[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: 13CFR314.7]

[Page 576-577]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 314--PROPERTY--Table of Contents
 
                        Subpart B--Real Property
 
Sec. 314.7  Title.


    (a) The recipient must hold title to the real property required for 
a project, except in limited cases as provided in paragraph 314.7(c) of 
this section. Except in those limited cases, the recipient must furnish 
evidence, satisfactory in form and substance to EDA, that title to real 
property required for a project (other than property of the United 
States) is vested in the recipient, and that such easements, rights-of-
way, State permits, or long-term leases as are required for the project 
have been or will be obtained by the recipient within an acceptable time 
as determined by EDA.
    (b)(1) The recipient must disclose to EDA all:
    (i) Liens,
    (ii) Mortgages,
    (iii) Other encumbrances,
    (iv) Reservations,
    (v) Reversionary interests, or
    (vi) Other restrictions on title or the recipient's interest in the 
property.
    (2) No such encumbrance or restriction will be acceptable if, as 
determined by EDA, the encumbrance or restriction will interfere with 
the construction, use, operation or maintenance of the project during 
its estimated useful life.
    (c) EDA may determine that a long-term leasehold interest for a 
period not less than the estimated useful life of the project, or an 
agreement for the recipient to purchase the property, will be 
acceptable, but only if fee title is not obtainable and the lease or 
purchase agreement provisions adequately safeguard the Federal 
Government's interest in the project. Also, EDA may permit the following 
exceptions to the requirement that the recipient hold title to the real 
property required for a project.
    (1) When a project includes construction within a railroad's right-
of-way or over a railroad crossing, it may be acceptable for the work to 
be completed by the railroad and for the railroad to continue to own, 
operate and maintain that portion of the project, if required by the 
railroad, and provided that this is a minor but essential component of 
the project.
    (2) When a project includes construction on a State-owned or local 
government-owned highway, it may be acceptable for the State or local 
government to own, operate and maintain that portion of the project, if 
required by the State or local government, provided that this is a minor 
but essential component of the project, the construction is completed in 
accordance with EDA requirements, and the State or local government 
provides assurances to EDA:

[[Page 577]]

    (i) That the State or local government will operate and maintain the 
improvements for the useful life of the project as determined by EDA;
    (ii) That the State or local government will not sell the 
improvements for the useful life of the project, as determined by EDA; 
and
    (iii) That the use of the property will be consistent with the 
authorized purpose of the project.
    (3) When the authorized purpose of the project is to construct 
facilities to serve industrial or commercial parks or sites owned by the 
recipient for sale or lease to private parties, such sale or lease is 
permitted so long as EDA requirements continue to be met. EDA may 
require evidence that the recipient has title to the park or site prior 
to such sale or lease.
    (4) When the authorized purpose of the project is to construct 
facilities to serve privately owned industrial or commercial parks or 
sites for sale or lease, such ownership, sale or lease is permitted so 
long as EDA requirements continue to be met. EDA may require evidence 
that the private party has title to the park or site prior to such sale 
or lease, and may condition the award of project assistance upon 
assurances by the private party relating to the sale or lease that EDA 
determines are necessary to assure consistency with the project 
purposes.