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(d)(1) The Secretary generally transfers surplus Federal real property to a selected applicant that meets the requirements of this part.

(2) Alternatively, the Secretary may lease surplus Federal real property to a selected applicant that meets the requirements of this part if the Secretary determines that a lease will promote the most effective use of the property consistent with the purposes of this part or if having a lease is otherwise in the best interest of the United States, as determined by the Secretary. (Authority: 40 U.S.C. 484(k)) $ 12.8 What transfer or lease instru

ments does the Secretary use? (a) The Secretary transfers or leases surplus Federal real property using transfer or lease instruments that the Secretary prescribes.

(b) The transfer or lease instrument contains the applicable terms and conditions described in this part and any other terms and conditions the Secretary or Administrator determines are appropriate or necessary. (Authority: 40 U.S.C. 484(c)) $ 12.9 What warranties does the Sec

retary give? The Secretary transfers or leases surplus Federal real property on an "as is, where is,” basis without warranty of any kind. (Authority: 40 U.S.C. 484(k)(1)) $ 12.10 How is a Public Benefit Allow

ance (PBA) calculated? (a) The Secretary calculates a PBA in accordance with the provisions of appendix A to this part taking into account the nature of the applicant, and the need for, impact of, and type of program and plan of use for the property, as described in that appendix.

(b) The following are illustrative examples of how a PBA would be calculated and applied under appendix A:

(1) Entity A is a specialized school that has had a building destroyed by fire, and that has existing facilities determined by the Secretary to be between 26 and 50% inadequate. It is proposing to use the surplus Federal real

property to add a new physical education program. Entity A would receive a basic PBA of 70%, a 10% hardship organization allowance, a 20% allowance for inadequacy of existing school plant facilities, and a 10% utilization allowance for introduction of new instructional programs. Entity A would have a total PBA of 110%. If Entity A is awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA exceeds 100%.

(2) Entity B proposes to use the surplus Federal real property for nature walks. Because this qualifies as an outdoor educational program, Entity B would receive a basic PBA of 40%. If Entity B is awarded the surplus Federal real property, it would be required to pay 60% of the fair market value of the surplus Federal real property in cash at the time of the transfer.

(3) Entity C is an accredited university, has an ROTC unit, and proposes to use the surplus Federal real property for a school health clinic and for special education of the physically handicapped. Entity C would receive a basic PBA of 50% (as a college or university), a 20% accreditation organization allowance (accredited college or university), a 10% public service training organization allowance (ROTC), a 10% student health and welfare utilization allowance (school health clinic), and a 10% service to the handicapped utilization allowance (education of the physically handicapped). Entity C would have a total PBA of 100%. If Entity Cis awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA is 100%.

(4) Entities A, B, and C all submit applications for the same surplus Federal real property. Unless the Secretary decides to apportion it, the Secretary transfers or leases the surplus Federal real property to Entity A, since its proposed program and plan of use has the highest total PBA. (Authority: 40 U.S.C. 484(k)(1)(c))

Subpart C-Conditions Applicable

to Transfers or Leases

$ 12.11 What statutory provisions and

Executive Orders apply to transfers

of surplus Federal real property? The Secretary directs the transferee or lessee to comply with applicable provisions of the following statutes and Executive Orders prior to, or immediately upon, transfer or lease, as applicable:

(a) National Environmental Policy Act of 1969, 42 U.S.C. 4332.

(b) National Historic Preservation Act of 1966, 16 U.S.C. 470.

(c) National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq.

(d) Floodplain Management, Exec. Order No. 11988, 42 FR 26951 (May 25, 1977).

(e) Protection of Wetlands, Exec. Order No. 11990, 42 FR 26961 (May 25, 1977).

(1) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000(d)(1) et seq.

(g) Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 et seq.

(h) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 et seq.

(i) Age Discrimination Act of 1975, 42 U.S.C. 1601 et seq.

(j) Any other applicable Federal or State laws and Executive Orders. (Authority: 40 U.S.C. 484(k)) (Approved by the Office of Management and Budget under control number 1880-0524) $ 12.12 What are the terms and condi.

tions of transfers or leases of sur

plus Federal real property? (a) General terms and conditions for transfers and leases. The following general terms and conditions apply to transfers and leases of surplus Federal real property under this part:

(1) For the period provided in the transfer or lease instrument, the transferee or lessee shall use all of the surplus Federal real property it receives solely and continuously for its approved program and plan of use, in accordance with the Act and these regulations, except that

(i) The transferee or lessee has twelve (12) months from the date of transfer to place this surplus Federal real property into use, if the Secretary did not, at the time of transfer, approve in writing

construction of major new facilities or major renovation of the property;

(ii) The transferee or lessee has thirty-six (36) months from the date of transfer to place the surplus Federal real property into use, if the transferee or lessee proposes construction of major new facilities or major renovation of the property and the Secretary approves it in writing at the time of transfer; and

(iii) The Secretary may permit use of the surplus Federal real property at any time during the period of restriction by an entity other than the transferee or lessee in accordance with $ 12.13.

(2) The transferee or lessee may not modify its approved program and plan of use without the prior written consent of the Secretary.

(3) The transferee or lessee may not sell, lease or sublease, rent, mortgage, encumber, or otherwise dispose of all or a portion of the surplus Federal real property or any interest therein without the prior written consent of the Secretary.

(4) A transferee or lessee shall pay all administrative costs incidental to the transfer or lease including, but not limited to

(i) Transfer taxes; (ii) Surveys; (iii) Appraisals; (iv) Inventory costs; (v) Legal fees; (vi) Title search; (vii) Certificate or abstract expenses; (viii) Decontamination costs; (ix) Moving costs; (x) Recordation expenses; (xi) Other closing costs; and

(xii) Service charges, if any, provided for by an agreement between the Secretary and the applicable State agency for Federal Property Assistance.

(5) The transferee or lessee shall protect the residual financial interest of the United States in the surplus Federal real property by insurance or such other means as the Secretary directs.

(6) The transferee or lessee shall file with the Secretary reports on its maintenance and use of the surplus Federal real property and any other reports required by the Secretary in accordance with the transfer or lease instrument.

(7) Any other term or condition that the Secretary determines appropriate or necessary.

(b) Additional terms and conditions for on-site transfers. The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period not to exceed thirty (30) years.

(c) Additional terms and conditions for off-site transfers. (1) The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period equivalent to the estimated economic life of the property conveyed for a transfer of off-site surplus Federal real property.

(2) In addition to the terms and conditions contained in paragraph (c) of this section, the Secretary may also require the transferee of off-site surplus Federal real property

(i) To post performance bonds;

(ii) To post performance guarantee deposits; or

(iii) To give such other assurances as may be required by the Secretary or the holding agency to ensure adequate site clearance.

(d) Additional terms and conditions for leases. In addition to the terms and conditions contained in paragraph (a) of this section, the Secretary requires, for leases of surplus Federal real property, that all terms and conditions apply to the initial lease agreement, and any renewal periods, unless specifically excluded in writing by the Secretary. (Authority: 40 U.S.C. 484(k)(1)) (Approved by the Office of Management and Budget under control number 1880-0524)

(2) The Secretary's written consent is obtained by the transferee or lessee in advance; and

(3) The Secretary approves the use instrument in advance and in writing.

(b) By ineligible entities. A transferee or lessee may permit the use of a portion of the surplus Federal real property by an ineligible entity, one not described in $ 12.5, only upon those terms and conditions the Secretary determines appropriate if

(1) In accordance with paragraph (a) of this section, the Secretary makes the required determination and approves both the use and the use instrument;

(2) The use is confined to a portion of the surplus Federal real property;

(3) The use does not interfere with the approved program and plan of use for which the surplus Federal real property was conveyed; and

(4) Any rental fees or other compensation for use are either remitted directly to the Secretary or are applied to purposes expressly approved in writing in advance by the Secretary. (Authority: 40 U.S.C. 484(k)(4))

Subpart D-Enforcement

$ 12.13 When is use of the transferred

surplus Federal real property by entities other than the transferee or

lessee permissible? (a) By eligible entities. A transferee or lessee may permit the use of all or a portion of the surplus Federal real property by another eligible entity as described in $ 12.5, only upon those terms and conditions the Secretary determines appropriate if

(1) The Secretary determines that the proposed use would not substantially limit the program and plan of use by the transferee or lessee and that the use will not unduly burden the Department;

$ 12.14 What are the sanctions for non

compliance with a term or condi. tion of a transfer or lease of surplus

Federal real property? (a) General sanctions for noncompliance. The Secretary imposes any or all of the following sanctions, as applicable, to all transfers or leases of surplus Federal real property:

(1) If all or a portion of, or any interest in, the transferred or leased surplus Federal real property is not used or is sold, leased or subleased, encumbered, disposed of, or used for purposes other than those in the approved program and plan of use, without the prior written consent of the Secretary, the Secretary may require that

(i) All revenues and the reasonable value of other benefits received by the transferee or lessee directly or indirectly from that use, as determined by the Secretary, be held in trust by the transferee or lessee for the United States subject to the direction and control of the Secretary;

(ii) Title or possession to the trans- property for each month during which ferred or leased surplus Federal real the program and plan of use has not property and the right to immediate been implemented. possession revert to the United States; (iii) The surplus Federal real prop

(Authority: 40 U.S.C. 484(k)(4)) erty be transferred or leased to another (4) If the Secretary determines that a eligible entity as the Secretary directs; lessee of a transferee or a sublessee of

(iv) The transferee or lessee abrogate a lessee is not complying with a term the conditions and restrictions in the

or condition of the lease, or if the lestransfer or lease instrument in accord

see voluntarily surrenders the premance with the provisions of $ 12.15;

ises, the Secretary may require termi(v) The transferee or lessee place the

nation of the lease. surplus Federal real property into immediate use for an approved purpose

(Authority: 40 U.S.C. 484(k)(4)(A)) and extend the period of restriction in

(b) Additional sanction for noncomplithe transfer or lease instrument for a

ance with off-site transfer. In addition to term equivalent to the period during

the sanctions in paragraph (a) of this which the property was not fully and

section, if the Secretary determines solely used for an approved use; or

that a transferee is not complying with (vi) The transferee or lessee comply

a term or condition of a transfer of offwith any combination of the sanctions

site surplus Federal real property, the described in paragraph (a)(1) or (a)(3) of this section.

Secretary may require that the un(2) If title or possession reverts to the

earned PBA become immediately due

and payable in cash to the United United States for noncompliance or is

States. voluntarily reconveyed, the Secretary may require the transferee or lessee

(Authority: 40 U.S.C. 484(k)(4)(A)) (i) To reimburse the United States for the decrease in value of the trans

Subpart E-Abrogation ferred or leased surplus Federal real property not due to

$ 12.15 What are the procedures for se(A) Reasonable wear and tear;

curing an abrogation of the condi(B) Acts of God; or

tions and restrictions contained in (C) Reasonable alterations made by the conveyance instrument? the transferee or lessee to adapt the surplus Federal real property to the ap- retary's sole discretion, abrogate the

(a) The Secretary may, in the Secproved program and plan of use for

conditions and restrictions in the which it was transferred or leased;

transfer or lease instrument if(ii) To reimburse the United States

(1) The transferee or lessee submits for any costs incurred in reverting title

to the Secretary a written request that or possession; (iii) To forfeit any cash payments

the Secretary abrogate the conditions made by the transferee or lessee

and restrictions in the conveyance inagainst the purchase or lease price of

strument as to all or any portion of the

surplus Federal real property; surplus Federal real property transferred;

(2) The Secretary determines that (iv) To take any other action di

the proposed abrogation is in the best rected by the Secretary; or

interests of the United States; (v) To comply with any combination

(3) The Secretary determines the of the provisions of paragraph (a)(3) of

terms and conditions under which the this section.

Secretary will consent to the proposed (3) If the transferee or lessee does not abrogation; and put the surplus Federal real property (4) The Secretary transmits the abrointo use within the applicable time gation to the Administrator and there limitation in $12.12(a), the Secretary is no disapproval by the Administrator may require the transferee or lessee to within thirty (30) days after notice to make cash payments to the Secretary the Administrator. equivalent to the current fair market (b) The Secretary abrogates the conrental value of the surplus Federal real ditions and restrictions in the transfer

or lease instrument upon a cash pay conditions the Secretary deems approment to the Secretary based on the for priate to protect the interest of the mula contained in the transfer or lease United States. instrument and any other terms and

(Authority: 40 U.S.C. 484(k)(4)(A)(iii)) APPENDIX A TO PART 12–PUBLIC BENEFIT ALLOWANCE FOR TRANSFER OF

SURPLUS FEDERAL REAL PROPERTY FOR EDUCATIONAL PURPOSES 1

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70

Elementary or

high
schools
70

10 10 10 10 20 30 10 10 10 10 100 Colleges or Universities 50 20 10 10 10 20 30 10 10 10

10 100 Specialized schools 70 10 10 10 20 30 10 10 10

10 100 Public librar

ies or edu-
cational
museums
2100

2100 School out

door edu-
cation
40

10
310

10 Central ad

ministrative
and/or
service
centers
80

80 Non-profit

educational
research
organiza-
tions
50 20
10

10 10

10 100 2 Applicable when this is the primary use to be made of the property. The public Denefit allowance for the overall program is applicable when such facilities are conveyed as a minor component of other facilities.

This 10% may include an approvable recreation program which will be accessible to the public and entirely compatible with, but subordinate to, the educational program.

* This column establishes the maximum discount from the fair market value for payment due from the transferee at the time of the transfer. This column does not apply for purposes of ranking applicants to determine to which applicant the property will be transferred. Competitive rankings are based on the absolute total of public benefit allowance points and are not limited to the 100% ceiling.

DESCRIPTION OF TERMS USED IN THIS

APPENDIX Elementary or High School means an elementary school (including a kindergarten), high school, junior high school, junior-senior high school or elementary or secondary school system, that provides elementary or secondary education as determined under State law. However, it does not include a nursery school even though it may operate as part of a school system.

College or University means a non-profit or public university or college, including a jun

ior college, that provides postsecondary education.

Specialized School means a vocational school, area trade school, school for the blind, or similar school.

Public Library means a public library or public library service system, not a school library or library operated by non-profit, private organizations or institutions that may be open to the general public. School libraries receive the public benefit allowance in the appropriate school classification.

1 This Appendix applies to transfers of both on-site and off-site surplus property.

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