Federal Surplus Property Improvement Act of 1998

Federal Surplus Property Improvement Act of 1998 - Requires that nonlethal excess supplies of the Department of Defense be made available to a State or a local government upon request before such supplies are made available for humanitarian relief purposes. Permits the President to make such supplies available for humanitarian purposes before they are made available to a State or local government in response to a natural disaster emergency.

Amends the Foreign Assistance Act of 1961, with respect to the transfer of property for environmental protection in foreign countries, to prohibit such transfers unless the Administrator of General Services (GSA Administrator) determines that there are no Federal or State use requirements for the property under any other provision of law.

Amends the Small Business Act to: (1) repeal the requirement permitting the transfer of U.S.-owned technology or surplus property to participants in the small business and capital ownership development program on a priority basis; and (2) subject to the oversight of the GSA Administrator, in consultation with State agencies responsible for surplus property distribution, the transfer of such technology or surplus property to program participants.

Repeals the authority of the Secretary of Energy to transfer surplus equipment to an educational institution with which it has a partnership agreement.

Requires the Administrator of General Services to report to the Congress on the effectiveness of surplus personal property donation and disposal programs (except for any program that grants access to personal property by local communities affected by the closure of a military base), along with recommendations for consolidating such programs under a single Federal authority.