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48 <br />I. Title, Use, Disposition and Retention (5 CCR 18025) <br />1. Buildings and Improvements <br />a. Title to real property acquired in whole or part with state childcare and <br />development (CCD) funds shall vest in the contractor subject to the <br />condition that the contractor shall use the real property for the a uthorized <br />purpose of the childcare and development program as long as it has a <br />contract with the CDSS and shall not encumber the property without the <br />prior written approval of the CDSS. (2 CFR 200.311(a)) <br />b. When the real property is no longer needed for the purposes of any CDSS <br />program, the Contractor shall request disposition instructions from the <br />CDSS, which shall observe one of the following three disposition <br />instructions: <br />i. The CDSS may permit the contractor to retain title without further <br />obligation to the CDSS after the contractor compensates the CDSS or <br />that percentage of the current fair market value of the property, net of <br />reasonable and necessary selling costs, attributable to the CDSS’s <br />share of the acquisition cost. <br />ii. The contractor may be directed to sell the property under guidelines <br />provided by the CDSS and pay the CDSS for that percentage of the <br />current fair market value of the property, net of reasonable and <br />necessary selling and fix-up costs, attributable to the CDSS’s share of <br />the acquisition cost. <br />iii. The contractor may be directed to transfer title to the property to the <br />CDSS or to an eligible third party, provided that, in such cases, the <br />contractor shall be entitled to compensation for its attributable <br />percentage of the current fair market value of the property. <br />2. Equipment (5 CCR 18025) <br />a. Title – When equipment is purchased with state funds, title shall vest with <br />the contractor only for such period of time as the contractor has a contract <br />with the CDSS. <br />b. Retention of Equipment – The CDSS may provide written authorization for <br />the contractor to retain the equipment for the contractor’s own use if a fair <br />compensation is paid to the state for the state’s share of the cost of the <br />equipment. Fair compensation shall be determined by the state using the <br />state’s share of original acquisition cost, less depreciation, computed on a <br />straight-line method over the estimated useful life expectancy of the <br />equipment.