[Code of Federal Regulations]
[Title 15, Volume 3]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 15CFR2301.22]

[Page 491-492]
 
                  TITLE 15--COMMERCE AND FOREIGN TRADE
 
       CHAPTER XXIII--NATIONAL TELECOMMUNICATIONS AND INFORMATION 
                 ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 2301_PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM--Table of Contents
 
                    Subpart D_Post-Award Requirements
 
Sec. 2301.22  Protection, acquisition, and substitution of equipment.

    (a) To assure that the Federal investment in public 
telecommunications facilities funded under the Act will continue to be 
used to provide public telecommunications services to the public during 
the Federal interest period, the Agency may require a grantee to:
    (1) Execute and record a document establishing that the Federal 
government has a priority lien on any facilities purchased with funds 
under the Act during the period of continuing Federal interest. The 
document shall be recorded where liens are normally recorded in the 
community where the facility is located and in the community where the 
grantee's headquarters are located; and
    (2) File a certified copy of the recorded lien with the 
Administrator ninety (90) days after the grant award is received.
    (b) The grantee shall maintain protection against common hazards 
through adequate insurance coverage or other equivalent undertakings, 
except that, to the extent the applicant follows a different policy of 
protection with respect to its other property, the applicant may extend 
such policy to apparatus acquired and installed under the project. The 
grantee shall purchase flood insurance (in communities where such 
insurance is available) if the facilities will be constructed in any 
area that has been identified by the Federal Emergency Management Agency 
as having special flood hazards.
    (c) The grantee shall not dispose of or encumber its title or other 
interests in the equipment acquired under this grant during the Federal 
interest period.
    (d) The grantee shall demonstrate that the grantee has obtained 
appropriate title or lease satisfactory to protect the Federal interest 
to the site or sites on which apparatus proposed in the project will be 
operated. The grantee must have the right to occupy, construct, 
maintain, operate, inspect, and remove the project equipment without 
impediment to assure the sufficient continuity of operation of the 
facility; and nothing must prevent the Federal government from entering 
the property and reclaiming or securing PTFP-funded property.
    (e) The Agency will allow the acquisition of facilities by lease; 
however, the following requirements apply:
    (1) The lease must be of benefit to the Federal government;
    (2) The actual amount of the lease must not be more than the 
outright purchase price would be; and
    (3) The lease agreement must state that in the event of anticipated 
or actual termination of the lease, the Federal government has the right 
to transfer and assign the leasehold to a new

[[Page 492]]

grantee for the duration of the lease contract.
    (f) Transfer of equipment. Where the grant equipment is no longer 
needed for the original purposes of the project, the Department may 
transfer the equipment to the Federal government or an eligible third 
party, in accordance with Office of Management and Budget guidelines.
    (g) Transfer of Federal interest to different equipment. The 
Department may transfer the Federal interest in PTFP-funded equipment to 
other eligible equipment presently owned or to be purchased by the 
grantee with non-Federal monies, provided the following conditions are 
met:
    (1) If the Federal interest is to be transferred to other equipment 
presently owned or to be purchased by a grantee, the Federal interest in 
the new equipment must be at least equal to the Federal interest in the 
original equipment.
    (2) Equipment previously funded by PTFP that is within the Federal 
interest period may not be used in a transfer request as the designated 
equipment to which the Federal interest is to be transferred.
    (3) The same item can be used only once to substitute for the 
Federal interest. However, the Federal interest in several items of 
equipment from different grants may be transferred to a single item if 
the request for all such transfers is submitted at the same time.
    (4) A lien on equipment transferred to the Federal interest may be 
required by PTFP and must be recorded in accordance with Sec. 
2301.23(b)(8). A copy of the lien document must be filed with the PTFP 
within sixty (60) days of the date of approval of the transfer of 
Federal interest.
    (h) Termination by buy-out. A grantee may terminate the Federal 
revisionary interest in a PTFP grant by buying out the Federal interest 
with non-Federal monies. Buy-outs may be requested at any time.