(c) In-kind benefits—(1) Eligible types of benefits and their valuation. The following types of in-kind benefits are eligible when they are provided for projects eligible under § 266.7 of this part (whether or not Federal assistance is requested for the projects) or they are activities which would be eligible for planning and program operation assistance. Eligible in-kind benefits are valued as follows:

1. (i) The value of forgiven taxes, such as those portions of gross receipts or revenue taxes which are applicable to an approved project or property taxes on project related property, shall be the amount which would otherwise have been levied by the taxing authority. Forgiveness may be through exemption or remission;
2. (ii) The value of trackage rights secured by a State for a common carrier shall be the amount paid by railroads for comparable rights on comparable rail freight properties;
3. (iii) The value of State salaries for State public employees working in the State Rail Service Assistance Program, shall be consistent with rates paid for similar work by state public employees working in comparable state programs but shall not include overhead or general administrative costs;

4. (iv) The value of donations by the State or by a third party on behalf of the State of real property or tangible personal property of the kind necessary for safe and efficient operation of rail freight service, such as State or locally owned or leased buildings used in rail freight operations or equipment or materials, shall be determined as follows:

   1. (A) The value of State tangible personal property shall be established at the State's actual cost in accordance with Federal Management Circular 74-4;
   2. (B) The value of donated tangible personal property shall be determined in accordance with Attachment F of Office of Management and Budget Circular (OMB) A-102;
   3. (C) The value of State real property shall be established at the State's actual cost in accordance with Federal Management Circular 74-4, if at least one independent appraisal based on the results of a title search was performed when the property was purchased by the State, otherwise it shall be valued at the fair market value as established by at least one independent appraisal based on the results of a title search at the time the state proposes to make the property available as in-kind benefit; and
   4. (D) The value of donated real property shall be its fair market value, at the time of donation to the State, as established by at least one independent appraisal based on the results of a title search;

   5. (2) Eligibility criteria. To be applied toward the State share, in-kind benefits must:

      1. (i) Be verifiable from the State's records;
      2. (ii) Be necessary and reasonable for proper and efficient accomplishment of the objectives of the Rail Service Assistance Program;
      3. (iii) Be provided for in the approved grant budget; and
      4. (iv) Be approved under paragraph (3) of this paragraph (c).
      5. (v) The State shall submit such information as the Administrator may request to verify the value of in-kind benefits.

   6. (3) Request for approval. A request for approval of the in-kind benefits are to be applied and shall include the following:

      1. (i) Full name and principal business address of the contributor if other than grantee;
      2. (ii) Detailed documentation of the in-kind benefits including identification of the kind of in-kind benefits to be provided as well as their estimated value. When in-kind benefits are to be provided by a third party, a copy of the executed agreement between the State and the third party; and
      3. (iii) Certification by the State that the contribution will be used solely for the purposes documented.