Section 60. Terms and conditions on donable property

A. Certification by donee on all donated property. The donee authorized representative certifies and agrees to all the terms, conditions, reservations, and restrictions included on the issue documents shown as exhibits in 1VAC30-120-150.

1. Distribution Document and Invoice; Exhibit 1

2. Surplus Property Transfer Document; Exhibit 2

B. Additional certification by donee for donation of aircraft and vessels.

1. Combat-Type Aircraft Conditional Transfer Document; Exhibit 3;

2. Non-Combat-Type Aircraft Conditional Transfer Document; Exhibit 4;

3. Vessel Conditional Transfer Document; Exhibit 5.

C. Amendment and release of terms and conditions.

1. The State Agency may amend, modify, or grant releases of any term, condition, or restriction it has imposed on donated items in accordance with the standards prescribed in Exhibit 3, 1VAC30-120-150, in this plan provided that the conditions pertinent to each situation have been affirmatively demonstrated to the prior satisfaction of the State Agency and made a matter of record.

2. Pursuant to FMR 102-37.465(1) the State Agency may grant approval to the donee to cannibalize or accomplish secondary utilization of an item which is subject to the terms, conditions, reservations, or restrictions as listed on the Distribution Document and Invoice, Exhibit 1. The State Agency may issue an item for the purposes of cannibalization or secondary utilization with approval for such action marked on the Distribution Document and Invoice. If a donee finds that it cannot use the donated item for the purposes for which acquired, and therefore wishes to cannibalize it or accomplish secondary utilization, a written request for an approval must be submitted to the State Agency. The request shall give item identification, condition, and proposed use. The State Agency will respond in writing and may grant approval when it is determined that such action appears to be the best utilization of the item.

3. Standards to amend or grant releases. In accordance with this section of the plan of operation, the State Agency may amend or grant releases during the period of restriction from the terms, conditions, reservations, or restrictions it has imposed on donated property; in accordance with the following standards provided that the conditions pertinent to each situation have been affirmatively demonstrated to the prior satisfaction of the State Agency, and have been made a matter of record:

a. Secondary utilization or cannibalization. Secondary utilization or cannibalization may be accomplished provided that:

(1) Disassembly of the item for use of its component parts for secondary use or repair and maintenance of a similar item has greater potential benefit than utilization of the item in its existing form;

(2) Items approved for disassembly or cannibalization will remain under the period of restriction imposed by the transfer document pending completion of the proposed secondary use or cannibalization; and

(3) A written report of such action is made by the donee to the State Agency, including a list of all components resulting from the secondary utilization or cannibalization that have a single item acquisition cost of $3,000 or more. These components will remain under the restrictions imposed by the transfer document. Components with a single item acquisition cost of less than $3,000 will be released from the restrictions imposed by the transfer document. However, these components will continue to be used or be otherwise disposed of in accordance with applicable law and regulations.

b. Trade-in of an item on a similar replacement. An item of donated personal property may be traded in or used as whole or part payment for another like item of property provided:

(1) The item being traded in is not, when the request is made, in compliance status for violation of the terms, conditions, reservations, or restrictions placed on it;

(2) The item being traded in has been used by the donee for eligible purposes for at least six months from the date of being placed in use, and it has been demonstrated that the trade-in will result in increased utilization value to the donee;

(3) The trade-in is on a one-for-one basis only, i.e., one donated item being traded for one like item having similar use potential;

(4) The item being acquired has an estimated market value at least equal to the estimated market value of the item being traded in; and

(5) The item acquired is made subject to the period of restriction remaining on the item traded in.

c. Abrogation. Except in cases involving the failure to use or the misuse of donated property, abrogation of restrictions imposed by the State Agency in the transfer instrument may be authorized upon payment to the State Agency of an amount representing the fair market value at the time of donation less a credit for the time the property was used for the purpose for which donated, during the period of restriction, and provided that the State Agency determines that such action will not result in a windfall revenue to the donee, and provided further that the property has been used for at least 12 months from the date of being placed in use.

d. Revision of the acquisition cost. The acquisition cost of an item may be revised provided that the request therefore is made in writing by the donee, and it is determined by the State Agency that the listed acquisition cost is unrealistic in view of its research and development costs, its incompleteness due to missing parts, or its generally deteriorated condition.

e. Destruction and abandonment. A donated item of personal property may be destroyed or abandoned by a donee when it is determined that the item has no commercial value or the estimated cost of its continued care and handling would exceed the estimated proceeds from its sale. The determination shall be based on a finding made in writing by the State Agency and the State Agency shall prescribe the means and methods whereby the property shall be destroyed or abandoned.

f. Enforcement of compliance. The enforcement of the terms and conditions, reservations and restrictions imposed by the State Agency, of donated property, or the remedy of breaches of such terms and conditions, may be satisfied:

(1) When payment is made to the State Agency of any and all fair rental values due and payable for any unauthorized use of donated property;

(2) When payment is made to the State Agency of either the fair market value or gross proceeds of sale, whichever is in the best interest of the state, for the unauthorized disposal or destruction of donated property; or

(3) When donated property is recovered by the State Agency accountability and distribution of such property is the responsibility of the State Agency.

g. Reduction in the period of restriction. Provided an item of donated property is not in compliance status, a reduction in the period of restriction may be authorized when a revised standard covering the period of restriction is promulgated by the State Agency.

h. Limitations. These provisions are not applicable to:

(1) Donated military-type aircraft or other items of property on which federal General Services Administration has imposed special handling condition or use limitations; or

(2) Property which was not placed in use for the purposes for which acquired within one year from the date the property was placed in use, and continued in use for one year from the date the property was placed in use, except with respect to secondary use or cannibalization as provided in FMR 102-37.465(c).

D. The State Agency may impose reasonable terms, conditions, reservations, and restrictions on the use of donable property items other than those with a unit acquisition cost of $3,000 or more, and passenger vehicles.

Historical Notes

Derived from VR330-04-03 §VI, eff. September 20, 1984; amended, Volume 29, Issue 17, eff. May 22, 2013.

Statutory Authority

§ 2.2-1123 of the Code of Virginia.