[Federal Register Volume 63, Number 247 (Thursday, December 24, 1998)]
[Proposed Rules]
[Pages 71238-71249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33994]



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.


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.


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: 


    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 
    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
710 Subpart B, State Highway Department        710.201--State
 Responsibilities.                              responsibilities.
710 Subpart C, Reimbursement Provisions......  710.203--Funding and
712 Subpart B, General Provisions and Project  710 Subpart C, Project
 Procedures.                                    Development (See also
                                                Subpart E, Property
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
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.

    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

[[Page 71241]]

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 

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:

[[Page 71242]]


Subpart A--General

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 
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 
    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 
    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 

[[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 
    (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 

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 
    (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.

    \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.

    (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 
    (ii) Easements not incorporated into the right-of-way. The cost of 
acquiring easements outside the right-of-way for permanent or temporary 
    (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 

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 

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 

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 
    (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 
    (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

    \2\ This FHWA directive is available for public inspection and 
copying as prescribed at 49 CFR part 7.

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 

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 
    (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, 
    (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 

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 
    (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 
    (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 

    (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 
    (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 
    (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 
    (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 
    (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 
    (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 
    (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 
    (g) Following execution, the STD shall record the deed in the 
appropriate land record office and so advise the FHWA and the concerned 
    (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 
    (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 
    (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 
    (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 
    (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 
    (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; 
    (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 
    (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.


    2. Part 712 is 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]