Department of Justice
land, and only depreciation or use al-
lowances may be counted for donated
equipment and buildings. The deprecia-
tion or use allowanves for this property
are not treated as third party in-kind
contributions, Instead, they are treat-
ed as costs incurred by the grantee or
subgrantee. They are computed and al-
located (usually as indirect costs) in
accordance with the cost principles
specified in §66.22, in the same way as
depreciation or use allowances for pur-
chased equipment and buildings. The
amount of depreciation or use allow-
ances for donated equipment and build-
ings is based on the property’s market
value at the time it was donated.
(f) Valuation of grantee or subgrantee
donated real property for construction/ac-
quisition. If a grantee or subgrantee do-
nates real property for a construction
or facilities acquisition project, the
current market value of that property
may be counted as cost sharing or
matching. If any part of the donated
property was acquired with Federal
funds, only the non-federal share of the
property may be counted as cost shar-
ing or matching.
(¢) Appraisal af real properly. In some
cases under paragraphs (d), (e) and (f)
of this section, it will be necessary to
establish the market value of land or a
building or the fair rental rate of land
or of space in a building. In these cases,
the Federal agency may require the
market value or fair rental value be set
by an independent appraiser, and that
the value or rate be certified by the
grantee. This requirement will also be
imposed by the grantee on subgrantees.
$66.25 Program income.
(a) General. Grantees are encouraged
to earn income to defray program
costs. Program income includes income
from fees for services performed, from
the use or rental of real or personal
property acquired with grant funds,
from the sale of commodities or items
fabricated under a grant agreement,
and from payments of principal and in-
terest on loans made with grant funds.
Except as otherwise provided in regula-
tions of the Federal agency, program
income does not include interest on
grant funds, rebates, credits, discounts,
refunds, etc. and interest earned on
any of them.
§ 66.25
(b) Definition of program income. Pro-
gram income means gross income re-
ceived by the grantee or subgrantee di-
rectly generated by a grant supported
activity, or earned only as a result of
the grant agreement during the grant
period. “During the grant period’’ is
the time between the effective date of
the award and the ending date of the
award reflected in the final financial
report.
(c) Cost of generating program income.
If authorized by Federal regulations or
the grant agreement, costs incident to
the generation of program income may
be deducted from gross income to de-
termine program income.
(a) Governmental revenues. Taxes, spe-
cial assessments, levies, fines, and
other such revenues raised by a grantee
or subgrantee are not program income
unless the revenues are specifically
identified in the grant agreement or
Federal agency regulations as program
income.
(e) Royalties. Income from royalties
and license fees for copyrighted mate-
rial, patents, and inventions developed
by a grantee or subgrantee is program
income only if the revenues are specifi-
cally identified in the grant agreement
or Federal agency regulations as pro-
gram income. (See §66.34.)
(f) Property. Proceeds from the sale of
real property or equipment will be han-
dled in accordance with the require-
ments of §§ 66.31 and 66.32.
(g) Use of program income. Program
income shall be deducted from outlays
which may be both Federal and non-
Federal as described below, unless the
Federal agency regulations or the
grant agreement specify another alter-
native (or a combination of the alter-
natives). In specifying alternatives, the
Federal agency may distinguish be-
tween income earned by the grantee
and income earned by subgrantees and
between the sources, kinds, or amounts
of income. When Federal agencies au-
thorize the alternatives in paragraphs
(g) (2) and (8) of this section, program
income in excess of any limits stipu-
lated shall also be deducted from out-
lays.
(1) Deduction. Ordinarily program in-
come shall be deducted from total al-
lowable costs to determine the net al-
lowable costs. Program income shall be
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