SECTION 260:80-1-17. Property use restrictions and requirements

(a)   The Agent shall inform donees that property the donee receives is subject to the use restrictions and requirements of 41 CFR 102-37, GSA and as specified by this Section. Donees shall acknowledge and agree to restrictions and requirements at the time of acceptance of property. The Agent may only grant releases from state imposed use restrictions, conditions or special handling instructions.

(b)   A donee shall present an encumbrance (or certification) document to the Agent certifying adequate funds to pay service charges the donee incurs to acquire the property.

(c)   A donee accepts property as is, with no expressed or implied warranty, except that a donee may return property to the agency pursuant to provisions of (g) of Section 260:80-1-13.

(d)   The state and federal governments are not liable for and held harmless from actions incident to acquisition of the property, its use or final disposition.

(e)   A donee shall use property to carry out or promote the public purpose of the donee entity.

(f)   A donee shall not encumber property the donee acquires from the agency by lien or other method of encumbrance.

(g)   A donee shall place donated property in-use within one year of donee receipt of the property.

(h)   A donee shall return property to the Agent if the donee does not use the property within one year of receipt at the expense of the donee.

(i)   A donee shall retain and use an item with an OAC not exceeding $5,000 for the purpose for which it was donated for one year after the donee places the property in-use.

(j)   A donee shall retain passenger motor vehicles or items with an OAC of (or exceeding) $5,000 in its possession for 18 months after the donee places the property in-use.

(k)   A donee that acquires an aircraft or vessel shall meet additional use requirements.

(1)   A donee shall submit a Letter of Intent that states the uses for which the donee intends to use the aircraft or vessel. The Agent shall advise the donee of all information required to be included in a Letter of Intent in accordance with 41 CFR 102-37.230.

(2)   A donee shall use an aircraft or vessel for a period of five years. The period of restriction for combat-configured aircraft is perpetuity.

(3)   A donee shall apply to the Federal Aviation Administration (FAA) to register an aircraft for flight use within 30 calendar days of donee receipt of the aircraft.

(4)   A donee shall apply to register or document a vessel pursuant to applicable federal, state and local laws within 30 calendar days of donee receipt of the vessel and record each document with the U. S. Coast Guard.

(5)   A donee shall include with its request for registration or documentation a fully executed copy of the transfer document and a copy of the donee Letter of Intent.

(6)   Upon receipt, a donee shall provide a copy of FAA registration or Coast Guard documentation to the Agent and GSA.

(7)   A donee shall use an aircraft or vessel in accordance with the executed Conditional Transfer Document and as set forth in the donee Letter of Intent.

(8)   A donee may request amendments to the donee Letter of Intent by submitting amendments in writing to the Agent and GSA.

(9)   A donee shall use an aircraft or vessel for purposes the donee states in the donee Letter of Intent unless the Agent and GSA provide approval of amendments to the Letter of Intent.

(10)   If required by FAA or the U.S. Coast Guard, a donee shall provide a copy of the amended version of the Letter of Intent (which must be approved by both the Agent and GSA) to the FAA or U.S. Coast Guard, as applicable.

(11)   If a donee breaches the terms and conditions of an original or amended Conditional Transfer Document, title to the aircraft or vessel may revert to the federal government, GSA may require the donee to return the aircraft or vessel and may require the donee to pay for any unauthorized disposal, transaction or use in accordance with FMR 102-37.460 (d).

(12)   A donee may submit a request to return an aircraft or vessel during a period of use restriction to the Agent. The Agent shall notify GSA of the request. If GSA accepts the request, the Agent will then request that GSA provide written instructions for disposition. If GSA approves and provides instructions for disposal, the Agent shall provide notice and disposal instructions to the donee.

(13)   A donee shall not modify for flight purposes military aircraft the donee receives for ground training or static display.

(14)   A donee that receives an aircraft for non-flight use shall provide the Agent with aircraft historical records within 30 calendar days of donee receipt of the aircraft. The Agent shall forward the records to GSA.

(l)   A donee shall agree upon execution of the Agent's Distribution Document that the donee holds conditional title to property during the period of use restrictions. Full title to the property will vest in the donee only after the donee meets all property use requirements.

(m)   A donee shall not remove the property from the state for permanent use or sell, trade,lease, loan or otherwise dispose of property during periods of use restriction without written authorization from the Agent.

(n)   The Agent shall evaluate a donee request for removal or property disposition as described in this Section and, if required, seek GSA approval of the action. The Agent shall notify the donee of approval or disapproval of the request.

(o)   A donee shall report information pertaining to property to the Agent, as the Agent requires, during periods of use restriction.

(p)   If a donee insures property and the donee experiences an insured loss of the property during a period of use restriction, the Agent or GSA is eligible to claim reimbursement from insurance proceeds for an amount equal to the unamortized portion of the fair market value for the insured item.

(q)   A donee may request authorization to cannibalize property from the Agent .

(l)   A cannibalization request for donated property which is in the custody of the donee and under a use restriction period must be made in writing and approved by the Agent prior to actual cannibalization action.

(2)   The cannibalization request shall identify all components of an item the donee intends to utilize.

(3)   The Agent shall determine the value of components of the item the donee intends to utilize.

(4)   The Agent shall evaluate a donee request for cannibalization pursuant to conditions of the transfer document and approve or disapprove the request.

(5)   The Agent may grant authority to the donee to cannibalize the property if he/she determines that such action will result in increased utilization of the property. However, the Agent must not authorize cannibalization if the item can be better used in its existing form or if GSA has not approved cannibalization for property with special handling conditions or use limitations imposed by GSA.

(6)   If the Agent approves the request, the Agent shall advise the donee of the following use restrictions and requirements:

(A)   Cannibalization by the donee must begin within 1 year of receiving the property and shall continue until the requirement for parts no longer exists (e.g., as parts are needed they are to be removed)

(B)   Property authorized for cannibalization must remain under the use restriction imposed by the transfer/distribution document until the proposed cannibalization is completed. Components resulting from the cannibalization, which have a unit acquisition cost of $5,000 or more, must remain under the restrictions stated on the transfer/distribution document. Components with a unit acquisition cost less than $5,000 may be released from state imposed restrictions only.

(C)   When cannibalization actions are completed before the end of the period of restriction and residue remains, the Agent may authorize or require the donee to:

(i)   Return unneeded residue to the Agent;

(ii)   Retain the residue for use in other eligible programs; or

(iii)   Report residue with an estimated fair market value over five hundred dollars to the Agent, for which the Agent may perform the following:

(I)   Re-donate the residue.

(II)   If unable to re-donate the residue, the Agent must report such residue to GSA for disposal instructions.

(III)   The Agent may consider use restrictions satisfied if the fair market value of the remaining residue is less than five hundred dollars and release such residue to the donee, provided the proceeds of any disposal are returned to the account from which the service charges were paid to the Agent for the property and used by the donee in the eligible program.

(7)   In cases where property is specifically requested for the purpose of cannibalization, the intended donee must provide written justification for the proposed action which shall accompany the SF 123 transfer document. The justification should provide detailed information concerning the need for the components or accessories and an explanation of the effect removal will have on the item. GSA will only approve donation of property for cannibalization when it is clear from the justification that disassembly of the item for component parts will provide greater potential benefit than use of the item in its existing form.

(8)   All property donated specifically for cannibalization remains subject to the same terms, conditions, reservations, use restrictions and special handling conditions imposed by GSA reflected in (q)(6) of this Section.

(r)   Vessels and aircraft shall remain subject to the terms and conditions stated on the respective Conditional Transfer Document (and based on the requirements of 41 CFR 102-37.450 and 102-37.460).

(s)   The Agent shall advise the donee of the terms and conditions for the use, retention, return or disposal of property having an OAC of $5,000 or more and any passenger motor vehicle or other donated item. The donee will therefore obtain permission from the Agent before attempting to dispose of donated property during the item's period of use restriction.

(1)   When a donee requests disposal instructions, the Agent shall follow the provisions outlined in Section 260:80-1-13.

(2)   Subsection (s) of this Section is not applicable to Service Educational Activities (SEAs) donees as only Department of Defense (DOD) property may be donated to SEAs. In these cases, the Agent shall observe any restrictions imposed on the property by the sponsoring military service.

(t)   A donee may submit a request to the Agent for release from use restrictions for property.

(1)   The Agent may approve a request for release from state requirements if the Agent determines by item review or inspection that the property retains no capacity for useful purpose.

(2)   A donee may request release from the special handling conditions or use limitations imposed by GSA by submitting a request to the Agent. The Agent shall forward the request to GSA and provide additional information as required by GSA. The Agent will advise the donee of the GSA determination.

(3)   Upon request from a donee, the Agent may, with GSA approval, grant an extension of the time period to place property in-use if the Agent determines that a delay results from factors beyond the predictable control of the donee.

(u)   A donee may request that the Agent exchange an item that the donee used for a minimum of six months subject to item use restrictions and requirements for one like item having similar use potential if the exchange will result in increased utilization value to the donee.

(1)   The use restrictions and special handling requirements for the item received by the donee shall commence upon donee receipt of the item.

(2)   The Agent shall ensure that the OAC of the item the donee receives in exchange is of equal or greater value than the item the donee originally received.

[Source: Added at 31 Ok Reg 1482, eff 9-12-14]