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(b) Calculating the Fair Market Value of Prematurely Withdrawn Project <br /> Property. The Contractor agrees that the Federal/State Government retains a Federal/State interest in <br /> the fair market value of Project property prematurely withdrawn from appropriate use. The amount of <br /> the Federal/State interest in the Project property shall be determined by the ratio of the Federal/State <br /> assistance awarded for the property to the actual cost of the property. The Contractor agrees that the <br /> fair market value of Project property prematurely withdrawn from use will be calculated as follows: <br /> 1. Equipment and Supplies. The Contractor agrees that the fair <br /> market value of Project equipment and supplies shall be calculated by straight-line depreciation of that <br /> property, based on the useful life of the equipment or supplies as established by the Department. The <br /> fair market value of Project equipment and supplies shall be the value immediately before the <br /> occurrence prompting the withdrawal of the equipment or supplies from appropriate use. In the case of <br /> Project equipment or supplies lost or damaged by fire, casualty, or natural disaster, the fair market <br /> value shall be calculated on the basis of the condition of that equipment or supplies immediately before. <br /> the fire, casualty, or natural disaster, or the amount of insurance coverage, whichever is greater. <br /> 2. Real Property. The Contractor agrees that the fair market <br /> value of real property shall be determined either on the basis of competent appraisal based on an <br /> appropriate date approved by the Department, as provided by 49 C.F.R. Part 24, or by straight line <br /> depreciation of improvements to real property coupled with the value of the land as determined on the <br /> basis of appraisal, or other Federal/state law or regulations that may be applicable. <br /> 3. Exceptional Circumstances. The Contractor agrees that <br /> the Department may require the use of another method to determine the fair market value of Project <br /> property. In unusual circumstances, the Contractor may request that another reasonable valuation <br /> method be used including, but not limited to, accelerated depreciation, comparable sales, or <br /> established market values. In determining whether to approve such a request, the Department may <br /> consider any action taken, omission made, or unfortunate occurrence suffered by the Contractor with <br /> respect to the preservation of Project property withdrawn from 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 fair market value of any Project <br /> property prematurely withdrawn from appropriate use. In turn, the Department shall be responsible to <br /> remit the Federal interest to the FTA. In the case of fire, casualty, or natural disaster, the Contractor <br /> may fulfill its obligations to remit the Federal and State interest by either: <br /> 1. Investing an amount equal to the remaining Federal and <br /> State interest in like-kind property that is eligible for assistance <br /> within the scope of the Project that provided Federal/State <br /> assistance for the Project property prematurely withdrawn from <br /> use; or <br /> 2. Returning to the Department an amount equal to the <br /> remaining Federal and State interest in the withdrawn Project <br /> 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 <br /> or destroyed Project property taken out of service, or <br /> (2) Return to the Department an amount equal to the remaining Federal <br /> and State 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 /> "Shippers - General Requirements for Shipments and Packagings," 49 C.F.R. Part 173, in connection <br /> with the transportation of any hazardous materials. <br /> I. Misused or Damaged Project Property. If any damage to Project property results <br /> from abuse or misuse occurring with the Contractor's knowledge and consent, the Contractor agrees to <br /> restore the Project property to its original condition or refund the value of the Federal and State interest <br /> in that property, as the Department may require. <br /> Revised 4/22/14 Page 24 of 36 <br />