# Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-25558 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** December 18, 2019 - **Citation:** 84 FR 69466 ## Text DEPARTMENT OF TRANSPORTATION Office of the Secretary 49 CFR Part 24 [FHWA Docket No. FHWA-2018-0039] RIN 2125-AF79 Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs AGENCY: Federal Highway Administration (FHWA), U.S. Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FHWA is proposing to amend its Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Uniform Act) regulations. The revisions are prompted by enactment of the Moving Ahead for Progress in the 21st Century Act (MAP-21), which increases statutory relocation benefits and reduces length of occupancy requirements. This proposal is intended to update existing regulations on the use of those amendments. The FHWA is also proposing to update the Uniform Act regulations to reflect the Agency's experience with the Federal-aid highway program since the last comprehensive rulemaking for the part, which occurred in 2005. The updates include streamlining processes to better meet current Uniform Act implementation needs and eliminating duplicative and outdated regulatory language. DATES: Comments must be received by March 17, 2020. Late-filed comments will be considered to the extent practicable. ADDRESSES: To ensure that you do not duplicate your docket submissions, please submit them by only one of the following means: • Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting comments. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave. SE, W12-140, Washington, DC 20590. • Hand Delivery: West Building Ground Floor, Room W12-140, 1200 New Jersey Ave. SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is (202) 366-9329. • Instructions: You must include the Agency name and docket number or the Regulatory Identification Number (RIN) for the rulemaking at the beginning of your comments. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided. FOR FURTHER INFORMATION CONTACT: Arnold Feldman, Office of Real Estate Services, (202) 366-2028, email address: Arnold.Feldman@dot.gov; or David Sett, Office of the Chief Counsel (HCC), (404) 562-3676, email address: David.Sett@dot.gov; Federal Highway Administration, 1200 New Jersey Avenue SE, Washington, DC 20590. Office hours are from 7:30 a.m. to 5:00 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: Electronic Access and Filing This document and all comments received may be viewed online through the Federal eRulemaking portal at http://www.regulations.gov. The website is available 24 hours each day, 365 days each year. An electronic copy of this document may also be downloaded by accessing the Office of the Federal Register's home page at: https://www.federalregister.gov. Table of Contents for Supplementary Information I. Executive Summary II. Background III. Section-By-Section Discussion of the Proposals I. Executive Summary The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. 4601 et seq. (Uniform Act) provides important protections and assistance for people affected by federally funded projects. Congress enacted this law to ensure that people whose real property is acquired, or who move as a result of projects receiving Federal funds, are treated fairly and equitably and receive just compensation for, and assistance in moving from, the property they occupy. The governmentwide regulation implementing the Uniform Act is title 49 CFR part 24. The Surface Transportation and Uniform Relocation Assistance Act (STURAA) (Pub. L. 100-17) of 1987 designated the U.S. Department of Transportation (DOT) as the Federal Lead Agency (Lead Agency) for the Uniform Act. Duties of the Lead Agency include developing, issuing, and maintaining the governmentwide regulation, providing assistance to other Federal Agencies, and reporting to Congress on Uniform Act implementation issues. The DOT has delegated these responsibilities to the FHWA at 49 CFR 1.85(d)(7). Acting as Lead Agency, FHWA is proposing to amend and update 49 CFR part 24, which would affect the land acquisition and displacement activities of all Federal Agencies subject to the Uniform Act. The proposed changes to this regulation are necessitated in part by Section 1521 of the MAP-21 (Pub. L. 112-141, July 6, 2012). Section 1521 included increases in benefit levels for displaced persons, authority to develop a regulatory mechanism to consider and implement future adjustments to those benefit levels, the requirement for an annual report on governmentwide real property acquisitions subject to the Uniform Act, and provisions for the funding of Lead Agency services. In addition to these required changes, FHWA proposes to amend the regulations to clarify existing requirements for implementing the Uniform Act, meet modern needs, and improve the Agencies' service to individuals and businesses affected by Federal or federally assisted projects. The proposed changes would also reduce the paperwork and administrative burdens of Government regulations on Agencies subject to the Uniform Act. The costs of the proposed rule for all Uniform Act Agencies are estimated to be minor: $1.8 million when discounted at 7 percent and $2.0 million when discounted at 3 percent. The 10-year annualized costs are estimated to be: $255,000 per year when discounted at 7 percent and $230,000 per year when discounted at 3 percent. Therefore, the costs associated with this rule are de minimis. Moreover, these minor costs should be fully offset, if not outweighed, by cost savings resulting from new flexibilities and streamlining contained in this proposal. These cost savings are not quantifiable. The larger impact of this rule is in the form of transfers from the government to property owners whose real estate is acquired for Federal projects. The estimated amount of transfers resulting from this rule are $115 million when discounted at 7 percent and $146 million when discounted at 3 percent. This rule can therefore be thought of as predominantly a transfer rule, as the estimated costs are significantly smaller than the estimated transfers. The FHWA was the only agency that provided data upon which to base estimates of the transfers. Therefore, the magnitude of the change in transfers for all Federal Agencies may be larger than is reported here. The Regulatory Impact Analysis for this rulemaking contains further breakdown of costs associated with FHWA's program. Other Federal Agencies may have additional regulatory or administrative updates specific to their programs as a result of this rulemaking. The benefits of the proposed rule primarily relate to improved equity and fairness to entities that are displaced from their properties or that move as a result of projects receiving Federal funds. For example, the proposed rule raises the statutory maximums for payments to displaced entities to assist with the reestablishment of the business, farm, or nonprofit organization. There is strong evidence that entities experience reestablishment costs well above the current maximum amount. Raising the maximum payment levels will compensate those entities more fairly and equitably for the negative impacts they experience as a result of a Federal or federally assisted project. However, the fairness and equity benefits of the proposed rule cannot be definitively quantified or monetized. The higher level of payments may also contribute to more entities being able to successfully reestablish after displacement. Background The FHWA last updated 49 CFR part 24 in 2005. Since publication of the 2005 rule, FHWA has undertaken a comprehensive effort to identify potential opportunities for improving implementation of the Uniform Act. The FHWA initiatives have included research on the need for regulatory and statutory change to the Uniform Act; co-sponsorship of national symposiums on Uniform Act implementation issues; implementation of pilot projects designed to determine the effect of changes in certain Uniform Act requirements and procedures; and an examination of the experiences of several State departments of transportation (State DOT) in providing payments required by State law that supplemented Uniform Act benefits. These activities confirmed that there are a number of enhancements that could be made to clarify existing requirements, reduce administrative burdens, and improve the Government's service to individuals and businesses affected by Federal or federally assisted projects and programs. The Uniform Act and the common rule govern the relocation and land acquisition programs of all Federal Agencies. Those Federal Agencies that, for convenience, provide a cross reference to this part, and the location of those cross-references, are listed below: Department of Agriculture 7 CFR part 21 Department of Commerce 15 CFR part 11 Department of Defense 32 CFR part 259 Department of Education 34 CFR part 15 Department of Energy 10 CFR part 1039 Environmental Protection Agency 40 CFR part 4 General Services Administration 41 CFR part 105-51 Department of Health and Human Services 45 CFR part 15 Department of Housing and Urban Development 24 CFR part 42 Department of Justice 41 CFR part 128-18 Department of Labor 29 CFR part 12 National Aeronautics and Space Administration 14 CFR part 1208 Tennessee Valley Authority 18 CFR part 1306 Veterans Administration 38 CFR part 25 Department of Homeland Security 44 CFR part 25 The Uniform Act applies to all acquisitions of real property or displacements of persons resulting from Federal or federally assisted programs or projects; the Uniform Act's application is not affected by the absence of a cross reference to 49 CFR part 24 in an Agency's regulations. Further, Federal or federally assisted activities involving land acquisition or displacement, undertaken by a newly constituted Federal Agency, would be covered by the Uniform Act. After the publication of the 49 CFR part 24 final rule, FHWA began a process to identify additional needs for regulatory updates and elicit input from Federal stakeholders and conducted research projects, which resulted in many of the regulatory changes proposed here. The primary focus of the various efforts was to identify opportunities to streamline processes to better meet current Uniform Act implementation needs and eliminate duplicative and outdated regulatory language in that rule. Beginning in 2012, and culminating in 2018, FHWA held working group meetings with representatives of the Federal Agencies subject to the Uniform Act. The meetings included a section-by-section review of the regulation, consideration of comments received during the 2005 rulemaking process, review of listening session comments, and consideration of research findings. Contributions from working group members were based on their experiences implementing the rule and feedback they had received from their partners and customers. The early review by the working group led to a compilation of potential changes to the rule. The FHWA considered the group's recommendations and proposed changes for each of the regulation's subparts and developed an initial draft rulemaking. Over a series of several working group meetings, the draft was refined and revised based on proposed edits and comments of the working group. When the working group meetings concluded, FHWA worked internally to finalize the draft rulemaking and continued to share drafts and receive additional comments from the Federal Agencies. This rulemaking also considers comments received from two DOT Federal Register documents requesting public comments and recommendations for evaluating existing regulations. The DOT published these documents on June 8, 2017 (82 FR 26734) and October 2, 2017 (82 FR 45750). The FHWA received several comments requesting streamlining and updates of this rule. The NPRM is responsive to comments received through the DOT Federal Register documents and deregulatory efforts to update regulations and streamline processes. Federal Agency Reporting Requirement The Lead Agency convened a separate working group of Federal Agencies to discuss the reporting requirements contained in Section 1521(d) of MAP-21. Federal Agencies that are subject to the Uniform Act and have programs or projects requiring the acquisition of real property or causing a displacement from real property must provide the Lead Agency an annual summary report describing activities conducted by the Federal Agency. This group discussed the new reporting requirements and developed a proposed template for the annual report. Each Federal Agency participant was given an opportunity to review and comment on draft versions of a proposed annual Agency report template. The proposed annual report template in appendix B of this NPRM is based on the feedback FHWA received from this group. The FHWA believes that the proposed report template provides Federal Agencies with a streamlined reporting format that balances the need to provide Federal Agencies with appropriate time to develop necessary reporting systems with the need to compile this information into a meaningful report. The FHWA understands that developing a data collection mechanism and system may take Federal Agencies several years. In the interim Agencies may elect to provide an annual narrative summary report instead of the statistical report in appendix B. Section-by-Section Discussion of Proposed Changes Descriptions of the regulatory changes proposed in this part are set forth below. All members of the public who are affected by relocation or land acquisition activities undertaken or funded by Federal Agencies are encouraged to comment on this NPRM. Comments from interested State and local governments are particularly requested. Subpart A—General Section 24.2 Definitions and acronyms In response to comments and questions from Federal and State partners, FHWA proposes to make additions and modifications to certain definitions and acronyms in order to provide clarification. The FHWA proposes several minor corrections, including renumbering definitions and acronyms and organizing them alphabetically. In addition, FHWA proposes updating appendix A references to reflect the proposed renumbering and alphabetizing of definitions. Section 24.2(a) Definitions Agency Throughout this regulation, references are made to those who are carrying out real property acquisition and relocation assistance, which are subject to Uniform Act requirements. The current regulations use a combination of definitions—Agency, Acquiring Agency, and Displacing Agency—to describe Uniform Act applicability to those parties. The FHWA is proposing to simplify these references by revising the current definition of Agency so it can be used throughout the proposed regulation to describe all parties carrying out real property acquisition and relocation assistance which are subject to Uniform Act requirements. The FHWA is also proposing to delete definitions of Acquiring Agency and Displacing Agency as the singular definition of Agency will be used throughout the regulation to describe responsible parties and Uniform Act applicability. Comparable Replacement Dwelling The MAP-21 amended Section 203(a)(1) of the Uniform Act by reducing the number of days that a person must have occupied a displacement dwelling in order to be eligible for a replacement housing payment from 180 to 90 days. The FHWA proposes to modify this definition accordingly, and in each place it appears throughout the regulation. Many readers of this NPRM will notice that the length of time a valid lien (mortgage) must be in place to qualify for an increased mortgage interest costs payment remains 180 days prior to the initiation of negotiations. The MAP-21 did not change this requirement. The FHWA also proposes to combine portions of the appendix for this definition with the regulatory text with no change in requirement or meaning resulting from this reorganization. Contribute Materially The FHWA has received a number of questions regarding the correct interpretation of this definition, especially in regard to displaced businesses that have not been in operation for 2 full years prior to displacement. Practitioners have questioned whether this definition means a business must be in operation for 2 full taxable years prior to displacement in order to be eligible for the payment. They have also questioned how to correctly calculate a prorated fixed payment if a business were in operation for less than 2 full years. While there is no proposed change to this definition, FHWA is reiterating that a displaced business may be eligible to receive payment for a business that is open for less than 2 full years. The FHWA believes that this definition and the regulations at § 24.305(a)(6) and (e), as currently written, give clear direction for calculating the prorated payment and provide broad latitude for equitable treatment. The FHWA proposes a clarification of appendix A, Section 24.305(e), to provide a more detailed discussion about calculating a benefit and, if necessary, prorating the average annual net earnings of a business or farm operation. The proposed clarifications include sample calculations for businesses with less than 1 year in operation, more than 1 year but not 2 full years in operation, and seasonally operated businesses. Decent, Safe, and Sanitary Dwelling The Uniform Act requires that displaced persons must have decent, safe, and sanitary (DSS) housing made available to them. The FHWA has received a number of questions about which DSS requirements to apply, especially in cases where local housing codes are more stringent than DSS requirements. The FHWA proposes to revise the definition of “DSS dwelling” by adding language which states that an Agency must use the more stringent of either the local housing code, the regulations, or the Agency's regulation or written policy. The purpose of this change is to clarify that the requirements in the definition of DSS in § 24.2(a) are minimum requirements. The FHWA also proposes to strike the portion of this definition which states that a Federal funding Agency with good cause could waive those regulatory DSS requirements which were not met by local code. The FHWA believes this portion of the regulation is unnecessary because Federal Agencies retain such authority under § 24.7. The FHWA proposes to move a portion of the previous appendix from this item to the regulation to streamline the new rule. The proposed new organization does not change requirements or create new requirements. In addition, the definition of DSS dwelling in § 24.2(a) uses the term “housekeeping dwelling.” However, several Federal Agencies have noted that housekeeping dwelling is undefined in the regulation and open to varying interpretations. The FHWA agrees that the lack of a definition for the term is contrary to the Uniform Act's goal of providing uniform and equitable treatment of persons displaced. The FHWA proposes to remove the “housekeeping dwelling” term from the regulation. The FHWA also proposes changes to this definition to clarify that the requirement that a kitchen be part of a comparable replacement dwelling is dependent on local housing code standards for residential occupancy. In parallel, FHWA proposes a new appendix A discussion to further clarify that FHWA recommends, as a good practice, that even in instances where local housing codes do not require a kitchen, Agencies select a comparable replacement dwelling that has a kitchen. Displaced Person At the request of Federal Agencies that have programs or projects that do not require the acquisition of real property, but instead may require the rehabilitation or demolition of real property, FHWA proposes adding the terms “rehabilitate or demolish” to the definition of a displaced person. The purpose of this addition is to clarify that the term displaced persons includes those required to move, or move their personal property, from the real property as a result of a written notice of intent to rehabilitate or demolish, even if the real property is not being acquired. The term displaced person is used in the Uniform Act to describe persons that move because of a Federal or federally assisted project or program. “Persons not displaced” is a term used to describe persons who do not qualify for Uniform Act benefits. Persons not displaced generally include those who will be temporarily relocated. The FHWA proposes to reorganize the definition to specifically address persons who are temporarily displaced and is proposing a new addition, § 24.202(a), to describe the required assistance and services that must be made available for persons temporarily displaced. The FHWA also proposes to eliminate the use of the term “guidelines” in this definition. Several Federal Agencies have noted that their recipients often have questions regarding the use and meaning of this term despite the explanation in the appendix. Federal Agencies have also noted that they do not have “guidelines,” but instead have relevant policies. The FHWA proposes to clarify the definition of persons not displaced by deleting “guidelines” and replacing it with “policy or guidance.” The FHWA believes that the terms “policy or guidance” more accurately reflect how Federal Agencies provide programmatic direction to their recipients. One Federal Agency requested an addition to this regulation that would require that a non-displacement relocation notice be provided which clearly states that a person will not be displaced by a program or project. It is FHWA's opinion that the current definition of persons displaced or not displaced already accomplishes this objective, that such a notice is generally not necessary for a majority of the Federal Agencies' programs, and that the clarification should not be included in the regulation. However, such a notice can be necessitated by Federal Agency policy. Based on the discussions in the working groups, FHWA also believes that Federal Agencies can and should ensure that informative materials and advisory services provide clear information on how to determine when someone is or is not displaced. Agencies may develop guidance to address questions specific to their programs to better direct those carrying out relocation assistance for their programs and projects. The FHWA proposes adding a reference to a new definition of “Federal down payment assistance.” In addition to the new reference, FHWA proposes removing the existing example of American Dream Downpayment Initiative (ADDI) authorized by section 102 of the American Dream Downpayment Act (Pub. L. 108-186; codified at 42 U.S.C. 12821). The proposed removal would provide for a more general reference to similar programs. In some instances, a person may have Federal down payment assistance funds provided for the purpose of purchasing and occupying a dwelling. These funds are not Uniform Act benefits. Agencies providing persons with only such Federal down payment assistance funds are not Agencies causing displacement as defined by this regulation, and persons using those funds are not causing displacements as defined in this regulation. For example, a person using Federal down payment assistance to purchase a home that a tenant also occupies would not be causing displacement as defined by this regulation, and the tenant who would have to move as a result of the acquisition of the home would also not be a displaced person as defined by this regulation. The FHWA has received numerous questions in recent years about whether persons in occupancy at temporary, daily, or emergency shelters that are acquired are in fact displaced persons. Persons who are occupying a shelter that only allows overnight stays, requires the occupants to remove their personal property and themselves from the premises on a daily basis, and offers no guarantee of reentry in the evening typically would not meet the definition of displaced persons. The FHWA believes that each relocation is unique and requires a fact-based determination in each instance. Those acquiring a shelter should consider factors including, but not limited to, whether the shelter has specific rules and requirements as to who can occupy or use the shelter and whether prolonged and continuous occupancy is allowed. In order to clarify when a person would not be displaced in these scenarios, FHWA proposes three changes to this definition. First, FHWA proposes to add “occupants of temporary, daily or emergency shelters” to the definition of “persons not displaced.” Second, FHWA also recommends that, at a minimum, all occupants should receive advisory assistance at initiation of negotiations. Finally, FHWA proposes adding a new appendix item for this definition that provides a discussion of FHWA's view of determining occupancy and eligibility for those who occupy a shelter. It offers a discussion of certain shelter occupants who may be considered displaced persons due to extenuating reasons, such as employment by the shelter. The FHWA believes that acquisition of a shelter and/or displacement from a shelter creates many unique challenges and that Agencies should address potential acquisition of shelters early in the project development process and in the project environmental review process. Doing so can facilitate the identification of required environmental justice mitigation measures and ensure that all available assistance is provided to shelter occupants. The FHWA also proposes to add a definition of “temporary, daily, or emergency shelter (shelter)” at § 24.2(a) to further assist Agencies in making a determination of whether a person residing in a shelter can be considered displaced. Dwelling The FHWA proposes to delete the term “non-housekeeping unit” from this definition as it is a term that is not defined elsewhere in the regulation and will not enhance an Agency's ability to implement the regulation. The FHWA also proposes to modify the definition of “other residential units” in this definition to include clarification that residential units that may seem to be non-standard dwellings, but that meet minimum Uniform Act requirements and local codes for residential occupancy as a dwelling, such as motel rooms, must be considered “dwellings.” Federal Down Payment Assistance Some Federal programs provide some financial assistance to homebuyers to purchase a dwelling. These programs provide funds to an individual who will be buying a dwelling through an arm's length market transaction. The FHWA has responded to several questions about whether the use of Federal down payment assistance in purchasing a dwelling would trigger Uniform Act requirements. The FHWA is proposing to add a new definition of Federal down payment assistance to clarify that individuals using only Federal down payment assistance to purchase a home as their residence would not be considered users of Federal financial assistance for the Uniform Act as it is defined in § 24.2(a). To supplement this proposed change, this proposed rule also includes a new appendix item that provides further clarification and explanation on the use of Federal down payment assistance and Uniform Act applicability. Federal Financial Assistance Federal down payment assistance provided to a private individual to purchase a residence is Federal financial assistance, as defined by the Uniform Act. It results in an acquisition- based displacement under the Uniform Act, however, only when the purpose of the acquisition is to advance a Federal project or program designed to benefit the public as a whole, such as highways, hospitals, and other public works projects. The FHWA believes that the purchase of a dwelling using Federal down payment assistance, standing alone, does not constitute an acquisition as contemplated by the Uniform Act. Therefore, those who may relocate as a result of an acquisition funded in part with down payment assistance are not displaced persons within the meaning of the Uniform Act. The Federal Government's interest is only that the property would serve as the purchaser's dwelling and that it meets general criteria including those related to habitability. The lack of a conscious governmental decision requiring that a selected or specific property be acquired to advance a program or project demonstrates that the nature of the acquisition utilizing down payment assistance funds is nothing more than a person purchasing a dwelling with limited Federal financial assistance. The FHWA also proposes to add a reference to low income housing tax credit (LIHTC) to this definition. Over the last several years, the FHWA has received numerous questions about the use of LIHTCs and whether they are Federal financial assistance as defined in this rule. The LIHTC is described by the Office of the Comptroller of the Currency as a program “. . . established as part of the Tax Reform Act of 1986 and is commonly referred to as section 42, the applicable section of the Internal Revenue Code. The LIHTC program provides tax incentives to encourage individual and corporate investors to invest in the development, acquisition, and rehabilitation of affordable rental housing. The LIHTC is an indirect Federal subsidy that finances low-income housing. This allows investors to claim tax credits on their Federal income tax returns. The tax credit is calculated as a percentage of costs incurred in developing the affordable housing property, and is claimed annually over a 10-year period. Some investors may garner additional tax benefits by making LIHTC investments.” 1 Given the nature of these tax credits and because they are not a grant, loan, or contribution provided by the United States, FHWA does not believe that LIHTC is Federal financial assistance as it is defined in § 24.2(a) and therefore is not subject to Uniform Act requirements. 1 https://www.occ.gov/topics/community-affairs/publications/insights/insights-low-income-housing-tax-credits.pdf. Recipient The proposed rule would add a new definition for the term “recipient.” The term would mean the party that is the direct recipient of Federal program funds, is not a Federal Agency and is accountable to the Federal funding Agency for the use of the funds and for compliance with applicable Federal requirements. This NPRM proposes to emphasize that the recipient remains responsible for ensuring compliance with Federal requirements when the recipient provides funds to a subrecipient. Home Equity Conversion Mortgage A home equity conversion mortgage (HECM) is the Federal Housing Administration's mortgage program that enables seniors to withdraw some of the equity in their homes. The HECMs are commonly referred to as reverse mortgages. Agencies can face unique challenges when displacing a homeowner whose dwelling has a HECM. The FHWA proposes to add a definition for HECM to the regulation given that these mortgages are being encountered more frequently on federally-funded projects. The definition identifies a HECM as a valid lien and describes common terms and conditions of the HECM. To supplement the proposed definition, FHWA proposes to add a new provision at § 24.401(e), which would clarify how HECM expenses are an eligible replacement housing payment incidental expense and a new section to appendix A, Section 24.401(e), with examples of types of HECMs and sample calculations, both of which will be discussed later in this NPRM. Household Income Agencies have pointed out an inconsistency between the definition of “household income” and the corresponding appendix text. The regulation can be incorrectly read to state that a fulltime student must be under the age of 18. The FHWA proposes to clarify that income from “dependent children under 18 or fulltime students” is excluded from the household income calculation. For clarification, FHWA also proposes to adopt the standard definition of a fulltime student in accordance with the requirements set by the Working Families Tax Relief Act of 2004, Public Law 108-311. Under this regulation's revised definition, a fulltime student must be under the age of 24 and a fulltime student for at least 5 months of the year. Initiation of Negotiations At the request of Federal Agencies that have programs or projects that require rehabilitation or demolition of real property but do not necessarily require the acquisition of the real property, FHWA proposes to add “rehabilitate and demolish” real property to the definition. The FHWA agrees that some Federal Agency programs that rehabilitate or demolish establish eligibility criteria on a basis other than the initiation of negotiations. In most instances, a displaced person's eligibility for benefits is established at the initiation of negotiations. However, in some instances a person's eligibility may be established prior to the initiation of negotiations. This addition will serve to clarify that when persons move, or move their personal property from the real property as a result of a written notice of intent to rehabilitate or demolish, or move after that notice but before delivery of the initial written offer, initiation of negotiations means the actual move of the person from the property. These changes also allow Agencies to tailor their notices and more clearly describe when a displaced person may be eligible for benefits while ensuring that Federal funds are used in a manner that prevents waste, fraud and abuse. The Federal Agencies that often acquire property as voluntary acquisitions, as defined in this regulation, have noted the current regulation provides that tenants are immediately eligible for relocation assistance at the initiation of negotiations for a property that the Agency may not ultimately be able to acquire through a voluntary and amicable agreement. Furthermore, in many cases, until an Agency approves or administratively accepts a conditional sale or purchase agreement, there is no obligation on the Agency's part to consummate or finalize a sale. To address these concerns, FHWA proposes to modify the definition of “initiation of negotiations” by changing the timing for establishing the eligibility of tenants affected by an option to purchase, conditional sales, or purchase agreement as the result of the voluntary acquisition of real property described in § 24.101(b)(1)-(5). Under the current rule, tenants are eligible for relocation assistance at the initiation of negotiations. The new rule provides, when an option is being acquired, eligibility of tenants for relocation assistance occurs when there is a binding agreement for sale between the buyer and seller. An option to purchase, conditional sale, or purchase agreement is not considered a binding agreement to purchase real property. See appendix A, Section 24.2(a) Initiation of negotiations, Tenants, (iv). The use of the term “binding” in the context of this regulation refers to an agreement in which both parties have formally accepted the conditions contained in the agreement, have documented their agreement in writing, and with their signature acknowledged their acceptance. It is a legally enforceable document in which the property owner agrees to sell certain property rights necessary for a project and the Agency agrees to that purchase for a specified consideration. Because State laws may require differing elements in an agreement in order to make it a legally binding contract under State law each recipient or displacing agency should consult with their legal counsel and develop required documents and documentation necessary to make a sufficiency determination under State law. The FHWA also proposes including a similar change to the discussion in the appendix that describes the timing of eligibility for Uniform Act assistance, or trigger date, for a tenant. The FHWA believes that this change, from initial offer to acquire to acceptance of a binding written agreement, will not reduce benefits or assistance to tenants because it is coupled with the requirements for a clearly written notification to the tenant of the process being followed, an explanation of the trigger date of their eligibility, and for providing a notification that negotiations have failed to result in a binding agreement. Owner's Representative Several Federal Agencies believe that the current regulation requires that notifications and documents be given only to the property owner and thus is unnecessarily restrictive. The FHWA agrees that such a requirement, or interpretation, is too restrictive and believes that allowing either an owner or a designated representative to receive a written offer in no way diminishes a property owner's rights. The FHWA proposes to add a new definition for owner's designated representative. Small Business The FHWA has often been asked for guidance on the question of whether sites occupied solely by outdoor advertising signs, displays, or devices qualify for benefits under §§ 24.303 and 24.304. The FHWA proposes to clarify that sites occupied solely by outdoor advertising signs, displays, or devices do not qualify for benefits under § 24.303 or § 24.304, by adding a reference to § 24.303 in the last sentence of the definition. The FHWA believes that outdoor advertising signs which are eligible for relocation benefits under this part are to be treated as personal property and, as such, would not be eligible for benefits under § 24.303. The FHWA continues to believe that § 24.301 provides owners of sites occupied solely by outdoor advertising signs, displays, or devices with sufficient allowances for the relocation of their personal property. Subrecipient This NPRM proposes to define “subrecipient” as a governmental Agency or other legal entity that enters into an agreement with a recipient to carry out part or all of the activity funded by Federal program grant funds. There are instances when recipients enter into subgrant agreements with cities, towns, and other governmental entities, collectively often referred to as “local public Agencies” or “local transportation Agencies,” under which those public Agencies administer projects and construct facilities. This NPRM makes a number of changes to emphasize that the recipient remains responsible for ensuring compliance with Federal funding Agency requirements when the recipient delegates project activities to subrecipients, including public Agencies. Temporary, Daily, or Emergency Shelter The FHWA has responded to a number of questions about temporary, daily, or emergency shelters, and whether persons in occupancy at these shelters are displaced persons. The FHWA proposes to add a new definition of the term “shelter.” The definition of shelter clarifies that emergency, temporary, or daily shelters are typically intended as overnight, short term, short duration accommodation. Persons who are occupying a shelter that only allows overnight stays, requires the occupants to remove their personal property and themselves from the premises on a daily basis, and offers no guarantee of reentry in the evening, typically would not meet the definition of displaced persons. The FHWA believes that each relocation is unique and requires a fact-based determination in each instance. Those acquiring a shelter should consider factors including, but not limited to, whether the shelter has specific rules as to who can occupy or use the shelter and whether prolonged and continuous occupancy is allowed. Also, there may be certain shelter occupants who may be considered displaced persons due to extenuating reasons such as employment by the shelter. Utility Facility The FHWA has received a number of questions regarding the interpretation of the phrase “any transportation system” as used in this definition. The common concern is that “any transportation system” can be viewed to mean a highway system or other similar transportation system. The FHWA believes that the current phrase can lead to an overly expansive view of what constitutes a utility facility for purposes of this regulation. The FHWA is proposing to replace the current definition of “utility facility” with the definition of “utility facility” found at 23 CFR 645.207. The proposed new definition will address the questions raised by offering a clear and consistent definition, along with several examples of utilities. Section 24.2(b) Acronyms The Bureau of Citizenship and Immigration Services (BCIS) has been renamed the U.S. Citizenship and Immigration Service (USCIS). The UA has been added as an acronym for the Uniform Relocation Assistance and Real Property Acquisition Policy of 1970. The FHWA proposes to make these changes in the acronym listing of this paragraph, remove numbers, and alphabetize the acronyms. Section 24.5 Manner of Notices The current regulation requires that Agencies personally serve or send notices to property owners or occupants by certified or registered first-class mail, return receipt requested. The FHWA proposes providing additional flexibility in the types of notices that can be used to communicate with property owners. The first type of flexibility we are proposing is to allow trackable delivery and signed receipts via companies other than the United States Postal Service that provide the same function as certified mail with return receipts. The FHWA also believes that delivery of notices by digital or electronic means can provide Agencies and property owners with an optional communications method that can streamline the notice process while not reducing any benefits or protections to property owners. Delivery of notices by digital or electronic means must be done in a manner that will provide verification of delivery and receipt and acceptance confirmation similar to the current standard of certified mail. The proposed regulation provides several minimum requirements that an Agency must follow if they choose to allow electronic notices and electronic signatures. The FHWA proposes to require that property owners or occupants must voluntarily elect to receive notices by electronic means. The FHWA continues to believe that there is no substitute for face-to-face meetings with property owners but also recognizes that for a variety of reasons face-to-face meetings may not be practical. Agencies may not determine in advance to use this proposed flexibility for all property owners on a project or program-wide basis. The acquisition of a person's real property and or displacement from their real property usually requires an Agency to make every effort to make personal contact. The FHWA proposes to add a new appendix item that further explains FHWA's position regarding when the use of electronic notifications may be appropriate and provides several examples of when it may and may not be a good option. The new appendix item describes additional safeguards that should be included as part of an Agency's process. It also reemphasizes that, should an owner or occupant elect not to receive offers and notices by electronic means, an Agency must accommodate that property owner or occupant by using certified first class mail, return receipt requested, or by personally serving notices. The FHWA is also proposing a new addition to this section, paragraph (d), which provides property owners with the flexibility to designate a representative to receive required notices and documents. This proposal requires that a designation of an owner's representative must be in writing and must identify any notices or documents that the designated representative is not authorized to receive. A properly designated property owner's representative would be able to receive required notices and information including acquisition and relocation information and/or the written offer of the property's fair market value on behalf of the owner. Section 24.9(c)  Recordkeeping and Reports Section 1521(d) of MAP-21 requires that each Federal Agency that has programs or projects requiring the acquisition of real property or causing a displacement from real property subject to the provisions of the Uniform Act provide an annual summary report to the Lead Agency that describes the activities conducted by the Federal Agency. The FHWA proposes to modify the reporting requirements in this paragraph accordingly by changing the first sentence requiring that a Federal Agency submit a report of its real property acquisition and displacement activities to the Federal Agency funding the project from “if required” to “as required.” We also propose to delete the second sentence requiring the reports not more than every 3 years and unless the Federal Agency shows good cause for requiring the report. The last sentence in this paragraph is deleted and further discussion of reporting requirements has been added in the appendix. The FHWA proposes to add new language in this paragraph to detail the annual reporting requirements that Section 1521 of MAP-21 introduced. The proposed paragraph will discuss the new annual reporting requirements for each Federal Agency subject to the Uniform Act. It includes a narrative on the overarching program and/or related activities, as well as specific program metrics, including the number of acquisitions, relocations, condemnations, total dollars spent, and use of housing of last resort. The report would be due by November 15th of each year. The FHWA also proposes to add a new appendix section explaining that FHWA realizes that not all Federal Agencies subject to this reporting requirement currently have the ability to collect all information requested on the reporting form. However, FHWA envisions that the Federal Agencies may elect to provide a narrative report focusing on their respective efforts to improve and enhance delivery of Uniform Act benefits and services. Narrative report information would include training offered, reviews conducted, or technical assistance provided to recipients. Section 24.10(g) Determination and Notification After Appeal The FHWA proposes to revise the language in the last sentence of this paragraph to clarify that the determination on appeal is the Agency's final decision. The language on content and procedures for the written determination on appeal, including informing a displaced person of the right to judicial review of the final decision, is not substantively changed. The proposed changes are intended to more clearly describe the authorities and rights created by the appeals process and to more directly provide information on the process to follow should a determination on the appeal be desired. Section 24.11 Adjustments of Payments The FHWA proposes to add a new section to the regulation to implement the new provision in MAP-21 at Section 1521(d)(2) which provides that if the head of the Lead Agency determines that the cost of living, inflation, or other factors indicate the relocation assistance benefits should be adjusted to meet the policy objectives of the Uniform Act, that the head of the Lead Agency may adjust: The amounts of relocation benefits for reestablishment expenses-nonresidential moves; fixed payment for moving expenses-nonresidential moves; replacement housing payment for 90-day homeowner-occupants; and replacement housing payment for 90-day tenants and certain others. Prior to MAP-21, FHWA led research projects to examine whether inflation had an effect on relocation benefit levels. The research concluded that since publication of the final rule in 1989, the benefit levels were not able to meet the policy objectives of the Act due to inflation. The FHWA's research focused primarily on the use of indexes as a tool to evaluate inflation's effects on Uniform Act benefits. In considering the most appropriate indexes, several Consumer Price Indexes appeared to provide a suite of goods and services that are related to housing and other costs associated with displacement. The FHWA is proposing to evaluate inflation's effect on the benefits for reestablishment for nonresidential moves, fixed payment for non-residential moving expenses, replacement housing payments for 90-day owners, and rental assistance payments for 90-day tenants and certain others by using the Consumer Price Index for All Urban Consumers (CPI-U) Seasonally Adjusted. 2 Guidelines FHWA used in choosing this index: 2 https://www.bls.gov/news.release/cpi.t01.htm. 1. The CPI-U is a measure of the average change in consumer prices over time for a fixed market basket of goods and services, including food, clothing, shelter, fuels, transportation, and charges for medical and dental services and drugs. The all urban consumers group represents about 87 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed and retired persons as well as urban wage earners and clerical workers. Bureau of Labor Statistics (BLS) publishes a CPI-U report monthly and releases an Annual Report at the end of each fiscal year. 2. It is available on a monthly basis, free of charge and can be expected to be tabulated regularly into the future. The CPI-U is widely used by other Federal Agencies including FEMA and HUD. 3. The CPI-U is used by other Federal Agencies for inflation adjustment indexing. The CPI-U is produced by the BLS and is subject to verification and oversight. Additional information on consumer price indexes can be found on the Bureau of Labor Statistics website. 3 The FHWA is proposing that this determination of whether an increase in benefit amounts is necessary would be made no more frequently than every 5 years. If the FHWA determines that the cost of living, inflation, or other factors indicate the relocation assistance benefits should be adjusted to meet the policy objectives of the Uniform Act, FHWA will issue a Federal Register notice of that determination and the specific adjustments of the relocation assistance benefits that are being made. The FHWA believes Federal and State partners will benefit from several years of stable and predictable regulatory benefit amounts. 3 https://www.bls.gov/cpi/. The FHWA proposes a new item in appendix A, Section 24.11, which provides a sample calculation showing how FHWA will determine whether future adjustments to these benefit amounts should be proposed. In addition to a temporal limit on adjustments, FHWA attempted to identify an inflationary impact threshold or other regulatory condition indicating when an adjustment should be proposed. The FHWA recognizes that prior to MAP-21, relocation benefit amounts had not been adjusted for several decades. The FHWA welcomes comments on use of the CPI-U Seasonally Adjusted Index, and suggestions on the inflationary impact threshold that would warrant adjustments to the maximum benefit amounts. Subpart B—Real Property Acquisition The FHWA intends for the terms “fair market value” and “market value,” which may be more typical terminology in private transactions, to be synonymous in this regulation. In order to make this clarification, FHWA proposes to modify the appendix item for subpart B by deleting “may be” and inserting “are” to indicate that “fair market value” (as used throughout this subpart) and “market value” are the same. Section 24.101(a)(2) Applicability of Acquisition Requirements Section 24.101(a)(2) currently includes the same reference twice, which may create confusion. The FHWA is proposing to modify this paragraph by deleting the first reference to 49 CFR 24.2(a) and by editing the second reference at the end of the paragraph to cross reference § 24.2(a). The FHWA believes that making a single reference at the end of the paragraph to this definition accurately points readers to the requisite section and eliminates the need for redundant references in this paragraph. Section 24.101(b)(1)(i) Applicability of Acquisition Requirements Some Federal Agencies reported that the terms “site” and “geographic area” were close enough in meaning that they caused confusion in the second sentence. They stated that the term “site” did not accurately describe the type of project needs encountered in delivering their programs and recommended changing the term to property. The FHWA proposes to strike the term “site(s)” and insert “property or properties.” The FHWA believes the proposed change accurately reflects the types of acquisitions that Agencies may make and this requirement's goal of ensuring that voluntary acquisitions are truly independent of site and corridor. The FHWA also proposes to revise the appendix item for this paragraph. A Federal Agency suggested that the appendix to this paragraph be changed to further define the term “general geographic area.” Some Federal Agencies expressed concern that the appendix definition was too restrictive for their programs or some projects. The FHWA reviewed the NPRM and final rule comments and was unable to determine why the term “geographic area” was inserted into the appendix during the 2005 rulemaking. That rulemaking stated that is was “not to be construed to be a small limited area.” The FHWA proposes to delete that clause and insert a sentence that describes a “general geographic area” as any of several properties that are not necessarily contiguous or are not limited to a specific group of properties. Section 24.101(b)(1)(iii)-(iv) and (b)(2)(i)-(ii) Applicability of Acquisition Requirements Several Federal Agencies believe that the current language of these paragraphs requiring that notification be given only to the property owner is unnecessarily restrictive. The FHWA agrees and believes that allowing either an owner or a designated representative to receive a written offer in no way diminishes a property owner's rights. The FHWA proposes to make minor revisions to the language of these parts by adding allowances for an owner's properly designated representative to be able to receive acquisition and relocation information and/or the written offer of the property's fair market value on behalf of the owner. The FHWA is proposing that such designation must be in writing. Section 24.101(b)(2)(iii) Applicability of Acquisition Requirements Some Agencies possess the power of eminent domain but do not use it for specific projects. The FHWA has received questions about the interpretation of this paragraph from several Agencies. Some Agencies have interpreted this paragraph to mean that if an Agency possesses the power of eminent domain but will not use it on the project, the Agency would not be able to use the voluntary acquisition authority for its project or program. The FHWA proposes to clarify this paragraph's applicability by simplifying the language so it clearly states that if eminent domain will not be used, then an Agency may use the voluntary acquisition requirements provided by this section. The FHWA believes that whether an Agency has such authority is not the relevant issue in determining whether this section's requirements are being met. The relevant issue is that eminent domain may not be used as part of the offer and negotiation to acquire property needed for the project. Also, FHWA proposes adding language in appendix A that recognizes some Agencies may have an unanticipated need that may require use of eminent domain authority. The FHWA views the clear purpose of the provision as ensuring that voluntary acquisitions are not simply preludes to an eminent domain acquisition, should voluntary acquisition negotiations fail. The FHWA is proposing a new paragraph to allow the Federal funding Agency to permit acquisitions by eminent domain in extraordinary circumstances when negotiations were initially undertaken under the requirements for voluntary acquisitions. The FHWA further recognizes that property owners subjected to such acquisitions should be assured that they are being afforded all protections and eligibilities of this regulation. Therefore, FHWA is proposing that, should an Agency carrying out a project advanced as a voluntary acquisition find an extraordinary instance requiring the use of eminent domain, it must request a waiver of regulations, under authority of § 24.7 of this part, from the Federal Agency funding the project. This proposed addition is in response to requests from Agencies that often acquire property as voluntary acquisitions. The FHWA is interested in commenters' opinions on whether the use of a waiver of regulations should be required, whether criteria necessary for a waiver should be included in this regulation, what that criteria should include, and whether and how to define the exceptional circumstances under which eminent domain authority may be permitted under this section. Section 24.101(d) Federally Assisted Projects The FHWA is proposing to add a new paragraph to respond to questions it has received about the applicability of Uniform Act requirements to properties that were acquired in advance of a federally-funded project. The FHWA recognizes that Agencies may acquire or own previously acquired properties for several reasons. This proposed change will clarify that if such a property were acquired with the intent of including it in a planned, anticipated, or designated federally-funded program or project, then the acquisition would be subject to the requirements in subparts B-F, as applicable. This proposed change would incorporate guidance that FHWA has included in its Frequently Asked Questions for 49 CFR part 24, see current question number five. 4 This proposed change does not create a new requirement but is proposed to ensure that those Agencies acquiring properties which may be incorporated into a planned, anticipated, or designated federally assisted program or project understand when, why, and how the requirements of this rule apply. The FHWA is interested in commenters' suggestions on how to further clarify when, how, and why the requirements of this rule apply. 4 See current question number five at: https://www.fhwa.dot.gov/real_estate/policy_guidance/uafaqs.cfm. Section 24.102 Basic Acquisition Policies The term “waiver valuation” in this regulation and the more commonly used term “appraisal waiver” means the valuation process used and the product produced, when the Agency determines that an appraisal is not required, pursuant to § 24.102(c)(2). In 1989, FHWA first adopted a rule on appraisal waivers. Under that rule, Agencies were allowed to decide when an appraisal was not needed if they first determined that the valuation was uncomplicated and the property was “low-value.” Over the years, we have used the terms “low-value” and “uncomplicated” interchangeably. The FHWA is proposing to eliminate the term “low-value” since this proposed regulation now defines the range of values to which a waiver can be applied. The rule initially defined uncomplicated as being $2,500 or less. Beginning in 1995, FHWA approved, for its recipients, increases for the uncomplicated definition of up to $10,000 on a State-by-State basis. Since 2002, some agencies have received approval to use a $25,000 uncomplicated threshold when applying the appraisal waiver provisions of the 1989 rule. In January 2005, FHWA issued an updated rule that acknowledged the trend toward increasing the threshold for uncomplicated acquisitions. The current rule contained in § 24.102(c)(2)(ii) provides Agencies the latitude to define “uncomplicated” as being up to $10,000. It also permits an increase in the amount up to $25,000 provided the Federal funding Agency approves, and the Agency agrees to provide the property owner the option to request an appraisal. Appraisal waiver requirements have proven to be an effective tool in containing costs and in fostering accelerated project delivery while protecting the rights of property owners under the Uniform Act. A national survey and various process reviews have confirmed this to be the case. 5 The FHWA is proposing changes to § 24.102(c)(2)(ii)(C) waiver valuation requirements, as described in the following three sections, in recognition of the positive experience using them. 5 The FHWA has developed, collected or reviewed several supporting documents. They include an FHWA national survey of waiver valuation in 2005, results from 4 SDOTs which carried out waiver valuation pilot projects and a Colorado study of Waivers. FHWA is also embarking on a new national survey of waiver valuations in support of this NPRM effort. Section 24.102(b) Notice to Owner The FHWA is proposing to add a new appendix item which states that when condominiums and other types of housing with common areas or community property are being acquired, an Agency should determine who must receive notification, which could include a condo or homeowner's board, a designated representative, or all individual owners when common or community property is being acquired for the project. Section 24.102(c)(2) Appraisal Waiver The FHWA proposes to modify the appendix for this paragraph to further explain the term “uncomplicated acquisitions.” The FHWA also proposes to modify the regulation to emphasize that the person making the determination to use the waiver valuation must have sufficient understanding of the local markets, and should have knowledge of appraisal principles and use of valuations to be able to determine whether the valuation problem is uncomplicated. The FHWA also proposes to add to this appendix that Agencies should put procedures in place to ensure that waiver valuations are accurate and are consistent with the unit values as determined by appraisals and appraisal reviews. The FHWA proposes to strike the term “sophisticated” and insert “complex” in the appendix to more accurately reflect the intent that the waiver valuation frees up appraisers to do more complicated appraisal work. The FHWA also proposes inserting in the appendix that those who prepare waiver valuations have an understanding of appraisal principles and use of appraisals so as not to imply that they must be appraisers. The FHWA is also proposing to add a reference to the appendix item for this paragraph. Section 24.102(c)(2)(ii)(A) Appraisal Waiver The FHWA has received questions about whether and how a licensed appraiser could develop a waiver valuation which would be consistent with professional standards and licensure requirements. The appendix states that waiver valuations are not appraisals under this rule. There is no national consensus or standard about the implications of having a licensed or certified appraiser prepare a waiver valuation. In some States, when a State-certified or licensed appraiser estimates a value, they may be obligated under the licensing requirements of their State to perform an appraisal even if the client requests something less than an appraisal. Performing appraisals rather than waiver valuations in situations where the valuation problem is not complex can cause unnecessary delay and adds unnecessary cost to an acquisition. However, some States have laws that interpret waiver valuations as appraisals, and those States only permit appraisers to perform appraisals, which effectively nullifies the benefits of the waiver valuation. In order to encourage those States to take advantage of the streamlining efficiencies offered by the waiver valuation, and in an effort to avoid the increased time and increased cost associated with providing fully documented appraisals, FHWA proposes to incorporate a jurisdictional exception that preserves the original intent of the waiver valuation process while offering appraisers that wish to perform this type of work for Agencies an avenue for accepting waiver valuation assignments while remaining compliant with the provisions of the State appraisal licensing enforcement Agencies. The FHWA also recognizes that some States prefer to have waiver valuations reviewed even though this regulation does not require a formal review of waiver valuations. Appraisers can accept these types of assignments as well with this proposed language. The FHWA is proposing to add language to this paragraph that would preclude an appraiser from complying with standards rules 1, 2, 3, and 4 of the “Uniform Standards of Professional Appraisal Practice” (USPAP), as promulgated by the Appraisal Standards Board of The Appraisal Foundation. 6 This proposed modification would afford those States a solution that preserves the intent of this regulation to streamline processes and provide programmatic efficiencies. This proposal would provide States and licensed or certified appraisers with clarity about the requirements of this regulation and the implications of developing a waiver valuation. The FHWA invites comments or suggestions on this proposed change. 6 http://www.uspap.org. Section 24.102(c)(2)(ii)(D) Appraisal Waiver Thereof, and Invitation to Owner The FHWA proposes to add a new paragraph (c)(2)(ii)(D) to this section to institute a three-tiered approach to waiver valuations. The proposed new third tier of waiver valuations would be a $50,000 waiver value ceiling available under clearly defined circumstances. This change is presented as an option that Federal funding Agencies and recipients may consider using on a project-by-project basis. In proposing this change, it is important to note that additional safeguards have been created to ensure the full protection of property owners' rights and interests. The safeguards include the use of the third tier being limited to Federal funding Agencies and recipients, with no delegation to subrecipients, and that approvals may be granted on a project-by-project basis with requests made in writing and when the six pieces of information required in this paragraph are provided. The required information is: The anticipated benefits of raising the ceiling, administrative/managerial oversight mechanisms, names and credentials of those performing the waiver valuations, quality controls to be used, performance metrics with quarterly reports, and a close-out report measuring cost/time benefits and lessons learned. The FHWA believes that the proposed required information provides a set of requirements that ensure use of waiver valuations above $25,000 would be carefully considered and used in appropriate circumstances with specific safeguards. An important safeguard of this proposal is the requirement that the Agency offer an appraisal. The procedures described in this paragraph may not be used if the property owner elects to have the Agency appraise the property. Section 24.102(n)(1) Conflict of Interest The FHWA proposes to change the word “making” to “developing” an appraisal in this paragraph to more accurately describe the activity of preparing an appraisal or waiver valuation. This paragraph ensures that the valuation process continues to operate in an independent manner by prohibiting the compensation for an appraisal or waiver valuation to be based on the amount of the valuation estimate. Section 24.102(n)(3) Conflict of Interest The current regulation allows single agents who valued properties to also perform negotiations on properties that were valued at less than $10,000. The FHWA has conducted reviews that provided no indication that the use of the single agent created a problem to administer, or led to property owners receiving offers that were less than the Agency's best estimate of just compensation. The FHWA's experience is that the $10,000 limit has been managed effectively and property owners' rights and protections have not been diminished by this process. The FHWA now proposes to raise the limit to $25,000 with a two-tiered approach. Under the proposed changes, the single agent concept could still be applied with waiver valuations up to the $10,000 amount. The FHWA is proposing that acquisitions estimated to be greater than $10,000 but less than $25,000 would require an appraisal, and review of the appraisal, if the valuation preparer is also acting as the negotiator. The FHWA also proposes that the Agency or recipient desiring to exercise this option for acquisitions estimated to be greater than $10,000 but less than $25,000 on a project or a program basis must submit a request in writing to the Federal funding Agency. The FHWA proposes to require that Agencies and recipients that implement this provision have a separate and distinct quality control process in place and written procedures which include an outline of the quality control process approved by the Federal funding agency . Federal Agencies may elect whether to use this single agent tool and to establish guidance for its use. The proposed increase to a $25,000 limit may be extended to a subrecipient when the Agency or recipient determines and documents that the subrecipient has a separate and distinct quality control process in place and outlined in written procedures approved by the Federal funding agency. The FHWA is also proposing to add a new appendix item for this paragraph, which explains the objective of using the conflict of interest provisions, the purpose of the three parts of this provision, and the new third tier of the conflict of interest provisions. Section 24.103(a) Appraisal Requirements The FHWA proposes to delete date and publication information from the description of “Uniform Standards of Professional Appraisal Practice (USPAP).” The FHWA believes this change is needed because the USPAP has been updated several times since the publication of the current rule and may be updated several times over the next several years. The FHWA also proposes to add new updated web links for the USPAP in this paragraph. The FHWA will monitor future publications of USPAP to ensure that those publications continue to be consistent with the requirements of this rule and will make technical corrections when necessary. We also propose to modify the appendix item for this part by changing “Standard Rules 1, 2, 3” by striking the word “Rules” to “Standards 1, 2, 3 & 4” and inserting “2018-2019 edition of the” before “USPAP” to ensure consistency with USPAP. The FHWA also proposes to delete “Supplemental Standard Rule” as it is no longer contained in USPAP. Subpart C—General Relocation Requirements Section 24.202(a) Persons Required To Move Temporarily Several Agencies have questioned whether persons temporarily displaced should receive benefits because they are identified in the rule as persons not displaced. The FHWA is proposing to revise the definition of displaced persons and to specify the services and assistance that must be provided to a temporarily displaced person in this part. The FHWA also proposes to incorporate the majority of the appendix discussion on minimum Agency actions for temporary displacements into this section of the regulation. Several Federal Agencies noted that the proposed reorganization will provide their recipients with a more easily understood and concise discussion of minimum standards and actions required when temporarily displacing a person. The FHWA believes that the proposed change to the regulation aligns the regulation more closely with the language and requirements of Section 4621 of the Uniform Act. These requirements include a recognition that relocation assistance policies must provide for fair, uniform, and equitable treatment of all affected persons. In addition, FHWA believes that providing services and assistance to temporarily displaced persons is necessary to minimize the impacts of displacement and to maintain the economic and social well-being of communities. The proposed changes require that persons displaced from their dwelling or business be reimbursed for out-of-pocket expenses associated with the move and that temporary relocations may not last more than 12 months. The FHWA believes that the language in the current appendix that limits temporary relocations to no more than 12 months reflects a standard that some recipients were not aware of due to its placement in the appendix. The FHWA believes that more clearly establishing this standard as a regulatory requirement by incorporating it into the regulatory text will provide recipients with a more easily understood requirement for persons who are temporarily displaced. The new proposal also requires that appropriate advisory services be provided. The FHWA is not proposing to develop an all-inclusive list of actual and reasonable out-of-pocket expenses because each temporary relocation is unique and fact-specific. However, reimbursement should be provided for those additional costs necessitated by the temporary move, including lodging, cost of meals when temporary lodgings do not include kitchen facilities, and cost to move personal property when necessary. The FHWA is also proposing to add an item to this part to explicitly state that aliens not lawfully present in the United States are not eligible for temporary relocation assistance unless such denial of benefits would create an extremely unusual hardship to a designated family member in accordance with § 24.208(g). This clarification is not an additional prohibition or change to the regulation. The addition is intended to assist Agencies that frequently do temporary relocations by ensuring that the existing provisions and prohibitions are easily understood. Section 24.203(a) General Information Notice Several Agencies have indicated that the term “scheduled” in this paragraph does not have a clear meaning in the context of their programs. These Agencies believe that “may be displaced” more closely fits the processes they follow since a large part of their programs are voluntary acquisitions and “scheduled to be displaced” could be interpreted to mean a decision to displace had been made regardless of the outcome of the negotiation process. The FHWA believes that the proposed change would fit both voluntary and eminent domain acquisitions and subsequent relocations. This proposed change would also promote consistency between this paragraph and the following paragraph since the phrase “may be displaced” is already used in § 24.203(a)(1). Section 24.203(b) Notice of Relocation Eligibility and Section 24.203(d) Notice of Intent To Acquire One Agency has requested that the existing “Notice of intent to acquire” in § 24.203(d) be revised to eliminate confusion and to expand its applicability to rehabilitation and demolition activities where no acquisition is involved. They propose to replace it with an “Advanced Notice of relocation eligibility” which would serve to establish relocation eligibility. Rather than rewriting § 24.203(d) and eliminating § 24.203(b) in the regulation, FHWA proposes to simply rename the “Notice of intent to acquire” as “Notice of intent to acquire, rehabilitate, or demolish” to cover the situations unique to the Agency and similar programs when an acquisition does not occur but persons are required to move for some period of time. As a result, several other parts of the regulation will be modified to reflect this new title. Specifically, FHWA proposes to reword the definition of a “displaced person” at § 24.2(a) and the definition of “initiation of negotiations” at § 24.2(a) wherever this it appears. The FHWA also proposes to add “rehabilitate or demolish” wherever “notice of intent to acquire” occurs in § 24.203(b) and (d). In § 24.203(d), FHWA proposes to also strike “acquired” from “property acquired” to again emphasize that the Notice of Intent to Acquire clearly includes rehabilitation and demolition projects. The FHWA believes that renaming the notice of intent to acquire to include rehabilitation and demolition clearly conveys the many types of displacements to which this notice is intended to apply. The FHWA believes that this is the simplest solution to tailor applicability of this notice to all programs. Section 24.204(a) Introductory Text Through (a)(1) Availability of Comparable Replacement Dwelling Before Displacement The FHWA has received a number of questions regarding the meaning of the term “made available” in the context of this paragraph's discussion of comparables. The questions are focused on the general requirements of this paragraph's language providing direction on the number of comparables that should be used in the determination process and is not focused on benefit determination or eligibility. A majority of practitioners believe that “made available” simply requires that information on the comparable replacement dwellings be provided to a displaced person. Others believe that the regulation requires that all comparables be inspected before being used in estimating eligibility. The FHWA proposes to modify the language in this paragraph to clearly state that “made available” means providing information in writing on the location of actual comparable replacement dwellings that were used in the determination process. The regulation continues to state that three or more comparable replacement dwellings shall be made available, whenever possible in the determination process. The FHWA believes that providing information on at least three comparable replacement dwellings should be the standard practice because it provides the displaced person with the assurance that the selected comparable replacement dwellings fairly represent comparable properties available on the market. The FHWA is also proposing changes to § 24.205(c)(2)(ii)(C) Relocation Planning, Advisory Services, and Coordination which are discussed in detail below. The FHWA agrees that an inspection of a comparable dwelling should be made prior to its use in any eligibility determination. The proposed change requires Agencies to inform displaced persons in writing of the reason(s) a DSS inspection of a comparable replacement dwelling was not made (in cases where inspections were not made) and to indicate that, should a displaced person select one of the comparable dwellings, a replacement housing payment cannot be made until a DSS inspection is made of that dwelling. Section 24.205(c)(2)(ii)(C) Relocation Planning, Advisory Services, and Coordination The FHWA proposes to modify the language in this paragraph to require Agencies to inform displaced persons in writing of the reason(s) a DSS inspection of a comparable replacement dwelling was not made (in cases where inspections were not made) and to indicate that, should a displaced person select one of the comparable dwellings, a replacement housing payment cannot be made until a DSS inspection is made of that dwelling. The FHWA also proposes adding a new item to appendix A, Section 24.205(c)(2)(ii)(C), explaining what constitutes a DSS inspection and a further discussion of the requirement that an Agency must make full disclosure and explanation to the displaced person if the comparable replacement dwelling was not inspected. It is the position of FHWA that comparable replacement housing must be inspected whenever possible and that the selected comparable replacement dwelling should be inspected ( e.g., walk through/physical inspection). The FHWA proposes to add a part in the appendix which explains that reliance on an exterior visual inspection, or examination of an MLS listing, does not constitute a full DSS inspection as required by the regulation in most cases. Section 24.205(c)(2)(ii)(D) Relocation Planning, Advisory Services, and Coordination The FHWA is proposing to revise the appendix for this part to include a reminder that Agencies should ensure that they are appropriately documenting their efforts to provide comparables and replacement dwellings which are not in areas of minority concentration. Section 24.207(f) No Waiver of Relocation Assistance The FHWA proposes to add a reference to appendix A, Section 24.207, which further explains the requirements when a displaced person chooses not to accept some or all of the payments or assistance to which they are entitled. Section 24.207(h) Entitlement to Payments-Deductions From Relocation Payments To date, the practice of withholding a portion of, or deducting from, a relocation replacement housing payment to satisfy non-payment of rent to an Agency, or to satisfy an obligation to any other creditor, has been clearly prohibited. Because the current prohibition is only found in § 24.404(a)(6) pertaining to replacement housing payments, several questions have been raised regarding whether the withholding prohibition applies to all relocation assistance payments or only to replacement housing payments. The FHWA proposes to add a new paragraph to the general requirements for claims for relocation payments to emphasize that withholdings or deductions may not be made from any type of relocation payments for non-payment of rent or to satisfy an obligation to any other creditor. The proposed addition would also clarify that Agencies must deduct any advanced relocation payment from the relocation payments to which the displaced person is otherwise entitled. Section 24.208(c) Aliens Not Lawfully Present in the United States The FHWA proposes to add a reference to a new addition to the appendix for this paragraph that provides examples of how to calculate relocation payments if some members of a displaced family are lawfully present but others are aliens not lawfully present. The new addition would provide calculations that are based on the ratio of ownership between aliens not lawfully present and eligible displaced persons. The proposed addition to appendix A also incorporates several current Uniform Act Frequently Asked Questions, 7 to provide specific calculation examples. 7 https://www.fhwa.dot.gov/real_estate/policy_guidance/uafaqs.cfm. Section 24.208(f)(1) The FHWA proposes to update the acronym for the BCIS to the current USCIS and add a corrected link to that Agency's website. The FHWA also proposes to amend this paragraph by requiring the use of the USCIS's Systematic Alien Verification for Entitlements (SAVE) program to confirm certifications which an agency believes may be invalid. The FHWA seeks comments on whether there may be other resources that can be used when an agency considers a certification invalid. The FHWA would also like comments on whether and how the certification process in this part should be updated. The FHWA is interested in comments on whether revisions should include document review and collection for all displaced persons. Section 24.208(g) Aliens Not Lawfully Present in the United States The FHWA has received questions from several Federal Agencies about providing temporary relocation assistance to aliens not lawfully present in the United States. The question arises because the requirements focus on displaced persons. In instances of temporary relocation, persons are not displaced persons but are eligible for certain temporary benefits. The Federal Agencies question whether this paragraph's restriction on providing relocation benefits or assistance would prohibit or allow an Agency to deny temporary relocation assistance to an alien not lawfully present in the United States. The FHWA believes that the clear intent in statute and this regulation do not allow for any Uniform Act benefits or assistance to be provided to an alien not lawfully present in the United States, with the exception being cases where an exceptional and extremely unusual hardship to a spouse, child, or parent who is a U.S. citizen or alien lawfully admitted for permanent residence would be created by denying such benefits and assistance. This regulation provides specific considerations and requirements that allow for benefits to be provided in this limited instance. Given that this regulation allows and defines instances when an alien not lawfully present in the United States may receive Uniform Act benefits, the FHWA believes that the hardship exception also applies to temporary relocations in cases where an exceptional and extremely unusual hardship to a designated family member would be created by denying such benefits and assistance. The FHWA does not believe that any additional changes are needed to this regulation given the restrictive and specific language in this paragraph. Section 24.208(h) Aliens Not Lawfully Present in the United States Some Agencies have asked FHWA how to determine when there is an “exceptional and extremely unusual hardship” to a spouse, parent, or child of a person not lawfully present in the United States when the determination results in more than the loss of relocation payments and/or assistance alone. The FHWA proposes to add a reference to appendix A, Section 24.208(h), which incorporates FHWA's previously published FAQ explaining the meaning and intent of the term “exceptional and extremely unusual hardship.” 8 The FHWA believes that including existing guidance into the appendix will provide a clear resource to address the questions raised. 8 https://www.fhwa.dot.gov/real_estate/uniform_act/relocation/illegaqa.cfm Subpart D—Payments for Moving and Related Expenses Section 24.301(b)(2) Moves From a Dwelling The FHWA requests comments on adding an option, similar to that found in this part for business self-moves, to allow self-moves from dwellings to be eligible for reimbursement in the amount of the lower of two bids or estimates prepared by a commercial mover or based on an estimate prepared by a qualified Agency staff person. The FHWA would like comments on whether and how adding new self-move options for moves from a dwelling would reduce administrative burden on the displaced person and the Agency. The FHWA believes that self-move options would reduce administrative burden and eliminate the burden to the property owner of providing receipts or proof of expenditures to support residential self-move claims for payment. The FHWA is also interested in comments on how reimbursement should be made if a self-move reimbursement is based on a commercial move bid. Should the reimbursement be for the full commercial move bid, or should it be made after subtracting an amount to account for overhead and profit in the commercial move bid? Section 24.301(b)(3), (c)(2)(ii), and (d)(2)(ii) Moving Cost Finding and (d)(2)(iii) Non-Residential Moving Cost Schedule The FHWA is interested in incorporating methods in this regulation that can reduce administrative burdens and improve the government's service to individuals and businesses affected by Federal or federally assisted projects and programs. In previous rules, there was a provision that allowed moving expenses to be determined by a qualified staff person for small, uncomplicated personal property moves, commonly called a “moving cost finding” or “a finding.” Persons displaced from their dwellings can elect to receive reimbursement for moving their personal property by use of a streamlined process that does not require commercial move estimates or receipts documenting moving costs. The Fixed Residential Moving Cost Schedule allows an Agency to determine, document, and establish moving cost eligibility based on the number of rooms of furniture being moved. The FHWA is considering a similar tool for nonresidential moves. A business move cost schedule would conceptually be established by regulation and would allow an SDOT to determine eligibility for reimbursement based on a predetermined metric such as number of rooms or number of items. If a non-residential moving cost schedule were allowed by regulation, Agencies would no longer need to document costs based on moving estimates or receipted bills. The FHWA would like comments about move cost findings and development of a non-residential moving cost schedule, and whether they should be considered for incorporation in a final rule. Specifically, FHWA would like to know if any Agencies use a similar process for their programs and projects which are not subject to the requirements of the Uniform Act; whether that process has produced administrative cost savings; and, whether the process has been found satisfactory by displaced persons relocated by the Agency. Section 24.301(e) Personal Property Only The FHWA proposes to modify appendix A, Section 24.301(e), to provide Agencies with additional flexibility for use in residential moves where the only personal property to be moved is located outside of the dwelling. The FHWA recognizes that in some instances the costs of obtaining moving bids for moving personal property located outside of the dwelling may exceed the cost of the actual move. The FHWA proposes to allow a payment for moves of residential personal property located outside of the dwelling to be based on the “additional room” category of the Fixed Residential Move Cost Schedule. We also propose to include the link to the Schedule on the FHWA website in this appendix. Section 24.301(g)(3) Disconnecting, Dismantling, Removing, Reassembling, and Reinstalling Relocated Household Appliances and Other Personal Pproperty The FHWA proposes to add a clarification in the appendix of this paragraph to address questions received about the eligibility of certain costs to build or rehabilitate structures as a reimbursable expense. Generally, costs to construct, rehabilitate, or reconstruct are capital expenditures and are ineligible for reimbursement. In instances where these costs may be required, a waiver of regulation by the Federal funding Agency must be obtained. Section 24.301(g)(11) Eligible Actual Moving Expenses—License, Permit, Fees The FHWA proposes to add “actual, reasonable, and necessary” before the words “license, permit, fees or certification” and “farms or non-profits” and after “business” in this paragraph. The FHWA believes that each business, farm, or non-profit move is unique due to varying local, State, and Federal requirements and requires a careful review of the facts in order to determine whether a permit or fee should be reimbursable for a specific move. The FHWA also proposes to clarify that the permit or fees allowed under this paragraph are for those necessary to operate a business, farm, or non-profit by adding “to operate a business, farm, or non-profit” after “required” in the first sentence of this paragraph. The proposed change would clarify that permit fees associated with construction are not included as an actual moving expense. In most instances, reimbursing for building a new structure at the replacement location is not a permissible actual moving cost expense. Consequently, the cost of a permit for new construction in almost all instances is not an eligible expense under this part. A new construction permit for repairs or improvements to the replacement property or modification to accommodate the business, farm, or non-profit operation or make the replacement structure suitable for conducting the business, farm, or non-profit may, however, be eligible for reimbursement if determined to be reasonable and necessary under § 24.304 Reestablishment expenses or if required by local law, code, or ordinances. Section 24.301(g)(13) Re-Lettering Signs and Replacing Sationary on Hand Currently, the regulation specifies that re-lettering signs and replacing stationery made obsolete at the time of the displacement are eligible moving expenses. The FHWA proposes to modify this paragraph to recognize that many businesses use media other than printed media by adding the phrase “and making updates to other media.” We propose making a reference to a new item in appendix A, Section 24.301(g)(13), which includes examples of other potentially reimbursable costs for other media such as DVDs or CDs and modification of websites to update contact and location information made necessary because of the move. This proposed change would allow Agencies to determine if expenses incurred to update media on hand, such as DVDs, CDs, or updating a website to reflect information on the new location of the business, are actual, reasonable, and necessary expenses which would be eligible under this paragraph. The FHWA intends that the compensation would be limited to costs to reproduce the number of DVDs and CDs on hand at the time of displacement, and, in the case of a website update, only those costs necessary to edit and modify the location information. Section 24.301(g)(14)(i)-(ii) Actual Direct Loss of Tangible Personal Property The FHWA has received a number of questions regarding the appropriate method for calculating the actual direct loss of tangible personal property and the meaning of “value in place for continued use” as used in these paragraphs. Some Agencies have reported that it can be difficult and very costly to find machinery and equipment (M&E) valuation experts who are able to determine value in place for continued use. Other Agencies have noted that considering the value in place for continued use ensures that payments made under provisions of these paragraphs are reasonable and that procuring the services of an M&E valuation expert is relatively easy. The FHWA believes that procuring the services of an M&E valuation expert is achievable but perhaps not always easily. The FHWA proposes to modify these paragraphs to allow for a new two-part consideration of the actual direct loss of tangible personal property payment. First, FHWA proposes separate paragraphs for calculating payments for items currently in use and for items not currently in use. For items in use, reimbursement is based on the lesser of the cost to move and reinstall the item or fair market value in place of the item “as is for continued use.” The FHWA believes that by using “the lesser of” consideration, the eligibility determination provides options to both the Agency and the displaced person. For items not currently in use, FHWA proposes to base the reimbursement on the cost to move the item as is, with no allowance for storage. The FHWA also proposes to reorganize these paragraphs by proposing a separate subordinate paragraph for goods held for sale. When payment for property loss is claimed for goods held for sale, the fair market value shall be based on the cost of the goods to the business, not the potential selling prices. The FHWA proposes to add a reference to appendix A for this paragraph. The FHWA also proposes to add a discussion to the end of appendix A about procuring M&E valuation expert services. The FHWA welcomes comments that identify such services and methods that may be used to direct the reader to reasonable methods of estimating value in place either by hiring an M&E appraiser or by estimating via websites available for M&E valuations. Finally, FHWA proposes updating regulatory references in the appendix for these paragraphs due to renumbering and reorganization of the regulation section. Section 24.301(g)(17)(i)-(ii) Searching for a Replacement Location The FHWA's Business Relocation Assistance Retrospective Study 9 reported that businesses incur searching expenses that routinely exceed the current regulatory limit of $2,500. The report recommended increasing the limit on searching expenses to $5,000 and lessening the burden of documentation. The FHWA proposes to increase searching expenses' eligibility from $2,500 to $5,000. The FHWA believes that in some instances requiring documentation for all searching expenses can be administratively burdensome to both the Agency and the displaced person. As such, FHWA proposes to add a new provision at § 24.301(g)(17)(ii) of this regulation that would provide Federal Agencies with the option to allow, on a project or program wide basis, a one-time alternative searching payment of up to $1,000 with little or no documentation. The FHWA believes that the potential savings in administrative costs offset the possibility of fraud, waste, and abuse. The FHWA also proposes to modify the appendix for these paragraphs by striking $2,500 and inserting $5,000 and by proposing new flexibility by allowing one time alternative searching payments of up to $1,000 with little or no documentation. 9 https://www.fhwa.dot.gov/real_estate/publications/business_relocation_assistance/final_report/page06.cfm. The FHWA also proposes to incorporate a frequently asked question into the appendix to clarify that search expenses may be incurred anytime the business anticipates it may be displaced, including prior to project authorization or the initiation of negotiations. However, such expenses should not be reimbursed until the business has received the notice, required in § 24.203(b), and only after the Agency has determined such costs to be actual, reasonable, and necessary. Section 24.301(g)(17)(i)(F) Searching for a Replacement Location The FHWA proposes to change this paragraph to allow expenses to include attorney's fees. The FHWA recognizes that displaced business owners may incur actual, reasonable, and necessary costs for either time spent or fees paid for services necessary to determine the adequacy of a potential replacement property. These costs may include those necessary to determine appropriate zoning and resolve other issues during a search for a replacement location. Several State Agencies have reasoned that in a number of instances having attorneys negotiate for the purchase of replacement sites could be an actual, reasonable, and necessary expense. The FHWA agrees that attorney's fees for negotiating a purchase can be considered a reasonable expense under this part. The FHWA also proposes to strike “time spent” and insert “expenses” negotiating the purchase of a replacement site. The FHWA is proposing to amend the appendix for this paragraph to clarify that attorney's fees could be considered eligible as a searching expense. The FHWA also believes that because the fees are reimbursed at the Agency's discretion based on the actual, reasonable, and necessary test, the potential for waste, fraud, and abuse is manageable. Section 24.301(h)(13) Ineligible Moving and Related Expenses State DOTs have asked about the eligibility of costs to make cosmetic alterations or improvements to replacement dwellings, such as painting, fitting draperies, and replacing carpet or flooring. The FHWA believes that expenses for cosmetic changes to a dwelling are not moving costs which are reimbursable under the Uniform Act. This proposed change is not intended to prohibit alterations to a dwelling to make it accessible and free of barriers for ingress, egress, or use as required under the definition of a DSS dwelling, for a displaced person with a disability at § 24.2(a). Section 24.302 Fixed Payment for Moving Expenses-Residential Moves Persons displaced from a seasonal residence or dormitory style room may receive a fixed moving cost payment as an alternative to a payment for actual moving and related expenses. A number of questions have been raised about the appropriate uses of the moving cost schedule, including whether storage can be included as part of a fixed cost move and what the allowance for storage can include. The FHWA proposes to add language to the appendix to clarify that if an Agency determines that storage is an actual, reasonable, and necessary expense in conjunction with this schedule, payment may be paid in accordance with § 24.301(g)(4) for a period not to exceed 12 months. The FHWA also proposes to revise language in appendix A, Section 24.302, to clarify the applicability of the Fixed Residential Move Cost Schedule (Schedule) to seasonal residents and temporary moves from a dwelling and to add a reference to the revised appendix item. The FHWA proposes to add a new paragraph to this section to allow for actual reasonable and necessary storage. This proposed addition requires that the Agency notify the displaced person in writing that the Fixed Residential Move Cost Schedule is only for one move. In instances where storage was approved, only the costs to move the personal property from the displacement location to storage would be reimbursable. The FHWA believes that in most cases the use of a fixed cost move is meant to be a one-time uncomplicated move, and if storage is necessary, it would be in the displaced person's interest to use a commercial move to ensure that all costs related to moving and storage are reimbursed. Section 24.303(a) Related Non-Residential Eligible Expenses The FHWA has received a number of questions regarding the meaning of “nearby utilities” and whether “nearby” allows for reimbursement for certain utility service modifications and reconnection costs. In general, there has been confusion about whether “nearby” meant from the property line or some other defined point. The intent of this paragraph was to recognize that relocating a business may require some utility service modifications and reconnection costs. “Nearby” has sometimes been interpreted to mean anywhere from several feet to several miles away. The FHWA proposes to strike “nearby” and “right-of-way” and add “from the replacement site's property line.” The FHWA believes that the proposed changes will more clearly and accurately indicate the kinds of expenses that are eligible under this part. The FHWA proposes adding a new appendix item for this paragraph that includes examples to more clearly describe eligible costs. The FHWA also proposes to add a reference to the new appendix A, Section 24.303(a), to the end of this paragraph. Section 24.303(c) Related Nonresidential Eligible Expenses—Impact Fees or One-Time Assessments Impact fees or one-time assessment for anticipated heavy utility usage are eligible expenses. The FHWA is proposing to clarify that “impact fees” are only related to anticipated “heavy utility usage” at the replacement location. Generally, the terms “heavy utility usage” and impact fees recognize costs associated with utility usage including water, sewer, gas, and electric. Impact fees associated with major infrastructure construction, such as adding a lane for additional traffic capacity or other similar required infrastructure improvements, fire stations, regional drainage improvements, and parks are not eligible. The FHWA proposes changing the “or” before “one time assessments” to “and.” The FHWA believes this change, a subsequent new appendix A, Section 24.303(c), and a reference to it in the regulation will adequately respond to the questions about correctly interpreting and applying this benefit. Section 24.304 Reestablishment Expenses—Non-Residential Moves Section 1521(a)(1) of MAP-21 amends Section 202 of the Uniform Act by raising the statutory limit to $25,000. The FHWA proposes to revise this section to reflect the new statutory limit of $25,000. Section 24.304(b) Ineligible Expenses Several Federal Agencies and FHWA have received questions from their program partners regarding whether construction of a facility, where little or no structure currently exists, would be an eligible reestablishment expense. They have reasoned that § 24.401(a)(1), which allows for “improvements to the real property,” and § 24.401(a)(2), which allows for “modifications to the replacement property,” may be read to allow for new construction or substantially new construction where there is little or no structure. The FHWA proposes to add a new § 24.304(b)(5) to clarify exclusion of costs to construct a new facility such as a new business building on a vacant replacement property or to substantially construct or reconstruct a building. These costs are considered capital expenditures and are generally ineligible for reimbursement as a reestablishment expense. The FHWA believes that building from the ground up or substantially reconstructing a building, or the rehabilitation or rebuilding of a shell, is beyond the intended scope of § 24.304(a). The FHWA recognizes that there may be special cases where substantial reconstruction or building from the ground up may be necessary. Agencies will need to consider each request for eligibility on a case-by-case basis and determine whether that eligibility should be requested. Agencies that determine that eligibility should be provided must request a waiver of § 24.304(b)(1) under the provisions of § 24.7 from the Federal Agency funding the project or program The FHWA also proposes incorporating two current Frequently Asked Questions into a new appendix item with an example of when such a waiver is requested and discusses the costs that may be eligible for reimbursement. Section 24.305 Fixed Payment for Moving Expenses-Nonresidential Moves, Paragraphs (a) Business, (c) Farm Operation, and (d) Nonprofit Organization Section 1521(a)(2) of MAP-21 amends Section 202 of the Uniform Act by raising the statutory limit for a fixed payment for moving expenses-nonresidential moves to $40,000. The FHWA proposes to revise these three paragraphs to reflect the new statutory limit of $40,000. Several Federal Agencies and some program partners have raised questions about whether a fixed payment for moving expenses in nonresidential moves prohibits other relocation assistance payments for moving and related expenses and reestablishment payments. The FHWA proposes to add clarifying language to ensure that the regulation is clearly understood to prohibit payments for any moving and related expenses or reestablishment payments when a displaced person elects to receive a fixed cost moving payment under this section of the regulation. The fixed payment option's purpose is to provide a displaced person with an alternative method of receiving reimbursement for all costs associated with a move. This alternative fixed payment is a one-time payment that exhausts and eliminates other eligibilities and payments for any moving and related expenses (including actual direct loss of tangible personal property and searching) or reestablishment payments. The FHWA also proposes a new appendix item for these parts to further clarify that this fixed payment represents a one-time alternative for businesses, farms, and non-profits. Section 24.305(e) Average Annual Net Earnings Practitioners have asked FHWA about the requirement that a business must have been in operation for at least 2 full years to qualify for the fixed payment based on the average annual net earnings and what to do in instances where the business was not in operation for two full years. The FHWA proposes to add a reference in this paragraph to a revised appendix A, Section 24.305(e). The revisions clarify that a business must only contribute materially to the income of the displaced person for a period of time during the 2 taxable years prior to displacement but does not have to be in existence for 2 full years prior to displacement in order to be eligible for this benefit. The proposed new appendix item also provides sample calculations of benefits when a business was in operation for less than 1 year, more than 1 year but not 2 full years, and when a business only operates seasonally. We propose that the seasonal net income be considered the entire income for that year when making the payment calculation. The appendix also restates, as currently provided for in the regulation, that average annual net earnings may be based upon a different period of time that an Agency determines to be more equitable. The FHWA believes that the combination of the proposed new item in appendix A and the specific examples of calculations will ensure that businesses that contribute materially, but are in operation less than 2 years prior to displacement, will have their annual net earnings correctly determined. Section 24.306(a) Discretionary Utility Relocation Payments The FHWA proposes to revise the reference to § 24.2(a), Utility facility. Subpart E—Replacement Housing Payments Section 24.401 Replacement Housing Payment for 90-Day Homeowner-Occupants Section 1521(b)(2) of MAP-21 amends Section 203(a)(1) of the Uniform Act by reducing the number of days a person must have owned and occupied a displacement dwelling from 180 days to 90 days in order to be eligible for a replacement housing payment. The FHWA proposes to modify the heading for § 24.401 and paragraphs (a) introductory text and (a)(1) and the appendix entries for these parts by deleting “180 days” and inserting “90 days” in each place it appears. Section 24.401(b) Amount of Payment Section 1521(b)(1) of MAP-21 amends Section 203(a)(1) of the Uniform Act by raising the statutory limit for replacement housing payments to $31,000. The FHWA proposes to modify this section by deleting $22,500 and inserting $31,000 in each place it appears. Section 24.401(d) Introductory Text Through (d)(1) Increased Mortgage Interest Costs The FHWA is not proposing a change in this section but believes it is important to note that MAP-21 did not change the requirement that a lien must have been in place for 180 days prior to the initiation of negotiations in order to be considered a valid lien and to be eligible for an increased mortgage interest cost payment under this part. Prior to MAP-21, the eligibility requirements for occupancy of a displacement dwelling and for a valid lien were both 180 days prior to the initiation of negotiations. The FHWA proposes to modify the appendix item for § 24.401(d) to improve clarity by striking “and that the person must obtain a mortgage of at least the same amount as the old mortgage and for at least the same term in order to receive the full amount of this payment” from the sentence after the sample computation. This does not necessarily occur often in practice since a displaced person may obtain a lesser mortgage amount or term on their replacement dwelling. The rest of the sentence remains to inform the displaced person of the approximate amount of the payment and interest rate and points used to calculate the payment. The FHWA also proposes to add a link in the appendix to increased interest cost calculators available on its website. Section 24.401(e) HECM The FHWA proposes to add a new definition, paragraph, and appendix item to address HECM (also known as reverse mortgages). Although the actual number of HECM type mortgages is still relatively low in comparison to all types of mortgages, FHWA believes that this may change in the future due in part to the number of aging homeowners in the marketplace and also because the marketplace and marketing practices for HECMs are evolving and growing. Since these mortgages did not exist when the Uniform Act was enacted, their unique and particular financial construction was not accounted for in the development of relocation assistance benefits. Because there are unknown factors in calculating exact costs to replace a HECM, the services of a mortgage broker are required. The FHWA believes that there is ample authority in the Uniform Act, its legislative history, and implementing regulations to support the strategies proposed in this NPRM for addressing displaced persons with HECMs. We have incorporated in the NPRM information from a 2013 Study of Reverse Mortgages in Relocation Assistance conducted by FHWA. These mortgages often have unique terms. We are proposing that every reasonable attempt should be made to make available a replacement HECM with similar terms. The FHWA is also proposing that the displaced homeowner is eligible for costs associated with origination of a replacement HECM, such as mortgage insurance, origination fee, and other incidental expenses, in accordance with § 24.401(f). Our research has revealed that the cost of replacing a HECM can be substantial, especially when the owner has little or no equity left and their equity is being dispersed as term or tenure payments. The FHWA is also proposing options to replace the HECM with a mortgage with terms similar to the displacement HECM loan or the use of other methods such as a life estate for securing a dwelling for the person's remaining lifetime. In cases where there is a tenure or term payment, FHWA has developed a simple online calculator to estimate the cost to purchase a replacement HECM. However, the exact payment required to purchase a replacement HECM includes information and calculations which are proprietary to HECM mortgage brokerages. The FHWA believes the use of a calculator which provides an estimate will serve to inform the Agency and displaced person of approximate eligibility and a method for determining whether HECM replacement costs are actual, reasonable, and necessary. The new item in appendix A presents the various HECM terms that can be encountered with solutions for Agencies to consider. It also provides a link to the FHWA online calculator to estimate the eligibility and costs to replace the HECM. This calculator uses basic information readily available to an Agency to calculate this estimated payment. It only requires the value of the acquired dwelling, existing balance of the displacement HECM, and price of the selected comparable or actual replacement dwelling. Next, it calculates an estimate of the remaining equity on the displacement HECM, the initial principal limit of the replacement HECM (current HUD rules require 60 percent minimum equity in the dwelling be available at the time of purchase of the HECM) and funds needed to purchase a replacement HECM. Then, it subtracts the remaining equity and price differential payment from the total funds needed to arrive at the estimated HECM supplemental payment eligibility. Section 24.401(f) Rental Assistance Payment This paragraph has been re-lettered (g) due to the insertion of the new § 24.401(e) on HECMs. Section 1521(c)(1) of MAP-21 amends Section 204(a) of the Uniform Act by increasing the statutory limit for rental assistance payments to $7,200. Similarly, section 1521(b)(2) of MAP-21 also amends Section 203(a)(1) of the Uniform Act by reducing the number of days a person must have owned and occupied an acquired dwelling in order to be eligible for a rental assistance payment from 180 days to 90 days. The FHWA proposes to modify this paragraph and the appendix to reflect both changes. Section 24.402 Replacement Housing Payments for 90-Day Tenants and Certain Others The FHWA proposes to strike “90-day occupants,” which included tenants or owner-occupants, from this section's current title and replace it with “tenants and certain others.” The FHWA is proposing this change to be consistent with the heading “Tenants and certain others” contained in both the Uniform Relocation Assistance and Real Property Acquisition Polices Act as amended in 1987, and the statute Title 42, U.S.C. Chapter 61, section 4624— Replacement housing for tenants and certain others. Section 24.402(a) Eligibility Section 24.402 of the regulations sets out criteria for when 90-day tenants and certain others displaced from a dwelling are eligible for a payment for rental assistance or down payment assistance. Section 1521(b)(2) of MAP-21 amends Section 204(a) of the Uniform Act by increasing the statutory limit for replacement housing payment to tenants to $7,200. The FHWA proposes to update the amount listed in this paragraph accordingly. Section 24.402(a)(2) Eligibility The FHWA proposes to add “the date he or she moves from the displacement dwelling” to the end of § 24.402(a) and to delete the remainder of this paragraph. These changes are necessary because of changes to eligibility criteria for owners in Section 1521(a)(1) of MAP-21, which reduced the number of days a person must have owned and occupied a displacement dwelling in order to be eligible for a replacement housing payment from 180 days to 90 days. This change eliminates the need or requirement to discuss eligibilities for homeowners of more than 90 but less than 180 days. Consequently, FHWA is proposing to reorganize the section. Section 24.402(b) Rental Assistance Payment Section 1521(a)(1) of MAP-21 amends Section 204(a) of the Uniform Act by increasing the statutory limit for replacement housing payment to tenants to $7,200. The FHWA proposes to update the amount listed in this paragraph accordingly. The FHWA also proposes to correct the web link to the Uniform Act Low Income Limits Survey, which currently points to an inactive website. Section 24.402(b)(1)(i) Rental Assistance Payment The FHWA has received some questions about calculating and developing a base monthly rental. Developing a base monthly rental requires information on costs of utilities. The question that arises is whether the allowance in § 24.402(b)(1)(i) of using the “. . . estimated average monthly cost of utilities for a comparable replacement dwelling” can be applied, as opposed to the actual utility costs, when determining base monthly rental of the displacement dwelling. The FHWA believes that Agencies should attempt to secure actual costs of utilities from the displaced person in order to calculate and determine base monthly rental, to the extent practicable. Should those costs not be available, the Agency should so document its file and then utilize an estimate to develop a base monthly rental at the displacement dwelling. The FHWA invites comments and suggestions as to what estimates may best approximate actual monthly utility costs and what additional guidance or support may be needed in meeting the requirements of this paragraph. Section 24.402(b)(2) Rental Assistance Payments The FHWA is proposing to revise the low income calculation example in the appendix by striking reference to “(a)(14)” and inserting to refer to the definition of “household income” in § 24.2(a). Section 24.402(b)(3) Manner of Disbursement The FHWA proposes to add the word “replacement” to housing in this paragraph to clarify the type of housing covered. The sentence states that the full amount of the rental assistance payment vests with a tenant regardless of the later condition or location of the replacement dwelling. Section 24.402(c) Down Payment Assistance Payment Section 204 of the Uniform Act sets criteria for when 90-day tenants and certain others displaced from a dwelling are eligible for a payment for rental assistance or down payment assistance. Section 1521(c)(1) of MAP-21 amends Section 204(c) of the Uniform Act by increasing the statutory limit for down payment assistance to $7,200. The FHWA proposes to update the amount listed in this paragraph and the appendix accordingly. The FHWA also proposes to modify this paragraph by deleting “180 days” and inserting “90 days” in each place it appears in this paragraph and appendix. The FHWA also proposes to add clarifying language in the appendix to describe rental assistance payment eligibilities for a displaced homeowner who fails to meet the 90-day occupancy requirements. Section 24.403(a)(1) Additional Rules Governing Replacement Housing Payments Comparable replacement housing must be inspected whenever possible. The selected comparable replacement dwelling should be inspected with a walk through or physical inspection. Reliance on an exterior visual inspection of comparables, or examination and review of an MLS listing's details, does not, in most cases, constitute a full DSS inspection as required by the regulation and may not reveal deficiencies in a property that would render it not decent, safe, and sanitary. The FHWA proposes to modify language in this paragraph to require that Agencies inform displaced persons in writing of the reason the full DSS inspection of the comparable replacement dwelling was not made and that, should a displaced person select one of the comp [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2019-25558. Public record. Not legal advice.