from two or more veterans on the same property, the offer to be accepted shall be selected by lot. This drawing should be made openly and in the presence of as many as practicable of the interested parties. A record shall be made at the time of the order in which the names are drawn with respect to each tract or unit sold in this manner. If a veteran is selected for more than one unit, he shall elect in writing which property he will take.

§ 5.604-05 Veteran's affidavit of eligibility. When the district office is ready to accept a veteran's offer, but before the acceptance is executed, the veteran shall be required to submit an affidavit to the effect that he served in the active military or naval services of the United States on or after September 16, 1940, and prior to the termination of World War II, and has been discharged or released from such service under honorable conditions; that he has not prior to the date of the affidavit purchased under a right of priority a tract or unit of surplus real property pursuant to section 23 of the Surplus Property Act of 1944; that in exercising his right of priority as a veteran, he is acting in his own right and behalf and not on behalf of, or as agent, attorney in fact, or trustee of, or in any representative or fiduciary capacity for, another, and that the property applied for is for the applicant's own personal use for agricultural or residential purposes or to enable him to establish or maintain his own small business enterprise, indicating the particular contemplated use. If the intended use is for his own small business enterprise, it will be necessary to obtain additional factual information in order that the disposal agency may determine if the applicant's own small business comes within the definitions set forth in § 5.103-02 (p) and (q). Before the affidavit is accepted from the veteran, he shall be informed of the substance of the provisions of section 26 of the Surplus Property Act of 1944.

OFFERS FROM OWNER-OPERATORS $5.605-01 Obtaining offers. In order to retain their priority rights owner-operators must either express their desire to purchase a particular tract or any of the tracts in a project in a written statement or submit a formal offer on tracts in which they are interested during the 90-day priority period. However, no offer may be legally accepted from an owner-operator until the expiration of the period allowed for submitting offers.

After all offers from veterans have been processed, a list of remaining salable tracts shall be prepared showing the current market value, and all offers and statements of desire to acquire property filed by owner-operators shall be reviewed at this time. The project manager shall notify in writing all such owner-operators and give them fifteen (15) days within which to make an offer. This notice should generally describe the tracts remaining to be sold and the conditions upon which offers will be received at the project office during the time allowed.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 5.605-01 Obtaining offers. In order to retain their priority rights owneroperators must either express their desire to purchase a particular tract or any of the tracts in a project in a written statement or submit a formal offer on tracts in which they are interested during the appropriate priority period provided for in § 5.507-04. However, no offer may be legally accepted from an owneroperator until the expiration of the period allowed for submitting offers. After all offers from veterans have been processed, a list of remaining salable tracts shall be prepared showing the current market value, and all offers and statements of desire to acquire property filed by owner-operators shall be reviewed at this time. The project manager shall notify in writing all such owner-operators and give them fifteen (15) days within which to make an offer. This notice shall generally describe the tracts remaining to be sold and the conditions upon which offers will be received at the project office during the time allowed. [Reg., Sept. 8, 1947, 12 F.R. 6255]

§ 5.605-02 Selection of acceptable purchasers. If acceptable offers are received, they should be handled in accordance with the procedure for processing other types of offers. If only one offer is received for any particular tract and it is acceptable, it may be submitted immediately to the district office for approval. If more than one offer is received for a particular tract at the current market value, the purchaser shall be selected by lot, as in the case of offers from veterans.

§ 5.605-03 Owner-operator's affidavit of eligibility. When the district office is ready to accept an owner-operator's offer, but before the acceptance is executed, the owner-operator shall be re

quired to submit an affidavit that he expects to operate and cultivate the land to earn a livelihood; that he has not theretofore under his right of priority as an owner-operator (as defined in WAA Regulation 5; Title 32, Part 8305, infra) purchased a tract or unit of surplus real property pursuant to section 23 of the Surplus Property Act of 1944; and that in exercising his right of priority as an owner-operator, he is acting in his own right and behalf and not on behalf of, or as agent, attorney in fact, or trustee of, or in any representative or fiduciary capacity for, another. Before the affidavit is accepted from the owner-operator, he shall be informed of the substance of the provisions of section 26 of the act.

OFFERS FROM NON-PROFIT INSTITUTIONS § 5.606-01 Obtaining offers. In order to retain its priority rights a nonprofit institution must either express its desire to purchase a particular tract or any of the tracts in a project in a written statement or submit a formal offer on tracts in which it is interested during the 90-day priority period. However, no offer may be legally accepted from a nonprofit institution until the expiration of the period allowed for submitting offers. After all offers from owner-operators have been processed, a list of remaining salable tracts shall be prepared showing the current market value, and all offers and statements of desire to acquire property filed by nonprofit institutions shall be reviewed at this time. The project manager shall notify in writing all such nonprofit institutions and give them fifteen (15) days within which to make an offer. This notice should generally describe the tracts remaining to be sold and the conditions upon which offers will be received at the project office during the time allowed.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

$ 5.606-01 Obtaining offers. In order to retain its priority rights, a nonprofit institution must either express its desire to purchase a particular tract or any of the tracts in a project in a written statement or submit a formal offer on tracts in which it is interested during the appropriate priority period provided for in § 5.508-04. However, no offer may be legally accepted from a nonprofit institution until the expiration of the period allowed for submitting offers. After all offers from owner-operators have been processed, a list of remaining salable tracts shall be prepared showing the cur

rent market value, and all offers and statements of desire to acquire property filed by nonprofit institutions shall be reviewed at this time. The project manager shall notify in writing all such nonprofit institutions and give them fifteen (15) days within which to make an offer. This notice should generally describe the tracts remaining to be sold and the conditions upon which offers will be received at the project office during the time allowed. [Reg., Sept. 8, 1947, 12 F.R. 6255]

SALES TO NON-PRIORITY HOLDERS

§ 5.607-01 Obtaining offers and acceptance of offers. After all offers from priority holders have been processed, a list of remaining properties shall be prepared and sales negotiated by the project manager in the manner and upon the basis determined to be to the best interest of the Government. At the discretion of the district office additional notices may be published at this time in newspapers or such other publicity given to the availability of property as may be deemed advisable. Notice should be sent to individuals who have expressed a desire to purchase or who have submitted an offer at some period. Depending upon circumstances, sales may be made on the basis of sealed bids, auctions, or private negotiations. In any event offers must be accepted on the basis of the highest obtainable bid provided that no sale shall be made at a price which is less than 75 percent of the current market value as established by appraisal until such offer has been reviewed and approved by the WAA unless the price offered is the maximum price which may be charged the purchaser. At this time sales may be made to the general public, including any former priority holders. The offers to purchase will be processed and handled in the same manner as indicated in previous sections of these regulations relating to offers from priority holders. If equal acceptable offers are received from two or more nonpriority offerors, selection shall be made by lot unless otherwise authorized by the Administrator.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 5.607-01 Obtaining offers and acceptance of offers. After all offers from priority holders have been processed, a list of remaining properties shall be prepared and sales negotiated by the project manager in the manner and upon the basis determined to be to the best interest of the Government. At the discretion of the district office additional notices may be published at this time in newspapers or such other publicity given to the availability of property as may be

deemed advisable. Notice should be sent to individuals who have expressed a desire to purchase or who have submitted an offer at some period. Depending upon circumstances, sales may be made on the basis of sealed bids, auctions, or private negotiations. In any event offers must be accepted on the basis of the highest obtainable bid provided that no sale shall be made at a price which is less than 75 percent of the current market value as established by appraisal until such offer has been reviewed and approved by the WAA unless the price offered is the maximum price which may be charged the purchaser. At this time sales may be made to the general public, including any former priority holders. The offers to purchase will be processed and handled in the same manner as indicated in previous sections of the regulations in this part relating to offers from priority holders. Any information submitted, the disclosure of which might tend to subject the offerer to a competitive business disadvantage shall, upon request, be held in strict confidence by the disposal agency and by any other Government agency to which it is made available. If equal acceptable offers are received from two or more nonpriority offerors, the selection shall be determined by the disposal agency, unless otherwise directed by the Administration, by taking into consideration actual proposals received and the use of the property most desirable in the light of the applicable objectives of the act. [Reg., Sept. 8, 1947, 12 F.R. 6255]

§ 5.608-02 Notices in cases of nonperformance by successful bidders. If performance of the contract of a successful bidder is not completed or if the Government agency or State or local government fails to complete its acquisition of the property after having it held for the time allotted by the WAA, all those who made unsuccessful offers during the priority period or any time allowed thereafter shall be notified by mail that if they renew their offers within fifteen (15) days from the date of mailing the notice, they will be reconsidered on the same basis on which they would have been considered had the offer accepted not been received in the first instance; Provided, That any case in which, after acceptance of an offer by the disposal agency, the offeror requests more time for completion of the purchase than the disposal agency is willing to grant, shall

be submitted to the central office for transmittal to the War Assets Administration.

LEASING

§ 5.610-01 Authority. The disposal agency may lease or grant a permit on surplus property to place it in productive use pending disposition: Provided, That such lease shall be revocable at the will of such disposal agency; and may also, with the approval of the Administrator, grant irrevocable leases where such action would be in the best interest of the Government and meet the obJectives of the act.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 5.610-01 Authority. The disposal agency may lease or grant a permit on surplus property to place it in productive use pending disposition: Provided, That such lease shall be revocable on not to exceed thirty (30) days' notice by the Government agency having jurisdiction of the property: And provided further, That the use and occupation will not interfere with, delay, or retard the disposition of the property. In such cases, an immediate right of entry to such property may be granted pending execution of the formal lease or permit. [Reg., Sept. 8, 1947, 12 F.R. 6255]

§ 5.610-015 Terms and form of lease. Land shall be leased for a period of one crop year with a clause giving the disposal agency the right of revocation at its election, using the form of "Agricultural Lease" supplied for that purpose, and with a reservation of fissionable materials as provided in 32 CFR, Supps., Part 8305. Rental prices shall be substantially in accordance with the prevailing cash rental prices at the time for comparable land in the locality. All leases shall be on a cash basis, payable in advance either annually or quarterly, depending upon the circumstances and the amounts involved. Leases may be revoked at any time during the period of the lease, using the form, "Notice of Revocation," provided for that purpose. When leases are revoked, compensation will be on the basis outlined in the lease agreement.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 5.610-015 Terms and form of lease. Land shall be leased for a period of one crop year with a clause giving the disposal agency the right of revocation as provided in § 5.610-01, using the form of "Agricultural Lease" supplied for that purpose, and with a reservation of fissionable materials as provided in 32 CFR,

Supps. 8305.24. Unless otherwise authorized by the Administration the lease or permit shall be for a consideration that is fair and reasonable under all the circumstances, with or without cash consideration, and shall be on such terms and conditions as are deemed appropriate properly to protect the interests of the United States. All leases made on a cash basis shall be payable in advance either annually or quarterly, depending upon the circumstances and the amounts involved. Leases may be revoked at any time during the period of the lease, using the form, "Notice of Revocation," provided for that purpose. When leases are revoked, compensation will be on the basis outlined in the lease agreement. [Reg., Sept. 8, 1947, 12 F.R. 6255]

§ 5.610-02 Decision to lease and selection of tenant. The basis of determining whether or not to lease will be of advantage to the Government not only in terms of income and increase of crop production, but also in terms of aid in preventing deterioration of the soil and improvements. Before selecting a tenant, the property to be leased should be advertised in order to insure the acceptance of the highest obtainable offer from a satisfactory tenant. The notice generally describing the property to be leased and inviting offers from parties interested should be approved by the vice president of the Federal Farm Mortgage Corporation and placed in the local newspaper which will afford the greatest publicity. Ordinarily one publication of the notice, to be contracted and paid for under the procedure established by this part, should furnish sufficient publicity and the date set in the notice should be far enough ahead to permit time for those interested to appear at the project office and submit a written offer. Preferably, leases of agricultural land should be made to farm operators with sufficient equipment, labor, and resources to cultivate properly the acreage leased. Where advantages to the Government are considered equal, preference shall be given to former owners. In the discretion of the district office, it will not be necessary to advertise a property for lease in those cases where a satisfactory tenant is already in possession of the property at a rental determined to be fair to the Government. A desirable cropping program should be worked out with the tenant and made a part of each lease and should provide reasonable as

surance of proper maintenance of the soil, buildings, and other improvements.

§ 5.610-03 Preparing lease form. (a) Upon securing an acceptable offer from a desirable tenant to lease a tract of land, the district supervisor or project manager will prepare the form of Agricultural Lease showing the description of the property, terms of lease, rental arrangement, acreage and crops to be seeded, and possession date. In instances where more than one tract is involved, separate forms will be prepared on each tract. The signature of the tenant, together with his post office address, will be required on all copies of the lease. The three copies of the lease and any rental monies collected will be forwarded to the bank, together with a transmittal letter outlining the project manager's recommendations. A copy of the receipt given for any rental monies collected is to be attached to the remittance letter. The property record card in the project office will be tabbed to show "lease pending" and any necessary follow-up established.

(b) Upon receipt in the district supervisor's office, the district supervisor will make a recommendation to the vice president of the Corporation. If the vice president approves, he will execute all three copies of the lease form. Then the original will be filled in the property folder, the second copy forwarded to the tenant, and the third copy mailed to the project office. The property record card in the district supervisor's office will be posted to show the name and address of the tenant, rental terms, possession date, expiration date, and amounts and dates of any future payments.

(c) Upon the receipt of the executed copy of the lease in the project office, the property record card will be posted, showing the name and address of the tenant, the rental terms, possession date, expiration date, amounts, and dates of future payments, if any, and the property record card will be tabbed to show "leased" and to provide follow-up for billing purposes. A copy of the lease will be filed in the related property folder.

§ 5.610-04 Revocation of lease. Where it is decided to revoke a lease, the form of Notice of Revocation will be prepared by the project manager or district supervisor of surplus property disposal, in three copies accompanied by a detailed statement of the facts supporting

his recommendation. Upon approval by the district office, the vice president of the Corporation will execute three copies. Thereupon the necessary information will be posted upon the property record card, the original filed in the property folder, the second copy mailed to the tenant with necessary instructions, and the third copy mailed to the project office for posting purposes and filing in the related property folder, if the project office is still in operation.

§ 5.610-05 Sales subject to leases. As a general policy, in cases where sales are made to priority holders subject to leases on which advance rentals are paid to the Government covering a period after the date when the purchaser becomes entitled to a deed, the purchase price should reflect an allowance of a pro rata share of the rentals computed from that date. For this purpose, a purchaser should be considered entitled to deed on the date he completes his payment of the purchase price or date of acceptance of the offer, whichever is later. The allowance for such rentals may be effected in establishing the purchase price. This policy does not necessarily apply to sales to nonpriority holders, where matters such as rentals are ordinarily taken into account by prospective purchasers and the disposal agency in making and considering offers. In practice, it may be advisable for offers taken from priority holders in cases of the type concerned here to provide that the stated dollar amount shall be reduced by an amount determined by application of the formula for prorating the rentals.

DISPOSAL OF IMPROVEMENTS

§ 5.702-01 Disposal of personalty. Where equipment and supplies are assigned for disposition in conjunction with real property, they may be disposed of with the real property, and any discount applicable to the real property shall apply also to the equipment and supplies. The disposal agency shall hold the real property and personalty intact until such time as the disposal agency determines that the retention of the personalty will not facilitate the disposition of the real property: Provided, That in no event shall the personal property be separated from the real property until such time as such property has been offered for disposition intact and the period for the submission of bids has expired. Upon such determination by the disposal agency, the declaration covering the personal property shall be forwarded to the agency designated in SPA Regulation 1 (32 CFR, Supps.,

Part 8301) to dispose of such personalty, with notice to the Administrator, and the real property may be readvertised for disposition without the personalty.

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 5.702-01 Personalty. Where it is determined that equipment or supplies or other personal property located in or on surplus real property is to be disposed of in conjunction with real property, it may be disposed of with the real property subject to applicable provisions of this part. The disposal agency shall hold such surplus personalty intact until such time as the disposal agency determines in writing that the retention of any part of the personalty will not facilitate the disposition of any or all of the surplus real property, at which time the personalty to be released shall be transferred to the jurisdiction of the agency designated in WAA Reg. 1 (32 CFR, Supps., 8301) to dispose of such property. In connection with the leasing of any surplus real property, the disposal agency may sell to the lessee any personal property determined to be necessary for the operation of the realty. [Reg., Sept. 8, 1947, 12 F.R. 6255]

§ 5.703-01 Water rights. (a) Water rights in connection with real property subject to irrigation shall ordinarily be disposed of with the real property to which they relate, whether such rights are evidenced by stock certificates in irrigation projects or otherwise, and shall be disposed of subject to the provisions of this part.

(b) In order to meet the objectives of the act to discourage disposals for speculative purposes, it shall be the policy of the Administrator to dispose of such rights to the owners of the real property who may be entitled to the benefits thereof, rather than to persons who are not owners, and in quantities proportionate to the amount of property owned by such persons.

(c) Former owners shall be entitled to a priority for any such rights acquired from them in connection with real property which they sold to the Government where such former owners are entitled to and claim priority as to such property.

(d) Except as to former owners who are governed by the provisions of 32 CFR, Supps., Part 8305 as to price, the