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equipment or supplies as established by the Department. The fair <br /> market value of Project equipment and supplies shall be the value <br /> immediately before the occurrence prompting the withdrawal of the <br /> equipment or supplies from appropriate use. In the case of Project <br /> equipment or supplies lost or damaged by fire, casualty, or natural <br /> disaster, the fair market value shall be calculated on the basis of the <br /> condition of that equipment or supplies immediately before the fire, <br /> casualty, or natural disaster, or the amount of insurance coverage, <br /> whichever is greater. <br /> 2. Real Property. The Contractor agrees that the fair market value of <br /> real property financed under the Project shall be determined by FTA <br /> either on the basis of competent appraisal based on an appropriate <br /> date approved by FTA, as provided by 49 C.F.R. Part 24, by straight <br /> line depreciation of improvements to real property coupled with the <br /> value of the land as determined by FTA on the basis of appraisal, or <br /> other Federal law or regulations that may be applicable. <br /> 3. Exceptional Circumstances. The Contractor agrees that the <br /> Department may require the use of another method to determine the fair <br /> market value of Project property. In unusual circumstances, the <br /> Contractor may request that another reasonable valuation method be <br /> used including, but not limited to, accelerated depreciation, comparable <br /> sales, or established market values. In determining whether to approve <br /> such a request, the Department may consider any action taken, <br /> omission made, or unfortunate occurrence suffered by the Contractor <br /> with respect to the preservation of Project property withdrawn from <br /> appropriate use. <br /> (c) Financial Obligations to the Federal/State Government. The Contractor <br /> agrees to remit to the Department the Federal and State interest in the <br /> fair market value of any Project property prematurely withdrawn from <br /> appropriate use. In turn, the Department shall be responsible to remit <br /> the Federal interest to the FTA. In the case of fire, casualty, or natural <br /> disaster, the Contractor may fulfill its obligations to remit the Federal <br /> and State interest by either: <br /> 1. Investing an amount equal to the remaining Federal and State <br /> interest in like-kind property that is eligible for assistance within the <br /> scope of the Project that provided Federal/State assistance for the <br /> Project property prematurely withdrawn from use; or <br /> 2. Returning to the Department an amount equal to the remaining <br /> Federal and State interest in the withdrawn Project property. <br /> j. Insurance Proceeds. If the Contractor receives insurance proceeds as a result of <br /> damage or destruction to the Project property, the Contractor agrees to: <br /> (1) Apply those insurance proceeds to the cost of replacing the damaged or <br /> destroyed Project property taken out of service, or <br /> (2) Return to the Department an amount equal to the remaining Federal and State <br /> interest in the damaged or destroyed Project property. <br /> k. Transportation - Hazardous Materials. The Contractor agrees to comply with <br /> applicable requirements of U.S. Pipeline and Hazardous Materials Safety Administration regulations, <br /> Updated 3/07/12 Page 24 of 37 <br />