(d) Retransfers and reallocations of donable property to other donees or to other State Agencies shall be subject to the applicable provisions set forth in $13.6, 13.7, 13.9, 13.10, and 13.11.

(e) No donable property will be allocated until the Secretary has determined that the State Agency has conformed to the minimum standards of operation prescribed by the Secretary for the disposal of surplus property.

(f) Donable property received in State Agency warehouses shall be distributed promptly to eligible donees within the State, or shall be reallocated to another State Agency by the Department. Property not distributed within a 12-month period shall be reported to the Department for redisposal instructions.

(g) State Agencies shall make such reports to the Department on the use, condition, and location of donated property and other pertinent matters as the Department may from time to time require.

§ 13.6 Certifications by State Agencies and donees.

(a) A State Agency, in making application for donable surplus personal property, shall make a certification as follows:

(1) The State Agency hereby certifies that:

(1) It is the agency of the State designated under State law and as such has legal authority within the meaning of section 203 (j) of the Act, and the regulations of the Department to receive surplus property for distribution within the State to eligible donees within the meaning of said Act and regulations.

(ii) Such property is usable and needed for educational, public health, or civil defense purposes, including research for any such purpose, in the State.

(2) When such property is picked up by or shipped to a State Agency, the State certifies that it has available adequate funds, facilities, and personnel to effect accountability, warehousing, proper maintenance, and distribution of such property.

(3) When such property is distributed by a State Agency to a donee, or when delivery is made direct from a holding agency to a donee, the State certifies that the donee who is acquiring the property is eligible within the meaning of the Act, and the regulations of the Department, and that such property is usable and needed by the donee.

(b) A donee, when acquiring donable surplus personal property shall certify as follows:

(1) It is a tax-supported or nonprofit and tax-exempt (under section 501(c) (3) of the Internal Revenue Code of 1954, or section 101(6) of the Internal Revenue Code of 1939) school system, school, college, university, school for the mentally retarded or physically handicapped, public library, educational radio, or educational television station, medical institution, hospital, clinic or health center, or a civil defense organization designated pursuant to State law, within the meaning of the Act, and the regulations of the Department.

(2) Such property is usable and necessary in the State for either educational, public health, or civil defense purposes, including research for any such purpose, is required for its own use to fill an existing need for one of such purposes, and is not being acquired for any other use or purpose, for use outside the State, or for sale.

(3) Funds are available to pay the costs of care and handling incident to donation, including packing, preparation for shipping, loading, and transporting such property.

§ 13.7

State Agency agreements.

With respect to property picked up by or shipped to State Agencies, the State Agency shall agree to the following:

(a) The right to possession only is granted and the State agrees to make prompt State-wide distribution of the same, on the basis of educational, public health, or civil defense usability and need, to donees eligible to acquire property under section 203 (j) of the Act, and regulations of the Department, after such eligible donees have properly executed the certifications and appropriate agreements.

(b) Title to such property shall remain in the United States of America although the State shall have taken possession thereof, except where State licensing laws require that title pass in order that State licensing or registration of the property may be effected. Title to the property shall pass to the eligible donees when it executes the certifications and appropriate agreements required by this part and has taken possession of the property.

(c) The State further agrees that it will pay the cost of care, handling, and shipping incident to taking possession of

such property and that during the time that title remains in the United States of America it will be responsible, as a bailee for mutual benefit, for such property from the time it is released to the 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 pur

pose 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 acquisition 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 Trans

fer 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, witlin 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

66-099-72- 4

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.