ployment and that the property and business was beneficial to the economy of the country.

The Department of Commerce and representatives of the manufacturers of new equipment objected to the contentions made by the import dealers. However, it was generally agreed that the present statute (sec. 402 of the Property Act) had serious defects which made it very difficult to administer or enforce. As a result of these hearings a bill was drafted which was introduced in the House of H.R. 9996 and a companion bill, S. 3154, was introduced in the Senate by Senator Humphrey and cosponsored by Senator Engle.

H.R. 9996 was reported (H. Rept. 1638) by the Committee on Government Operations to the House of Representatives on May 23, 1960.

An examination of the bill as reported by the House (H. Rept. 1638) reveals that it is identical to the Senate bill with the following exceptions:

Page 2, line 4, the House committee deleted the word "if" and inserted the word "unless" in lieu thereof.

Page 2, lines 8 and 9, the phrase "be injurious to the economy of this country" was deleted and the phrase "not result in undue loss of production or improvement in the United States" was inserted in lieu thereof.

Page 4, line 10, delete "prior to such importation" and insert in lieu thereof "upon entry for any such purpose."

On page 4, after line 12, the following new material was inserted by the House committee:

"The provisions of this section shall also apply to importations into the United States of property sold or disposed of abroad as surplus property pursuant to the Surplus Property Act of 1944 (58 Stat. 765).

"For the purposes of this section, the term 'United States' shall include the Commonwealth of Puerto Rico and the Virgin Islands.

"SEC. 2. Subsection (b) of section 601 of such Act is amended to read as follows:

"(b) by any officer of the Government under the authority of the Surplus Property Act of 1944, as amended, or any other authority, with respect to surplus property located in the continental United States, Hawaii, Alaska, Puerto Rico, and the Virgin Islands;'.

"SEC. 3. The amendments made by this Act shall take effect on the expiration of the ninety-day period which begins the date of enactment of this Act." The staff has been informed that these amendments were worked out by the House Committee on Government Operations in cooperation with representatives of the General Services Administration, Departments of Agriculture, Commerce, Defense, and the Department of the Treasury. All of the affected agencies and the Bureau of the Budget have approved the amendments which are intended to clarify and strengthen the purpose and intention of the proposed legislation. It is also understood that these amendments will permit the Department of Commerce to issue regulations and instructions which will be better understood and easier to administer.

AGENCY COMMENTS

The committee has received favorable reports from all of the agencies which will be affected by this proposal. Agency comments and recommendations will be made available for insertion in the record and placed in the report, if ap proved by the committee.

Approved:

GLENN K. SHRIVER, Professional Staff Member.

WALTER L. REYNOLDS,

Chief Clerk and Staff Director.

[S. 3489, 86th Cong., 2d sess.]

A BILL To amend section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 484 (j)), to provide that the Department of Defense may allocate surplus property under its control for transfer under that Act only to educational institutions conducting approved military training programs

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 484 (j)), is amended

(1) by amending paragraph (2) to read as follows:

"(2) In the case of any surplus property under the control of the Department of Defense, the Secretary of Defense shall determine whether such property is usable and necessary for activities of educational institutions which are of special interest to the armed services because they maintain military training programs which are approved by the Secretary of the Army, Navy, or Air Force, as the case may be, and which apply for such property: Provided, That any organization established by law of the United States whose object is to encourage and foster the development of aviation that was eligible to receive surplus property under this paragraph on the day before the date of enactment of this proviso shall continue thereafter to be eligible to receive surplus property under this paragraph. If, upon application made by any such institution or organization, the Secretary of Defense determines that such property is usable and necessary for any such purpose, he shall allocate it for transfer by the Administrator to the appropriate State agency for distribution to such institution or organization. If the Secretary determines that such property is not usable and necessary for such purposes, it may be disposed of in accordance with paragraph (3) or paragraph (4) of this subsection."; and

(2) by amending the first sentence of paragraph (3) by striking out the word "and" before the designation "(B)", and inserting before the period at the end thereof a comma and the words "and (C) any other tax-supported or nonprofit activity which, before the date of enactment of this clause, was eligible to receive property under paragraph (2) but which is not eligible to receive property under that paragraph after that date."

STAFF MEMORANDUM No. 86-2-25, SENATE COMMITTEE ON GOVERNMENT OPERATIONS, MAY 27, 1960

Subject: S. 3489, to amend section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 484 (j)), to provide that Department of Defense may allocate surplus property under its control for transfer under that act only to educational institutions conducting approved military training programs.

PURPOSE

This bill was drafted by the Department of Defense, forwarded to the President of the Senate and introduced by Senator John L. McClellan on May 5, 1960. The purpose of this bill is to clarify section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended, permitting the Secretary of Defense to donate surplus personal property to schools and colleges of special interest to the armed services. The bill proposes to amend the act so that schools and colleges must maintain military training programs which are approved by Secretary of the Army, Navy, or Air Force in order to qualify for Federal surplus property.

The bill further provides that any organization established by law, whose object is to encourage and foster the development of aviation which was eligible to receive surplus property on the day before the date of enactment of this act shall continue thereafter to be eligible to receive surplus property, by donation from the Federal Government. This is intended to preserve the present eligibility of the Civil Air Patrol to receive surplus property as is under the control of the Department of Defense, directly from that Department.

BACKGROUND

Section 203 (j) of the Federal Property and Administrative Services Act of 1949 has authorized the Secretary of Defense to donate surplus property which is under his custody and control to schools, colleges, and educational institutions which were considered of special interest to the Department of Defense. Under this provision of law, Federal property has been donated to a large number of schools, colleges, and educational institutions. However, some organizations which did not maintain regular approved classroom study programs petitioned the Department of Defense from time to time for inclusion in the program and as a result some were made eligible by administrative determination of the Secretary of Defense. This established a precedent under which the Boy Scouts, Girl Scouts, and other similar organizations became eligible, thereby

placing those organizations in a position of receiving surplus property, in some instances before it became available to the regular health and educational activities administered by the State departments of health and education. In 1956 the committee had under consideration several bills to amend the Property Act (S. 3693, H.R. 7227) at which time this condition was presented to the committee and the statute was amended in order to place a more restrictive application on its interpretation. This change in the law helped to forego further expansion or interpretation of section 203 of the Federal Property and Administrative Services Act of 1949, however, neither the Department of Defense nor the Department of Health, Education, and Welfare was satisfied with the law and it was agreed that a new bill would be submitted to Congress, for the purpose of clarifying and defining the authority intended under the act. The staff is informed that the bill (S. 3489) was developed by the Department of Defense in cooperation with officials of the Department of Health, Education, and Welfare, and of the Bureau of the Budget.

EXISTING STATUTE AND PROPOSED CHANGES

There follows an excerpt from section 203 (j) (2) together with the changes in law to be made by this bill. The material to be deleted is enclosed in black brackets and the new material is italicized.

"In the case of any surplus property under the control of the Department of Defense, the Secretary of Defense shall determine whether such property is usable and necessary for [educational] activities of educational institutions which are of special interest to the armed services, [such as Maritime academies or military, Naval, Air Force or Coast Guard preparatory schools] because they maintain military training programs which are approved by the Secretary of the Army, Navy, or Air Force, as the case may be, and which apply for such property; provided, that any organization established by law of the United States whose object is to encourage and foster the development of aviation that was eligible to receive surplus property under this paragraph on the day before the date of enactment of this proviso shall continue thereafter to be eligible to receive surplus property under this paragraph. If upon application made by any such institution or organization, the Secretary of Defense determines that such property is usable and necessary for such purposes, he shall allocate it for transfer by the Administrator_to the appropriate state agency for distribution to such [educational activities] institution or organization. [If such Secretary shall determine that such property is usable and necessary for such purposes, he shall allocate it for transfer by the Administrator to the appropriate State agency for distribution to such educational activities.] If he shall] the Secretary determines that such property is not usable and necessary for such purposes, it may be disposed of in accordance with paragraph (3) or paragraph (4) of this subsection; and

"(2) by amending the first sentence of paragraph (3) by striking out the word "and" before the designation “(B)”, and inserting before the period at the end thereof a comma and the words "and (C) any other tax-supported or nonprofit activity which, before the date of enactment of this clause, was eligible to receive property under paragraph (2) but which is not eligible to receive property under that paragraph after that date."

AGENCY COMMENTS

As of this date the only agency which has reported on the bill was the General Accounting Office. The Comptroller General stated in part, as follows:

"We have no special knowledge as to the merit or desirability of the proposed legislation and we therefore offer no comment or recommendation with regard to the bill."

For the information of the committee, there is attached a letter dated August 28, 1959, from the Secretary of Defense which contains some background and an explanation statement of the proposed legislation.

Approved:

WALTER L. REYNOLDS,

GLENN K. SHRIVER, Professional Staff Member.

Chief Clerk and Staff Director.

Hon. RICHARD M. NIXON,
President of the Senate.

THE SECRETARY OF DEFENSE,
Washington, August 28, 1959.

DEAR MR. PRESIDENT: There is enclosed a draft of proposed legislation to amend section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 484 (j)), to provide that the Department of Defense may allocate surplus property under its control for transfer under that act only to educational institutions conducting approved military programs.

The proposal is part of the Department of Defense legislative program for 1959. It is recommended that this legislation be enacted by the Congress.

PURPOSE OF LEGISLATION

The purpose of the proposed legislation is to limit distribution of surplus property under the control of the Department of Defense to educational institutions conducting military training programs at standards acceptable to the Department of Defense and to transfer the responsibility for administering the requests of other educational activities now receiving such surplus property to the Department of Health, Education, and Welfare.

Under criteria developed over the past years within the scope of the present: statute, the Department of Defense has found certain fine organizations eligible to receive surplus property. It is unnecessary to emphasize the worth to this. country of organizations such as the Boy Scouts, Campfire Girls, and the Boys. Clubs of America; however, it is believed that determinations with respect to the distribution of surplus property to such organizations more properly belong within the purview of the Department of Health, Education and Welfare.

On the other hand, the Department of Defense has a direct responsibility for military training programs conducted at educational institutions maintaining and conducting military programs at standards acceptable to the Secretaries of the Army, Navy and Air Force. The Armed Forces benefit from these programs by receiving militarily trained manpower. It is therefore entirely reasonable that a direct responsibility for supplying needed surplus property to institutions of this nature should be imposed upon the Department of Defense.

Similar reasoning impels the inclusion of the proviso in the bill which would preserve the present eligibility of the Civil Air Patrol to receive surplus property under the control of the Department of Defense.

The Civil Air Patrol maintains a capability to assist both civil and military activities during emergency and during periods when no emergency exists, by the voluntary efforts of the Civil Air Patrol senior members who operate and maintain light aircraft, mobile support units, and a nationwide radio communication network. Therefore, it is the position of the Department of Defense that the Civil Air Patrol should continue to receive support of their overall program through the donation feature as heretofore.

The Bureau of the Budget advises that there is no objection to the submission of this proposal to the Congress.

Sincerely yours,

NEIL MCELROY,

[S. 3493, 86th Cong., 2d sess.]

A BILL To amend the Federal Property and Administrative Services Act of 1949, as amended, so as to authorize the use of surplus personal property by State distribution agencies, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 203 (n) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 484 (n)), is hereby amended by adding at the end thereof the following new sentences: "Under such cooperative agreements, the Administrator may, subject to such conditions as may be prescribed by the Secretary of Health, Education, and Welfare (in the case of surplus property donated for use in any State for purposes of education or public health, or for research for either such purpose) or the Director of the Office of Civil and Defense Mobilization (in the case of such property donated for use in any State for the purpose of civil defense or for research for such purpose), transfer any of such property to the agency of that State so designated for the distribution of surplus property, for its own use, if the Secretary or the Director, as the case may be, has determined that such

property is necessary to, or would facilitate, the effective operation of that State agency in performing its functions in connection with the appropriate program. Upon a determination by the Secretary or the Director, as the case may be, that such action is necessary to, or would facilitate, the effective use of surplus property so made available under the terms of such a cooperative agreement, and with the approval of the Administrator, title to property so transferred may be vested in that State agency."

[S. 2605, 86th Cong., 1st sess.]

A BILL To amend section 203 (f) of the Federal Property and Administrative Services Act of 1949 to permit the donation of surplus property to certain civilian youth organizations

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the first sentence contained in paragraph (2) of subsection 203 (j) of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484 (j)) is amended to read as follows: "In the case of surplus property under the control of the Department of Defense, the Secretary of Defense shall determine whether such property is usable and necessary for (A) educational activities which are of special interest to the armed services, such as maritime academies or military, naval, Air Force, or Coast Guard preparatory schools, or (B) nonprofit civilian youth organizations sponsored and supervised by personnel of police departments or agencies of any State, or any municipality or other political subdivision of any State, for the purpose of combating juvenile delinquency.".

(b) The second sentence of that paragraph is amended by inserting therein, immediately after the word "educational", and the words "or youth".

[S. 3288, 86th Cong., 2d sess.]

A BILL To amend the Federal Property and Administrative Services Act of 1949 to permit the disposal of certain surplus property to State fishery agencies

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 203 (j) of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484 (j)) is amended to read as follows:

"(j) (1) Under such regulations as he may prescribe, the Administrator is authorized to donate without cost (except for costs of care and handling) for use in any State any vessels, equipment, material, books, or other supplies under the control of any executive agency which have been determined by the Administrator to be surplus property and by the appropriate Federal officer in conformity with the provisions of this subsection to be usable and necessary for any of the purposes specified in this subsection (including research for any such purpose). In determining whether property is to be donated under this subsection, no distinction shall be made between property capitalized in a working-capital fund established under section 405 of the National Security Act of 1947, as amended, or any similar fund, and any other property. No such property shall be transferred for use within any State except to the State agency designated under State law for the purpose of distributing, in conformity with the provisions of this subsection, all property allocated under this subsection for use within such State. No such surplus property may be so transferred until such Federal officer has received from such State agency a certification that such property is usable and necessary for one of the purposes specified in this subsection, and has determined that such State agency has conformed to minimum standards of operation prescribed by such Federal officer for the disposal of surplus property for that purpose. Such Federal officer may impose reasonable terms, conditions, reservations, and restrictions upon the use of any single item of personal property donated under this subsection which has an acquisition cost of $2,500 or more.

"(2) In the case of surplus property under the control of the Department of Defense, the Secretary of Defense shall determine whether such property is usable and necessary for educational activities which are of special interest to the armed services, such as maritime academies or military, naval, Air Force, or Coast Guard preparatory schools. If he determines that such property is