Common use of Disposition of Project Property Clause in Contracts

Disposition of Project Property. A. If the property is not continuously used for public passenger transportation in a manner similar to that intended by the application, the AGENCY shall immediately notify the DEPARTMENT. This provision shall also be triggered upon receipt of replacement equipment or facilities. The DEPARTMENT shall then determine whether the property should be transferred to another duly designated public transit system for continued use in public transportation. If the DEPARTMENT determines there is no need for the property, after making the equipment available for transfer, the DEPARTMENT may authorize local disposal. Upon receipt of such authorization, the AGENCY shall then dispose of such property, whether funded with state or federal assistance, in accordance with 49 CFR 18 (Appendix T). The following represents a summary of those provisions: (1) If the property is "retained" by the AGENCY, the AGENCY shall reimburse the DEPARTMENT either an amount equal to the federal and or state financial interest in the fair market value of the property, based upon expert and objective appraisal, which value must be approved in writing by the DEPARTMENT, or, for federally funded projects, if required by FTA, an amount equal to the federal financial interest in the value of the property as determined through straight line depreciation from the original price. (2) If the property is sold, it shall be sold by the AGENCY, at the highest price obtainable at public or private sale, subject to written approval of the sale price by the DEPARTMENT for capital items sold at greater than $5,000. The federal and or state financial interest in the net sale price (less expense of the sale) shall be paid to the DEPARTMENT, or, if required by FTA the amount paid to the DEPARTMENT shall be based on the federal financial interest in the value of the property as determined by straight line depreciation from the original price. Proceeds from disposal of capital property under $5,000 must be applied to the transit program. B. If the property is not maintained in usable condition, it shall be considered to not be in continuous use for public transportation service under this paragraph.