parties has proved to be a very useful and flexible device for the disposal of many pieces of Government-owned surplus property.

As indicated in Senate Report 2075, 82d Congress, it was believed that this authority could be permitted to expire by the end of 1950 without causing any difficulty or delay in the disposal program. However, by reason of the action in Korea certain parcels of real property which formerly were declared excess to the needs of the Department of Defense were withdrawn from disposal, but subsequently declared excess, which fact, in the view of the committee, warranted further extensions.

Under existing authority the sale of surplus property, in all but a few exceptional cases, is required to be made by advertising and competitive bid. The Administrator of General Services has informed the committee that lack of authority to negotiate sales would make difficult the disposal of some industrial and other real property, and would add to the cost of disposing of some lots of surplus personal property. The House Committee on Government Operations suggested, in House Report No. 1524, that studies be conducted with a view to considering further general legislation dealing with this problem in the present Congress in order to provide an orderly means of disposing of surplus property.

In the committee's report in the 1st session of the 83d Congress recommending extension of this authority to June 30, 1954, it was pointed out that the General Services Administration was then in the process of preparing a draft of proposed legislation for submission. to the Bureau of the Budget and other interested Government agencies for review before submission to the Congress, which would provide permanent negotiating authority for the disposal of surplus property when this procedure was found to be in the Government's interest.

The Administrator of General Services advised the committee in a letter addressed to the chairman, under date of March 31, 1954, that this draft legislation had not yet been completed and recommended, that, in view of the fact that certain matters relating thereto had not been fully clarified, the temporary authority be extended for another year. The following is quoted from the Administrator's letter:

The cessation of hostilities in Korea has enabled the Department of Defense to undertake comprehensive planning and programing of military surplus property. Operation Clean Sweep, recently initiated by the Department of Defense, is a part of such planning and programing. The General Services Administration is cooperating closely with the Department of Defense in these worthwhile efforts to improve Government planning in the property management and accounting fields. As you know, the Hoover Commission has created a task force with responsibility in these same areas.

The negotiation of sales is an essential tool for the disposal of surplus property. Until the planning for surplus disposal has been completed and approved, we cannot realistically recommend the guide lines for negotiating authority on & permanent basis. Therefore, it is urged that a further extension of temporary negotiating authority be granted to the Administrator of General Services pending the development of the overall sales program.

DISPOSAL PROCEDURE FOLLOWED UNDER PRESENT AUTHORITY

The act of July 12, 1952 (Public Law 522), required the Administrator of General Services to prepare an explanatory statement setting forth the facts in relation to property to be disposed of be submitted

in advance of its disposition to the appropriate committees of Congress. Under this requirement the Administrator has submitted reports on 93 such sales or lease proposals to the Senate and House Committees on Government Operations for their information and review.

The Senate Committee on Government Operations has adopted a procedure which requires staff examination of the facts in connection with each proposed disposal reported by the Administrator. Details are then submitted to the Senators from the States in which the property is located for their comments and recommendations. In several other instances, the GSA has designated the holding agency as the disposal agency, as authorized by the law. In these latter cases, unless of minor importance, the facts have been submitted to the members of the committee, i. e., disposal of the Bluebeard's Castle Hotel, Virgin Islands, and the sale of gamma globulin by the Department of the Air Force to the American Red Cross and the National Foundation for Infantile Paralysis. To date, there has been no objection to any of the 93 separate proposed negotiated leases or sales submitted to the committee under this authority, since the passage of Public Law 522, all of which have been executed or are now in process of consummation.

NEED FOR EXTENSION OF AUTHORITY

The committee understands that it has generally been the policy of General Services Administration to advertise surplus property disposals and invite sealed bids. However, in the sale of surplus property desired by States and local governments or by former owners the two major classes of transactions covered by this billthe circumstances occasionally are such as would make it inequitable or contrary to the public interest if those purchasers were required to bid competitively with private interests. It is the intent of the committee, in recommending extension of the authority, that negotiated sales to States, local governments, former owners, or others, be made at the current market value of the properties, as established by competent appraisers.

The committee believes that inasmuch as this bill merely extends this authority for another year, during which time ample opportunity will be afforded to further examine proposed legislation which would provide for the adoption of this method of disposing of surplus property on a permanent basis, the authority should continue until June 30, 1955, as proposed by S. 3243.

AGENCY VIEWS

The letter from the Administrator of General Services requesting the introduction and approval of this legislation follows:

GENERAL SERVICES ADMINISTRATION, Washington 25, D. C., March 31, 1954. Re: Draft bill to extend authority to negotiate surplus property sales. Hon. JOSEPH R. MCCARTHY,

Chairman, Committee on Government Operations,

United States Senate, Washington 25, D. C.

DEAR SENATOR MCCARTHY: There is enclosed herewith a draft of a bill to amend the Federal Property and Administrative Services Act of 1949, as amended. This measure would amend subsection (e) of section 203 of the Federal Property and Administrative Services Act of 1949, as amended, to extend the authority

of the Administrator of General Services to negotiate sales of surplus Government property to June 30, 1955. Existing law provides for the termination of this authority on June 30, 1954.

Authority to dispose of surplus property by negotiated sales was granted in the Surplus Property Act of 1944, as amended, and continued under the Federal Property and Administrative Services Act of 1949, until the statutory termination date of December 31, 1950. Expiration of this authority resulted in increased difficulty in disposing of some industrial and other real property and added to the costs of disposals of surplus personal property.

In recognition of the problems and increased governmental cost, the Congress, in Public Law 522, 82d Congress, granted authority to the Administrator of General Services to negotiate such disposals until June 30, 1953.

In enacting Public Law 522, 82d Congress, the House and Senate Committees on Government Operations recommended that this authority be granted on an interim basis, pending studies and plans for legislation of a permanent nature on this subject. Subsequently the Congress enacted Public Law 245, 83d Congress, which extended this authority until June 30, 1954. It was contemplated that it might be possible to submit such a legislative proposal during the present session.

The cessation of hostilities in Korea has enabled the Department of Defense to undertake comprehensive planning and programing of military surplus property. Operation Clean Sweep, recently initiated by the Department of Defense, is a part of such planning and programing. The General Services Administration is cooperating closely with the Department of Defense in these worthwhile efforts to improve Government planning in the property management and accounting fields. As you know, the Hoover Commission has created a task force with responsibility in these same areas.

The negotiation of sales is an essential tool for the disposal of surplus property. Until the planning for surplus disposal has been completed and approved, we cannot realistically recommend the guidelines for negotiating authority on a permanent basis. Therefore, it is urged that a further extension of temporary negotiating authority be granted to the Administrator of General Services pending the development of the overall sales program.

We have been advised that the Bureau of the Budget has no objection to submission to the Congress of this legislative proposal.

Cordially yours,

EDMUND F. MANSURE,

CHANGES IN EXISTING LAW

Administrator.

In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, S. 3243, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman):

FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, as AMENDED

SEC. 203. (e) Unless the Administrator shall determine that disposal by advertising will in a given case better protect the public interest, surplus property disposal may be made without regard to any provision of existing law for advertising until 12 o'clock noon, eastern standard time, [June 30, 1954] June 30, 1955: Provided, That an explanatory statement shall be prepared and submitted to the appropriate committees of Congress and a copy preserved in the file of all cases where negotiated disposal occurs.

O

83D CONGRESS 2d Session

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SENATE

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REPORT No. 1538

PROVIDING FOR THE CONVEYANCE TO THE TEXAS HILL COUNTRY DEVELOPMENT FOUNDATION OF CERTAIN SURPLUS LAND SITUATED IN KERR COUNTY, TEX.

JUNE 9 (legislative day, MAY 13), 1954.-Ordered to be printed

Mr. MCCARTHY, from the Committee on Government Operations, submitted the following

REPORT

[To accompany H: J: Res. 300]

The Committee on Government Operations to whom was referred the resolution (H. J. Res. 300) to provide for the conveyance to the Texas Hill Country Development Foundation of certain surplus land situated in Kerr County, Tex., having considered the same, report favorably thereon, without amendment, and recommend that the bill do pass.

PURPOSE

The purpose of House Joint Resolution 300, is to authorize and direct the Administrator of General Services to convey to the Texas Hill Country Development Foundation, Inc., of Kerrville, Tex., all right, title, and interest of the United States in and to about 90 acres of surplus land located in Kerr County, Tex.

The resolution further provides that the Texas Hill Country Development Foundation shall pay $16,500 for the property and the Administrator of General Services convey the land to the foundation under a conditional deed of conveyance providing that the property be used for promotion of agriculture through encouragement of 4-H Clubs, Future Farmers of America, and other agricultural activities for a period of 25 years, and that, in the event such property ceases to be used for this purpose, it shall, at the option of the United States, revert to the Federal Government.

BACKGROUND

The property covered by this resolution is part of an original grant of about 800 acres donated in 1920 by the Schreiner family to the American Legion of Texas, which in turn transferred the property to the State of Texas. On December 31, 1925, the United States Veterans' Bureau (predecessor to the Veterans' Administration) acquired the property from Texas for use by the veterans' hospital.

On November 2, 1951, the property covered by this resolution was declared excess to the needs of the Veterans' Administration and turned over to the General Services Administration for disposal.

On November 19, 1951, the Texas Hill Country Development Foundation was chartered by the State of Texas as a nonprofit organization for the purpose of promoting improved methods in agriculture through education and better utilization of land, crops, and range methods for ranchers.

In the meantime, this foundation was informed that the Veterans' Administration had declared about 90 acres of land excess to its needs and, on November 28, 1951, the foundation filed an application with the Federal Security Agency in San Antonio, Tex., for transfer of the property, in accordance with section 203 of the Federal Property and Administrative Services Act of 1949, as amended, Public Law 152. On December 12, 1951, the director of the Texas Surplus Property Agency, notified the foundation, as follows:

The real estate in question has not yet been made available to me for disposal by the Federal Security Agency. I will notify you when this happens.

A careful reading and comparison of sections 203 (j) and 203 (k) of Public Law 152, 81st Congress (Federal Property and Administrative Services Act of 1949) reveals that institutions such as your foundation may unquestionably be eligible to acquire real estate under section 203 (k) but not (so unquestionably) eligible to acquire personal property by donation under section 203 (j).

Under 203 (k) (real estate), the following are eligible: “* ** the States and their political subdivisions and instrumentalities, and tax-supported educational institutions, and to other nonprofit educational institutions which have been held exempt from taxation under section 101 (6) of the Internal Revenue Code." 203 (j) states that only tax-supported or tax-exempt, nonprofit "school systems, schools, colleges, and universities" are eligible.

In April 1952, the General Services Administration published in the local newspapers a notice of sale of this property and requested interested persons to submit sealed bids to the General Services Administration office at Dallas, Tex., on or before 11 a. m., May 14, 1952. The highest bid submitted called for the payment of $15,287.50 for the property.

It is understood that the foundation did not submit a bid in accordance with the invitation, because the director of the Surplus Property Agency, San Antonio, Tex., assured them that the foundation qualified as a nonprofit educational institution for obtaining the property under the public-benefit discount allowance provisions of the Federal Property and Administrative Services Act of 1949.

After it was too late for the foundation to submit a bid, the General Services Administration ruled that, "technically, the foundation could not qualify to acquire the land under Public Law 152, since a regular curriculum of classwork was not contemplated."

On June 4, 1952, Representative O. C. Fisher introduced House Joint Resolution 476, 82d Congress, 2d session, which provided that