1. (a) If a grantee acquires an interest in real property with money received from the grant, the grantee must negotiate property management terms with the council.

2. (b) Before a grantee may use money received from a grant to purchase non-expendable personal property, the acquisition cost of the property must be included in the budget, or in an amendment to the budget, of the grant project which was approved by the council. In this subsection, "acquisition cost" means

   1. (1) the cost of the non-expendable personal property and the cost of necessary accessories; and
   2. (2) ancillary charges, such as duty, taxes, transportation, protective in-transit insurance, and installation fees if the inclusion of those charges is in accordance with the grantee's regular accounting practices.

3. (c) Title to property purchased under (b) of this section vests in the grantee upon acquisition, subject to the right of the council to transfer title to the property to the state or to another person or legal entity if

   1. (1) the council did not waive its right to transfer title to property under this subsection under the terms of the grant;
   2. (2) the grantee no longer has need for the property in the grant project for which it was acquired, or the grant project or that part of the grant project for which the property was acquired is being transferred to another grantee;
   3. (3) no later than 120 days after the completion or termination of the grant or 120 days after the date of an appeal decision under 13 AAC 95.350, if applicable, whichever is later, the council provides written notice to the grantee of its intent to transfer the property; and
   4. (4) the council reimburses the grantee for the property in accordance with (d) of this section.
4. (d) The council will compute the amount of reimbursement under (c)(4) of this section by applying the percentage of the total cost of the grant project contributed to the grant project by the grantee for the budget period in which the property was acquired to the current fair market value of the property. The council will also reimburse the grantee for reasonable shipping and storage costs incurred in connection with the transfer of the property.
5. (e) Except when the council has exercised the right to transfer title under (c) of this section, a grantee shall retain property purchased under (b) of this section in the grant project as long as the property is needed for successful accomplishment of an objective of the grant project. During that time, the grantee shall make the property available for use in other activities conducted by the grantee with financial assistance from the state as long as this use does not interfere with the grant project. Among the other activities, the grantee shall give priority to the use of the property in an activity receiving financial assistance from the council.

6. (f) If a grantee no longer needs property purchased under (b) of this section in the grant project, the grantee may retain the property if the grantee compensates the state. The council will compute the amount of compensation by applying the percentage of the total cost of the grant project contributed to the grant project by the council for the budget period in which the property was acquired to the current fair market value of the property. If the grantee does not wish to retain the property, the grantee shall request disposition instructions from the council. The council will, in its discretion, instruct the grantee to

   1. (1) ship the property elsewhere; or
   2. (2) sell the property in accordance with procedures specified by the council.
7. (g) The council will reimburse a grantee for a disposition of property under (f)(1) of this section in an amount determined in accordance with (d) of this section.
8. (h) A grantee shall reimburse the council for a disposition of property under (f)(2) of this section in an amount determined in accordance with the procedure described in (f) of this section for the retention of property by a grantee. However, the grantee may deduct from the amount of reimbursement 10 percent of the proceeds of the sale of each piece of property.

9. (i) A grantee shall maintain accurate property records as well as effective inventory, control, and maintenance procedures for non-expendable personal property. These records must include the following information:

   1. (1) a description of the property and the manufacturer's serial number or other identification number;
   2. (2) the grant program under which the property was acquired;
   3. (3) the acquisition date and cost of the property;
   4. (4) the percentage of the total cost of the grant project contributed to the grant project by the council for the budget period in which the property was acquired;
   5. (5) the location, use, and condition of the property, and the date on which that information was recorded; and
   6. (6) the disposition of the property, including the date of its disposal and its sales price or the method used to determine its current fair market value.
10. (j) A grantee shall take an inventory of non-expendable personal property of the grant project and must reconcile the results of the inventory with the property records maintained under (i) of this section at the end of the grant period to verify the existence, current use, and continued need for the property.
11. (k) A grantee shall provide a copy of the updated inventory list described in (i) and (j) to the council on an annual basis on a date specified by the council.
12. (l) A grantee shall maintain a control system to ensure adequate safeguards to prevent loss, damage, or theft of non-expendable personal property of the grant project. The control system must include procedures for maintaining oversight of the equipment, sign-out procedures, periodic review of the condition of the equipment and obtaining needed repairs, and otherwise ensuring that the equipment is usable and is not lost or stolen. A grantee shall provide for the investigation and full documentation of a loss, damage, or theft of non-expendable personal property of the grant project.

(Eff. 6/25/88, Register 106)

Authority: AS 18.66.050