[Code of Federal Regulations]
[Title 45, Volume 4]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR1309.11]

[Page 190-191]
 
                        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--
 
                    Subpart B_Application Procedures
 
Sec.  1309.11  Cost comparison for purchase, construction and major renovation 

of facilities.

    (a) A grantee proposing to acquire or undertake a major renovation 
of a facility must submit a detailed estimate of the costs of the 
proposed activity and compare the costs of the proposed activity as 
provided under paragraph (c) of this section and provide any additional 
information requested by the responsible HHS official.
    (b) All costs of acquisition, renovation and ownership must be 
identified, including, but not limited to, professional fees, purchase 
of the facility to be renovated, renovation costs, moving expenses, 
additional transportation costs, maintenance, taxes, insurance, and 
easements, rights of way or land rentals. An independent appraisal of 
the current value of the facility proposed to be purchased, or which the 
grantee will continue to purchase with Head Start funds or to receive 
major renovation, made by a professional appraiser, must be included.
    (c)(1) Grantees proposing to purchase a facility, without requesting 
funds for major renovations to the facility, must compare costs of the 
proposed facility to the cost of the facility currently used by the 
grantee, unless the grantee has no current facility, will lose the use 
of its current facility, intends to continue to use its current facility 
after it purchases the new facility, or has shown to the satisfaction of 
the responsible HHS official that its existing facility is inadequate. 
Where the grantee's current facility is not used as the alternate 
facility, the grantee must use for comparison a facility (or facilities) 
available for lease in the grantee's service area and suitable for use 
as a Head Start facility or which can be made suitable through 
incidental alteration or renovations, the cost of which shall be 
included in the cost comparison. In the case of an application for 
approval of the use of Head Start funds to continue purchase of a 
facility, the

[[Page 191]]

cost of the present facility must be compared to the cost of the 
facility used by the grantee before purchase of its current facility. If 
the facility used by the grantee before the purchase of its present 
facility was deemed inadequate by the responsible HHS official, or the 
grantee had no previous facility, the alternative facility shall be an 
available, appropriate facility (or facilities) of comparable size that 
was available for rent in the grantee's service are at the time of its 
purchase of the current facility. Grantees which have established under 
Sec.  1309.10(f) that there is a lack of alternative facilities that 
will prevent or would have prevented operation of the program are not 
required to provide a cost comparison under this paragraph.
    (2) Grantees proposing to construct a facility must compare the 
costs of constructing the proposed facility to the costs of purchasing a 
suitable alternate facility or owning, purchasing or leasing an 
alternative facility which can be made suitable for use through 
incidental alterations and renovations or major renovations. The 
alternative facility is one now owned by the grantee or available for 
lease or purchase in the grantee's service area. If no such facility is 
available, this statement must explain how this fact was determined and 
the claim must be supported, whenever possible, by a written statement 
from a licensed real estate professional in the grantee's service area.
    (3) A grantee proposing to undertake a major renovation of a 
facility must compare the cost of the proposed renovation (including the 
cost of purchasing the facility to be renovated, if the grantee is 
proposing to purchase the facility) to the costs of constructing a 
facility of comparable size. In place of the cost comparison required in 
the preceding sentence, a grantee proposing to make major renovations to 
a leased facility must show that the monthly or annual occupancy costs 
for the term of the lease, including the cost of the major renovations, 
is less than, or comparable to, the costs of purchasing or leasing any 
other facility in the grantee's service area which can be made suitable 
through major renovations, if such a facility is available.
    (d) The grantee must separately delineate the following expenses in 
the application:
    (1) One-time costs, including but not limited to, costs of 
purchasing the facility to be renovated, the down payment, professional 
fees, moving expenses, the cost of site preparation; and
    (2) Ongoing costs, including, but not limited to, mortgage payments, 
insurance premiums, maintenance costs, and property taxes. If the 
grantee is exempt from the payment of property taxes, this fact must be 
stated.
    (e) The period of comparison for purchase, construction or major 
renovation of a facility is twenty years, except that for the purchase 
of a modular unit the period of comparison is ten years and the period 
of comparison for major renovation of a leased facility is the period of 
the lease remaining after the renovations are completed. For approvals 
of the use of Head Start funds to continue purchase of the facility the 
period of comparison begins on the date the purchase began.
    (f) If the facility is to be used for other purposes in addition to 
the operation of the Head Start program, the cost of use of that part of 
the facility used for such other purposes must be allocated in 
accordance with applicable Office of Management and Budget cost 
principles.

[68 FR 23221, May 1, 2003]