[Code of Federal Regulations]

[Title 45, Volume 4]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR1309.21]



[Page 192-193]

 

                        TITLE 45--PUBLIC WELFARE

 

CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 

                           AND HUMAN SERVICES

 

PART 1309_HEAD START FACILITIES PURCHASE, MAJOR RENOVATION AND 

CONSTRUCTION--Table of Contents

 

                Subpart C_Protection of Federal Interest

 

Sec. 1309.21  Recording of Federal interest and other protection of 

Federal interest.



    (a) The Federal government has an interest in all real property and 

equipment acquired or upon which major renovations have been undertaken 

with grant funds for use as a Head Start facility. The responsible HHS 

official may subordinate the Federal interest in such property to that 

of a lender, which financed the acquisition or major renovation costs 

subject to the conditions set forth in paragraph (f) of this section.

    (b) Facilities acquired with grant funds may not be mortgaged or 

used as collateral, or sold or otherwise transferred to another party, 

without the written permission of the responsible HHS official.

    (c) Use of the facility for other than the purpose for which the 

facility was funded, without the express written approval of the 

responsible HHS official, is prohibited.

    (d)(1) A grantee receiving funds to acquire or make major 

renovations to a facility that is or will be sited on land not owned by 

the grantee must have a lease or other arrangement which protects the 

Federal interest in the facility and ensures the grantee's undisturbed 

use and possession of the facility. The lease or document evidencing 

another arrangement shall include provisions to protect the right of the 

grantee, or some other organization designated by ACF in the place of 

the grantee, to occupy the facility for the term of the lease or other 

arrangement and such other terms required by the responsible HHS 

official. The designation of an alternate tenant or occupant of the 

facility by ACF shall be subject to approval by the Lessor, which will 

not be withheld except for good reason, not including the willingness of 

another party to pay a higher rent. A grantee receiving funds for the 

major renovation or acquisition of a facility, on land belonging to 

another party, must have a land lease or other similar interest in the 

underlying land which is long enough to allow the Head Start program to 

receive the full value of those permanent grant-supported improvements.

    (2) Except as required under Sec. 1309.31 for certain modular 

units, the grantee must record the Notice of Federal Interest in the 

appropriate official records for the jurisdiction where a facility is or 

will be located immediately upon: purchasing a facility or land on which 

a facility is to be constructed; receiving permission to use funds to 

continue purchase of a facility; commencing major renovation of a 

facility or construction of a facility. In the case of a leased facility 

undergoing major renovations, the Notice of Federal Interest shall be a 

copy of the executed lease and all amendments. In the case of a facility 

now sited or to be constructed on land not owned by the grantee, the 

Notice of Federal Interest shall be the land lease or other document 

protecting the Federal interest. The lease or other document must ensure 

the right of the grantee to have undisturbed use and possession of the 

facility. In the event that filing of a lease is prohibited by State 

law, the grantee shall file an affidavit signed by the representatives 

of the grantee and the Lessor stating that the lease includes terms 

which protect the right of the grantee, or some other organization 

designated by ACF in the place of the grantee, to occupy the facility 

for the term of the lease.

    (3) The Notice of Federal Interest for property sited on land not 

owned by the grantee shall include the following information:

    (i) The date of the award of grant funds for the acquisition or 

major renovation of the property to be used as a Head Start facility, 

and the address and legal description of the property to be acquired or 

renovated;

    (ii) That the grant incorporated conditions which included 

restrictions on the use of the property and provide for a Federal 

interest in the property;

    (iii) That the property may not be used for any purpose inconsistent 

with that authorized by the Head Start Act and applicable regulations;

    (iv) That the property may not be mortgaged or used as collateral, 

sold or otherwise transferred to another party, without the written 

permission of the responsible HHS official;



[[Page 193]]



    (v) That these grant conditions and requirements cannot be altered 

or nullified through a transfer of ownership; and

    (vi) The name (including signature) and title of the person who 

completed the Notice for the grantee agency, and the date of the Notice.

    (4) A lease, serving as a Notice of Federal Interest, an affidavit 

filed in the land records as a substitute for the lease, or other 

document protecting the Federal interest in a facility acquired with 

grant funds and sited on land not owned by the grantee, shall include 

the following information:

    (i) The address and legal description of the property;

    (ii) That the grant incorporated conditions which include 

restrictions on the use of the property and provide for a Federal 

interest in the property for the term of the lease or other arrangement; 

and

    (iii) That the property may not be used for any purpose during the 

lease or other arrangement that is inconsistent with that authorized by 

the Head Start Act and applicable regulations.

    (e) Grantees must meet all of the requirements in 45 CFR parts 74 or 

92 pertaining to the purchase and disposition of real property, or the 

use and disposal of equipment, as appropriate.

    (f) In subordinating its interest in a facility acquired or upon 

which major renovations have been undertaken with grant funds, the 

responsible HHS officials does not waive application of paragraph (d) of 

this section and Sec. 1309.22. A written agreement by the responsible 

HHS official to subordinate the Federal interest must provide:

    (1)(i) The lender shall notify the Office of the Regional 

Administrator, Administration for Children and Families, the Office of 

the Commissioner, Administration on Children, Youth and Families, 

Washington, D.C., and the Office of the General Counsel, Department of 

Health and Human Services, Washington, DC, or their successor agencies, 

immediately, both telephonically and in writing of any default by the 

Head Start grantee;

    (ii) Written notice of default must be sent by registered mail 

return receipt requested; and,

    (iii) The lender will not foreclose on the property until at least 

60 days after the required notice by the lender has been sent.

    (2) Such notice will include:

    (i) The full names, addresses, and telephone numbers of the lender 

and the Head Start grantee;

    (ii) The following statement prominently displayed at the top of the 

first page of the notice: ``The Federal Interest in certain real 

property or equipment used for the Head Start Program may be at risk. 

Immediately give this notice to the appropriate government official'';

    (iii) The date and nature of the default and the manner in which the 

default may be cured; and

    (iv) In the event that the lender will be exercising its remedy of 

foreclosure or other remedies, the date or expected date of the 

foreclosure or other remedies.

    (3) Head Start grantees which purchase facilities with respect to 

which the responsible HHS official has subordinated the Federal Interest 

to that of the lender must keep the lender informed of the current 

addresses and telephone numbers of the agencies to which the lender is 

obligated under paragraph (b) of this section to give notice in the 

event of a default.



[64 FR 5945, Feb. 8, 1999, as amended at 68 FR 23221, May 1, 2003]