale shall be for the benefit and account of the United States of America and the gross proceeds thereof shall be received and held in trust for the United States of America and shall be transmitted promptly through the State Agency to the Department. Reimbursement by the Department will be made to the donee in accordance with the provisions of this part.

(7) Donee shall make reports to the State Agency on the use, condition, and location of such property and on other pertinent matters as may be required from time to time by the State Agency or the Department.

(8) At the option of the Department, the donee may abrogate the terms and conditions set forth in subparagraphs (1) through (7) of this paragraph by payment of an amount as determined by the Department.

(c) Aircraft (FSC Group 15) are a specific exception to the provisions of paragraphs (a) and (b) of this section. The special terms and conditions provided in § 13.10 shall apply to the donation of aircraft.

(d) Vessels measuring 50 feet or more in length are also a specific exception to the provisions of paragraphs (a) and (b) of this section. The special terms and conditions provided in § 13.10 shall apply to the donation of such vessels.

(e) Property donated for civil defense purposes shall be subject to the terms and conditions set forth in Title 32, Chapter XVIII, Part 1802, OCD Regulations.

(f) Butler-type storage warehouses, house trailers (without undercarriages), and quonset huts, located on nonexcess land, donated under this section, shall be subject to the terms and conditions applicable to the transfer or retransfer of donable property for public health, educational, or civil defense purposes. The State Agency and/or the donee, as applicable, shall comply with all conditions which may be required by the holding agency for the removal of such property. Whenever the holding agency requires the site upon which such property is located to be cleared after removal of

such property, the State Agency shall post performance bonds, or make performance guaranty deposits, or give whatever assurances may be required by the Department or the holding agency that the site will be cleared. The State Agency in lieu of posting such performance bonds, or making such performance guaranty deposits, or giving such other assurances that the site will be cleared, may require these actions to be taken by the donee.

(g) When surplus property in the custody of a State Agency is sold, it shall be sold for the benefit and account of the United States of America, and the gross proceeds thereof will be deposited in the Federal Depository. The Department may reimburse a State Agency for its documented costs of listing and lotting the property which are incurred subsequent to the authorization of the sales action, plus the actual cost of advertising in those cases where the State Agency is requested to conduct the sale. Listing, as used here, means preparing a list of the items of property to be advertised for sale with a description of each item. Lotting, as used here, means segregating the property to be sold and dividing the property into lots, if by such a grouping a greater return may be expected from the sale. Advertising, as used here, means any form of public announcement intended to give wide circularization and publicity to prospective purchasers. § 13.10 Terms and conditions applicable to transfers or retransfers of aircraft and vessels measuring 50 feet or more in length.

(a) Aircraft or vessels donated pursuant to this part, regardless of acquisition cost, shall be on an "as is," "where is" basis without warranty of any kind.

(b) Aircraft having a single item acquisition cost of $2,500 or more, or those vessels measuring 50 feet or more in length and having a single item acquisition cost of $2,500 or more, regardless of the purpose for which donated, shall be subject to the following additional terms and conditions:

(1) An Aircraft Conditional Transfer Document or Vessel Conditional Transfer Document containing the terms and conditions provided for in this section and signed by the authorized representative of the applicant must accompany the institution's or organization's application.

(2) Title to the aircraft or vessel shall pass from the United States of America

to the donee when the Aircraft Conditional Transfer Document or Vessel Conditional Transfer Document is executed by the Department of Health, Education, and Welfare and is delivered to the donee.

(3) The donee of aircraft shall apply to the Federal Aviation Agency for registration of the aircraft within 30 days of the receipt of the fully executed Aircraft Conditional Transfer Document, and the donee's application for registration shall include a fully executed copy of the Aircraft Conditional Transfer Document. The donee of a vessel shall obtain documentation of the vessel under the applicable laws of the United States and the applicable laws of the several states and will at all times maintain such documentation, and shall, within 60 days of the receipt of the fully executed Vessel Conditional Transfer Document, record said document with the Collector of Customs at the port of documentation of the vessel.

(4) The aircraft or vessel, together with all engines, appurtenances, and accessories attached thereto and installed therein, hereinafter referred to in this section as the "aircraft or vessel property," shall be placed in use for the purpose stated no later than 12 months after acquisition thereof.

(5) In the event the donee of aircraft property does not apply to the Federal Aviation Agency for registration of the aircraft property, or in the event the donee of vessel property does not record the Vessel Conditional Transfer Document with the Collector of Customs at the port of documentation of the vessel property, or in the event the aircraft or vessel property is not placed in use within 12 months of receipt, the donee in the case of aircraft property, within 30 days after the date on which application for registration should have been made, or in the case of vessel property, within 30 days after the date on which the Vessel Conditional Transfer Document should have been recorded, or within 30 days after the expiration of the 12-month period, shall notify the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, in writing, through the State Agency. Title and right to the possession of the

aircraft property on which application for registration has not been made within 30 days, or to the vessel property on which the Vessel Conditional Transfer Document has not been recorded within 60 days, or aircraft or vessel property which has not been placed in use within 12 months, shall at the option of the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, revert to the United States of America. Upon demand, the donee shall, as directed by the Department of Health, Education, and Welfare, or its designee, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, or its designee, in the case of aircraft or vessel property donated for civil defense purposes, release the aircraft or vessel property to such agency or person as may be designated, sell the aircraft or vessel property, or otherwise dispose of the aircraft or vessel property. Any sale shall be for the benefit and account of the United States of America.

(6) There shall be a period of restriction which will expire after the aircraft or vessel property has been used for the purpose stated for a period of 10 years. The period of restriction for combat aircraft is perpetual.

(7) During the period of restriction the aircraft or vessel property shall be used only for the purpose stated.

(8) During the period of restriction the donee shall make reports to the State Agency on the use, condition and location of the aircraft or vessel property and on other pertinent matters as may be required from time to time by such State Agency, or the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes.

(9) During the period of restriction, the donee shall not sell, trade, lease, lend, bail, cannibalize or disassemble for secondary utilization purposes, encumber, or otherwise dispose of the aircraft or vessel property, without prior written approval of the Department of Health,

Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes. Any sale, trade, lease, loan, bailment, encumbrance, or other disposal of the aircraft or vessel property, when such action is authorized by the Department of Health, Education, and Welfare, where the property was donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, shall be for the benefit and account of the United States of America.

(10) In the event, during the period of restriction the aircraft or vessel property is sold, traded, leased, loaned, bailed, cannibalized or be disassembled for secondary utilization purposes, encumbered, or otherwise disposed of without prior approval, or is used for a purpose other than the purpose stated, the donee at the option of the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, shall be liable to the United States of America for the proceeds of the disposal, the fair market value, or the fair rental value of the aircraft or vessel property at the time of such unauthorized transaction or use, as determined by the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes.

(11) If, during the period of restriction, the aircraft or vessel property is no longer suitable, usable or further needed by the donee for the purpose for which acquired, the donee shall promptly notify the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, through the State Agency, and shall, as directed by the Department of Health,

Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, or the State Agency, retransfer the aircraft or vessel property to another donee, retransfer the aircraft or vessel property to a department or agency of the United States, sell the aircraft or vessel property, or otherwise dispose of the aircraft or vessel property. Any sale shall be for the benefit and account of the United States of America.

(12) At the option of the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, the donee may obtain abrogation of the terms and conditions set forth in subparagraphs (6) through (11) of this paragraph by payment of an amount as determined by the Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes. Abrogation of restrictions does not apply to combat aircraft.

(13) The Department of Health, Education, and Welfare, in the case of aircraft or vessel property donated for public health or educational purposes, or the Office of Civil Defense, Department of the Army, in the case of aircraft or vessel property donated for civil defense purposes, may terminate all of the above conditions and give unrestricted title to the aircraft or vessel property to the donee whenever such action is determined to be appropriate.

damages to or loss of property due to fire or other hazards and where loss of or damage to Federal surplus personal property occurs, the Department will be entitled to reimbursement from the State Agency of the fair value of the damaged or destroyed Federal property, payable from the insurance proceeds, less the State Agency's actual cost of acquiring and rehabilitating the property prior to its damage or destruction.

(b) It is not the Department's policy to require donees to carry insurance as a condition of donation. However, where a donee carries insurance against damages to or loss of property due to fire or other hazards and where loss of or damage to donated Federal surplus personal property, with unexpired Federal restrictions, occurs, the Department will be entitled to reimbursement by the donee, from the insurance proceeds, of an amount equal to the unamortized portion of the fair value of the damaged or destroyed donated items.

primarily with records, while responsibility is concerned primarily with custody, care, and safekeeping.

(b) "Act" means the Federal Property and Administrative Services Act of 1949, Public Law 152, 81st Congress (63 Stat. 377), as amended (40 U.S.C. 471 et. seq.). Terms defined in the Act and not defined in this section shall have in this part the meaning given to them in the Act.

(c) "Department" means the Department of Health, Education, and Welfare.

(d) "Donable property" means surplus equipment, materials, books, or other supplies under the control of any executive agency (including surplus property in working capital funds established pursuant to 10 U.S.C. 2208 or in similar management-type funds) except:

(1) Such property as may be specified from time to time by the Administrator of General Services;

(2) Surplus agricultural commodities, food, and cotton or woolen goods determined from time to time by the Secretary of Agriculture to be commodities requiring special handling in order to assist him in carrying out his responsibilities with respect to price support or stabilization;

(3) Property in trust funds.

(e) "Need" means a requirement for anything usable and necessary by eligible applicants in the conduct of educational, public health, or civil defense activities.

(f) "Overage" means the excess occurring upon the receipt of a larger number of a specific item or a larger number of items than either (1) approved on an "Application for Donation of Surplus Personal Property", Standard Form 123, or (2) listed on a shipping document.

(g) "Screening" is the process of physically inspecting, and/or reviewing lists or reports of property for the purpose of submitting lists of property with findings and recommendations to the Department for its information and guidance in determining whether property that is surplus or which is expected to become surplus is usable and necessary for health, educational, or civil defense purposes.

(h) "Service charge" means the fee assessed by a State Agency against the donee when distributing surplus property under section 203 (j) of the Act.

(i) "Shortage" means the deficiency occurring upon the receipt of a smaller number of a specific item or a smaller number of items than either (1) ap