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CHAPTER 2-200

PROPERTY

2-200-00 What does this chapter do?

2-200-10 Where do these policies come from?

2-200-20 What is property?

2-200-30 What is equipment?

2-200-40 Who holds title to equipment acquired under an assistance agreement?

2-200-50 How must states manage equipment?

2-200-60 How must recipients other than states manage equipment?

2-200-70 How must you manage any Federally-owned equipment we provide to you?

2-200-80 When does OSMRE have the right to transfer title to equipment?

2-200-90 How must you manage supplies?

2-200-100 Can you acquire land with OSMRE funds?

2-200-110 What specific rules apply to real property acquired land with AML grant

funds?

2-200-120 What specific rules apply to real property acquired with Watershed

Cooperative Agreement funds?

2-200-130 How must you manage real property?

2-200-00 What does this chapter do?

This chapter explains the policy and procedures for the use, management, and disposition of real 

property, equipment and supplies purchased by you, the recipient, under an assistance agreement 

from us, the Office of Surface Mining Reclamation and Enforcement (OSMRE).

2-200-10 Where do these policies come from?

Requirements for the use, management, and disposal of real property, supplies, and equipment 

acquired under your assistance agreement are established in the Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR Part 200, 

Subpart D.

2-200-20 What is property?

Property is any tangible item which is acquired or held through an assistance agreement. Real 

property is land, including buildings, and improvements fixed on the land. Personal property is 

all other property except real property. 

2-200-30 What is equipment?

We define equipment as nonexpendable personal property with a useful life of more than one 

year and an acquisition cost of $5,000 or more per unit. Alternatively, you may use your own 
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definition of equipment as long as your definition includes all property, which would be 

considered equipment under our definition.

2-200-40 Who holds title to equipment acquired under an assistance agreement?

Title to equipment you acquire under an assistance agreement will vest in the non-federal entity 

upon acquisition, subject to the obligations and conditions in this chapter.

2-200-50 How must states manage equipment?

States will use, manage, and dispose of equipment acquired under an assistance agreement in 

accordance with state laws and procedures.

2-200-60 How must recipients other than states manage equipment?

A. If you are not a state government, you must follow these requirements regarding the use 

of equipment:

1. You must use equipment in the program or project for which you acquired it, as 

long as it is needed. This applies to whether or not the program continues to be 

supported by Federal funds. When you no longer need the equipment for the 

original program, you may use the equipment for other activities currently or 

previously supported by a Federal agency.

2. You may also make equipment available for use on other programs or projects 

currently or previously supported by the Federal government. That use must not 

interfere with the work on the program for which the equipment was acquired. 

You must give other programs or projects supported by OSMRE first preference 

for other use. You should consider charging user fees if appropriate.

3. You must not use equipment acquired with assistance funds to provide services 

for a fee to compete unfairly with private companies that provide equivalent 

services, unless specifically authorized by Federal statute.

B. Your procedures for managing equipment must meet the following minimum 

requirements:

1. You must maintain property records that include:

a. A description of the property

b. A serial number or other identification number

c. The source of the property

d. Who holds title?

e. The acquisition date
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f. Cost of the property

g. Percentage of Federal participation in the cost of the property

h. The location, use and condition of the property

i. Disposition data including the date of disposal and the sale price of the 

property.

2. You must take a physical inventory of property and reconcile the results with your 

property records at least once every two years. You must provide us a copy of the 

results of your physical inventory and reconciliation.

3. You must develop a control system to ensure adequate safeguards to prevent loss, 

damage or theft of the property. You must investigate any loss, damage, or theft 

which occurs, and provide the results of your investigation to us.

4. You must develop adequate maintenance procedures to keep the property in good 

condition.

C. You must dispose of original or replacement equipment when you no longer need it for 

the original program or for other activities currently or previously supported by a Federal 

agency. You must dispose of the equipment according to the following rules. You must 

inform us of the disposition action you will take.

1. You may keep, sell, or otherwise dispose of Items of equipment with a current per 

unit fair market value of less than $5,000 with no further obligation to us.

2. You may keep or sell items of equipment with a current per unit fair market value 

of $5,000 or more after compensating us. To calculate the amount to pay us, 

apply our percent share of the original cost to the current fair market value of the 

equipment.

3. If you sell equipment, you must establish proper sales procedures to ensure the 

highest possible return.

4. If you fail to take appropriate or timely disposition actions, we may direct you to 

take the appropriate actions.

D. When you replace equipment, which is no longer serviceable or efficient, you may use 

the old equipment as a trade-in, or sell it and use the proceeds to purchase replacement 

equipment. You must meet the following requirements:

1. The replacement equipment must serve the same function as the original 

equipment; however, the equipment does not necessarily have to be of the same 

type, grade or quality.
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2. If you trade in or sell the equipment, the value credited for it must be comparable 

to its fair market value.

3. The sale of the equipment and purchase of its replacement must occur close 

enough in time to show that the two events are related; however, you may 

purchase the replacement equipment before you sell the original equipment.

4. Replacing equipment in this way is not a disposition of the equipment. You are 

not required to compensate OSMRE for the Federal share of the equipment at the 

time of replacement. Instead, the Federal share of the original equipment will be 

transferred to the replacement equipment with an appropriate adjustment as 

follows.

a. Apply the percentage of Federal share in the cost of the old equipment to 

the proceeds from its sale or the amount credited for trade-in to set a dollar 

amount for Federal share of the proceeds.

b. Use the dollar amount of the Federal share of the proceeds to reduce the 

Federal share of the cost of the replacement. 

c. If the Federal share of the proceeds is greater than the Federal share of the 

cost of the replacement, you may use the excess funds to reduce the 

Federal share of the grant. Otherwise you must return the excess funds to 

OSMRE.

2-200-70 How must you manage any Federally-owned equipment we provide to you?

If we provide any Federally-owned equipment to you, the following rules apply.

A. Title to the equipment will remain vested in the Federal government.

B. You must manage the equipment under the same requirements as equipment you acquired 

through the assistance agreement.

C. You must complete an inventory list annually and send it to the awarding OSMRE office. 

To report, use the Tangible Personal Property Report (SF-428). This report allows for 

you to provide an inventory list the inventory in any format which gives us enough 

information to determine the status of the equipment. 

D. When your project no longer needs the equipment, you must request disposition 

instructions from OSMRE.

2-200-80 When does OSMRE have the right to transfer title to equipment?
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OSMRE reserves the right to transfer title of any equipment acquired through an OSMRE 

assistance agreement to the Federal government or to a third party named by OSMRE. Such 

transfers will be subject to the following requirements.

A. We must identify the specific piece of property to you in writing. We will give you this 

notice in the award document or as soon as possible after we approve the equipment 

purchase so that you can note this restriction in your property management system.

B. We will issue disposition instructions within 120 calendar days of the end of the 

assistance agreement in which you acquired the equipment. If we fail to issue disposition 

instructions in this period, you may follow normal equipment disposition procedures.

C. When we transfer title to the equipment, we will pay you an amount calculated by 

applying the percentage of your participation in the purchase to the current fair market 

value of the property.

2-200-90 How must you manage supplies?

Supplies are items of personal property which do not meet the criteria for equipment. Items 

which have a useful life of less than one year or cost less than $5,000 per unit are supplies. You 

must meet the following requirements when managing supplies.

A. Title to supplies acquired under an assistance agreement will vest in you upon 

acquisition.

B. You must purchase supplies only in amounts you reasonably expect to be needed for the 

period of the OSMRE-funded assistance agreement. 

C. Although you do not have to account for supplies as you do for equipment, you must 

maintain adequate records to document the purchase, receipt, cost, and use of supplies in 

accordance with good management practices.

D. You may have unused supplies left at the end of the award. If their total fair market 

value is over $5,000 and you do not need the supplies for other Federally-sponsored 

programs or projects, you must compensate us for the Federal share. To calculate the 

amount to pay OSMRE, apply our percentage share in the original cost to the fair market 

value of the supplies.

2-200-100 Can you acquire land with OSMRE funds?

Yes, you may use OSMRE assistance funds to acquire land or other real property. You must 

meet the following requirements.
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A. You must have our specific approval before you spend any funds to acquire real property. 

Our approval decision will be made by the OSMRE official who is authorized to award 

your assistance agreement. 

B. You will hold title to all real property. Title vests in your organization upon acquisition. 

You must not encumber your title or interests in real property. 

C. If you are acquiring real property for use by your program, see 2 CFR Part 200.

D. If you are acquiring land for reclamation using AML or Watershed Cooperative 

Agreement funds, you must follow the program-specific rules below.

2-200-110 What specific rules apply to real property acquired land with AML grant 

funds?

In most cases, you do not need to acquire land in order to reclaim it. We do not encourage the 

purchase of sites with coal or coal refuse because that may result in your having to provide for 

long-term water treatment. However, on rare occasions you may find it necessary to acquire 

land in order to reclaim it. You must meet the following requirements to acquire land.

A. The land to be acquired must be adversely affected by past coal mining practices and 

acquisition must be necessary for successful reclamation. The land must also serve 

recreation, historic, or conservation purposes after reclamation. It must also have 

permanent facilities for reclamation of mining impacts or preventing future damage to the 

land, such as a relocated stream channel, or diversion ditch. You may acquire coal refuse 

disposal sites, including the coal refuse.

B. We must agree that the land acquisition is necessary for reclamation, and specifically 

approve the purchase in advance. 

C. You must use funds from sources other than AML grants to pay at least 10% of the 

acquisition cost of the land. 

D. You must follow the provisions in sections 407 and 409 of SMCRA, OSMRE regulations 

at 30 CFR Part 879, and the Uniform Relocation Assistance and Real Property 

Acquisitions Policies Act of 1970 (P.L. 91-646) for the acquisition, use and disposition of 

the land. 

2-200-120 What specific rules apply to real property acquired with Watershed 

Cooperative Agreement funds?

Sites for the construction of AMD treatment facilities are usually on private lands. In most 

cases, you can get the landowner’s permission to use the property for AMD treatment. Often, 

you may get an easement from the landowner for perpetual use of the property for the treatment 
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facility. However, on rare occasions the landowner will not agree to install the treatment facility, 

and you may have to acquire the land in order to do your project. The owner may want to 

transfer ownership of the project site to you at fair market value or some lower price. 

A. You must demonstrate to us that acquisition of the property is necessary to achieve the 

goals of your project, and that other options such as easements or a different location are 

not viable.

B. You may use up to 50% of the amount of our watershed cooperative agreement funding 

for the purchase of the land, and related expenses. 

C. You must pay at least 10% of the cost of the property with funds from sources other than 

the AML Fund.

D. You must follow the provisions of Section 407 of SMCRA and 30 CFR Part 879. 

E. The future property owner must be your organization, another approved 501(c)(3) nonprofit group, or the state.

F. OSMRE’s contribution to the purchase price of the property must not exceed the 

appraised fair market value.

G. The property appraisal should be prepared by a state-certified real estate appraiser. The 

appraiser should be certified for general property appraisals, not just for residential 

properties. 

H. You must send the appraisal through our Clean Streams Coordinator to the regional 

office appraiser for review. The regional appraiser must accept the appraisal before you 

spend watershed cooperative agreement funds to purchase the property.

I. The deed of transfer must specify that the property will be used for the purposes of the 

project and/or recreation, conservation, or environmental education purposes in 

perpetuity. If the original owner organization dissolves or is unable to continue 

managing the property as intended, the property must be transferred to another non-profit 

organization with similar goals. The new owner organization must continue to operate, 

and maintain the property as appropriate.

J. The deed of transfer must specify that if the owner determines the property is no longer 

needed for the purposes stated in the deed, the owner will notify and consult with 

OSMRE for appropriate disposition instructions.

2-200-130 How must you manage real property?
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A. You can manage real property acquired in whole or in part with OSMRE funds for the 

originally authorized purposes as long as it is needed for those purposes. This rule 

applies even if the program or project is no longer supported by Federal funds.

B. When you no longer need the real property for the original purpose, you must request 

disposition instructions from us. We will give you disposition instructions using one of 

the following options.

1. You may keep title to the property after compensating us. To calculate the 

amount to pay us, apply the OSMRE percentage share in the original cost to the 

current fair market value of the property.

2. You may sell the property and compensate us. To calculate the amount to pay us, 

deduct your actual and reasonable selling and fix-up expenses from the proceeds 

of the sale of the property. Apply the OSMRE percentage share in the original 

cost to the net proceeds. You must use sales procedures that provide for as much 

competition as practicable, and result in the highest possible return.

3. You may transfer title to us or to a third party we name or approve. We will pay 

you compensation calculated by applying your percent share in the original cost to 

the current fair market value of the property.