[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR12.9]

[Page 50-52]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 12--DISPOSAL AND UTILIZATION OF SURPLUS REAL PROPERTY FOR PUBLIC HEALTH 
PURPOSES--Table of Contents
 
Sec. 12.9  General disposal terms and conditions.

    (a) Surplus real property transfers under this part will be limited 
to public health purposes. Transferees shall be entitled to a public 
benefit allowance in terms of a percentage which will be applied against 
the value of the property to be conveyed. Such an allowance will be 
computed on the basis of benefits to the United States from the use of 
such property for public health purposes. The computation of such public 
benefit allowances will be in accordance with Exhibit A attached hereto 
and made a part hereof.
    (b) A transfer of surplus real property for public health purposes 
is subject to the disapproval of the Administrator within 30 days after 
notice is given to him of the proposed transfer.
    (c) Transfers will be on the following terms and conditions:
    (1) The transferee will be obligated to utilize the property 
continuously in accordance with an approved plan of operation.
    (2) The transferee will not be permitted to sell, lease or sublease, 
rent, mortgage, encumber, or otherwise dispose of the property, or any 
part thereof, without the prior written authorization of the Department.
    (3) The transferee will file with the Department such reports 
covering the utilization of the property as may be required.
    (4) In the event the property is sold, leased or subleased, 
encumbered, disposed of, or is used for purposes other than those set 
forth in the approved plan without the consent of the Department, all 
revenues or the reasonable value of other benefits received by the 
transferee directly or indirectly from such use, as determined by the 
Department, will be considered to have been received and held in trust 
by the transferee for the account of the United States and will be 
subject to the direction and control of the Department. The provisions 
of this paragraph shall not impair or affect the rights reserved to the 
United States in paragraph (c)(6) of this section, or the right of the 
Department to impose conditions to its consent.
    (5) Lessees will be required to carry all perils and liability 
insurance to

[[Page 51]]

protect the Government and the Government's residual interest in the 
property. Transferees will be required to carry such flood insurance as 
may be required by the Department pursuant to Pub. L. 93-234. Where the 
transferee elects to carry insurance against damages to or loss of on-
site property due to fire or other hazards, and where loss or damage to 
transferred Federal surplus real property occurs, all proceeds from 
insurance shall be promptly used by the transferee for the purpose of 
repairing and restoring the property to its former condition, or 
replacing it with equivalent or more suitable facilities. If not so 
used, there shall be paid to the United States that part of the 
insurance proceeds that is attributable to the Government's residual 
interest in the property lost, damaged, or destroyed in the case of 
leases, attributable to the fair market value of the leased facilities.
    (6) With respect to on-site property, in the event of noncompliance 
with any of the conditions of the transfer as determined by the 
Department, title to the property transferred and the right to immediate 
possession shall, at the option of the Department, revert to the 
Government. In the event title is reverted to the United States for 
noncompliance or voluntarily reconveyed, the transferee shall, at the 
option of the Department, be required to reimburse the Government for 
the decrease in value of the property not due to reasonable wear and 
tear or acts of God or attributable to alterations completed by the 
transferee to adapt the property to the public health use for which the 
property was transferred. With respect to leased property, in the event 
of noncompliance with any of the conditions of the lease, as determined 
by the Department, the right of occupancy and possession shall, at the 
option of the Department, be terminated. In the event a leasehold is 
terminated by the United States for noncompliance or is voluntarily 
surrendered, the lessee shall be required at the option of the 
Department to reimburse the Government for the decrease in value of the 
property not due to reasonable wear and tear or acts of God or 
attributable to alterations completed by the lessee to adapt the 
property to the public health use for which the property was leased.

With respect to any reverter of title or termination of leasehold 
resulting from noncompliance, the Government shall, in addition thereto, 
be reimbursed for such costs as may be incurred in recovering title to 
or possession of the property.


Any payments of cash made by the transferee against the purchase price 
of property transferred shall, upon a forfeiture of title to the 
property for breach of condition, be forfeited.
    (7) With respect to off-site property, in the event of noncompliance 
with any of the terms and conditions of the transfer, the unearned 
public benefit allowance shall, at the option of the Department, become 
immediately due and payable or, if the property or any portion thereof 
is sold, leased, or otherwise disposed of without authorization from the 
Department, such sale, lease or sublease, or other disposal shall be for 
the benefit and account of the United States and the United States shall 
be entitled to the proceeds. In the event the transferee fails to remove 
the property or any portion thereof within the time specified, then in 
addition to the rights reserved above, at the option of the Department, 
all right, title, and interest in and to such unremoved property shall 
be retransferred to other eligible applicants or shall be forfeited to 
the United States.
    (8) With respect only to on-site property which has been declared 
excess by the Department of Defense, such declaration having included a 
statement indicating the property has a known potential for use during a 
national emergency, the Department shall reserve the right during any 
period of emergency declared by the President of the United States or by 
the Congress of the United States to the full and unrestricted use by 
the Government of the surplus real property, or of any portion thereof, 
disposed of in accordance with the provisions of this part. Such use may 
be either exclusive or nonexclusive. Prior to the expiration or 
termination of the period of restricted use by the transferee, the 
Government will not be obligated to pay rent or any other fees or 
charges during the period

[[Page 52]]

of emergency, except that the Government will:
    (i) Bear the entire cost of maintenance of such portion of the 
property used by it exclusively or over which it may have exclusive 
possession or control;
    (ii) Pay the fair share, commensurate with the use of the cost of 
maintenance of such surplus real property as it may use nonexclusively 
or over which it may have nonexclusive possession or control;
    (iii) Pay a fair rental for the use of improvements or additions to 
the surplus real property made by the purchaser or lessee without 
Government aid; and
    (iv) Be responsible for any damage to the surplus real property 
caused by its use, reasonable wear and tear, the common enemy and acts 
of God excepted. Subsequent to the expiration or termination of the 
period of restricted use, the obligations of the Government will be as 
set forth in the preceding sentence and, in addition, the Government 
shall be obligated to pay a fair rental for all or any portion of the 
conveyed premises which it uses.
    (9) The restrictions set forth in paragraphs (c) (1) through (7) of 
this section will extend for thirty (30) years for land with or without 
improvements; and for facilities being acquired separately from land 
whether they are for use on-site or off-site, the period of limitations 
on the use of the structures will be equal to their estimated economic 
life. The restrictions set forth in paragraphs (c) (1) through (7) of 
this section will extend for the entire initial lease period and for any 
renewal periods for property leased from the Department.
    (d) Transferees, by obtaining the consent of the Department, may 
abrogate the restrictions set forth in paragraph (c) of this section for 
all or any portion of the property upon payment in cash to the 
Department of an amount equal to the then current fair market value of 
the property to be released, multiplied by the public benefit allowance 
granted at the time of conveyance, divided by the total number of months 
of the period of restriction set forth in the conveyance document and 
multiplied by the number of months that remain in the period of 
restriction as determined by the Department. For purposes of abrogation 
payment computation, the current fair market value shall not include the 
value of any improvements placed on the property by the transferee.
    (e) Related personal property will be transferred or leased as a 
part of the realty and in accordance with real property procedures. It 
will be subject to the same public benefit allowance granted for the 
real property. Where related personal property is involved in an on-site 
transfer, the related personal property may be transferred by a bill of 
sale imposing restrictions for a period not to exceed five years from 
the date of transfer, other terms and conditions to be the same as, and 
made a part of, the real property transaction.