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§ 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;
(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]
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45 CFR 1301-1311. Head Start Program Performance Standards and Other Regulations. 2006. English.
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