Reclamation Supplement to Federal Property Management Regulations

Part 47 Utilization and Disposal of Real Property

Subpart 114S-47.3 Surplus Real Property Disposal


114S-47.300 Scope of Subpart.

The instructions contained in this subpart apply only to disposal of unneeded real property which has been found to be surplus to all Federal agency needs and not to property being disposed of pursuant to special Acts in furtherance of Reclamation programs. An example of disposals falling in this latter category is the sale of lands to project settlers under authority of the Columbia Basin Project Act of March 10, 1943 (47 Stat. 14), as amended. Lands disposed under this and similar special Acts are not surplus but are disposed of in a manner which furthers the development of the project.

(a) Facilities Turned Over to Water Users. Facilities turned over to water users' organizations pursuant to a contract for operation and maintenance under Reclamation laws, where title remains in the United States, do not constitute disposals. The holding project remains accountable for such property and it must continue to be listed in the annual inventory of real property.

(b) Protection of Historic and Cultural Properties. In order to satisfy the requirements of 36 CFR Part 800, the regional preservation officer must concur in writing with all disposal actions of unneeded real property.

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114S-47.301-2 Applicability of Anti-Trust Laws.

Whenever a proposed disposal (for which Reclamation has been delegated disposal authority) to a private interest, involving property costing $3,000,000 or more is anticipated, the Attorney General's advice as to the applicability of Anti-Trust laws must be obtained prior to offering the property for sale. This will be obtained through the Reclamation Service Center, D-7900 after all pertinent details have been submitted. D-7900 will furnish the appropriate GSA regional office a copy of the notice to the Attorney General.

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114S-47.301-3 Disposal Under Other Laws.

(a) Specific Reclamation Laws Covered. Disposals may be made pursuant to authority contained in the Act listed in (1) below, unless and until the property involved has been determined surplus to all Federal agency needs in the usual manner, and permission to make such disposal has been granted by GSA in each separate instance (see 101-47.301-3). Advance approval of GSA to dispose of property under this law is required even in instances where the appraisal is less than $1,000, notwithstanding the provisions of 101-47.603. No property may be disposed of pursuant to this Act without the express permission of the Commissioner. When such disposal is contemplated, full particulars including a description of the property, its appraised market value, and other pertinent details shall be submitted to the Commissioner for further handling. Authority to dispose of property under the following Act has been delegated to the Commissioner (see 255 DM 3.1G).

(1) Sale of improved public land not needed for the purpose for which withdrawn under authority of the Act of May 20, 1920 (43 U.S.C. 375).

(b) Disposal Not Covered by FPMR 101-47. The provisions of the Federal and Administrative Services Act of 1949, as amended, are not applicable to the following types of disposals by Reclamation.

(1) Return of withdrawn land to the public domain.

(2) Sale of acquired land, with or without improvements, not needed for the purpose for which acquired under authority of the Act of February 2, 1911 (43 U.S.C. 374).

(3) Disposal to settlers pursuant to the Act of May 16, 1930 (43 U.S.C. 424).

(4) Disposal of small tracts of unimproved public land pursuant to the Act of March 31, 1950 [43 U.S.C. 375(b)].

(5) Exchanges of farm units pursuant to the Act of August 13, 1953 (67 Stat. 566).

(6) Reconveyance of donated land under Subsection Q, Section 4, of the Act of December 5, 1924 (43 U.S.C. 376).

(7) Resale of lands to prior owners under Federal Water Projects Recreation Act of July 9, 1965 (79 Stat 213).

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114S-47.301-4 Credit Disposals.

Credits may be extended in connection with sales of surplus real property, when justified, as determined by the Regional Director. Any such credit shall be subject to the provisions of 101-47.304-4, covering terms of payment, and 101-47.307-2 covering conditions in disposal instruments.

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114S-47.301-5 Records and Reports.

A case file shall be maintained in the regional office covering each disposal of real property. The file should be assembled as a functional responsibility of the regional head of Property Management, or other individual handling the disposal, and released to files personnel intact when disposal is complete. Retention of the case file shall be governed by the current records disposition schedules. The file should contain, but not be limited to, the following:

(a) Complete description, identification, and location of the property.

(b) Authority for disposal.

(c) Record of screening procedure.

(d) Record of transfers, if any.

(e) Record of sales method used, name and address of purchaser(s), amount(s) received, and reference to the sales contract(s).

(f) Complete written justification for negotiated sale.

(g) Appraisal report.

(h) Letters of assignment to the Department of Health and Human Services and to the Department of Education.

(i) A record of the sale, recorded on Property Voucher, Form 7-763, to provide a document of entry to the records and accounts. Information thereon shall include both the acquisition cost of the property and the sale price.

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114S-47.303-1 Classification of Lands Subject to Flooding.

Where a site evaluation indicates the probability of flooding within a time of frequency of a once-in-10 years average, appropriate restrictions shall be provided on the future use of lands hereafter conveyed or transferred. Conveyance document (see 101-47.307) involving a fee title shall include an appropriate restrictive covenant running with the land provided such restrictive covenants are permissible under the statute authorizing the conveyance. If an interest less than fee title is transferred, whether by lease, permit or otherwise, an appropriate restrictive clause or condition on the use of such land shall be included in the document.

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114S-47.303-4 Appraisal.

It is the practice of Reclamation to dispose of surplus real property, for which the Department of the Interior had been named disposal agency, at its current fair market value, as determined by an appraisal, except as provided in 114S-47.305-1. The extent and formality of the appraisal should be determined taking into consideration the nature of the property involved and the proposed method of disposals.

(a) Advertised Disposals. When real property is to be sold to the highest bidder after public advertising, a reasonable balance should be maintained between the extent and detail of the appraisal and the value of the property being appraised. Since the bidding will, under normal circumstances, determine the true market value of the property, the preliminary appraisal made by Reclamation should be only in such detail as to determine the approximate value. So that appraisal costs will not be disproportionate to the proceeds from sales, regional offices should adopt a simplified and economical method of appraisal for use in connection with advertised disposals where the anticipated proceeds from the sale will be less than $10,000. Such appraisals must, however, be appropriately documented in letter or memorandum form and retained as part of the permanent record (see 114S-47.301-5). When the anticipated proceeds from the sale are $10,000 or more, the appraisal procedure should be prescribed in (b) below.

(b) Negotiated Disposals. In negotiated disposals of surplus real property, the appraisal and report should be made by qualified appraisers in accordance with the provisions of Reclamation Manual LND. All land shall be appraised on the basis of the highest and best use, regardless of its past or present use.

(c) Disposal by Other Agencies. When surplus real property is disposed of by GSA or by donation through the Department of Health and Human Services or the Department of Education, they are responsible for determining the current market value of the property. These agencies will usually have the property appraised by professional appraisers who have been certified by GSA as competent and qualified, and as having no personal interest in the property. Accordingly, it is Reclamation's practice to accept such appraisals as the best measure of the property's worth.

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114S-47.304-4 Sales to Federal Employees.

Where Reclamation acts as disposal agency, surplus real property shall not be disposed of by sale, lease, or otherwise to Federal employees except where all the following conditions are met (the term "Federal employee" as used in this subsection shall include the spouse and dependent children of the employee).

(a) The invitation to bid states the extent to which Federal employees are eligible to bid and requires Federal employees to identify themselves, their organization, and position.

(b) Notice is given that no award will be made to Federal employees who might reasonably be expected to have information with regard to the property or its use which is not readily available to members of the public, or who participated in the decision to dispose of the property, or in the sale itself.

(c) The disposal itself is conducted under publicly advertised, sealed bid procedures.

(d) Disposals under this subsection apply only to actions taken pursuant to the Federal Property and Administrative Services Act of 1949, as amended.

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114S-47.304-9 Negotiated Disposals.

(a) Negotiated Sale of Surplus Property With Estimated Fair Market Value of $15,000 or Less. Surplus real property having a current estimated fair market value of $15,000 or less may be disposed of by a negotiated sale rather than by advertising, as follows:

(1) Without Prior Approval of Commissioner. When the disposing region or office determines that the Government's interest would be better served by a negotiated sale; and:

(i) The prospective purchaser is a State, county, municipality, other State subdivision, irrigation district or association, cooperative power customer; 

(ii) The prospective purchaser is an agency that is held to be exempt from taxation under Section 101(6) of the Internal Revenue Code;

(iii) Due to the nature or location of the property, the value if sold to the prospective purchaser significantly exceeds its anticipated return if sold to anyone else, and the disposing office has no reason to believe anyone else would be interested in acquisition at such higher value, except that, in instances where the property might have this higher value to two prospective purchasers, as where a parcel of land adjoins two other holdings, preference should be given to the former owner if he is one of the two;

(iv) The provisions of 101-47.306-1 (absence of acceptable offers) would otherwise apply;

(v) The provisions of 101-47.313-1 (disposal of easements to owners of servient estate) would otherwise apply.

(2) With Prior Approval of Commissioner. In any instance where it is proposed to dispose of surplus real property with an appraised value of $15,000 or less by negotiation under circumstances not falling within the five instances shown in (1) above, prior approval of the Commissioner must be obtained.

(3) Special Disposal Provisions. Competition to the extent feasible under the circumstances must be obtained in each negotiated disposal made in accordance with the foregoing paragraphs. Such disposal shall be made at no less than the appraised market value. An explanatory statement need not be submitted to the Congressional Committees; however, a written justification for such negotiated disposal must be preserved in the permanent file (see 114S-47.301-5).

(b) Negotiated Sales of Surplus Property With Appraised Value of More Than $15,000. Whenever in the opinion of the Regional Director, it is determined that a negotiated disposal of real property with an appraised market value $15,000 or more is in the best interest of the United States, the procedures in the following paragraphs will apply. These instructions are also applicable to proposed negotiated disposals under 101-47.306-1 (absence of acceptable offers) and 101-47.313-1 (easements) where the appraised market value of the property is $15,000 or more.

(1) Where Reclamation is Disposal Agency. When Reclamation is the disposal agency the disposal procedures shall be as indicated in one or the other of the following paragraphs depending on whether the Regional Director proposes to have GSA first make the finding of surplus or wishes to seek authority for Reclamation to make this finding.

(i) When the Regional Director proposes to have GSA make the surplus determination, as is the prescribed procedure with property valued at $15,000 or more, he/she should proceed with circularization and declaration of the property as prescribed in 114S-47.203-70. Once GSA has made the actual finding of surplus and has so notified the declaring region, a recommendation shall be submitted to the Commissioner for consideration. The recommendation should show the date the surplus determination was made and clearly demonstrate that the prospective purchaser is the only party likely to have an interest in or be in a position to use the property, or if such cannot be shown, the best interest of the United States otherwise justify a negotiated sale. The circumstances would have to be compelling in the latter case. If the Commissioner concurs with the recommendation, the notice of intention to dispose of property by negotiation will be sent to the GSA Administrator as required by 101-47.304-12.

(ii) When the Regional Director wishes to seek authority to make the necessary finding of surplus rather than report the property to GSA, a recommendation showing the nature of the circumstances which tend to justify a negotiated disposal shall be submitted to the Commissioner as in subsection (i) above. This submission should include a recommendation that GSA be requested to grant authority for Reclamation to make the surplus determination prior to disposal. If the recommendation is concurred in by the Commissioner, and GSA grants the authority requested, the Regional Director will be instructed to proceed to make the actual finding of surplus. Once the finding has been made, it should be reported to the Commissioner so that the GSA Administrator can be notified as required by 101-47.304-12.

(2) Where GSA is Disposal Agency. When GSA is the disposal agency the disposal procedure shall be as indicated in one or the other of the following subsections depending on whether the Regional Director proposes to have GSA handle the disposal or wishes to seek authority for Reclamation to make the finding of surplus and act as disposal agenc

(i) When the Regional Director proposes to have GSA handle the disposal, he/she shall proceed with circularization within the Department as required for reportable real property. If the property is not transferred as a result of such circularization it may then be reported as excess in accordance with 101-47.202-2. The names and addresses of interested private parties should be made known to GSA by appropriate notation in Block 17 of SF-118. GSA will be responsible for notifying the appropriate Congressional Committees in these instances.

(ii) Where the circumstances are such that the Regional Director believes that the entire disposal could better be made by Reclamation, a recommendation describing the nature of the circumstances which tend to justify a negotiated disposal shall be submitted to the Commissioner. This submission should include a recommendation that GSA be requested to grant authority for Reclamation to make the finding of surplus and act as disposal agency. If the recommendation is concurred in by the Commissioner, and GSA grants the authority requested, the Regional Director will be instructed to proceed to make the actual finding of surplus. Once the finding has been made, it should be reported to the Commissioner so that the GSA Administrator can be notified as required by 101-47.304-12.

(3) Special Disposal Provisions. Competition to the extent feasible under the circumstances must be obtained in each negotiated disposal made in accordance with the foregoing subsections. Such disposal shall be made at not less than the current fair market value as determined by an appraisal (see 114S-47.303-4)

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114S-47.305-1 Acceptance of Offer Less Than Appraised Fair Market Value.

When all bids are less than the appraised value of the property, the high bidder may be given an opportunity to raise his bid as permitted by 101-47.305-1(b). When this method is not used, or its use does not result in an offer equaling the appraisal, the following criteria will govern acceptance.

(a) When the appraised value of the property, determined in accordance with 114S-47.303-4 is $15,000 or less, the Regional Director may authorize acceptance of the bid in an amount less that the appraised value where the circumstances are such that further attempts to obtain a higher offer are not justified or not in the best public interest. The factors resulting in this decision must be documented and made part of the case file covering the disposal (114S-47.301-5).

(b) When the appraised value of the property is in excess of $15,000, the property may not be sold for less without the prior approval of the Commissioner. When such approval is requested, full details must be furnished, including the appraised market value and how it was determined, the number of responsive bidders, and the range of bids.

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114S-47.307-6 Proceeds From Disposal.

The proceeds, if any, from the disposal of available, excess, or surplus real property must be recorded and deposited in accordance with Reclamation law and other applicable legal requirements. For specific information about these procedures, contact the Reclamation Law, Contracts, and Repayment Office, D-5200. When property is transferred to other Reclamation and other Federal agencies without reimbursement, or when it is disposed of through the Department of Health and Human Services at a discounted rate, the transaction shall be recorded in the accounts as prescribed in the Movable and Fixed Property Accounting Procedures Manual. (Also see 114S-47.203-71 concerning reimbursements for transfers.)

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114S-47.308-1 Power Transmission Lines and Other Installed Power Facilities.

(a) Under $1,000 in Value. Regional Directors are authorized to dispose of installed power generation and transmission line facilities having a fair market value under $1,000. Such property shall be circularized as provided in 114S-47.203-70, and determinations as excess or surplus made by the Regional Director. Disposal as surplus will be in accordance with 101-47.308-1.

(b) $1,000 in Value and Over. Prior approval of the Commissioner and concurrence of the Department is required before any installed power generation or transmission line facilities having a fair market value of $1,000 or more are determined to be excess. The proposal to dispose of such facilities, together with a statement of the circumstances, shall be submitted to the Reclamation Service Center, Attention D-7900. Upon receipt of the Commissioner's approval, the region shall proceed with circularization of the property following the instructions for reportable or nonreportable real property, whichever is applicable.

(1) Determination of Surplus. Excess facilities having a fair market value of $1,000 or more will be subject to determination as surplus as follows:

(i) Reportable Facilities. The finding of surplus will be made by GSA, and Reclamation's responsibility will cease upon submission of the Report of Excess Real Property, SF-118, to GSA, unless unusual conditions are to be imposed or Reclamation seeks to be named disposal agency. Such eventualities will be dealt with in the Commissioner's letter of approval.

Note: If the facilities are to be disposed of without the underlying land Reclamation will be disposal agency by virtue of 101-47.302-2.

(ii) Nonreportable Facilities. When the property involved is nonreportable, or when Reclamation has sought and been delegated authority by GSA to determine a particular transmission facility to be surplus, the finding of surplus will be made by the Commissioner. In those cases where circularization has been accomplished and no transfer results, the Regional Director shall submit a report to this effect to the Reclamation Service Center, D-7900. The report should include recommendations concerning any proposed sales or other disposition of the facilities as surplus, and a statement showing how Section 13(d) of the Surplus Property Act of 1944 affects the proposed disposal. The actual surplus determination will be made upon receipt of this report in the Reclamation Service Center, and the region will be advised as to the appropriated method of disposal under the circumstances.

(c) Failure to Agree on Price or Other Terms. Regardless of fair market value, if sale for public or cooperative power project purposes cannot be accomplished because of failure to agree on price or otherwise and the certification of the State or Government agency is not withdrawn, the region shall submit a full report on the facts involved to the Reclamation Service Center, D-7900 for determination of further action.

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114S-47.308-4 Assignment to Department of Health and Human Services and Department of Education.

All surplus real and related personal property owned by Reclamation, irrespective of the funds from which purchased, is subject to donation for education and public health purposes pursuant to Subsection 203(k) of the Act. Accordingly, all such property shall be offered to the Departments of Health and Human Services and Education for their determination as to whether the property is needed for educational or public health purposes. This offering will be made by the GSA in the case of reportable property and by Reclamation in the case of nonreportable property.

(a) Assignment of Trust Fund Property. Surplus real property acquired with funds such as funds advanced by the water users, should be offered to the Departments of Health and Human Services and Education for screening in the same manner as all other property. However, when they request the assignment of such property, the following procedure will apply:

(1) Where GSA is Disposal Agency. The GSA regional office addressed by the Departments of Health and Human Services and Education should be asked to temporarily withhold such assignment pending consideration by the Commissioner.

(2) Where Reclamation is Disposal Agency. The Departments of Health and Human Services and Education should be notified that the matter is being referred to the Commissioner for consideration.

(3) Referral to the Commissioner. In either of the above circumstances, full details should be furnished to the Reclamation Service Center, D-7900, with a request for action to be taken. Assignments to the Departments of Health and Human Services and Education, directly or through GSA, should neither be agreed to nor rejected without further instruction from the Commissioner.

(b) Procedures. When the Department of the Interior has been designated the disposal agency, Regional Directors are authorized to make the notification of surplus and assignments to the Departments of Health and Human Services and Education in accordance with the procedures in 101-47.

(1) Notification of Surplus. The appropriate regional offices of the Departments of Health and Human Services and Education will be notified by letter 3 days in advance of the notice which is given to eligible public agencies so that the Departments of Health and Human Services and Education may notify eligible nonprofit institutions simultaneously.

(2) Assignment Procedure. If the Departments of Health and Human Services and Education are interested in property for which Reclamation is disposal agency, they will submit a recommendation for assignment to Reclamation, certifying as to the need for the property for educational or public health purposes, identifying the property desired, indicating the intended public benefit allowance and the estimate upon which such proposed allowance is based, and stating the intended disposition. When the Regional Director concurs in the proposed disposal, he/she should assign the property by letter or other document to the Department of Health and Human Services or to the Department of Education for disposal. The assignment document, which is submitted to the regional office of the Department of Health and Human Services and the Department of Education, should generally show (1) description of the property involved, (2) reference to the screening document, (3) the authority for the action taken, (4) any special conditions of transfer, such as removal terms, etc., (5) the disposal to be made of any proceeds from such disposal, and (6) the Finance Station number, symbol, and the name and address of the Disbursing Officer handling the account for the project involved, and should contain a request that the project receiving credit for the collection be notified when disposition has been completed. One copy of each assignment document and each sales agreement shall be furnished to the Finance Office handling the project accounts and the Reclamation Service Center, D-7900. The Departments of Health and Human Services and Education will take all other action necessary to accomplish the transfer and will furnish copies of the executed sales agreement.

(c) Documentation of Transfer. Transfer of real property through the Departments of Health and Human Services and Education for educational or public health purposes shall be documented by use of Form 7-763, Property Voucher. The property voucher shall show, in addition to the usual descriptive information concerning the property involved, the acquisition cost, the appraised value, the amount of the public benefit allowance, and information as to the appropriate accounting designation (see the Movable and Fixed Property Accounting Procedures Manual).

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 114S-47.370 Exchange of Surplus Real Property.

This subpart establishes the guidelines under which surplus property is exchanged for other property. The authority for such action is contained in subsection 203(c) of the Federal and Administrative Services Act of 1949. Whenever, in the opinion of the Regional Director, it is determined that an exchange of property is in the best interest of the Government, the following procedures will apply:

(a) Where the Fair Market Value of the Property is Less Than $1,000. Surplus real property having a fair market value of less than $1,000 may be exchanged for other real property without prior approval of the Commissioner whenever it is determined by the Regional Director that the property to be received in exchange rather than a cash purchase is in the best interests of the Government or, the owner of the property needed by Reclamation is not willing to sell except on an exchange basis. A written justification for such disposal must be preserved in the disposal file.

(b) Where the Fair Market Value of the Property is $1,000 or More. Surplus real property having a fair market value of $1,000 or more shall not be exchanged for other real property without the advanced approval of the Commissioner in each instance. Where GSA is the disposal agency, jurisdiction and control of the real property received by Reclamation in the exchange procedure is initially vested in GSA. The property is then formally transferred to Reclamation by GSA. Moreover all such exchanges are subject to approval by the appropriate committees of Congress and certain cases are subject to the approval of the Office of Management and Budget. Since it appears to be of little advantage for Reclamation to dispose of property by the exchange method where the appraised value is $1,000 or more, such actions are to be avoided whenever possible.

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  FPMR-13 - 9/15/95 (Supersedes 6/5/68, 10/28/69, 5/27/70, 9/6/72, and 6/12/74)