Right-of-way Program Administration

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 710, 712, and 713

[FHWA Docket No FHWA-98-4315]

RIN 2125-AE44

Right-of-way Program Administration

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The FHWA is proposing to amend its right-of-way regulations

for federally assisted transportation programs. The FHWA requests

comments on the proposed regulations and any other issues believed to

be relevant to the administration of the real estate aspects of the

Federal-aid highway program. The regulations are arranged to follow the

same sequence as the development and implementation of a Federal-aid

project to assist the public and State transportation department (STD)

in locating regulations applicable to a specific point of interest.

This proposal is intended to clarify the State-Federal partnership.

DATES: Comments in response to this NPRM must be received on or before

March 24, 1999.

ADDRESSES: Submit written, signed comments to the docket number

appearing at the top of this document. You must submit your comments to

the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street,

SW., Washington, DC 20590-0001. All comments will be available for

examination at the above address between 10 a.m. and 5 p.m., e.t.,

Monday through Friday, except Federal holidays. To receive notification

of receipt of comments you must include a pre-addressed, stamped

envelope or postcard.

FOR FURTHER INFORMATION CONTACT: Mr. James E. Ware, (202) 366-2019,

Office of Real Estate Services, HRE-20, or Mr. Reid Alsop, Office of

Chief Counsel, HCC-31, (202) 366-1371. Office hours are from 7:45 a.m.

to 4:15 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

Internet users can access all comments received by the U.S. DOT

Dockets, Room PL-401, by using the universal resource locator (URL):

http://dms.dot.gov. It is available 24 hours each day, 365 days each

year. Please

[[Page 71239]]

follow the instructions online for more information and help.

An electronic copy of this document may be downloaded by using a

modem and suitable communications software from the Government Printing

Office's Electronic Bulletin Board Service at (202) 512-1661. Internet

users may reach the Federal Register's home page at: http://

www.nara.gov/fedreg and the Government Printing Office's database at:

http://www.access.gpo.gov/nara.

Background

The FHWA provides funds to the States and other organizations to

reimburse them for the cost they have incurred in completing highways

and other transportation related projects. Regulations dealing with

reimbursement and management of right-of-way are contained in 23 CFR

parts 710 through 713. The FHWA acknowledged that the regulations were

outdated and in need of updating by publishing an advance notice of

proposed rulemaking on November 6, 1995, at 60 FR 56004 under Docket

No. 95-18 (transferred to U.S. DOT Docket Facility and scanned as FHWA

Docket No. FHWA-97-2266).

Twenty comments were received: 2 from individuals, 2 from private

groups or organizations, and 16 from State transportation agencies.

Based on the responses received, the FHWA concluded the right-of-

way (ROW) regulations needed a comprehensive revision. During an

initial review, the FHWA identified several parts of the regulations

that were no longer needed.

As a first step in the comprehensive revision, the FHWA removed the

obsolete and redundant parts by publishing an interim final rule on

April 25, 1996, 61 FR 18246. This action removed from 23 CFR all of

parts 720 and 740, and portions of parts 710 and 712.

This NPRM begins the second and final stage of the updating

process. It seeks to further clarify and reduce Federal regulatory

requirements and to place primary responsibility for a number of

approval actions at the State level. If these regulatory changes are

adopted, other parts of 23 CFR will be affected, and in developing the

final rule, attention will be provided to conforming revisions as

necessary. Such parts include: 23 CFR part 130, subpart D, Advance

right-of-way revolving funds; 23 CFR part 480, Use and disposition of

property previously acquired by States for withdrawn Interstate

segments; and 23 CFR part 620, subpart B, Relinquishment of highway

facilities.

This proposed rule substantially revises the order of regulatory

materials and completes the process of removing redundant, outdated,

and unnecessary content from the existing rule. A unified purpose and

applicability statement along with definitions is included in Subpart A

of the proposed rule. This consolidates material now found in several

locations of the existing regulations.

The following table highlights the reordering of content and

intended action for each subpart of the existing regulation:

------------------------------------------------------------------------

Old section New section

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710 Subpart B, State Highway Department 710.201--State

Responsibilities. responsibilities.

710 Subpart C, Reimbursement Provisions...... 710.203--Funding and

reimbursement.

712 Subpart B, General Provisions and Project 710 Subpart C, Project

Procedures. Development (See also

Subpart E, Property

Acquisition

Alternatives)

712 Subpart D, Administrative Settlements, Definitions retained in

Legal Settlements, and Court Awards. 710.105, Eligibility for

reimbursement in

710.203. See also 49 CFR

part 24.

712 Subpart E, Federal Land Transfers and 710.601--Federal land

Direct Federal Acquisition. transfer, and 710.602--

Direct Federal

acquisition.

712 Subpart F, Functional Replacement of Real 710.509--Functional

Property in Public Ownership. replacement.

712 Subpart G, Right-of-way Revolving Fund... Removed.

713 Subpart A, Property Management........... 710 Subpart D, Real

Property Management.

713 Subpart B, Management of Airspace........ 710.405--Air rights.

713 Subpart C, Disposal of Right-of-way...... 710.407--Disposals.

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Alternative methods to achieve program objectives have been

explored in developing this NPRM. Specifically, efforts were made to

reduce the level of Federal oversight, required recordkeeping, and

mandated reporting. However, no change is made to the longstanding

statutory requirement that States be suitably staffed and equipped to

perform surface transportation functions as a prerequisite for Federal

financial assistance. Nor have we changed the requirement for States to

maintain State right-of-way operating manuals.

Many of the existing provisions were designed to provide project

level oversight through a series of Federal monitoring steps and

Federal approval actions. This NPRM would eliminate or reduce the level

of Federal approval actions and would rely on State ROW operating

manuals to guide the implementation of appropriate practices. The

proposed regulation contains a provision for States to certify that

their ROW manuals are current and conform to Federal requirements.

Alternatives to this procedure were considered. One option would be to

retain the current FHWA approval process. We solicit comments on these

and other alternative approaches that would assure current and accurate

ROW operating manuals.

State ROW manuals are considered to be a sound basis for

implementing appropriate procedures at the State and local level. It is

a State responsibility to maintain the manual and complete the various

right-of-way phases in a manner which assures compliance with Federal

law and regulations. The manual provides a documented reference for use

by State ROW personnel, local public agencies, affected individuals,

and the FHWA.

The FHWA believes that the need for project level surveillance has

diminished since the era of the Interstate program when Federal funding

was allocated on the basis of the cost to complete the system. Now

States receive a fixed allocation of Federal funds based largely on

formula. Hence, it is clearly in the States' best interest to use their

Federal-aid funds prudently in all areas, including the acquisition,

management, and disposition of real property. Since 1991, States have

been accorded a wide array of eligible activities for Federal-aid, as

well as greatly expanded discretion in the use of Federal-aid funds.

This NPPM echoes the policy changes that have occurred throughout the

rest of the Federal-aid program for surface transportation.

[[Page 71240]]

A major objective of the NPRM is to reorder the regulation so that

it follows the same sequence as the development and implementation of a

Federal-aid project. This rearrangement in chronological order should

aid the public and State transportation departments in locating the

parts of the regulation needed to answer their questions.

The proposed revisions clarify the State-Federal partnership and

are not considered a major or significant change.

Provisions relating to the real estate issues contained in the

Transportation Equity Act for the 21st Century (TEA-21) Pub.L. 105-178,

112 Stat. 107, have been incorporated in these proposed regulations,

notably: (1) Allowing credit to the non-Federal share when a State or

local government contributes land to a project; (2) allowing States to

retain income from sale or lease of real property, as long as the

income is used for title 23, U.S.C., purposes; and (3) eliminating the

ROW revolving fund.

Current procedures require States to submit a right-of-way

certification and availability statement as part of construction PS&E

approval. The NPRM accommodates TEA-21 oversight standards by

incorporating the need for submission and review of these documents

into the oversight agreement required by revised 23 U.S.C. 106.

The NPRM would expand Federal reimbursement for right-of-way

acquisition costs, beyond the current limit of ``generally

compensable'' costs. Under current regulations, States and the Federal

government must ascertain which types of acquisition costs are

generally compensable across the nation and limit Federal reimbursement

to those activities. This limits State flexibility, imposes a ``one

size fits all'' philosophy, and creates administrative burdens for both

States and the FHWA. State and Federal staff time devoted to isolating

and extracting these costs does not add value to the overall

transportation program accomplishments. Moreover, States should have

greater discretion in determining the best use of formula-allocated

Federal funds for acquisition purposes, as they now have in virtually

every other aspect of projects funded with Federal-aid. This proposed

rule provides that FHWA will reimburse the costs of acquisition and

damages in accordance with State law.

Three variations of this reimbursement policy were considered in

developing the NPRM. First, the present regulation could be retained as

it currently exists. This would require that the FHWA and the States

continue to exclude from Federal reimbursement elements of damage not

generally compensable in eminent domain, such as circuity of travel,

loss of business or goodwill, and those State required acquisition

costs now specifically excluded, such as property owner attorney or

appraisal fees. A second alternative could be to allow all valid

property damage claims but to retain the limitation on reimbursement of

cost elements related to the property acquisition as required by State

law, such as property owner appraisal and attorney fees. Under this

second alternative, State law, both statute and common, regarding

compensability would be relied upon to determine if loss of business or

goodwill, diversion of traffic, or other such value related damages are

eligible for reimbursement. A third approach would retain the generally

compensable standard relating to eligible property damage claims, but

permit reimbursement of all usual costs and disbursements associated

with property acquisition as required by State law. Comments are

solicited on these alternatives or other alternatives to establish the

appropriate scope of Federal-aid participation in acquisition costs.

The NPRM includes a TEA-21 provision that the Federal share of

proceeds from the sale or lease of real estate originally acquired as

part of a Federal-aid project (not limited to airspace) could be

retained by the State, if used for projects that would be eligible for

funding under title 23, U.S.C. The NPRM would require, with certain

exceptions, that the State charge fair market value for the sale or

lease of real property if the property was acquired with Federal

assistance made available from the highway trust fund. This reflects

the provisions of 23 U.S.C. 156 as amended by section 1303 of TEA-21.

This revision would reduce administrative burdens on States and the

FHWA and give States and local governments greater flexibility in use

of funds, while also protecting Federal interests by ensuring funds are

used on purposes permitted under title 23, U.S.C. This procedure

applies to all disposals, including surplus property from withdrawn

Interstate projects, processed subsequent to June 9, 1998, the

effective date of TEA-21. Under the rule as proposed, income from all

property uses and dispositions would be treated in a uniform manner.

The NPRM also includes a TEA-21 provision that the value of

property acquired by States or local governments before project

agreement could be credited toward the State share of project cost, as

long as certain conditions, including those relating to the

Environmental process, have been met. Prior to TEA-21, private property

donated to a Federal project could be credited to the non-Federal

share, but no such credit was permitted for publicly owned property.

The proposed regulation fulfills TEA-21 statutory provisions by

allowing the State credit toward the non-Federal share of the cost of a

project, and mandating the credit in the case of locally-owned

property. The conditions which must be met to allow the credit would

include careful observance of the environmental assessment process.

The NPRM contains separate sections for property donations by

private parties and contributions by State or local government to

clearly distinguish between these distinct actions, both of which can

generate credit for the State or local matching share of a project.

The NPRM continues to specify procedures the States would be

required to follow in use of airspace on the Interstate and other

National Highway System (NHS) facilities which have received funding

under title 23, U.S.C., in any way. However, these airspace

requirements would no longer be mandated for non-NHS highways.

The NPRM relocates a significant amount of detail relating to the

management of airspace. The detailed provisions for airspace,

particularly the detailed geometric requirements for the use of

property over or under a highway, would be developed and updated

through an official technical advisory, which would be referenced in

the final rule. Your comments are solicited regarding the possible use

of a technical advisory for these requirements rather than the detailed

provisions included in current regulations. An advantage of a technical

advisory is that it would be easier to update. Your comments are also

solicited regarding additional elements which should be included in

either an advisory or in a modified regulation.

The NPRM eliminates the future use of the right-of-way revolving

fund. The revolving fund was a pool of money that could be used by

States to acquire right-of-way in advance of the time that State

funding was available. The revolving fund was eliminated by TEA-21. The

only remaining provisions needed for closing out this fund would deal

with repayments which will be based on the transition provisions

included in sec. 1211(e)(2) of TEA-21.

The NPRM provides that property disposals or any other use of

right-of-way along the Interstate requires the State to obtain FHWA

concurrence, but this would no longer be required for

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non-Interstate highways. Instead, the State ROW manual would specify

procedures for the leasing, maintenance and disposal of property

rights, including access control.

The NPRM clarifies that where property is to be used for

environmental mitigation or environmental banking the provisions of the

Uniform Relocation Assistance and Real Property Acquisition Policies

Act (Pub.L. 91-646, 84 Stat. 1894, as amended) apply in the acquisition

of the property.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination using the docket number appearing at the top of this

document in the docket room at the above address or via the electronic

addresses provided above. The FHWA will file comments received after

the comment closing date in the docket and will consider late comments

to the extent practicable. The FHWA may, however, issue a final rule at

any time after the close of the comment period. In addition to late

comments, the FHWA will also continue to file in the docket relevant

information becoming available after the comment closing date, and

interested persons should continue to examine the docket for new

material.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this proposed action would not

constitute a significant regulatory action within the meaning of

Executive Order 12866, nor would it be a significant regulatory action

within the Department of Transportation's regulatory policies and

procedures. It is anticipated that the economic impact of this

rulemaking will be minimal; therefore, a full regulatory evaluation is

not required. The FHWA does not consider this proposed action to be

significant because these regulations would simplify, clarify, and

reorganize existing requirements. The proposed procedures would simply

implement current law and eliminate constraints on FHWA reimbursement

for certain right-of-way expenditures when those expenditures are made

under provisions within State law. Neither the individual nor the

cumulative impact of this action would be significant because this

action would not alter the funding levels available to the States for

Federal or federally assisted programs covered by TEA-21.

Those primarily impacted by the proposed changes have received

briefings of the revisions to be proposed at the last two annual Right-

of-Way National Conferences sponsored by the American Association of

State Highway Transportation Officials (AASHTO). During the most recent

conference in April 1998, the FHWA briefed State right-of-way staffs on

the changes being contemplated and asked them to comment when the NPRM

is issued.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,

5 U.S.C. 601-612), the agency has evaluated the effects of this

proposed rule on small entities and anticipates that this action would

not have a significant economic impact on a substantial number of small

entities. This proposed action would merely update and clarify existing

procedures. The NPRM would also reduce Federal regulatory requirements

and allow State procedures to be utilized. Local entities could also

adopt State procedures for advancing Federal-aid projects under the

State transportation plan. We specifically invite comments on the

projected economic impact of this proposal, and will actively consider

such information before completing our Regulatory Flexibility Act

analysis when adopting final rules.

Environmental Impacts

The FHWA has also analyzed this proposed action for the purpose of

the National Environmental Policy Act (42 U.S.C. 4321 et seq.), and

anticipates that this action would not have any effect on the quality

of the human and natural environment.

Executive Order 12612 (Federalism Assessment)

This proposed action has been analyzed in accordance with the

principles and criteria contained in Executive Order 12612, and it has

been determined that this action would not have sufficient Federalism

implications to warrant the preparation of a Federalism assessment.

This rule would reduce the level of Federal approval actions by placing

greater responsibility at the State or local level. Throughout the

proposed regulation there is an effort to keep administrative burdens

to a minimum.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.205

Highway planning and construction. The regulations implementing

Executive Order 12372 regarding intergovernmental consultation on

Federal programs and activities apply to this program.

Unfunded Mandates Reform Act

Under Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub.

L. 104-4, 109 Stat. 48), the FHWA must prepare a budgetary impact

statement on any proposal or final rule that includes a Federal mandate

that may result in estimated annual costs to State, local, or tribal

government of $100 million or more. The FHWA has determined that the

proposed revisions contained in this NPRM would not result in estimated

costs of $100 million or more to State, local, or tribal governments.

This proposed action would simplify and reduce existing requirements.

Accordingly no additional costs to State, local, or tribal governments

are anticipated as a result of the proposed action.

Paperwork Reduction Act

This proposal contains no new collection of information

requirements for purposes of the Paperwork Reduction Act of 1995, 44

U.S.C. 3501-3520. This NPRM would reduce the level of recordkeeping for

the disposal of properties and would permit States to retain income for

use and disposals of property thereby eliminating the administrative

burden of crediting funds to Federal projects.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN contained in the heading of

this document can be used to cross reference this action with the

Unified Agenda.

List of Subjects

23 CFR Part 710

Grant programs--transportation, Highways and roads, Real property

acquisition, Reporting and recordkeeping requirements, Rights-of-way.

23 CFR Parts 712 and 713

Grant programs--transportation, Highways and roads, Reporting and

recordkeeping requirements, Rights-of-way.

In consideration of the foregoing, and under the authority of 23

U.S.C. 315, the FHWA proposes to amend title 23, Code of Federal

Regulations, chapter I, as set forth below.

1. Part 710 is revised to read as follows:

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PART 710--RIGHT-OF-WAY AND REAL ESTATE

Subpart A--General

Sec.

710.101 Purpose.

710.103 Applicability.

710.105 Definitions.

Subpart B--Program Administration

710.201 State responsibilities.

710.203 Funding and reimbursement.

Subpart C--Project Development

710.301 General.

710.303 Planning.

710.305 Environmental analysis.

710.307 Project agreement.

710.309 Acquisition.

710.311 Construction advertising.

Subpart D--Real Property Management

710.401 General.

710.403 Management.

710.405 Air rights on the NHS.

710.407 Leasing.

710.409 Disposals.

Subpart E--Property Acquisition Alternatives

710.501 Early acquisition.

710.503 Protective buying and hardship acquisition.

710.505 Real property donations.

710.507 State and local contributions.

710.509 Functional replacement of real property in public

ownership.

710.511 Transportation enhancements.

710.513 Environmental mitigation.

Subpart F--Federal Assistance Programs

710.601 Federal land transfer.

710.603 Direct Federal acquisition.

Authority: 23 U.S.C. 101(a), 107, 108, 111, 114, 133, 142(f),

145, 156, 204, 210, 308, 315, 317, and 323; 42 U.S.C. 2000d et seq.,

4633, 4651-4655; 49 CFR 1.48(b) and (cc), 18.31, and parts 21 and

24; 23 CFR 1.32.

Subpart A--General

Sec. 710.101 Purpose.

The primary purpose of these requirements is to ensure the prudent

use of Federal funds under title 23, U.S.C., in the acquisition,

management, and disposal of real property. In addition to the

requirements of this part, other real property related provisions apply

and are found at 49 CFR part 24.

Sec. 710.103 Applicability.

This part applies whenever Federal assistance under title 23,

U.S.C., is used to acquire real property, unless stated otherwise.

Sec. 710.105 Definitions.

(a) Terms defined in 49 CFR part 24 and 23 CFR part 1 have the same

meaning when used in this part, unless otherwise defined in paragraph

(b) of this section.

(b) The following terms when used in this part have the following

meaning:

Access rights. The right of ingress and egress from a property that

abuts a street or highway.

Acquiring agency. A State agency, other entity, or person acquiring

real property for title 23, U.S.C., purposes.

Acquisition. Activities to obtain an interest in, and possession

of, real property.

Air rights. Real property interests defined by agreement, and

conveyed by deed, lease, or permit for the use of airspace.

Airspace. That space located above and/or below a highway or other

transportation facility's established grade line, lying within the

horizontal limits of the approved right-of-way boundaries.

Damages. The loss in value attributable to remainder property due

to severance or consequential damages, as limited by State law, that

arise when only part of an owner's property is acquired.

Disposal. The sale of real property or rights therein, including

access or air rights, when no longer needed for highway right-of-way or

other uses eligible for funding under title 23, U.S.C.

Donation. The voluntary transfer of privately owned real property

for the benefit of a public transportation project without compensation

or with compensation at less than fair market value.

Early acquisition. Acquisition of real property by State or local

governments in advance of Federal authorization or agreement.

Easement. An interest in real property that conveys a right to use

a portion of an owner's property or a portion of an owner's rights in

the property.

NHS. The National Highway System as defined in 23 U.S.C. 103(b).

Oversight agreement. The project approval and oversight agreement

required by 23 U.S.C. 106(c)(3).

Real property. Land and any improvements thereto, including but not

limited to, fee interests, easements, air or access rights, and the

rights to control use, leasehold, and leased fee interests.

Relinquishment. The conveyance of a portion of a highway right-of-

way or facility by a State highway department to another government

agency for continued transportation use. (See 23 CFR part 620, subpart

B.)

Right-of-way. Real property and rights therein used for the

construction, operation, or maintenance of a transportation or related

facility funded under title 23, U.S.C.

Settlement. The result of negotiations based on fair market value

in which the amount of just compensation is agreed upon for the

purchase of real property or an interest therein.

(1) An administrative settlement is a settlement reached prior to

filing a condemnation proceeding based on value related evidence,

administrative consideration, or other factors approved by an

authorized agency official.

(2) A legal settlement is a settlement reached by a responsible

State legal representative after filing a condemnation proceeding,

including stipulated settlements approved by the court in which the

condemnation action had been filed.

(3) A court settlement or court award is any decision by a court

that follows a contested trial or hearing before a jury, commission,

judge, or other legal entity having the authority to establish the

amount of compensation for a taking under the laws of eminent domain.

State agency. A department, agency, or instrumentality of a State

or of a political subdivision of a State; any department, agency, or

instrumentality of two or more States or of two or more political

subdivisions of a State or States; or any person who has the authority

to acquire property by eminent domain under State law.

State transportation department (STD). The State highway

department, transportation department, or other State transportation

agency or commission to which title 23, U.S.C., funds are apportioned.

Uneconomic Remnant. A remainder property which the acquiring agency

has determined has little or no utility or value to the owner.

Uniform Act. The Uniform Relocation Assistance and Real Property

Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601 et seq.),

and the implementing regulations at 49 CFR part 24.

Subpart B--Program Administration

Sec. 710.201 State responsibilities.

(a) Organization. Each STD shall be adequately staffed, equipped,

and organized to discharge its real property-related responsibilities.

(b) Program oversight. The STD shall have overall responsibility

for the acquisition, management, and disposal of real property on

Federal-aid projects. This responsibility shall include assuring that

acquisitions and disposals by a State agency are made in compliance

with legal requirements of State and Federal laws and regulations.

(c) Right-of-Way (ROW) Operations Manual. Each STD shall maintain a

manual describing its right-of-way organization, policies, and

procedures.

[[Page 71243]]

The manual shall describe functions and procedures for all phases of

the real estate program, including appraisal and appraisal review,

negotiation and eminent domain, property management, and relocation

assistance. The manual shall also specify procedures to prevent

conflict of interest and avoid fraud, waste, and abuse. The manual

shall be in sufficient detail and depth to guide State employees and

others involved in acquiring and managing real property.

(1) The STD shall prepare and make available to FHWA an up-to-date

Right-of-Way Operations Manual by no later than September 30, 2000.

(2) In October 2000, and every three years thereafter, the chief

administrative officer of the STD shall certify to the FHWA that the

current ROW operations manual conforms to existing practices and

contains necessary procedures to ensure compliance with Federal and

State real estate law and regulation.

(3) The STD shall update the manual periodically to reflect changes

in operations and make the updated materials available to the FHWA.

(d) Compliance responsibility. The STD is responsible for complying

with current FHWA requirements whether or not its manual reflects those

requirements.

(e) Adequacy of real property interest. The real property interest

acquired for all Federal-aid projects funded pursuant to title 23,

U.S.C., shall be adequate for the construction, operation, and

maintenance of the resulting facility and for the protection of both

the facility and the traveling public.

(f) Recordkeeping. The acquiring agency shall maintain adequate

records of its acquisition and property management activities.

(1) Acquisition records, including records related to owner or

tenant displacements, and property inventories of improvements acquired

shall be in sufficient detail to demonstrate compliance with this part

and 49 CFR part 24. These records shall be retained at least 3 years

from either:

(i) The date the State receives Federal reimbursement of the final

payment made to each owner of a property and to each person displaced

from a property; or

(ii) The date a credit toward the Federal share of a project is

approved based on early acquisition activities of the State.

(2) Property management records shall include inventories of real

property considered excess to project needs, all authorized uses of

airspace, and other leases or agreements for use of real property

managed by the STD.

(g) Procurement. Contracting for all activities required in support

of State right-of-way programs through use of private consultants and

other services shall conform to 49 CFR 18.36.

(h) Use of other public land acquisition organizations or private

consultants. The STD may enter into written agreements with other

State, county, municipal, or local public land acquisition

organizations or with private consultants to carry out its authorities

under paragraph (b) of this section. Such organizations, firms, or

individuals must comply with the policies and practices of the STD. The

STD shall monitor any such real property acquisition activities to

assure compliance with State and Federal law and requirements and is

responsible for informing such organizations of all such requirements

and for imposing sanctions in cases of material non-compliance.

(i) Approval actions. Except for the Interstate system, the STD and

the FHWA will agree on the scope of property related oversight and

approval actions that the FHWA will be responsible for under this part.

The content of the most recent Oversight Agreement shall be reflected

in the State Right-of-Way Operations Manual. The Oversight Agreement,

and thus the Manual, will indicate for which non-Interstate Federal-aid

project submission of materials for review and approval are required.

(j) Approval of just compensation. The amount determined to be just

compensation shall be approved by a responsible official of the

acquiring agency.

(k) Description of acquisition process. The STD shall provide

persons affected by projects or acquisitions advanced under title 23,

U.S.C., with a written description of its real property acquisition

process under State law and of the owner's rights, privileges, and

obligations. The description shall be written in clear, non-technical

language and, where appropriate, be available in languages other than

English.

Sec. 710.203 Funding and reimbursement.

(a) General conditions. The following conditions are a prerequisite

to Federal participation in the costs of acquiring real property:

(1) The project for which the real property is acquired is included

in an approved Statewide Transportation Improvement Program (STIP);

(2) The State has executed a project agreement;

(3) Preliminary acquisition activities, including a title search

and preliminary property map preparation necessary for the completion

of the environmental process, can be advanced under preliminary

engineering prior to National Environmental Policy Act (NEPA)

clearance, while other work involving contact with affected property

owners must be deferred until after NEPA approval, except as provided

in Sec. 710.503 for protective buying and hardship acquisition; and

(4) Costs have been incurred in conformance with State and Federal

law and requirements.

(b) Eligible costs. Federal participation in real property costs is

limited to the costs of property incorporated into the final project,

unless provided otherwise. Participation is provided for:

(1) Real property acquisition. Usual costs and disbursements

associated with real property acquisition required under the laws of

the State, including:

(i) The cost of contracting for private acquisition services or the

cost associated with the use of local public agencies.

(ii) The cost of pre-acquisition activities such as appraisal,

appraisal review, cost estimates, relocation planning, right-of-way

plan preparation, title work, and similar necessary right-of-way

related work.

(iii) The cost to acquire real property, including incidental

expenses.

(iv) The cost of administrative settlements in accordance with 49

CFR 24.102(i), legal settlements, court awards, and costs incidental to

the condemnation process.

(2) Relocation assistance and payments. Payments made incidental to

and associated with the displacement from acquired property under 49

CFR part 24.

(3) Damages. The cost of severance and/or consequential damages to

remaining real property resulting from a partial acquisition of real

property for a project based on elements compensable under applicable

State law.

(4) Property management. The net cost of managing real property

prior to and during construction to provide for maintenance,

protection, and the clearance and disposal of improvements until final

project acceptance.

(5) Payroll-related expenses and technical guidance. Salary and

related expenses of employees of an acquiring agency are eligible costs

in accordance with OMB Circular A-87.1 This includes State

costs incurred for managing or providing technical

[[Page 71244]]

guidance, consultation or oversight on projects where right-of-way

services are performed by a political subdivision or others.

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\1\ OMB circulars may be obtained from the EOP Publications

Office, 725 17th Street, NW., Room 2200, Washington, DC 20503 and at

OMB's Internet home page at http://www.whitehouse.gov/WH/EOP/omb.

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(6) Property not incorporated into a transportation project. The

cost of property not incorporated into a transportation project may be

eligible for reimbursement in the following circumstances:

(i) General. Costs for construction material sites, property

acquisitions to a logical boundary, or for eligible transportation

enhancement, environmental mitigation, or environmental banking

activities.

(ii) Easements not incorporated into the right-of-way. The cost of

acquiring easements outside the right-of-way for permanent or temporary

use.

(7) Uneconomic remnants. The cost of uneconomic remnants purchased

in connection with the acquisition of a partial taking for the project

as required by the Uniform Act.

(8) Access rights. Payment for full or partial control of access on

an existing highway (i.e., one not on a new location), based on

elements compensable under applicable State law. Participation does not

depend on another real property interest being acquired or on further

construction of the highway facility.

(9) Utility and railroad property. (i) The cost to replace

operating real property owned by a displaced utility or railroad and

conveyed to an STD for a highway project, as provided in 23 CFR part

140, Subpart I, Reimbursement for Railroad Work, and 23 CFR part 645,

Subpart A, Utility Relocations, Adjustments and Reimbursements, and 23

CFR part 646, Subpart B, Railroad-Highway Projects.

(ii) Participation in the cost of acquiring non-operating utility

or railroad real property shall be in the same manner as other

privately owned property.

(c) Withholding payment. The FHWA may withhold payment under the

conditions in 23 CFR 1.36 where the State fails to comply with Federal

law or regulation, State law, or under circumstances of waste, fraud,

and abuse.

Subpart C--Project Development

Sec. 710.301 General.

The project development process typically follows a sequence of

actions and approvals in order to qualify for funding. The key steps in

this process are provided in this subpart.

Sec. 710.303 Planning.

State and local governments conduct metropolitan and statewide

planning to develop coordinated, financially constrained system plans

to meet transportation needs for local and statewide systems, under

provisions contained in 23 CFR part 450. Projects must be included in

an approved State Transportation Improvement Program (STIP) in order to

be eligible for Federal-aid funding.

Sec. 710.305 Environmental analysis.

The NEPA process as described in 23 CFR part 771 normally must be

conducted and concluded with a record of decision (ROD), FONSI, or CE

determination before Federal funds can be placed under agreement for

acquisition of right-of-way. Where applicable, a State also must

complete Clean Air Act project level conformity analysis. At the time

of processing an environmental document, a State may request

reimbursement of costs incurred for early acquisition, provided

conditions prescribed in 23 U.S.C. 108(c) and Sec. 710.501, are

satisfied.

Sec. 710.307 Project agreement.

As a condition of Federal-aid, the STD shall obtain FHWA

authorization in writing or electronically before proceeding with any

real property acquisitions, including hardship acquisition and

protective buying (see Sec. 710.503). The STD must prepare a project

agreement in accordance with 23 CFR part 630, subpart C. The agreement

shall be based on an acceptable estimate for the cost of acquisition.

On projects where the initial project agreement was executed after June

9, 1998, a State may request credit toward the non-Federal share, for

early acquisitions, donations, or other contributions applied to the

project provided conditions in 23 U.S.C. 323 and Sec. 710.501 are

satisfied.

Sec. 710.309 Acquisition.

The process of acquiring real property includes appraisal,

appraisal review, establishing just compensation, negotiations,

administrative and legal settlements, and condemnation. The State shall

conduct acquisition and related relocation activities in accordance

with 49 CFR Part 24.

Sec. 710.311 Construction advertising.

The State must manage real property acquired for a project until it

is required for construction. Clearance of improvements can be

scheduled during the acquisition phase of the project using sale/

removal agreements, separate demolition contracts, or be included as a

work item in the construction contract. On Interstate projects, prior

to advertising for construction, the State shall develop ROW

availability statements and certifications related to project

acquisitions as required by 23 CFR 635.309. For non-Interstate

projects, the Oversight Agreement must specify responsibility for the

review and approval of the ROW availability statements and

certifications. Generally, for non-NHS projects, the State has full

responsibility for determining that right-of-way is available for

construction.

Subpart D--Real Property Management

Sec. 710.401 General.

This subpart describes the acquiring agency's responsibilities to

control the use of real property required for a project in which

Federal funds participated in any phase of the project. Prior to

allowing any change in access control or other use or occupancy of

acquired property along the Interstate, the STD shall secure an

approval from the FHWA for such change or use. The STD shall specify in

the State's ROW Operations Manual, procedures for the rental, leasing,

maintenance, and disposal of real property acquired with title 23,

U.S.C., funds. The State shall assure that local agencies follow the

State's approved procedures, or the local agencies own procedures if

approved for use by the STD.

Sec. 710.403 Management.

(a) The STD must assure that all real property within the

boundaries of a federally-aided facility is devoted exclusively to the

purposes of that facility and is preserved free of all other public or

private alternative uses, unless such additional uses are permitted by

Federal regulation or the FHWA. An alternative use must be consistent

with the continued operation, maintenance, and safety of the facility,

and such use shall not result in the exposure of the facility's users

or others to hazards.

(b) The STD shall specify procedures in the State manual for

determining when a real property interest is no longer needed. These

procedures must provide for coordination among relevant STD

organizational units, including maintenance, safety, design, planning,

right-of-way, environment, access management, and traffic operations.

(c) The STD shall evaluate the environmental effects of disposal

and leasing actions requiring FHWA approval as provided in 23 CFR part

771.

(d) Acquiring agencies shall charge current fair market value or

rent for the use or disposal of real property interests, including

access control, if those real property interests were obtained with

title 23, U.S.C., funding. Exceptions to the requirement for

[[Page 71245]]

charging fair market value may be approved in the following situations:

(1) With FHWA approval, when the STD clearly shows that an

exception is in the public interest, for: social, environmental, or

economic purposes; non-proprietary governmental use; or uses under 23

U.S.C. 142(f), Public Transportation. The STD shall submit requests for

such exceptions to the FHWA in writing.

(2) Use by public utilities is covered under separate regulations

(23 CFR part 645).

(3) Railroads may be accommodated in accordance with 23 CFR part

646.

(4) Bikeways and pedestrian walkways may be accommodated in

accordance with 23 CFR part 652.

(e) The Federal share of net income from the sale or lease of

excess real property shall be used by the STD for activities eligible

for funding under title 23, U.S.C.

Sec. 710.405 Air rights on the NHS.

(a) The FHWA policies relating to management of airspace on the NHS

for non-highway purposes are included in this section. This subpart

applies to the Interstate and to other National Highway System (NHS)

facilities which receive title 23, U.S.C., assistance in any way. This

section does not apply to non-NHS highways; to railroads and public

utilities which cross or otherwise occupy Federal-aid highway rights-

of-way, nor to relocations of railroads or utilities for which

reimbursement is claimed under subpart H and E of 23 CFR part 140; and

bikeways and pedestrian walkways as covered in 23 CFR part 652.

(b) A STD may grant rights for temporary or permanent occupancy or

use of NHS airspace if the STD has acquired sufficient legal right,

title, and interest in the right-of-way of a federally assisted highway

to permit the use of certain airspace for non-highway purposes; and

where such airspace is not required presently or in the foreseeable

future for the safe and proper operation and maintenance of the highway

facility. The STD must obtain prior FHWA approval, except for paragraph

(c) of this section.

(c) A State Agency may make lands and rights-of-way available

without charge to a publicly owned mass transit authority for public

transit purposes whenever the public interest will be served, and where

this can be accomplished without impairing automotive safety or future

highway improvements.

(d) An individual, company, organization, or public agency desiring

to use NHS airspace shall submit a written request to the STD. If the

STD recommends approval it shall forward an application together with

its recommendation and any necessary supplemental information including

the proposed airspace agreement to the FHWA. The submission shall

affirmatively provide for adherence to all policy requirements

contained in this subpart and conform to the provisions in the FHWA's

Technical Advisory on Airspace Utilization.2

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\2\ This FHWA directive is available for public inspection and

copying as prescribed at 49 CFR part 7.

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Sec. 710.407 Leasing.

(a) Leasing of real property acquired with title 23, U.S.C., funds

shall be covered by an agreement between the STD and lessee which

contains provisions to insure the safety and integrity of the federally

funded facility. It shall also include provisions governing lease

revocation, removal of improvements at no cost to the FHWA, adequate

insurance to hold the State and the FHWA harmless, nondiscrimination,

access by the STD and the FHWA for inspection, maintenance, and

reconstruction of the facility.

(b) Where a proposed use requires changes in the existing

transportation facility, such changes shall be provided without cost to

Federal funds unless otherwise specifically agreed to by the STD and

the FHWA.

(c) Proposed uses of real property shall conform to the current

design standards and safety criteria of the Federal Highway

Administration for the functional classification of the highway

facility in which the property is located.

Sec. 710.409 Disposals.

(a) Real property interests determined to be excess to

transportation needs may be sold or conveyed to a public entity or to a

private party in accordance with Sec. 710.403(d).

(b) Federal, State, and local agencies shall be afforded the

opportunity to acquire real property interests considered for disposal

when such real property interests have potential use for parks,

conservation, recreation, or related purposes, and when such a transfer

is allowed by State law. When this potential exists, the STD shall

notify the appropriate resource agencies of its intentions to dispose

of the real property interests.

(c) Real property interests may be retained to restore, preserve,

or improve the scenic beauty and environmental quality adjacent to the

transportation facility.

(d) Where the transfer of properties to other agencies at less than

fair market value for continued public use is clearly justified as in

the public interest and approved by FHWA, the deed shall provide for

reversion of the property for failure to continue public ownership and

use. Disposal actions which do not generate fair market value require a

public interest determination and FHWA approval, consistent with 23 CFR

710.403(c).

Subpart E--Property Acquisition Alternatives

Sec. 710.501 Early acquisition.

(a) Real property acquisition. The State may initiate acquisition

of real property at any time it has the legal authority to do so based

on program or project considerations. The State may undertake early

acquisition for corridor preservation, access management, or other

purposes.

(b) Eligible costs. Acquisition costs incurred by a State agency

prior to executing a project agreement with FHWA are not eligible for

Federal-aid reimbursement. However, such costs may become eligible for

reimbursement or use as a credit towards the State's share of a

Federal-aid project if the following conditions are met:

(1) The property was lawfully obtained by the State;

(2) The property was not park land described in 23 U.S.C. 138;

(3) The property was acquired in accordance with the provisions of

49 CFR part 24;

(4) The requirements of title VI of the Civil Rights Act of 1964

(42 U.S.C. 2000d et seq.) had been complied with;

(5) The State determined and the FHWA concurs that the action taken

did not influence the environmental assessment for the project,

including:

(i) The decision on need to construct the project;

(ii) The consideration of alternatives; and

(iii) The selection of the design or location; and

(6) The property will be incorporated into a Federal-aid project.

(c) Reimbursement. In addition to meeting all provisions in

paragraph (b) of this section, the FHWA approval for reimbursement for

early acquisition costs, including costs associated with displacement

of owners or tenants, requires the STD to demonstrate that:

(1) Prior to acquisition, the STD made the certifications and

determinations required by 23 U.S.C. 108(c)(2)(C) and (D); and

(2) The STD obtained concurrence from the Environmental Protection

[[Page 71246]]

Agency in the findings made under paragraph (b)(5) of this section

regarding the NEPA process.

(d) Credit. In addition to meeting all provisions in paragraph (b)

of this section, for original project agreements executed on or after

June 9, 1998, the State can apply for a credit toward the State's non-

Federal share of project costs for real property required by the

project.

Sec. 710.503 Protective buying and hardship acquisition.

(a) General conditions. Prior to the STD obtaining final

environmental approval, the STD may request FHWA agreement to provide

reimbursement for advance acquisition of a particular parcel or a

limited number of parcels, to prevent imminent development and

increased costs on the preferred location (Protective Buying) or to

alleviate hardship to a property owner or owners on the preferred

location (Hardship Acquisition), provided the following conditions are

met:

(1) The project is included in the currently approved STIP;

(2) The STD has complied with applicable public involvement

requirements in 23 CFR parts 450 and 771;

(3) A section 4(f) determination has been completed for any

property subject to the provisions of 49 U.S.C. 303, and 23 U.S.C. 138;

(4) Procedures of the Advisory Council on Historic Preservation are

completed for properties subject to 16 U.S.C. 470(f) (historic

properties).

(b) Protective buying. The STD must clearly demonstrate that

development of the property is imminent and such development would

create extreme adverse impacts on future transportation use. The FHWA

will not approve advance acquisition proposed solely for reducing

project cost.

(c) Hardship acquisitions. The STD must accept and concur in a

request for a hardship acquisition based on a property owners' written

submission that contains:

(1) Support for the hardship acquisition by providing justification

on the basis of health, safety or financial reasons that remaining in

the property poses an undue hardship compared to others; and

(2) Documents an inability to sell the property because of the

impending project, at fair market value, within a time period that is

typical for properties not impacted by the impending project.

(d) Environmental decisions. Acquisition of property under this

section shall not influence the environmental assessment of a project,

including the decision relative to the need to construct the project or

the selection of a specific location.

Sec. 710.505 Real property donations.

(a) Donations of property being acquired. A non-governmental owner

whose real property is required for a Federal-aid project may donate

the property to the acquiring agency. Prior to accepting the property,

the owner must be informed by the agency of his/her right to receive

just compensation for the property. The owner shall also be informed of

his/her right to an appraisal of the property by a qualified appraiser,

unless the Agency determines that an appraisal is unnecessary because

the valuation problem is uncomplicated and the fair market value is

estimated at no more than $2500 or the State appraisal waiver limit

approved by the FHWA, whichever is greater. All donations of property

received prior to the approval of the NEPA document must meet

environmental requirements as specified in 23 U.S.C. 323(d).

(b) Credit for donations. Donations of real property may be

credited to the State's matching share of the project. Credit to the

State's matching share for donated property shall be based on fair

market value established on the earlier of the date on which the

donation becomes effective or the date on which equitable title to the

property vests in the State. The fair market value shall not include

increases or decreases in value caused by the project. Donations may be

made at anytime during the development of a project. The STD shall

develop sufficient documentation to indicate compliance with paragraph

(a) of this section and to support the amount of credit applied. The

total credit cannot exceed the State's pro-rata share under the project

agreement to which it is applied.

(c) Donations in exchange for construction features or services. A

property owner may donate property in exchange for construction

features or services. The value of the donation is limited to the fair

market value of property donated less the cost of the construction

features or services. If the value of the donated property exceeds the

cost of the construction features or services, the difference may be

eligible for a credit to the State's share of project costs.

Sec. 710.507 State and local contributions.

(a) General. Real property owned by State and local governments

incorporated within a federally funded project can be used as a credit

toward the State matching share of total project cost. A credit cannot

exceed the State's matching share required by the project agreement.

(b) Effective date. Credits can be applied to projects where the

initial project agreement is executed after June 9, 1998.

(c) Exemptions. Credits are not available for lands acquired with

any form of Federal financial assistance, or for lands already

incorporated and used for transportation purposes.

(d) State contributions. Real property acquired with State funds

and required for federally-assisted projects may support a credit

toward the non-Federal share of project costs. The STD must prepare

documentation supporting all credits including:

(1) A certification it met the requirements in Sec. 710.501; and

(2) Justification of the value of credit applied. Acquisition costs

incurred by the State to acquire title can be used as justification for

the value of the real property.

(e) Credit for local government contributions. A contribution by a

unit of local government of real property in connection with a project

eligible for assistance under this title shall be credited against the

State share of the project at fair market value of the real property.

The STD shall assure that provisions in Sec. 710.401 have been complied

with, and that documentation justifies the amount of the credit.

Sec. 710.509 Functional replacement of real property in public

ownership.

(a) General. When publicly owned real property, including land and/

or facilities, is to be acquired for a Federal-aid highway project, in

lieu of paying the fair market value for the real property, the State

may provide compensation by functionally replacing the publicly owned

real property with another facility which will provide equivalent

utility.

(b) Federal participation. Federal-aid funds may participate in

functional replacement costs only if:

(1) Functional replacement is permitted under State law and the STD

elects to provide it.

(2) The property in question is in public ownership and use.

(3) The replacement facility will be in public ownership and will

continue the public use function of the acquired facility.

(4) The State has informed the agency owning the property of its

estimate of just compensation based on an appraisal of fair market

value and of the option to choose either just compensation or

functional replacement.

(5) The FHWA concurs in the STD determination that functional

replacement is in the public interest.

[[Page 71247]]

(6) The real property is not owned by a utility or railroad.

(c) Federal land transfers. Use of this section for functional

replacement of real property in Federal ownership shall be in

accordance with Federal land transfer provisions in subpart F of this

part.

(d) Limits upon participation. Federal-aid participation in the

costs of functional replacement are limited to costs which are actually

incurred in the replacement of the acquired land and/or facility and

are:

(1) Costs for facilities which do not represent increases in

capacity or betterments, except for those necessary to replace

utilities, to meet legal, regulatory, or similar requirements, or to

meet reasonable prevailing standards; and

(2) Costs for land to provide a site for the replacement facility.

(e) Procedures. When a State determines that payments providing for

functional replacement of public facilities are allowable under State

law, the State will incorporate within the State's ROW operating manual

full procedures covering review and oversight that will be applied to

such cases.

Sec. 710.511 Transportation enhancements.

(a) General. Section 133(b)(8) of title 23, U.S.C., authorizes the

expenditure of surface transportation funds for transportation

enhancement activities (TEA). Transportation enhancement activities

which involve the acquisition, management, and disposition of real

property, and the relocation of families, individuals, and businesses,

are governed by the general requirements of the Federal-aid program

found in titles 23 and 49 of the Code of Federal Regulations (CFR),

except as specified in paragraph (b)(3) of this section.

(b) Requirements. (1) Acquisitions and displacements for TEA are

subject to the Uniform Act.

(2) Except as provided in paragraphs (b)(3) and (b)(4) of this

section, entities acquiring real property for TEA who lack the power of

eminent domain may comply with the Uniform Act by meeting the limited

requirements under 49 CFR 24.101(a)(2).

(3) The requirements of the Uniform Act do not apply when real

property acquired for a TEA was purchased from a third party by a

qualified conservation organization, and--

(i) The conservation organization is not acting on behalf of the

agency receiving TEA or other Federal-aid funds; and

(ii) There was no Federal approval of property acquisition prior to

the involvement of the conservation organization. (``Federal approval

of property acquisition'' means the date of the approval of the

environmental document or project authorization/agreement, whichever is

earlier. ``Involvement of the conservation organization'' means the

date the organization makes a legally binding offer to acquire a real

property interest (including an option to purchase) in the property.)

(4) When a qualified conservation organization acquires real

property for a project receiving Federal-aid highway funds on behalf of

an agency with eminent domain authority, the requirements of the

Uniform Act apply as if the agency had acquired the property itself.

(5) When, subsequent to Federal approval of property acquisition, a

qualified conservation organization acquires real property for a

project receiving Federal-aid highway funds, and there will be no use

or recourse to the power of eminent domain, the limited requirements of

49 CFR 24.101(a)(2) apply.

(c) Property management. Real property acquired with TEA funds

shall be managed in accordance with the property management

requirements provided in subpart D of this part. Any use of the

property for purposes other than that for which the TEA funds were

provided must be consistent with the continuation of the original use.

When the original use of the real property is converted by sale or

lease to another use inconsistent with the original use the STD shall

assure that the fair market value or rent is charged and the proceeds

reapplied to title 23 purposes.

Sec. 710.513 Environmental mitigation.

(a) The acquisition and maintenance of land for wetlands

mitigation, wetlands banking, natural habitat, or other appropriate

environmental mitigation is an eligible cost under the Federal-aid

program. FHWA participation in wetland mitigation sites and other

mitigation banks is governed by 23 U.S.C. 103(b)(6)(M), 133(b)(11), and

23 CFR part 777.

(b) Environmental acquisitions or displacements by both public

agencies and private parties are covered by the Uniform Act when they

are for or related to (or the result of) a program or project

undertaken by a Federal agency or one that receives Federal financial

assistance. This includes real property acquired for a wetland bank, or

other environmentally related purpose, for a Federal or Federal-aid

project. Where private entities develop private wetland banks unrelated

to Federal or Federal-aid projects there would be no applicability of

Uniform Act provisions.

Subpart F--Federal Assistance Programs

Sec. 710.601 Federal land transfer.

(a) The provisions of this subpart apply to any project undertaken

with funds for the National Highway System. If the FHWA determines that

a Federal transportation interest exists, these provisions apply to

projects constructed on a Federal-aid system or that are under

provisions in chapter 2 of title 23, U.S.C.

(b) Sections 107(d) and 317 of title 23, U.S.C., provide for the

transfer of lands or interests in lands owned by the United States to a

STD or its nominee for highway purposes.

(c) The STD may file an application with the FHWA, or can make

application directly to the land-owning agency if the land-owning

agency has its own authority for granting interests in land.

(d) Applications under this section shall include the following

information:

(1) The purpose for which the lands are to be used;

(2) The estate or interest in the land required for the project;

(3) The Federal-aid project number or other appropriate references;

(4) The name of the Federal agency exercising jurisdiction over the

land and identity of the installation or activity in possession of the

land;

(5) A map showing the survey of the lands to be acquired;

(6) A legal description of the lands desired; and

(7) A statement of compliance with the National Environmental

Policy Act of 1969 (42 U.S.C. 4332, et seq.) and any other applicable

Federal environmental laws, including the National Historic

Preservation Act (16 U.S.C. 470(f)), 49 U.S.C. 303, and 23 U.S.C. 138.

(e) If FHWA concurs in the need for the transfer, the land-owning

agency will be notified and a right-of-entry requested. The land-owning

agency shall have a period of four months in which to designate

conditions necessary for the adequate protection and utilization of the

reserve or to certify that the proposed appropriation is contrary to

the public interest or inconsistent with the purposes for which such

land or materials have been reserved. FHWA may extend the four-month

reply period at the timely request of the land-owning agency for good

cause.

(f) Deeds for conveyance of lands or interests in lands owned by

the United States shall be prepared by the STD and

[[Page 71248]]

certified by an attorney licensed within the State as being legally

sufficient. Such deeds shall contain the clauses required by the FHWA

and 49 CFR 21.7(a)(2). After the STD prepares the deed, it will submit

the proposed deed with the certification to the FHWA for review and

execution.

(g) Following execution, the STD shall record the deed in the

appropriate land record office and so advise the FHWA and the concerned

agency.

(h) When the need for the interest acquired under this subpart no

longer exists, the STD must restore the land to the condition which

existed prior to the transfer and must give notice to the FHWA and to

the concerned Federal agency that such interest will immediately revert

to the control of the Federal agency from which it was appropriated or

to its assigns.

Sec. 710.603 Direct Federal acquisition.

(a) The provisions of this section apply to projects on the

Interstate System, defense access roads, public lands highways, park

roads, parkways, Indian reservation roads, and projects performed by

the FHWA in cooperation with Federal and State agencies. For projects

on the Interstate System and defense access roads, the provisions of

this part are applicable only where the State is unable to acquire the

required right-of-way or is unable to obtain possession with sufficient

promptness.

(b) To enable the FHWA to make the necessary finding to proceed

with the acquisition of the rights-of-way, the STD's written

application for Federal acquisition shall include:

(1) Justification for the Federal acquisition of the lands or

interests in lands;

(2) The date the FHWA authorized the STD to commence right-of-way

acquisition, the date of the project agreement and a statement that the

agreement contains the provisions required by 25 U.S.C. 111;

(3) The necessity for acquisition of the particular lands under

request;

(4) A statement of the specific interests in lands to be acquired,

including the proposed treatment of control of access;

(5) The STD's intentions with respect to the acquisition,

subordination, or exclusion of outstanding interests, such as minerals

and utility easements, in connection with the proposed acquisition;

(6) A statement on compliance with the provisions of 23 CFR part

771;

(7) Adequate legal descriptions, plats, appraisals, and title data;

(8) An outline of the negotiations which have been conducted by the

STD with landowners;

(9) An agreement that the STD will pay its pro rata share of costs

incurred in the acquisition of, or the attempt to acquire rights-of-

way; and

(10) A statement that assures compliance with the applicable

provisions of the Uniform Act. (42 U.S.C. 4601, et seq.)

(c) If the landowner tenders a right-of-entry at any time before

the FHWA makes a determination that the STD is unable to acquire the

rights-of-way with sufficient promptness, the STD is legally obligated

to accept such tender and the FHWA may not proceed with Federal

acquisition.

(d) If the STD obtains title to a parcel prior to the filing of the

Declaration of Taking, it shall notify the FHWA and immediately furnish

the appropriate U.S. Attorney with a disclaimer together with a request

that the action against the landowner be dismissed (ex parte) from the

proceeding and the estimated just compensation deposited into the

registry of the court for the affected parcel be withdrawn after the

appropriate motions are approved by the court.

(e) When the United States obtains a court order granting

possession of the real property, the FHWA shall authorize the STD to

take over supervision of the property. The authorization shall include,

but need not be limited to, the following:

(1) The right to take possession of unoccupied properties;

(2) The right to give 90 days notice to owners to vacate occupied

properties and the right to take possession of such properties when

vacated;

(3) The right to permit continued occupancy of a property until it

is required for construction and, in those instances where such

occupancy is to be for a substantial period of time, the right to enter

into rental agreements, as appropriate, to protect the public interest;

(4) The right to request assistance from the U.S. Attorney in

obtaining physical possession where an owner declines to comply with

the court order of possession;

(5) The right to clear improvements and other obstructions;

(6) Instructions that the U.S. Attorney be notified prior to actual

clearing, so as to afford him an opportunity to view the lands and

improvements, to obtain appropriate photographs, and to secure

appraisals in connection with the preparation of the case for trial;

(7) The requirement for appropriate credits to the United States

for any net salvage or net rentals obtained by the State, as in the

case of right-of-way acquired by the State for Federal-aid projects;

and

(8) Instructions that the authority granted to the STD is not

intended to preclude the U.S. Attorney from taking action, before the

STD has made arrangements for removal, to reach a settlement with the

former owner which would include provision for removal.

(f) If the Federal Government initiates condemnation proceedings

against the owner of real property in a Federal court and the final

judgment is that the Federal agency cannot acquire the real property by

condemnation, or the proceeding is abandoned, the court is required by

Law to award such a sum to the owner of the real property that in the

opinion of the court provides reimbursement for the owner's reasonable

costs, disbursements, and expenses, including reasonable attorney,

appraisal, and engineering fees, actually incurred because of the

condemnation proceedings.

(g) As soon as practicable after the date of payment of the

purchase price or the date of deposit in court of funds to satisfy the

award of the compensation in a Federal condemnation, the FHWA shall

reimburse the owner to the extent deemed fair and reasonable, the

following costs:

(1) Recording fees, transfer taxes, and similar expenses incidental

to conveying such real property to the United States;

(2) Penalty costs for prepayment of any preexisting recorded

mortgage entered into in good faith encumbering such real property; and

(3) The pro rata portion of real property taxes paid which are

allocable to a period subsequent to the date of vesting title in the

United States or the effective date of possession, whichever is the

earlier.

(h) The lands or interests in lands, acquired under these

provisions, will be conveyed to the State or the appropriate political

subdivision thereof, upon agreement by the STD, or said subdivision to:

(1) Maintain control of access where applicable;

(2) Accept title thereto;

(3) Maintain the project constructed thereon;

(4) Abide by any conditions which may set forth in the deed; and

(5) Notify the FHWA at the appropriate time that all the conditions

have been performed by the State.

(i) The deed from the United States to the State, or to the

appropriate political subdivision thereof, shall include the conditions

required by 49 CFR part 21.

[[Page 71249]]

The deed shall be recorded by the grantee in the appropriate land

record office, and the FHWA shall be advised of the recording date.

PART 712--[REMOVED]

2. Part 712 is removed.

PART 713--[REMOVED]

3. Part 713 is removed.

Issued on: December 16, 1998.

Kenneth R. Wykle,

Federal Highway Administrator.

[FR Doc. 98-33994 Filed 12-23-98; 8:45 am]

BILLING CODE 4910-22-U