Title 34—Education--Volume 1
PART 12—DISPOSAL AND UTILIZATION OF SURPLUS FEDERAL REAL PROPERTY FOR EDUCATIONAL PURPOSES
§ 12.1   What is the scope of this part?
This part is applicable to surplus Federal real property located within any State that is appropriate for assignment to, or that has been assigned to, the Secretary by the Administrator for transfer for educational purposes, as provided for in section 203(k) of the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 et seq.).
§ 12.2   What definitions apply?
(a) Definitions in the Act. The following terms used in this part are defined in section 472 of the Act:
(b) Definitions in the Education Department General Administrative Regulations (EDGAR). The following terms used in this part are defined in 34 CFR 77.1:
(c) Other definitions: The following definitions also apply to this part:
Abrogation means the procedure the Secretary may use to release the transferee of surplus Federal real property from the covenants, conditions, reservations, and restrictions contained in the conveyance instrument before the term of the instrument expires.
Act means the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 et seq. ).
Applicant means an eligible entity as described in § 12.5 that formally applies to be a transferee or lessee of surplus Federal real property, using a public benefit allowance (PBA) under the Act.
Lessee, except as used in § 12.14(a)(5), means an entity that is given temporary possession, but not title, to surplus Federal real property by the Secretary for educational purposes.
Nonprofit institution means any institution, organization, or association, whether incorporated or unincorporated—
(1) The net earnings of which do not inure or may not lawfully inure to the benefit of any private shareholder or individual; and
(2) That has been determined by the Internal Revenue Service to be tax-exempt under section 501(c)(3) of title 26.
Off-site property means surplus buildings and improvements—including any related personal property—that are capable of being removed from the underlying land and that are transferred by the Secretary without transferring the underlying real property.
On-site property means surplus Federal real property, including any related personal property—other than off-site property.
Period of restriction means that period during which the surplus Federal real property transferred for educational purposes must be used by the transferee or lessee in accordance with covenants, conditions, and any other restrictions contained in the conveyance instrument.
Program and plan of use means the educational activities to be conducted by the transferee or lessee using the surplus Federal real property, as described in the application for that property.
Public benefit allowance (“PBA”) means the credit, calculated in accordance with appendix A to this part, given to a transferee or lessee which is applied against the fair market value of the surplus Federal real property at the time of the transfer or lease of such property in exchange for the proposed educational use of the property by the transferee or lessee.
Related personal property means any personal property—
(1) That is located on and is an integral part of, or incidental to the operation of, the surplus Federal real property; or
(2) That is determined by the Administrator to be otherwise related to the surplus Federal real property.
Surplus Federal real property means the property assigned or suitable for assignment to the Secretary by the Administrator for disposal under the Act.
Transfer means to sell and convey title to surplus Federal real property for educational purposes as described in this part.
Transferee means that entity which has purchased and acquired title to the surplus Federal real property for educational purposes pursuant to section 203(k) of the Act.
§ 12.3   What other regulations apply to this program?
The following regulations apply to this program:
(a) 34 CFR parts 100, 104, and 106.
(b) 41 CFR part 101-47.
(c) 34 CFR part 85.
§ 12.4   How does the Secretary provide notice of availability of surplus Federal real property?
The Secretary notifies potential applicants of the availability of surplus Federal real property for transfer for educational uses in accordance with 41 CFR 101-47.308-4.
§ 12.5   Who may apply for surplus Federal real property?
The following entities may apply for surplus Federal real property:
(a) A State.
(b) A political subdivision or instrumentality of a State.
(c) A tax-supported institution.
(d) A nonprofit institution.
(e) Any combination of these entities.
§ 12.6   What must an application for surplus Federal real property contain?
An application for surplus Federal real property must—
(a) Contain a program and plan of use;
(b) Contain a certification from the applicant that the proposed program is not in conflict with State or local zoning restrictions, building codes, or similar limitations;
(c) Demonstrate that the proposed program and plan of use of the surplus Federal real property is for a purpose that the applicant is authorized to carry out;
(d) Demonstrate that the applicant is able, willing, and authorized to assume immediate custody, use, care, and maintenance of the surplus Federal real property;
(e) Demonstrate that the applicant is able, willing, and authorized to pay the administrative expenses incident to the transfer or lease;
(f) Demonstrate that the applicant has the necessary funds, or the ability to obtain those funds immediately upon transfer or lease, to carry out the proposed program and plan of use for the surplus Federal real property;
(g) Demonstrate that the applicant has an immediate need and ability to use all of the surplus Federal real property for which it is applying;
(h) Demonstrate that the surplus Federal real property is needed for educational purposes at the time of application and that it is so needed for the duration of the period of restriction;
(i) Demonstrate that the surplus Federal real property is suitable or adaptable to the proposed program and plan of use; and
(j) Provide information requested by the Secretary in the notice of availability, including information of the effect of the proposed program and plan of use on the environment.
§ 12.7   How is surplus Federal real property disposed of when there is more than one applicant?
(a) If there is more than one applicant for the same surplus Federal real property, the Secretary transfers or leases the property to the applicant whose proposed program and plan of use the Secretary determines provides the greatest public benefit, using the criteria contained in appendix A to this part that broadly address the weight given to each type of entity applying and its proposed program and plan of use. (See example in § 12.10(d)).
(b) If, after applying the criteria described in paragraph (a) of this section, two or more applicants are rated equally, the Secretary transfers or leases the property to one of the applicants after—
(1) Determining the need for each applicant's proposed educational use at the site of the surplus Federal real property;
(2) Considering the quality of each applicant's proposed program and plan of use; and
(3) Considering each applicant's ability to carry out its proposed program and plan of use.
(c) If the Secretary determines that the surplus Federal real property is capable of serving more than one applicant, the Secretary may apportion it to fit the needs of as many applicants as is practicable.
(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.
§ 12.8   What transfer or lease instruments 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.
§ 12.9   What warranties does the Secretary give?
The Secretary transfers or leases surplus Federal real property on an “as is, where is,” basis without warranty of any kind.
§ 12.10   How is a Public Benefit Allowance (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 C 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 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.
§ 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).
(f) 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.
§ 12.12   What are the terms and conditions of transfers or leases of surplus 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.
§ 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;
(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.
§ 12.14   What are the sanctions for noncompliance with a term or condition 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 transferred or leased surplus Federal real property and the right to immediate possession revert to the United States;
(iii) The surplus Federal real property be transferred or leased to another eligible entity as the Secretary directs;
(iv) The transferee or lessee abrogate the conditions and restrictions in the transfer or lease instrument in accordance with the provisions of § 12.15;
(v) The transferee or lessee place the surplus Federal real property into immediate use for an approved purpose and extend the period of restriction in the transfer or lease instrument for a term equivalent to the period during which the property was not fully and solely used for an approved use; or
(vi) The transferee or lessee comply with any combination of the sanctions described in paragraph (a)(1) or (a)(3) of this section.
(2) If title or possession reverts to the United States for noncompliance or is voluntarily reconveyed, the Secretary may require the transferee or lessee—
(i) To reimburse the United States for the decrease in value of the transferred or leased surplus Federal real property not due to—
(A) Reasonable wear and tear;
(B) Acts of God; or
(C) Reasonable alterations made by the transferee or lessee to adapt the surplus Federal real property to the approved program and plan of use for which it was transferred or leased;
(ii) To reimburse the United States for any costs incurred in reverting title or possession;
(iii) To forfeit any cash payments made by the transferee or lessee against the purchase or lease price of surplus Federal real property transferred;
(iv) To take any other action directed by the Secretary; or
(v) To comply with any combination of the provisions of paragraph (a)(3) of this section.
(3) If the transferee or lessee does not put the surplus Federal real property into use within the applicable time limitation in § 12.12(a), the Secretary may require the transferee or lessee to make cash payments to the Secretary equivalent to the current fair market rental value of the surplus Federal real property for each month during which the program and plan of use has not been implemented.
(4) If the Secretary determines that a lessee of a transferee or a sublessee of a lessee is not complying with a term or condition of the lease, or if the lessee voluntarily surrenders the premises, the Secretary may require termination of the lease.
(b) Additional sanction for noncompliance with off-site transfer. In addition to the sanctions in paragraph (a) of this section, if the Secretary determines that a transferee is not complying with a term or condition of a transfer of off-site surplus Federal real property, the Secretary may require that the unearned PBA become immediately due and payable in cash to the United States.
§ 12.15   What are the procedures for securing an abrogation of the conditions and restrictions contained in the conveyance instrument?
(a) The Secretary may, in the Secretary's sole discretion, abrogate the conditions and restrictions in the transfer or lease instrument if—
(1) The transferee or lessee submits to the Secretary a written request that the Secretary abrogate the conditions and restrictions in the conveyance instrument as to all or any portion of the surplus Federal real property;
(2) The Secretary determines that the proposed abrogation is in the best interests of the United States;
(3) The Secretary determines the terms and conditions under which the Secretary will consent to the proposed abrogation; and
(4) The Secretary transmits the abrogation to the Administrator and there is no disapproval by the Administrator within thirty (30) days after notice to the Administrator.
(b) The Secretary abrogates the conditions and restrictions in the transfer or lease instrument upon a cash payment to the Secretary based on the formula contained in the transfer or lease instrument and any other terms and conditions the Secretary deems appropriate to protect the interest of the United States.