Right-of-Way Program Administration

Federal RegisterDec 21, 1999

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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 130, 480, 620, 630, 635, 645, 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: Final rule.

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SUMMARY: This document amends the right-of-way regulations for

federally assisted transportation programs administered under title 23,

United States Code. The FHWA clarifies and reduces Federal regulatory

requirements and places primary responsibility for a number of approval

actions at the State level. Conforming revisions are made to several

regulatory parts to remove outdated, redundant, and unnecessary

content. Also, 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 departments (STDs) in

locating regulations applicable to a specific point of interest.

DATES: This final rule is effective January 20, 2000.

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

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

the 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 may 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 follow the instructions online for more information and

help.

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

computer modem, and suitable communications software from the

Government Printing Office's Electronic Bulletin Board Service at (202)

512-1661. Internet users may reach the Office of the Federal Register's

home page at: http://www.nara.gov/fedreg and the Government Printing

Office's webpage at: http://www.access.gpo.gov/nara.

Background

The FHWA began the process of revising its regulations with an

advance notice of proposed rulemaking (ANPRM) published on November 6,

1995 (60 FR 56004). As a first step in the comprehensive revision of

the regulations, the FHWA removed obsolete and redundant parts by

publishing an interim final rule on April 25, 1996, at 61 FR 18246.

This action removed from title 23, CFR, all of parts 720 and 740, and

portions of parts 710 and 712. Comments received in response to the

ANPRM also identified the need for a comprehensive rewrite of the

existing real estate program regulations.

[[Page 71285]]

An NPRM, published at 63 FR 71238, on December 24, 1998, proposed

to revise the regulations and arrange them to follow the same sequence

as the development and implementation of a Federal-aid project and

thereby assist the public and State transportation departments in

locating regulations applicable to a specific point of interest. The

NPRM also proposed to clarify the State-Federal partnership.

The FHWA provides funds to the States and other organizations to

reimburse them for the costs they have incurred in constructing

highways and other transportation related projects. Regulations dealing

with reimbursement and management of right-of-way (ROW) are contained

in 23 CFR parts 710 through 713.

Discussion of Comments

ANPRM of November 6, 1995

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

groups or organizations, and 16 from STDs.

Based on the responses received, the FHWA concluded that the (ROW)

regulations needed a comprehensive revision. During an initial review,

the FHWA identified several parts of the regulations that were no

longer needed.

NPRM of December 24, 1998

Twenty-eight comments were received in response to the December 24,

1998, NPRM. Comments were received from 25 States, one non-profit

organization, a law firm representing five States, one individual, and

a subcommittee of a right-of-way organization. The FHWA gratefully

acknowledges the effort required to provide comprehensive comments,

endorsements, and recommendations relating to the regulation.

Most commenters strongly supported the need to reorganize the

regulations. A couple of comments noted that the regulations should not

be reorganized and that reorganization could mean additional work for

some States which had provided cross references by section number to

the FHWA regulations. It was concluded that the advantages of

completing a comprehensive rewrite of regulations which are nearly 25

years old outweighed the time and expense of changing cross references.

Since the new regulations provide significant revisions, the text of

State right-of-way manuals would require some revision in any event.

The NPRM proposed that Federal funds be allowed to participate in

all costs necessitated by State law. Most commenters stated that they

welcomed the reduction in Federal involvement in State matters and that

since State laws varied widely, it made sense to reimburse based on

actual State expenditures. Some commenters believed that allowing

Federal reimbursement of costs not previously permitted would encourage

State legislatures and courts to expand both property damage payments

and costs of acquisition, such as, payments of property owners legal

fees, court costs, and perhaps loss of business costs. In developing

the final rule, the FHWA concluded that neither the FHWA nor STDs may

have sufficient resources to monitor a wide variety of State laws and

court decisions and that an across-the-board reimbursement of State

expenditures required by State law is the most practical and equitable

solution.

As the comment of the Vermont STD correctly noted, business loss

can partially overlap ``damages'' and there is great difficulty trying

to isolate and separate items in which the FHWA could not previously

participate versus items where participation was permitted. Court

awards most often do not clearly separate the various elements of

damages making it difficult to isolate historically ``noncompensable''

damages.

Several comments were received suggesting that specific wording

should be revised to more closely mirror language used by individual

States. In completing the final rule, the FHWA selected language which

it believes is best understood and utilized by the majority of the

States. Nuances in language can be accommodated in the State procedural

manual.

Several comments were received that questioned the procedures for

receiving either credit or reimbursement for early acquisitions. These

comments typically reflected that the reader believed that the FHWA was

too restrictive, and that there should be no impediment to States

moving forward to acquire right-of-way and receive reimbursement or

credit at a subsequent date. There were also comments that FHWA should

advance Federal funds for use in corridor preservation.

At the present time the FHWA believes that TEA-21 offers a great

deal of flexibility in considering early acquisition in selected

situations. The FHWA was aware of the statutory requirements which must

be met in order to obtain either credit or reimbursement at a later

date, as well as, lawsuits which have challenged early acquisition

approaches and has adopted an approach which it considers prudent, and

cautious, while fully implementing the intent of TEA-21. As additional

experience is gained in the application of the TEA-21 principles, the

FHWA will update the web page for ``Questions and Answers'' which will

be developed continually to facilitate implementation of early

acquisition concepts.

A limited number of comments were received questioning the FHWA's

determination under the Unfunded Mandates Reform Act that the proposed

regulation would result in estimated annual costs of less than $100

million. The regulation as developed should result in a reduction of

costs to State, local, or tribal governments since they will not have

to maintain staff to conduct surveillance to identify claims for

elements of property damage that are not eligible for Federal

reimbursement under the old regulation. The reduction in Federal

approval actions should also result in cost savings by eliminating the

time requirements for such approval.

The final rule also permits reimbursement to States for property

acquisition costs and administrative costs which are not now

reimbursed, so it is a benefit to those States.

A comment was received questioning the need for a reversionary

clause when property is transferred at no cost by an STD to be used for

public purposes under title 23, U.S.C. The FHWA concluded that where

property to be used for public purposes is transferred at no cost, good

stewardship and recognition of the public trust dictates that the

property be placed in the use for which the disposal was approved. The

reversionary clause is the most effective method to assure that use.

One comment was received concerning the need to insure that FHWA

approval is required for the disposal of property at nominal or no

costs in exceptional circumstances. Several comments were received

suggesting that no FHWA approval for any disposal should be mandated.

The requirement for FHWA approval is based on the requirements of 23

U.S.C. 156(b) and remains in the final rule. The rule's intent is that

disposals for less than fair market value are to be the exception,

rather than the rule. Language has been added encouraging that the

criteria for disposals at less than fair market value be clearly stated

in the STD manuals.

It is our intent to maintain current program guidance and

information in an electronic format with ``Questions and Answers'' and

policy interpretations. Technical air space guidance will also be

maintained in this manner. The URL for up-to-date guidance is: http://

www.fhwa.dot.gov/realestate/index.htm. This final rule seeks to further

clarify and reduce Federal regulatory

[[Page 71286]]

requirements and to place primary responsibility for a number of

approval actions at the State level. The adoption of these regulatory

changes impacts other parts of 23 CFR, and in developing the final

rule, attention has been given to conforming revisions as necessary.

Such other 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; 23 CFR

part 620, Subpart B, Relinquishment of highway facilities; 23 CFR part

630; 23 CFR part 635; and 23 CFR part 645.

This final 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 part 710,

subpart A of this final rule. This consolidates material now found in

several locations of the existing regulations.

The following table highlights the reordering of the content and

intended revisions and redesignations for each subpart of the existing

regulation:

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Old part, subpart or section New part, subpart or section

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Part 130, subpart D.................... Removed.

Part 480............................... Removed.

620.202................................ 620.202 [Revised].

620.203(j)............................. 620.203(j) [Revised].

630.106(c)(3).......................... 630.106(c)(3) [Revised].

635.307(b)(3).......................... 635.307(b)(3) [Revised].

645.103(c), 645.111(c) and (d), and 645.103(c), 645,111(c) and (d),

645.113(i). and 645.113(i) [Revised].

710, subpart A [Reserved].............. 710, subpart A [Added].

710, subpart B (Secs. 710.201-710.205) 710.201.

710, subpart C (710.301-710.306)....... 710.203.

712, subpart A [Reserved].............. Removed.

712, subpart B (712.201-712.204)....... 710, subpart C.

712, subpart C [Reserved].............. Removed.

712, subpart D (712.401-712.408)....... 710.105, 710.203.

712, subpart F (712.601-712.606)....... 710.509.

712, subpart G (712.701-712.703)....... Removed.

713, subpart A (713.101-713.103)....... 710.101-710.103.

713, subpart B (713.201-713.205)....... 710.405.

713, subpart C (713.301-713.308)....... 710.407-710.409.

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Part and Section Analysis

Part 130, Subpart D--Advance Right-of-Way Revolving Funds

Part 130, subpart D is removed from title 23, CFR, because section

1211 (e) of the TEA-21 eliminated the right-of-way revolving fund.

Part 480--Use and Disposition of Property Previously Acquired by States

for Withdrawn Interstate Segments

Part 480 is removed from title 23, CFR, since section 1303 of the

TEA-21 now allows States to retain the proceeds for the lease or sale

of real estate on Federal projects as long as the proceeds are used for

title 23, U.S.C., type projects. Other provisions of part 480 are

obsolete.

Part 620, Subpart B--Relinquishment of Highway Facilities

Part 620 is amended to clarify that it is applicable only to

transfers of highway facilities for continued highway use. Approvals

for other disposals and modifications of access are governed by 23 CFR

part 710.

Section 630.106(c)(3)

In Sec. 630.106(c)(3), the reference to ``23 CFR part 712'' is

revised to read ``23 CFR part 710'' to provide a current reference.

Section 635.307(b)(3)

In Sec. 635.307(b)(3), the reference to ``23 CFR 713, subpart A''

is revised to read ``23 CFR 710.403'' to provide a current citation.

Part 645--Utilities

Sections 645.103(c) and 645.111 (c) and (d) are amended to revise

the reference ``23 CFR chapter I, subchapter H, Right-of-Way and

Environment'' to read ``23 CFR 710.203.'' Section 645.113(i) is amended

to revise the reference ``23 CFR part 712, the Acquisition Functions''

to read ``23 CFR 710.503.''

Parts 710--Right-of-Way--General; 712--The Acquisition Function; and

713--Right-of-Way--The Property Management Function

Parts 710, 712, and 713 are removed in their entirety, and replaced

by six new subparts under a new part 710. The reorganization includes:

subpart A--General; subpart B--Program Administration; subpart C--

Project Development; subpart D--Real Property Management; subpart E--

Property Acquisition Alternatives; and subpart F--Federal Assistance

Programs. These new sections clarify the purpose of the regulation and

include a new definition section. Detailed requirements and rules have

been replaced by a provision that will allow States to include their

acquisition process in a State manual to be approved by the FHWA.

This final rule seeks to further clarify and reduce Federal

regulatory requirements and to place primary responsibility for a

number of approval actions at the State level. It substantially revises

the order of regulatory materials and completes the process of removing

redundant, outdated, and unnecessary content from the existing rule.

Part 710, Subpart A--General

A unified purpose and applicability statement along with

definitions is included in subpart A of this final rule. This

consolidates material now found in several locations of the existing

regulations.

Part 710, Subpart B--Program Administration

Section 710.201 clarifies that the STD has the overall

responsibility to assure compliance with State and Federal laws and

regulations. The methods and practices of the STDs are to be specified

in ROW operations manuals submitted for approval by the FHWA no later

than January 1, 2001, and certified as current every five years

thereafter.

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

[[Page 71287]]

maintain the manual and complete the various right-of-way phases in

accordance 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. Alternative methods to

achieve program objectives have been explored in developing this final

rule, specifically, efforts were made to reduce the level of Federal

oversight, required recordkeeping, and mandated reporting. 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.

Section 710.203(b)(1) expands Federal reimbursement for right-of-

way acquisition costs beyond the current limit of ``generally

compensable'' costs. Under former regulations, the States and the

Federal government were required to ascertain which types of

acquisition costs were 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 the 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.

Since 1991, the kinds of activities that are eligible for Federal-

aid funds have greatly increased, and States have received greatly

expanded discretion in the use of Federal-aid funds. This final rule

echoes statutory and policy changes that have occurred throughout the

rest of the Federal-aid program for the surface transportation program.

Part 710, Subpart C--Project Development

The sections in this subpart were taken from part 712, subpart B

and revised to provide a brief chronology of the sequence and actions

which are necessary to qualify for Federal-aid funding. Section 710.305

provides new agency requirements mandating that in areas in which Clean

Air Act conformity determination has lapsed, special coordination is

necessary prior to initiating new projects or continuing activity on

existing projects. Section 710.311 includes a new TEA-21 provision

which provides that an oversight agreement between the STD and the FHWA

must specify responsibility for the review of projects at the plan,

specification, and estimate (PS&E) stage.

Part 710, Subpart D--Real Property Management

The sections in this subpart were taken from part 712, subpart B

and revised to provide that the STD will charge fair market value for

the use or disposal of real estate acquired with title 23, U.S.C.,

funding. Exceptions to the requirement to collect fair market value or

rent may be approved by the FHWA. The air rights guidelines are to be

maintained on the Internet. The STD may retain the Federal share of

rental and disposal proceeds if used for projects eligible under title

23, U.S.C.

Section 710.401 provides that property disposals or any other use

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

concurrence, but this would no longer be required for non-Interstate

highways. Instead, the STD ROW manual would specify procedures for the

leasing, maintenance and disposal of property rights, including access

control.

Section 710.403(e) of the final rule 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 STD, if used for projects

that would be eligible for funding under title 23, U.S.C. Section

710.403(d) of the final rule requires that, with certain exceptions,

the STD 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 provision of 23 U.S.C.

156, as amended by section 1303 of TEA-21. This revision reduces

administrative burdens on States and the FHWA and gives 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, income from all property uses and dispositions

is treated in a uniform manner.

The final rule in Sec. 710.405 continues to specify procedures the

States will be required to follow in use of airspace on the Interstate

facilities which have received funding under title 23, U.S.C., in any

way. However, these airspace requirements will no longer be mandated

for non-Interstate highways.

The final rule in Sec. 710.405 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, will be developed and updated

through an airspace technical guidance document. An advantage of an

airspace technical guidance document is that it is easier to update.

Part 710, Subpart E--Property Acquisition Alternatives

The sections in this subpart were taken from part 712, subparts E

and F. Subpart G relating to the right-of-way revolving fund is removed

since TEA-21 eliminated the revolving fund.

The final rule in Sec. 710.501 also includes a TEA-21 provision

(section 1301) that the value of property acquired by State 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 regulation fulfills TEA-21 statutory provisions by

allowing a 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 process.

As a basis for protective buying, significant increased cost may be

used as a justification under Sec. 710.503(b).

The final rule in Secs. 710.505 and 710.507 contains separate

sections for property donations by private parties and contributions by

State or local governments to clearly distinguish between these

distinct actions, both of which can generate credits for the State or

local matching share of a project.

The final rule in Sec. 710.513(b) 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 (Public Law 91-645, 84 Stat. 1894,

[[Page 71288]]

as amended) apply in the acquisition of the property.

In general, FHWA approval actions in Sec. 710.409 and 710.405 for

disposal of property and use of air space were revised in the final

rule to more closely parallel the assumptions of responsibilities

principles, as outlined in section 1305 of TEA-21 to stress FHWA

approval actions on the Interstate system.

Part 710, Subpart F--Federal Assistance Programs

Sections 710.601 and 710.603 were taken from part 712, subpart F

and revised to provide updated references to new legislation and to

conform the regulatory references to this final rule.

Part 712--The Acquisition Function

Part 712 is removed from title 23, CFR. The provisions of current

part 712, subpart B, concerning general provisions and project

procedures are relocated and revised as new part 710, subpart C,

project development.

We are removing current part 712, subparts A and C (empty reserved

slots) and G, right-of-way revolving fund. Subpart G was eliminated by

section 1211(e) of the TEA-21. 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 information in current part 712, subpart D regarding

administrative and legal settlements and court awards is relocated to

new Secs. 710.105 (Definitions) and 710.203 (Funding and

reimbursement).

Federal land transfers and direct Federal acquisition policies and

procedures found in current part 712, subpart E are relocated to new

part 710, subpart F (Federal assistance programs), Secs. 710.601 and

710.603.

Current part 712, subpart F, concerning functional replacement of

real property in public ownership is relocated to new part 710, subpart

E, specifically Sec. 710.509.

A major objective of the final rule 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 (STD) in

effectively using the regulation.

The final rule also clarifies the State-Federal partnership, which

is not considered a major or significant change.

Part 713--Right-of-Way--The Property Management Function

Part 713 is removed from title 23, CFR. Current subpart A

concerning purpose, applicability, policies and procedures of property

management are relocated to new part 710, subpart A (Secs. 710.101 and

710.103) and included in the general statement for real property.

Current part 713, subpart B regarding management of airspace on

Federal-aid highway systems for non-highway purposes is relocated to

new part 710 at Sec. 710.405 (air rights on the Interstate). The FHWA

approval for the use of airspace is limited to Interstate projects.

Disposal of rights-of-way provisions found in current part 713, subpart

C are relocated to new part 710, subpart D (real property management)

at Secs. 710.407 (leasing) and 710.409 (disposals). This section

clarifies that income received by the STDs may be retained when used

for projects eligible under title 23, U.S.C.

Provisions relating to the real estate issues contained in sections

1301 and 1303 of the TEA-21 have been incorporated into these

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 projects eligible under title 23, U.S.C.; and

(3) eliminating the right-of-way revolving fund and clarifying credit

for private property donations.

Rulemaking Analyses and Notices

All comments received before the close of business on March 24,

1999, were considered in developing the final rule and late comments

were considered to the extent practicable. The comments are available

for examination using docket number FHWA 98-4315 in the docket room at

the above address or via the electronic addresses provided above.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866, nor is

it a significant regulatory action within the Department of

Transportation's regulatory policies and procedures. The economic

impact of this rulemaking will be minimal; therefore, a full regulatory

evaluation is not required. The FHWA does not consider this action to

be significant because these regulations simplify, clarify, reorganize,

and/or eliminate existing requirements. The 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 of State law. Neither the individual nor cumulative

impact of this action is significant because this rule does not alter

the funding levels available to the States for Federal or federally-

assisted programs covered by the TEA-21.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the agency has evaluated the effects of this rule on small

entities, such as local agencies and businesses. This action would

merely update and clarify existing procedures. Also, this rule reduces

Federal regulatory requirements and allows State procedures to be

utilized. Local entities could also adopt State procedures for

advancing Federal-aid projects under the State transportation plan.

Accordingly, the FHWA certifies that this action would not have a

significant economic impact on a substantial number of small entities.

Environmental Impact

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

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

concludes that this action will not have any effect on the quality of

the human and natural environment.

Executive Order 13132 (Federalism)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 13132, dated August 4, 1999, and

it has been determined this action does not have a substantial direct

effect or sufficient federalism implications on States that would limit

the policymaking discretion of the States. Nothing in this document

directly preempts any State law or regulation.

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 of 1995

This rule does not impose a Federal mandate resulting in the

expenditure by

[[Page 71289]]

State, local, and tribal governments, in the aggregate, or by the

private sector, of $100 million or more in any one year. (2 U.S.C. 1531

et seq.).

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA), 49 U.S.C. 3501-

3520, Federal agencies must determine whether requirements contained in

rulemaking are subject to the information collection provisions of the

PRA.

The FHWA has determined that this final rule places a requirement

on the STDs, for Right-of-Way Manuals, that requires Office of

Management and Budget (OMB) approval.

The FHWA is allowing STDs to develop and submit the manuals by

January 1, 2001. The FHWA estimates the annual burden of this

requirement is approximately 4,000 hours on a national basis.

A request for OMB approval of the manual requirement will be

submitted in the near future.

Executive Order 12988 (Civil Justice Reform)

This action meets applicable standards in sections 3(a) and 3(b)(2)

of Executive Order 12988, Civil Justice Reform, to minimize litigation,

eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

We have analyzed this action under Executive Order 13045,

Protection of Children from Environmental Health Risks and Safety

Risks. This rule is not an economically significant rule and does not

concern an environmental risk to health or safety that may

disproportionately affect children.

Executive Order 12630 (Taking of Private Property)

This rule will not effect a taking of private property or otherwise

have taking implications under Executive Order 12630, Governmental

Actions and Interference with Constitutionally Protected Property

Rights.

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 130

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

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

23 CFR Part 480

Grant programs--transportation, Highways and roads,

Intergovernmental relations, Mass transportation, Rights-of-way,

Reporting and recordkeeping requirements.

23 CFR Part 620

Grant programs--transportation, Highways and roads, Rights-of-way.

23 CFR Part 630

Government contracts, Grant programs--transportation, Highways and

roads, Project authorization, Reporting and recordkeeping requirements.

23 CFR Part 635

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

acquisition, Reporting and recordkeeping requirements.

23 CFR Part 645

Grant programs--transportation, Highways and roads, Rights-of-way,

Utilities.

23 CFR Parts 710, 712, and 713

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

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

For the reasons stated in the preamble, and under the authority of

23 U.S.C. 107, 108, 111, and 315, the FHWA amends 23 CFR chapter I as

set forth below:

PART 130--[REMOVED]

1. Remove part 130.

PART 480--[REMOVED]

2. Remove part 480.

PART 620--[AMENDED]

3. The authority citation for part 620 continues to read as

follows:

Authority: 23 U.S.C. 315 and 318; 49 CFR 1.48; and 23 CFR 1.32.

4. Revise Sec. 620.202 to read as follows:

Sec. 620.202 Applicability.

The provisions of this subpart apply to highway facilities where

Federal-aid funds have participated in either right-of-way or physical

construction costs of a project. The provisions of this subpart apply

only to relinquishment of facilities for continued highway purposes.

Other real property disposals and modifications or disposal of access

rights are governed by the requirements of 23 CFR part 710.

5. Revise Sec. 620.203(j) to read as follows:

Sec. 620.203 Procedures.

* * * * *

(j) If a relinquishment is to a Federal, State, or local government

agency for highway purposes, there need not be a charge to the said

agency, nor in such event any credit to Federal funds. If for any

reason there is a charge, the STD may retain the Federal share of the

proceeds if used for projects eligible under title 23 of the United

States Code.

PART 630--[AMENDED]

6. Revise the authority citation for part 630 to read as follows:

Authority: 23 U.S.C. 105, 106, 109, 115, 315, 320, and 402(a);

23 CFR 1.32; 49 CFR 1.48(b).

Sec. 630.106 [Amended]

7. Amend Sec. 630.106(c)(3) by revising the citation ``23 CFR part

712'' to read ``23 CFR part 710''.

PART 635--[AMENDED]

8. Revise the authority citation for part 635 to read as follows:

Authority: 23 U.S.C. 101(note), 109, 112, 113, 114, 116, 119,

128, and 315; 31 U.S.C. 6505; 42 U.S.C. 3334, 4601 et seq.; sec.

1041(a), Pub. L. 102-240, 105 Stat. 1914; 23 CFR 1.32; 49 CFR

1.48(b).

Sec. 635.307 [Amended]

9. Amend Sec. 635.307(b)(3) by revising the citation ``23 CFR part

713, subpart A'' to read ``23 CFR 710.403''.

PART 645--[AMENDED]

10. The authority citation for part 645 continues to read as

follows:

Authority: 23 U.S.C. 101, 109, 111, 116, 123, and 315; 23 CFR

1.23 and 1.27; 49 CFR 1.48(b); and E.O. 11990, 42 FR 26961 (May 24,

1977).

11. Amend Secs. 645.103(c) and 645.111(c) and (d) by revising the

words ``23 CFR chapter I, subchapter H, Right-of-Way and Environment''

to read ``23 CFR 710.203''.

11-A. Amend Sec. 645.113 (i) by revising the words ``23 CFR part

712, the Acquisition Functions'' to read ``23 CFR 710.503''.

PART 712--[REMOVED]

12. Remove part 712.

[[Page 71290]]

PART 713--[REMOVED]

13. Remove part 713.

14. Revise part 710 to read as follows:

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 Interstate

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 the requirements in this part is to ensure

the prudent use of Federal funds under title 23 of the United States

Code 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 of the

United States Code is used. The part applies to programs administered

by the Federal Highway Administration. Where Federal funds are

transferred to other Federal agencies to administer, those agencies'

procedures may be utilized. Additional guidance is available

electronically at the FHWA Real Estate services website: http://

www.fhwa.dot.gov/realestate/index.htm

Sec. 710.105 Definitions.

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

same meaning where used in this part, except as modified in this

section.

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

meaning:

Access rights means the right of ingress to and egress from a

property that abuts a street or highway.

Acquiring agency means a State agency, other entity, or person

acquiring real property for title 23 of the United States Code

purposes.

Acquisition means activities to obtain an interest in, and

possession of, real property.

Air rights means real property interests defined by agreement, and

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

Airspace means 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 or project

boundaries.

Damages means 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 means 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 of the

United States Code.

Donation means 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 means acquisition of real property by State or

local governments in advance of Federal authorization or agreement.

Easement means 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 means the National Highway System as defined in 23 U.S.C.

103(b).

Oversight agreement means the project approval and agreement

concluded between the State and the FHWA to outline which projects will

be monitored at the plans, specifications, and estimate stage by FHWA

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

Real property means 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 means 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 means real property and rights therein used for the

construction, operation, or maintenance of a transportation or related

facility funded under title 23 of the United States Code.

Settlement means 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. This term includes

the following:

(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 means 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, for public purposes, under State

law.

State transportation department (STD) means the State highway

department, transportation department, or other State transportation

agency or commission to which title 23 of the United States Code funds

are apportioned.

Uneconomic remnant means a remainder property which the acquiring

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

Uniform Act means the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970, as amended (Public Law 91-

646, 84 Stat.

[[Page 71291]]

1894), 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.

funding from the highway trust fund shall maintain a manual describing

its right-of-way organization, policies, and procedures. 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. The State manuals should be

developed and updated, as a minimum, to meet the following schedule:

(1) The STD shall prepare and submit for approval by FHWA an up-to-

date Right-of-Way Operations Manual by no later than January 1, 2001.

(2) Every five 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 submit the updated materials for approval by 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 of

the United States Code 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 of

the United States Code 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 a

language 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 except

as provided in Sec. 710.501 for early acquisition:

(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) (42

U.S.C. 4321 et seq.) clearance, while other work involving contact with

affected property owners must normally be deferred until after NEPA

approval, except as provided in 23 CFR 710.503 for protective buying

and hardship acquisition; and in 23 CFR 710.501, early acquisition.

Appraisal completion may be authorized as preliminary right-of-way

activity prior to completion of the environmental document; and

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

law requirements.

(b) Direct eligible costs. Federal participation in real property

costs is limited to the costs of property incorporated into the final

project and the associated direct costs of acquisition, 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 the following:

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

cost associated with the use of local public agencies.

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

appraisal review, cost estimates, relocation planning,

[[Page 71292]]

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.

(v) The cost of minimum payments and appraisal waiver amounts

included in the State approved manual.

(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, actual or

constructive, 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 (available at http://

www.whitehouse.gov/omb/circulars). This includes State costs incurred

for managing or providing technical guidance, consultation or oversight

on projects where right-of-way services are performed by a political

subdivision or others.

(6) Property not incorporated into a project funded under title 23

of the United States Code. The cost of property not incorporated into a

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, sites for disposal of hazardous materials, environmental

mitigation, environmental banking activities, or last resort housing.

(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 Reimbursement, 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 that used in

the acquisition of other privately owned property.

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.

(d) Indirect costs. Indirect costs may be claimed under the

provisions of OMB Circular A-87. Indirect costs may be included on

Federal-aid billings after the indirect cost rate has been approved by

FHWA.

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

FHWA's planning regulations contained in 23 CFR part 450. In addition,

air quality non-attainment areas must meet the requirements of the U.S.

EPA Transportation conformity regulations (40 CFR parts 51 and 93).

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 National Environmental Policy Act (NEPA) process, as described

in FHWA's NEPA regulations in 23 CFR part 771, normally must be

conducted and concluded with a record of decision (ROD) or equivalent

before Federal funds can be placed under agreement for acquisition of

right-of-way. Where applicable, a State also must complete Clean Air

Act (42 U.S.C. 7401 et seq.) project level conformity analysis. In

areas in which the Clean Air Act conformity determination has lapsed,

acquiring agencies must coordinate with Federal Highway Administration

for special instructions prior to initiating new projects or continuing

activity on existing projects. 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 23 CFR 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 23 CFR 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 23 CFR 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

[[Page 71293]]

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 of

the United States Code 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 alternative 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.

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 of the United States Code funding, except as provided in

paragraphs (d) (1) through (5) of this section. Since property no

longer needed for a project was acquired with public funding, the

principle guiding disposal would normally be to sell the property at

fair market value and use the funds for transportation purposes. The

term fair market value as used for acquisition and disposal purposes is

as defined by State statute and/or State court decisions. Exceptions to

the general requirement for 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 overall public interest for social, environmental,

or economic purposes; nonproprietary governmental use; or uses under 23

U.S.C. 142(f), Public Transportation. The STD manual may include

criteria for evaluating disposals at less than fair market value.

Disposal for public purposes may also be at fair market value. The STD

shall submit requests for such exceptions to the FHWA in writing.

(2) Use by public utilities in accordance with 23 CFR part 645.

(3) Use by Railroads in accordance with 23 CFR part 646.

(4) Use for Bikeways and pedestrian walkways in accordance with 23

CFR part 652.

(5) Use for transportation projects eligible for assistance under

title 23 of the United States Code.

(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 of the United States Code. Where project

income derived from the sale or lease of excess property is used for

subsequent title 23 projects, use of the income does not create a

Federal-aid project.

(f) No FHWA approval is required for disposal of property which is

located outside of the limits of the right-of-way if Federal funds did

not participate in the acquisition cost of the property.

(g) Highway facilities in which Federal funds participated in

either the right-of-way or construction may be relinquished to another

governmental agency for continued highway use under the provisions of

23 CFR 620, subpart B.

Sec. 710.405 Air rights on the Interstate.

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

Interstate for non-highway purposes are included in this section.

Although this section deals specifically with approval actions on the

Interstate, any use of airspace contemplated by a STD must assure that

such occupancy, use, or reservation is in the public interest and does

not impair the highway or interfere with the free and safe flow of

traffic as provided in 23 CFR 1.23.

(1) This subpart applies to Interstate facilities which received

title 23 of the United States Code assistance in any way.

(2) This subpart does not apply to the following:

(i) Non-Interstate highways.

(ii) Railroads and public utilities which cross or otherwise occupy

Federal-aid highway right-of-way.

(iii) Relocations of railroads or utilities for which reimbursement

is claimed under 23 CFR part 140, subparts E and H.

(iv) 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 Interstate system 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.

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 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

Airspace Guidelines at: http://www.fhwa.dot.gov/realestate/index.htm.

Sec. 710.407 Leasing.

(a) Leasing of real property acquired with title 23 of the United

States Code, 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,

[[Page 71294]]

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.

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(c).

(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. The notifications can be accomplished

by placing the appropriate agencies on the States' disposal

notification listing.

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 the FHWA, the deed shall provide

for reversion of the property for failure to continue public ownership

and use. Where property is sold at fair market value no reversion

clause is required. Disposal actions described in 23 CFR 710.403(d)(1)

for less than fair market value require a public interest determination

and FHWA approval, consistent with that section.

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 the FHWA are not eligible

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

for 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 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 State complied with the requirements of title VI of the

Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4);

(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.

(7) The original project agreement covering the project was

executed on or after June 9, 1998.

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

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

regarding the NEPA process.

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 determination has been completed for any property subject to

the provisions of 23 U.S.C. 138; and

(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

limit future transportation choices. A significant increase in cost may

be considered as an element justifying a protective purchase.

request for a hardship acquisition based on a property owner's written

submission that:

(1) Supports 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 STD. 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 STD 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

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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 following: either 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.

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.

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 that the acquisition satisfied the conditions

in 23 CFR 710.501(b); 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 which is offered for credit,

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. Property may also be presented for project

use with the understanding that no credit for its use is sought. The

STD shall assure that the acquisition satisfied the conditions in 23

CFR 710.501(b), 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

right to an 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.

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

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 of the United States

Code 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) Displacements for TEA are subject to the

Uniform Act.

(2) Acquisitions for TEA are subject to the Uniform Act except as

provided in paragraphs (b)(3), (b)(4), and (b)(5) of this section.

(3) 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).

(4) 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.]

(5) 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

[[Page 71296]]

requirements of the Uniform Act apply as if the agency had acquired the

property itself.

(6) 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.

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 projects eligible under title 23 of the United States

Code.

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 CFR part 777.

(b) Environmental acquisitions or displacements by both public

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

are 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, if it is to be used to mitigate impacts created by a Federal-

aid highway project.

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. When the FHWA determines

that a strong Federal transportation interest exists, these provisions

may also be applied to highway projects that are eligible for Federal-

aid under Chapters 1 and 2 of title 23, of the United States Code, and

to highway-related transfers that are requested by a State in

conjunction with a military base closure under the Defense Base Closure

and Realignment Act of 1990 (Public Law 101-510, 104 Stat. 1808, as

amended).

(b) Sections 107(d) and 317 of title 23, of the United States Code

provide for the transfer of lands or interests in lands owned by the

United States to an STD or its nominee for highway purposes.

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)), and 23 U.S.C. 138.

(e) If the 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. The

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 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. Alternative arrangements may be made for the sale or

reversion or restoration of the lands no longer required as part of a

memorandum of understanding or separate agreement.

Sec. 710.603 Direct Federal acquisition.

(a) The provisions of this section apply to any land and or

improvements needed in connection with any project 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 STDs 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 STDs 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 part 771 of

this chapter;

(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

[[Page 71297]]

(10) A statement that assures compliance with the applicable

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

possession document required by State law 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 this section,

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. The deed shall be recorded by the grantee

in the appropriate land record office, and the FHWA shall be advised of

the recording date.

Issued on: December 13, 1999.

Kenneth R. Wykle,

Federal Highway Administrator.

[FR Doc. 99-32908 Filed 12-20-99; 8:45 am]

BILLING CODE 4910-22-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.