[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR314.4]

[Page 574-575]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 314--PROPERTY--Table of Contents
 
                          Subpart A--In General
 
Sec. 314.4  Unauthorized use.

    (a) Except as provided in Secs. 314.3(b), (c) or (d), whenever, 
during the expected useful life of the project, any property acquired or 
improved in whole or in part with grant assistance is disposed of, or no 
longer used for the authorized purpose of the project, the

[[Page 575]]

Federal Government must be compensated by the recipient for the Federal 
share of the value of the property; provided that for equipment and 
supplies, the standards of the Uniform Administrative Requirements for 
Grants at 15 CFR parts 14 and 24 or any supplements or successors 
thereto, as applicable, shall apply.
    (b) If property is disposed of or encumbered without EDA approval, 
EDA may assert its interest in the property to recover the Federal share 
of the value of the property for the Federal Government. To that end, 
EDA may take such actions as are provided in connection with loans and 
loan guarantees, in Sec. 316.5(c) of this chapter. EDA may pursue its 
rights under both paragraphs (a) and (b) of this section to recover the 
Federal share, plus costs and interest.
    (c) RLF grant projects. (1) EDA may suspend or terminate any RLF 
grant for cause based on, but not limited to, the following:
    (i) Failure to make loans in accordance with the RLF Plan, including 
the time-schedule for loan closings;
    (ii) Failure to obtain prior EDA approval for such changes to the 
RLF Plan, including provisions for administering the RLF;
    (iii) Failure to submit progress, financial or audit reports as 
required by the terms and conditions of the grant agreement;
    (iv) Failure to comply with prohibitions against conflict-of-
interest for any transactions involving the use of RLF funds; or
    (v) Failure to operate the RLF in accordance with the RLF Plan and 
the terms and conditions of the grant agreement.
    (2) Whenever an RLF recipient fails in its fiduciary 
responsibilities or is unable or unwilling to perform as trustee of the 
grant, EDA may suspend, terminate or transfer the grant to an eligible 
successor with jurisdiction over the project area, to administer it as 
such trustee (replacement grantee).
    (3) Whenever EDA terminates any RLF grant for cause, in whole or in 
part, it has the right to recover residual funds and assets of the RLF 
grant in accordance with the legal rights of the parties.
    (4) If there is a partial termination of an RLF grant, the full 
amount of the original non-federal matching share is expected to be 
retained in the RLF for lending purposes unless otherwise provided for 
in the grant agreement or agreed to in writing by EDA.

[64 FR 5476, Feb. 3, 1999, as amended at 64 FR 69879, Dec. 14, 1999; 65 
FR 2536, Jan. 18, 2000]