[Federal Register Volume 79, Number 226 (Monday, November 24, 2014)]
[Proposed Rules]
[Pages 69998-70032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-27275]



[[Page 69997]]

Vol. 79

Monday,

No. 226

November 24, 2014

Part II





Department of Transportation





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Federal Highway Administration





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23 CFR Parts 635, 710, and 810





 Right-of-Way and Real Estate; Proposed Rule

Federal Register / Vol. 79 , No. 226 / Monday, November 24, 2014 / 
Proposed Rules

[[Page 69998]]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 635, 710, and 810

[Docket No. FHWA-2014-0026]
RIN 2125-AF62


Right-of-Way and Real Estate

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FHWA is proposing to amend its regulations governing the 
acquisition, management, and disposal of real property for 
transportation programs and projects receiving funds under title 23, 
United States Code. The revisions are prompted by enactment of the 
Moving Ahead for Progress in the 21st Century Act (MAP-21). Section 
1302 of MAP-21 includes new early acquisition flexibilities that can be 
used by State departments of transportation (SDOT) and other grantees 
of title 23 Federal-aid highway program funds. This proposal is 
intended to develop regulations on the use of those new early 
acquisition flexibilities. The FHWA is also proposing to update the 
real estate regulations to reflect the agency's experience with the 
Federal-aid highway program since the last comprehensive rulemaking, 
which occurred more than a decade ago. The updates include clarifying 
the Federal-State partnership, streamlining processes to better meet 
current Federal-aid highway program needs, and eliminating duplicative 
and outdated regulatory language. This notice of proposed rulemaking 
provides interested parties with the opportunity to comment on proposed 
changes to the regulations.

DATES: Comments must be received by January 23, 2015. Late-filed 
comments will be considered to the extent practicable.

ADDRESSES: To ensure that you do not duplicate your docket submissions, 
please submit them by only one of the following means:
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting 
comments.
    <bullet> Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Ave. SE., W12-140, Washington, DC 
20590-0001.
    <bullet> Hand Delivery: West Building Ground Floor, Room W12-140, 
1200 New Jersey Ave. SE., between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays. The telephone number is (202) 366-
9329.
    <bullet> Instructions: You must include the agency name and docket 
number or the Regulatory Identification Number (RIN) for the rulemaking 
at the beginning of your comments. All comments received will be posted 
without change to http://www.regulations.gov, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT: Arnold Feldman, Office of Real Estate 
Services, (202) 366-2028, email address: <a href="/cdn-cgi/l/email-protection#a1e0d3cfcecdc58fe7c4cdc5ccc0cfe1c5ced58fc6ced7"><span class="__cf_email__" data-cfemail="16576478797a723850737a727b77785672796238717960">[email protected]</span></a>; or 
Robert Black, Office of the Chief Counsel (HCC), (202) 366-1359, email 
address: <a href="/cdn-cgi/l/email-protection#c795a8a5a2b5b3e985aba6a4ac87a3a8b3e9a0a8b1"><span class="__cf_email__" data-cfemail="bdefd2dfd8cfc993ffd1dcded6fdd9d2c993dad2cb">[email protected]</span></a>; Federal Highway Administration, 1200 New 
Jersey Avenue SE., Washington, DC 20590. Office hours are from 7:30 
a.m.to 5:00 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access and Filing

    This document and all comments received may be viewed online 
through the Federal eRulemaking portal at http://www.regulations.gov. 
The Web site is available 24 hours each day, 365 days each year. An 
electronic copy of this document may also be downloaded by accessing 
the Office of the Federal Register's home page at: https://www.federalregister.gov.

Table of Contents for Supplementary Information

I. Executive Summary
II. Background
III. Section-by-Section Discussion of the Proposals

I. Executive Summary

A. Purpose of the Regulatory Action

    Many provisions in MAP-21 (Pub. L. 112-141, 126 Stat. 405) are 
designed to improve efficiency, effectiveness, and accountability in 
the development and delivery of Federal-aid transportation projects. 
This NPRM would implement section 1302 of MAP-21 by adding the new 
authorities for early acquisition of property to part 710, and 
clarifying the Federal-aid eligibility of a broad range of real 
property interests that constitute less than full fee ownership. This 
NPRM also proposes to streamline program requirements, clarify the 
Federal-State partnership, and carry out a comprehensive update of part 
710. Corresponding revisions are proposed for related regulations in 23 
CFR parts 635 and 810.
    The FHWA proposes updating 23 CFR parts 635, 710, and 810 to help 
ensure consistency in interpretation of title 23 requirements, and to 
better align the language of the regulations with current program needs 
and best practices. This proposed rule would implement changes 
identified by the public in response to the DOT's initiative on 
Implementation of Executive Order 13563, Retrospective Review and 
Analysis of Existing Rules.
    The regulations proposed in this NPRM cover a broad range of 
subjects. That breadth required FHWA to carefully consider which 
entities are affected by each new and revised provision. In general, 
the proposed regulations would apply to all grantees, their 
subgrantees, and other parties that carry out title 23 grant-funded 
programs and projects. However, some provisions in this NPRM would 
apply only to a subset of title 23 grantees. This typically occurs 
where a regulatory provision implements a part of title 23, United 
States Code, that applies only to the SDOTs.
    As a result of all these factors, FHWA concluded there was not a 
single term that could be used through the proposed regulation to 
identify the parties subject to the various provisions. The agency 
decided to use specific terms of reference in the NPRM, defined in 
proposed section 710.105, to distinguish the regulatory provisions that 
are applicable to title 23 grantees generally (thus affecting all title 
23 grantees and subgrantees, as well as any parties working on their 
behalf), from provisions applicable only to the State and or its SDOT. 
For example, when a provision in this NPRM uses only the term ``SDOT,'' 
that provision applies only to the SDOT as defined in section 710.105 
(``the State highway department, transportation department, or other 
State transportation agency or commission to which title 23, United 
States Code, funds are apportioned''). By contrast, when this NPRM uses 
the term ``State'' or ``State agency,'' the provision in question 
applies more broadly to agencies, political subdivisions, and 
instrumentalities of a State, but does not apply to every grantee or 
subgrantee of title 23 funds. This NPRM proposes definitions for the 
terms ``grantee'' and ``subgrantee.'' Those terms are used when the 
proposed provision applies to all parties receiving title 23 grant 
funding directly (grantees) or indirectly (subgrantees). For example, 
if an SDOT passes title 23 funds through to a local public agency as 
part of a subgrant agreement under which the local public agency will 
perform part or all of the project work, this proposed rule would refer 
to the local public agency as a subgrantee.
    The FHWA requests comments on how it can simplify and clarify the

[[Page 69999]]

scope and applicability of the regulatory requirements in this NPRM, 
including those suggesting alternative terminology or regulatory 
organization.

B. Summary of the Major Provisions of the Regulatory Action in Question

1. Conditional Right-of-Way (ROW) Certification
    This NPRM proposes revising section 635.309(c)(3) to provide 
broader authority to proceed with construction contract bidding in 
situations where the grantee has not yet acquired all real property 
interests needed for the project. The proposed regulation would allow 
the use of a conditional ROW certification procedure when the grantee 
has acquired all but a few of the necessary properties and would like 
to proceed with construction bidding. Unless FHWA finds it would not be 
in the public interest to do so, the new procedure would permit 
advertisement of a project as long as assurances are in place to 
protect property owners' and tenants' rights. Currently, the regulation 
provides that use of a conditional ROW certification for bidding and 
construction is permitted only under very limited circumstances. The 
FHWA believes the current regulation is more restrictive than necessary 
with respect to contract bidding, and that allowing earlier contract 
bidding as a standard flexibility would better meet project delivery 
needs while still protecting owners and tenants. However, FHWA still 
believes that in most cases, proceeding with construction work should 
occur only when all necessary ROW has been secured. For that reason, 
proceeding with construction under a conditional ROW certification 
should be permitted only under exceptional circumstances. The proposed 
regulation clarifies this strict limitation.
    The FHWA recognizes that expanding the use of conditional 
certifications could increase risks of compensation claims from 
contractors if completing acquisition or relocation activities for 
remaining parcels delays contract work. The proposed rule clarifies 
that Federal participation in the cost of such delay claims is subject 
to 23 CFR 635.124, and will be determined on a case-by-case basis, 
including consideration of whether the SDOT followed approved processes 
and procedures.
2. Federal-State Partnership and Compliance Responsibilities
    This NPRM proposes a number of revisions to clarify the roles and 
responsibilities of SDOTs, their subgrantees, and those carrying out a 
Federal-aid project on behalf of the SDOT. The FHWA believes these 
clarifications will help avoid confusion among the parties involved in 
activities funded under title 23. The changes, such as those proposed 
in sections 710.103 (Applicability) and 710.201(a) (Program oversight), 
also will better reflect the importance FHWA places on the role of its 
grantees in assuring subgrantee and contractor compliance with Federal 
requirements. Similar clarifications of grantee and subgrantee 
obligations are made throughout the regulation.
    This NPRM also proposes several revisions, including in sections 
710.201(i), 710.403(a), and 710.409(a), to clarify the use of 
Stewardship/Oversight Agreements between FHWA and the SDOT. Those 
agreements describe the roles and responsibilities of FHWA and the 
State in carrying out the Federal-aid highway program. Stewardship and 
Oversight Agreements specify which FHWA approvals required under part 
710 are assigned to the SDOT.
3. The ROW Manual
    The use of FHWA-approved procedures, such as those in the SDOT ROW 
manual, is critical to the ability of title 23 grantees and subgrantees 
to meet their compliance and oversight responsibilities. As the number 
of projects carried out by entities other than the State increased in 
recent years, FHWA recognized a need to identify ways that entities 
other than the SDOTs could demonstrate their intention to use 
acceptable ROW procedures. In proposed section 710.201(d), this NPRM 
proposes three methods for establishing approved ROW procedures for 
entities other than SDOTs. As proposed, the methods would be to follow 
the approved SDOT ROW manual, submit a ROW manual for FHWA approval, or 
submit a Real Estate Acquisition Management Plan (RAMP) for FHWA 
approval. The FHWA believes that the proposed changes will achieve the 
desired stewardship and oversight outcomes while providing practical 
options the SDOT, its partners, and other grantees and subgrantees may 
utilize.
    The NPRM also proposes to clarify how the approved ROW manual is 
used, and the topics it must cover. Among the proposed provisions is an 
explicit requirement that the approved ROW manual contain the 
procedures for determining when proposed alternative uses of ROW will 
not impact the safe operation of the facility (see proposed section 
710.403(c)), a provision clarifying the applicability of 23 CFR part 
771 environmental review requirements to disposals and agreements for 
the non-highway use of real property (see proposed section 710.403(d)), 
and a requirement that the ROW manual contain a section describing the 
criteria for evaluating requests for real property disposals at less 
than fair market value for social, environmental, or economic purposes 
(see proposed section 710.403(e)(1)). In each case, FHWA is responding 
to recurring experiences showing a need for more information in the 
regulations to help grantees understand the nature and scope of the 
requirements.
4. ROW Acquisition for Design-Build Projects
    In 2002, FHWA added provisions in 23 CFR 710.311 to address ROW 
procedures applicable to design-build projects. (67 FR 75935, December 
10, 2002). Since that time, States have used design-build contracting 
extensively and the experiences around the country have convinced FHWA 
that section 710.311 should be updated to simplify its requirements. 
The revisions proposed in this NPRM (proposed section 710.309) would 
eliminate many of the detailed requirements that address individual ROW 
activities. Under the proposal, a design-build contractor handling 
acquisitions directly would be required to certify that it will comply 
with the SDOT ROW manual or an approved RAMP. Most often, the design-
build contractor would certify it will comply with the SDOT ROW manual. 
The FHWA believes this approach will provide the same protections as 
the current regulation because the approved ROW procedures, whether in 
an SDOT ROW manual or an approved RAMP, include the full range of 
applicable procedures and requirements.
    This NPRM also proposes to simplify the regulatory provisions in 
existing section 710.311(d) on required measures when a design-build 
contractor starts construction before all acquisition and relocation 
activities have been completed. This NPRM would replace the itemized 
listing with a statement that contractor activities must be limited to 
those that do not have a material adverse impact on the quality of life 
of those in occupied properties that have been or will be acquired. The 
FHWA believes this change will help ensure that potential impacts not 
currently listed in regulation are addressed, and that the SDOT and 
contractor focus on outcomes rather than technical compliance issues.

[[Page 70000]]

5. Non-Highway Use and Disposal of Real Property Interests
    Management of real property acquired for highway purposes is an 
important aspect of the real estate function. Title 23 requirements 
focus on protecting the Federal investment, both in terms of safe and 
efficient operation of the transportation facility, and from the 
perspective of the Federal financial investment. Part 710 presently 
reflects a regulatory structure developed decades ago, when FHWA and 
SDOTs held a strong view that the highway ROW should be protected 
against non-highway uses to the greatest extent possible. That vision 
has evolved toward providing greater flexibility in determining when an 
alternate use of ROW can be compatible with the transportation use. 
Accordingly, this NPRM proposes to update the regulations by 
acknowledging this change in policy, simplifying the categories of 
transactions, and clarifying the applicable requirements when a grantee 
allows a non-highway use of ROW or wants to dispose of an excess real 
property interest altogether because it is no longer needed for highway 
purposes. This update includes elimination of the concepts of air space 
and air rights agreements from the current regulation's definitions 
(section 710.105) and section 710.405. This NPRM also would eliminate 
the separate section on leasing now in section 710.407. Instead, the 
proposed regulation would rely on the concept of ROW use agreements to 
handle leases and other time-limited non-highway uses. The process of 
deciding whether to grant or approve a ROW use agreement would continue 
to include consideration of whether the proposed use will interfere 
with the transportation facility in any way. The FHWA intends that this 
evaluation process will embody the same considerations the current 
regulation calls for in its air space, air rights agreements, and 
leasing provisions.
    This NPRM proposes corresponding changes to clarify that when a 
real property interest is not needed for the transportation facility 
now or in the foreseeable future, the grantee may determine its excess 
and dispose of it in whole or in part. The NPRM proposes to continue 
authorizing the use of the FHWA-SDOT Stewardship/Oversight Agreements 
to assign approval of some disposals to SDOTs, but this NPRM does not 
propose any change to the requirement that disposals of real property 
that are part of Interstate ROW be approved by FHWA. This NPRM proposes 
to add a definition of ``excess real property.'' The NPRM also proposes 
changes to the definition of ``disposal'' to clarify that a disposal 
involves the conveyance of permanent rights in excess real property, 
and must meet the requirements in proposed 23 CFR 710.403 that protect 
the title 23-funded facility. This NPRM also proposes revisions to 
section 710.409, which details the requirements for carrying out a 
disposal. The changes in section 710.409 primarily are proposed to 
align the section with the new approach described above and to provide 
additional clarity about existing requirements, such as compliance with 
23 CFR part 771.
6. Early Acquisition
    The term ``early acquisition'' describes real property acquisition 
activities carried out prior to completion of the review process 
required under the National Environmental Policy Act of 1969 (NEPA) for 
the project for which the property would be used. This NPRM would 
implement early acquisition provisions in section 1302 of MAP-21. 
Section 1302 broadens the ability of States to carry out early 
acquisition activities eligible for Federal-aid reimbursement or credit 
toward a State's share of project costs. This flexibility improves the 
State's ability to acquire or preserve real property for a 
transportation facility. This NPRM is proposing to revise and 
reorganize section 710.501, which presently covers early acquisitions, 
to address the changes arising from section 1302 and to generally 
clarify the early acquisition process pursuant to 23 U.S.C. 108 and 
323.
    The reorganized section will include an introductory paragraph 
describing the circumstances that support the use of early acquisition, 
and paragraphs covering each of the options for early acquisition: 
State-funded early acquisition without Federal credit or reimbursement, 
State-funded early acquisition eligible for future credit, State-funded 
early acquisition eligible for future reimbursement from title 23 
apportioned funds, and federally funded early acquisition using title 
23 apportioned funds.
    This NPRM also addresses the applicability of NEPA and other 
environmental laws in the early acquisition context. As further 
detailed in the Section-by-Section discussion, the NPRM proposes to 
retain the distinction in the current regulation between early 
acquisitions in section 710.501, and hardship acquisition and 
protective buying in section 701.503, with respect to the treatment of 
properties subject to 23 U.S.C. 138 (commonly known as ``section 4(f)'' 
properties). Those properties would not be subject to early acquisition 
under 710.501, but could be acquired under the section 710.503 hardship 
acquisition and protective buying provisions if the necessary 
evaluations and determinations are completed.
    In this NPRM, FHWA interprets the term ``State,'' as used in 23 
U.S.C. 108, as including agencies, political subdivision, and 
instrumentalities of the State. Accordingly, this NPRM uses the term 
``State agencies'' in the early acquisition section to identify those 
parties authorized by the statute to exercise early acquisition 
authorities.
7. Transportation Alternatives Program and Acquisitions by Conservation 
Organizations
    The MAP-21 eliminated the Transportation Enhancements Program 
(formerly authorized under 23 U.S.C. 133(b)(8)) and enacted a new 
Transportation Alternatives Program (TAP), codified in 23 U.S.C. 213. 
This change necessitates a revision to 23 CFR 710.511, which currently 
is a section specific to the Transportation Enhancements Program. This 
NPRM proposes rewriting section 710.511 to make it consistent with TAP. 
A major change resulting from the MAP-21 elimination of the 
Transportation Enhancements Program is the termination of authority to 
exclude transactions by conservation organizations from compliance with 
the Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970, as amended (Pub. L. 91-646, 84 Stat. 1894; 
primarily codified in 42 U.S.C. 4601 et seq.) (Uniform Act). This 
exclusion was contained in section 315 of the National Highway System 
Designation Act of 1995 (Pub. L. 104-59, 109 Stat. 588), and part 710 
subsequently incorporated it at 710.511(b)(4). With the termination of 
the exclusion, acquisitions by conservation organizations for TAP 
projects will be subject to the Uniform Act, including the provisions 
for voluntary acquisitions in the 49 CFR part 24 implementing 
regulations. This NPRM reflects that change.
    Another proposed change to section 710.511 involves adding to the 
regulation a provision embodying FHWA's long-standing policy on the 
treatment of real property interests acquired for Transportation 
Enhancements Program projects. Often those projects involve issues 
about the adequacy of the real property interest to be acquired because 
the projects envision lease agreements or other time-limited 
arrangements that do not ensure

[[Page 70001]]

the facility can remain in operation permanently. This situation, which 
FHWA anticipates will continue with TAP projects, raises a question 
about how to protect the Federal financial investment in the project. 
This NPRM proposes adding section 710.511(c), requiring a TAP property 
agreement through which FHWA and acquiring agency establish an agreed-
upon methodology for determining any required repayment of Federal 
funds in the event the TAP-funded facility is compromised or 
eliminated.
8. Federal Land Transfers and Direct Federal Acquisitions
    The proposed revisions to section 710.601 (Federal land transfers) 
are intended to clarify the process and to simplify the land transfer 
procedures that apply when land owned by a Federal agency is needed for 
a project. The changes proposed will incorporate a conforming amendment 
made in section 1104(c)(6) of MAP-21 (see proposed section 710.601(a)), 
which clarified that Federal land transfers are available for title 23-
eligible highway projects that are not on a Federal highway system.
    The NPRM also proposes clarifying revisions to section 710.603 
(Direct Federal acquisition), which addresses direct Federal 
acquisition of property for title 23 highway projects. The changes in 
paragraph (a) are intended to clarify that the provisions are 
applicable to property needed for Interstate highway or Defense Access 
Road projects, and related application requirements are relocated to 
(a). The proposed new section 710.603(b), would cover the use of 
Federal direct acquisition authority for projects administered by the 
FHWA Office of Federal Lands Highways that are not covered by 
710.603(a). The proposed regulation would better align the regulation 
to the existing practices and the needs of the programs carried out by 
FHWA's Federal Lands Highway Divisions under chapter 2 of title 23. The 
proposed language also clarifies that FHWA, when it carries out direct 
Federal acquisitions on behalf of a grantee or another Federal agency, 
does not acquire or retain any land management rights or 
responsibilities.

C. Costs and Benefits

    The FHWA estimated the incremental costs associated with two new 
requirements proposed in this NPRM that represent a change to current 
practices for State DOTs and Metropolitan Planning Organizations (MPO). 
These costs will be primarily incurred by SDOTs. The FHWA derived the 
costs \1\ of the two components by assessing the expected increase in 
level of effort from labor to update ROW manuals, and the increase in 
level of effort required to comply with new early acquisition 
requirements.
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    \1\ The FHWA used salary data from Indeed Salary Search 
(www.indeed.com) which represents an index of salary information 
from job postings over the past 12 months to estimate labor costs.
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    To estimate costs, FHWA first considered the costs associated with 
updating the SDOT ROW manual. The FHWA multiplied the level of effort, 
expressed in labor hours, with a corresponding loaded wage rate for the 
professional staff necessary to complete updates to the ROW manual. 
Following this approach the undiscounted incremental costs to comply 
with this rule are $890,000.\2\ Approximately 80 percent of these costs 
represent one time costs to implement this rule.\3\
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    \2\ This estimate assumes that it will take an additional 225 
hours to complete necessary updates to a ROW manual, that a loaded 
rate of $76 per hour (Hourly rate $47.60 for a ROW manager; 
estimated loaded rate of 160% of hourly rate) for labor will be 
incurred and by estimating the costs to update 52 ROW manuals.
    \3\ After updating the ROW manual to incorporate this 
rulemakings changes, the States will resume their normal process of 
updating their manuals.
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    Similarly, to estimate costs associated with complying with the new 
early acquisition requirements, FHWA multiplied the level of effort, 
expressed in labor hours, with a corresponding loaded wage rate for the 
professional staff necessary to comply with those requirements and 
additional effort that may be associated with the new early acquisition 
flexibilities. Following this approach, the annual undiscounted 
incremental costs to comply with this rule are $950,000.\4\ The FHWA 
does not believe that any of these costs represent one time costs to 
implement this rule.
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    \4\ The FHWA calculated this by estimating that there would be 
240 Early Acquisition Projects per year which would require 
approximately 40 hours of time each to comply with requirements 
associated only with Early Acquisition Projects. The FHWA used a 
loaded rate $76 per hour (Hourly rate $47.60 and an estimated loaded 
rate of 160% of hourly rate) for labor will be incurred (based on 
the cost of a ROW manager's loaded hourly rate).
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    The FHWA could not directly quantify the expected benefits due to 
data limitations and the amorphous and qualitative nature of the 
benefits from the proposed rule. The FHWA believes that significant new 
flexibilities in early acquisition will allow SDOTs to acquire real 
property interests earlier, ensuring parcel availability, ROW cost 
control and cost certainty, and expected reductions in project delay 
claims due to ROW not being available. The FHWA believes that the 
expected qualitative and quantitative benefits from the use of the 
early acquisition flexibilities alone will exceed the cost of 
implementing the rule. In addition, FHWA believes that significant 
benefits may accrue because this proposal clarifies and streamlines 
additional requirements including property management requirements, 
stewardship and oversight requirements, and Federal Land transfer 
requirements.
    The FHWA invites comments on its cost estimates and discussion of 
benefits.

II. Background

    The FHWA provides funds to States and other grantees under title 23 
for reimbursement of costs incurred in acquiring the real property 
needed for highways and other transportation-related projects. The 
primary regulations dealing with real property interests, 
reimbursement, and management of ROW are in 23 CFR part 710. Additional 
regulations in 23 CFR parts 635 and 810 address ROW certification and 
use of ROW by a transit agency, respectively. On July 6, 2012, 
President Obama signed into law MAP-21. One of the primary purposes of 
this NPRM is to provide regulatory direction on the use of new 
flexibilities contained in section 1302 of MAP-21. This proposed rule 
would clarify and streamline program requirements. The proposed rule 
also would help accelerate project delivery and enhance the Federal-
State partnership. Both of these objectives are consistent with MAP-21 
goals, as articulated in section 1302 and other provisions.
    This NRPM also proposes revisions to reduce duplication in the 
existing regulations and to clarify and update the real property 
regulations based on the FHWA's experience with administration of the 
current regulations. The FHWA proposals for changes to 23 CFR parts 
635, 710, and 810 will better ensure consistency in interpretation and 
better align the language of the regulations with current program needs 
and best practices. In developing this NPRM, FHWA considered public 
input received during the Office of Management and Budget's recently 
completed Retrospective Regulatory Review. In August 2011, the DOT 
published its Final Plan for Implementation of Executive Order 13563, 
Retrospective Review and Analysis of Existing Rules. This Final Plan 
outlines the DOT efforts to review existing regulations, expand public 
participation in the regulatory process, and enhance oversight of 
regulatory development and review. As part of the development of the 
DOT Final Plan, the DOT held a public meeting in March 2011 on its 
preliminary plan and solicited public

[[Page 70002]]

input on specific rules that should be reviewed. As a result of this 
outreach, FHWA received public comments on 13 topic areas.
    In the August 2011 Final Implementation Plan, the DOT identified 23 
CFR part 710 as an area for future study and possible regulatory 
action. The FHWA received comments covering use of Federal real 
property acquisition funds for early acquisition, addressing use of 
Federal financial support for corridor preservation acquisitions, and 
requesting new flexibilities in environmental review requirements and 
fiscal constraints as they pertain to federally funded early 
acquisition. As a result of the public comments on early acquisition of 
ROW, FHWA re-examined the regulations on early acquisition to identify 
beneficial changes. The FHWA believes that the new flexibilities 
provided in MAP-21 for federally funded early acquisition provide most 
of the flexibilities that the commenters sought.
    The evolution of the Federal-aid highway program in recent years, 
including changes in the parties involved in carrying out the program 
and in funding eligibilities under title 23, produced a number of 
challenges in drafting the real estate regulations. Historically, the 
Federal-aid highway program has been a federally assisted State program 
administered through SDOTs. The SDOTs remain the primary grantees of 
Federal-aid highway funds, and the FHWA-SDOT structure is the principal 
mechanism for administration of the Federal-aid highway program. 
However, there are instances when other entities receive funding under 
title 23 and are grantees under Federal law. In addition, SDOTs 
frequently enter into subgrant agreements with cities, towns, and other 
governmental entities, collectively often referred to as ``local public 
agencies'' or ``local transportation agencies,'' under which those non-
SDOT public agencies develop and construct facilities funded under 
title 23. This NPRM makes a number of changes to emphasize that the 
SDOT remains legally responsible to FHWA for compliance with title 23 
requirements even when the SDOT delegates project activities to other 
public agencies. While the terms ``local public agencies'' and ``local 
transportation agencies'' are frequently used in SDOT and FHWA 
publications, FHWA proposes to continue to use the term ``State 
agency'' in part 710 to include these local entities, as the definition 
of ``State agency'' in section 710.105(b) has long included all public 
agencies.
    In this proposed rule, FHWA continues the philosophy of relying on 
an approved ROW manual as one of the primary tools for implementing the 
Federal-State partnership and ensuring compliance by all grantees and 
subgrantees with applicable requirements. The SDOT ROW manual would 
continue to be the ROW manual most often used in the program, guiding 
the work of the SDOT and its subgrantees and contractors. However, this 
NPRM also would authorize non-SDOT entities to adopt or develop a ROW 
manual or a RAMP, and provides proposed procedures for those actions in 
proposed section 710.201(c). The approved ROW manual provides the 
detail needed to successfully carry out an acquisition program with 
consistency, and to ensure compliance with applicable statutes, 
regulations, and policies. The manual also serves to document a 
grantee's ROW procedures and practices for use by its ROW personnel, 
other public agencies, and individuals working with the grantee, and 
the FHWA.

III. Section-by-Section Discussion of the Proposals

    The proposed revisions to 23 CFR parts 635, 710, and 810 are 
described below. The FHWA filed a redline version of parts 635, 710, 
and 810 in the docket to show all proposed changes to the regulatory 
text and facilitate public review and comment. In addition to these 
changes, FHWA proposes to make minor changes throughout the regulations 
to eliminate outdated references, such as the change from ``STD'' to 
``SDOT,'' and clarify meaning without changing the intended scope or 
effect of the regulations. The FHWA proposes retaining the current 
order of the sections in part 710, which are ordered in the sequence 
agencies follow when developing and implementing a Federal-aid project. 
This will assist the public and grantees in locating regulations 
applicable to a specific point of interest.

PART 635--CONSTRUCTION AND MAINTENANCE

Subpart C--Physical Construction Authorization

Section 635.309 Authorization

    Over the course of the last several years, FHWA has identified and 
deployed innovations and flexibilities that can accelerate project 
delivery. Most recently, FHWA has promoted a number of these 
opportunities through the ``Every Day Counts'' (EDC) initiative. 
Information on the flexibilities in ROW practices and procedures is 
available at http://www.fhwa.dot.gov/everydaycounts/projects/toolkit/row.cfm. One of the EDC flexibilities promoted was the use of a 
conditional ROW certification. This NPRM proposes more flexible 
procedures for the use of conditional ROW certifications as a basis for 
authorizing construction contract bidding to proceed, while retaining 
necessary protections for owners and occupants.
    The FHWA's traditional approach to authorizing the advertising for 
construction bids and the beginning of construction has been to require 
that all necessary real property has been acquired for the entire 
project, with limited exceptions. This approach ensures that property 
owners' rights are protected, but FHWA's experience shows the current 
requirements in section 635.309(c)(3) are too stringent and can 
unnecessarily delay the advertisement for bids and consequently, the 
commencement of construction. The FHWA believes that when most 
properties for a project have been acquired, advertising for 
construction bids while the SDOT finalizes the acquisition of a small 
remaining number of needed real property interests is not detrimental 
to the goal of protecting property owners' rights. The FHWA review of 
current practice and project delivery needs, including discussions with 
SDOTs during EDC presentations around the United States, concluded that 
it is possible to protect the rights of owners and occupants without 
delaying advertising when only a few acquisitions remain incomplete. 
These rights can be protected on a parcel-by-parcel basis by including 
provisions in the conditional certification to ensure those who have 
not yet moved from properties needed for construction are protected 
against unnecessary inconvenience or any action that is coercive in 
nature.
    Accordingly, FHWA proposes to revise section 635.309(c)(3) to 
provide broader authority for funding grantees to use a conditional ROW 
certification procedure in order to permit advertisement of a project 
provided that assurances are in place for taking adequate care and 
precautions to protect the rights of property owners and tenants. This 
rule proposes removing existing language that limits State requests for 
authorization for advertisement on this basis to very unusual 
circumstances and removing the statement that this exception must never 
become the rule. The use of the conditional certification will still be 
an exception to the requirement in

[[Page 70003]]

635.309(c)(1) that legal and physical possession must have been 
acquired for all necessary rights-of-way for the project, but this 
change will allow bidding to proceed unless FHWA finds it would not be 
in the public interest. The use of a conditional certification to 
support authorization for construction would continue to be limited. 
The NPRM proposes language clarifying that FHWA will not approve 
construction based on a conditional certification unless there are 
exceptional circumstances that make such action in the public interest. 
This proposed rule would require that SDOTs provide FHWA with an update 
on the status of any properties not available and a realistic date when 
such properties will be available prior to FHWA approval of a notice to 
proceed with construction.
    While the proposed rule would provide broader flexibility, FHWA 
believes grantees will need to exercise caution in using this 
authority, given the risk it could create for delay claims from 
contractors during construction. The proposed rule identifies this risk 
and provides limitations on FHWA participation in such claims. The 
proposed rule clarifies that Federal participation in the cost of such 
delay claims is subject to 23 CFR 635.124, including consideration of 
whether the SDOT followed approved processes and procedures. The NPRM 
would also mitigate the risk of increased construction delay claims by 
requiring that advertisements for bids must specify whether all ROW has 
been obtained for the project.
    This NPRM proposes, in 635.309(h), to replace an outdated reference 
to FHWA directives with a reference to the requirements of 49 CFR part 
24, the Uniform Act implementing regulations. References to the FHWA 
Division Administrator in various parts of section 635.309 would be 
changed to simply ``FHWA.'' This is consistent with the usage in part 
710 and better supports FHWA's efforts to adjust internal delegations 
of authorities when needed.

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

Subpart A--General

Section 710.103 Applicability

    This rule proposes several changes to the current section 710.103, 
which provides information on when 23 CFR part 710 applies. The changes 
are proposed to clarify when these rules would apply. In recent years, 
FHWA has addressed a number of questions about the applicability of 23 
CFR part 710 in instances where no Federal funds were used for 
acquisition of real property, where there was limited title 23 funding 
in planning or environmental portions of the project, and where the 
property was acquired in advance of a title 23-eligible project. The 
FHWA believes that the proposed clarifications will resolve these 
questions on the applicability of part 710.
    The first clarification is that this rule applies whenever title 23 
grant funds are expended, including when the funds are used to pay for 
activities carried out by contractors or others on behalf of a grantee 
or subgrantee. This NPRM also includes a terminology change when 
referring to title 23 funding. Previously, the regulations used the 
term ``apportioned funds'' to describe how funds were provided to SDOTs 
and local public agencies. The use of the term ``grant funds'' will 
allow for a more accurate description of how funds are provided without 
changing the underlying requirements or applicability.
    The second change involves adding proposed language to clarify that 
grantees of funds under this part who allow others to use the funds are 
responsible for oversight of the use of the funds. This oversight is 
intended to ensure that applicable requirements and rules have been 
followed. This NPRM also proposes adding language to this section to 
alert readers to the distinctions inherent in the terminology used to 
refer to various parties affected by part 710.

Section 710.105 Definitions

    This NPRM proposes a number of revisions to the definitions in 
section 710.105(b). The proposed rule includes several changes to 
update terms that are used throughout the proposed regulation, such as 
the reference to the SDOT (rather than the current ``STD''). In 
addition, FHWA proposes adding terms to clarify the regulation and to 
carry out changes enacted in MAP-21, which expanded the acquisition 
options for States. Several changes are being proposed to clarify the 
meaning and applicability of definitions in the current regulation. The 
FHWA believes that the proposed clarifications are necessary to respond 
to questions and comments from our partners in recent years.
    For terms not specifically defined in proposed section 710.105 
(Definitions), this NPRM proposes to replace 23 CFR part 1 with 23 
U.S.C. 101(a) as the alternate source for definitions. The FHWA 
concluded that the list of definitions in the statute was more current 
and more complete than those in 23 CFR part 1.
    This NPRM proposes a revision to the definition of ``access 
rights'' to substitute ``public way'' for ``street or highway.'' The 
purpose of this revision is to clarify that access rights to allow for 
ingress and egress include access to a public way and are not 
restricted to a street or highway.
    The FHWA proposes to eliminate the definitions of ``air rights'' 
and ``air space,'' as part of an overall effort to update the approach 
to property management by consolidating and simplifying the categories 
of transactions involving real property acquired for a title 23-funded 
facility. The FHWA has received some questions in the past about when 
and how these definitions and the requirements are applied. The 
proposed rule would no longer use the term ``air space,'' and would 
instead use the term ``real property interests.'' The proposed rule 
replaces the term ``air rights'' with a new definition for ``ROW use 
agreement,'' which refers to agreements for the use of real property 
interests for non-highway uses. As explained further in the preamble 
summary of the definition of ``ROW use agreement,'' these agreements 
cover all land transfers in the ROW except permanent conveyances of 
real property interests. This new approach is discussed in more detail 
in the summaries for proposed changes to sections 710.405-409.
    This rule proposes a clarification to the definition of 
``damages,'' to clearly state that damages under this part apply to 
real property only. Because the current definition refers to remainder 
property, without explicitly limiting it to real property, the current 
definition may be misread to apply to either real or personal property.
    This NPRM proposes clarifying the definition of ``disposal'' by 
adding language confirming that disposals involve the transfer of 
permanent rights in real property and are subject to the requirements 
in 23 CFR 710.403. This rule also proposes a revision to the definition 
to clarify that disclaiming or informally abandoning ROW or real 
property interests that were either purchased with title 23 funds or 
incorporated into a title 23-funded project is a form of real property 
disposal. As such, that disclaimer or abandonment is subject to the 
real property disposal regulations contained in this regulation. The 
FHWA has received questions in the past about how this definition 
applied where an action was proposed that was not a sale of real 
property, but would result in a conveyance or other permanent change in 
ownership or use of real property. The FHWA believes that the proposed

[[Page 70004]]

change eliminates any confusion that has arisen over when the 
regulations apply.
    This rule proposes to revise the definition of ``donation'' to 
ensure that it is clearly understood property owners must be informed 
in writing of their rights and potential benefits under the Uniform Act 
prior to making a donation. The FHWA believes written notice has always 
been an inherent aspect of effective compliance with the Uniform Act, 
but the agency has concluded a specific statement would be useful to 
avoid any possible confusion. The FHWA believes that this requirement 
can be met by using informational tools, such as pamphlets currently 
available on the FWHA Web site,\5\ that are currently used to provide 
property owners with information on the Uniform Act and the real estate 
acquisition procedures.
---------------------------------------------------------------------------

    \5\ http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/acquisition/real_property.cfm.
---------------------------------------------------------------------------

    This NPRM proposes to update the definition of ``early 
acquisition'' to eliminate the existing reference to project 
authorization and to instead focus the definition on the relationship 
between the early acquisition and the completion of the environmental 
review for the transportation project for which the acquired real 
property interests would be used. This change also will make the 
definition conform to revisions under MAP-21, and ensure the definition 
will cover the full range of early acquisition options now available.
    In addition, this NPRM proposes adding a new definition, ``Early 
Acquisition Project.'' As explained more fully in the description of 
changes to 23 CFR 710.501, section 1302 of MAP-21 provides new 
flexibilities for carrying out real property acquisitions in advance of 
a Federal environmental decision on a proposed transportation project. 
One of those flexibilities is to treat the early acquisition itself as 
a Federal-aid project, eligible for reimbursement from title 23 
apportioned funds if applicable requirements are satisfied. The MAP-21 
section 1302 amends 23 U.S.C. 108 to allow States to develop a project 
that consists solely of the early acquisition of real property (23 
U.S.C. 108(d)). An Early Acquisition Project can consist of the 
acquisition of real property interests in a specific parcel, a portion 
of a transportation corridor, or an entire transportation corridor. 
This new authority for federally funded early acquisition, added to the 
authorities for early acquisition under pre-MAP-21 law, enhanced the 
need for terms in the regulation that would clearly distinguish 
projects for the early acquisition of real property under section 
710.501 (an ``Early Acquisition Project'') from the proposed projects 
for which the early-acquired property would be used (a ``transportation 
project'').
    This NPRM proposes to add a new definition, ``excess real 
property.'' The proposed definition defines excess real property 
interests as those not needed currently or in the foreseeable future 
for transportation purposes or other uses eligible under title 23. The 
FHWA believes that this new definition will help eliminate confusion 
that has existed about the appropriate use of disposal procedures, and 
about the differences between agreements for the alternate use of real 
property that may be needed in the future for transportation purposes 
(a ROW use agreement under this NPRM) and property that is no longer 
needed (excess real property under this NPRM).
    The proposed rule would add new definitions for the terms 
``Federal-aid project,'' ``federally assisted,'' ``grantee,'' and 
``subgrantee.'' The FHWA concluded there is a need for each of these 
defined terms in order to clarify the meaning and applicability of 
certain parts of the regulation. ``Federal-aid'' and ``federally 
assisted'' distinguish between projects receiving funds under chapter 
one of title 23 and projects receiving funds from any part of title 23. 
The term ``grantee,'' as proposed in this NPRM, would mean the party 
that is the direct recipient of title 23 funds and is accountable to 
FHWA for the use of the funds and for compliance with applicable 
Federal requirements. This NPRM proposes to define ``subgrantee'' as 
``a governmental agency or other legal entity that enters into an 
agreement with a grantee to carry out part or all of the activity 
funded by title 23 grant funds.''
    This NPRM proposes a definition for ``mitigation property.'' This 
term is used in the proposed definition for real property, discussed 
below. The FHWA believes including a definition of ``mitigation 
property'' will avoid confusion in the future about the intended scope 
of the term when it appears in later sections of the regulation. This 
proposal also is consistent with the FHWA's proposal, as described 
later in this NPRM, to delete section 710.513 on environmental 
mitigation, and instead to insert references to environmental 
mitigation or mitigation property where relevant in the regulatory 
text.
    This NPRM proposes to delete the definition of National Highway 
System (NHS) from this regulation. The FHWA believes that the 
definition of NHS in 23 U.S.C. 101(a) provides the needed definition.
    This NPRM proposes to add a new definition for ``option.'' Section 
1302 of MAP-21 in part redefines and expands the types of real property 
acquisitions that are eligible for Federal reimbursement. The MAP-21 
changes all references in 23 U.S.C. 108 from ``real property'' to 
``real property interests'' and defines real property interests to 
include a contractual right to acquire an interest in land. The new 
definition of ``option'' in the NPRM will clarify that the cost of 
acquiring an option and other types of real property interests is 
eligible for reimbursement under title 23.
    This NPRM is proposing to add a definition of ``person'' to this 
regulation. This definition is taken directly from 49 CFR part 24. The 
addition of a definition of a ``person'' is proposed to clarify to whom 
this NPRM applies when persons are acting for an SDOT or other agency 
on a project or program receiving title 23 funds. The proposed 
definition also defines those entitled to protections under this part 
and the Uniform Act. The definition is consistent with the definition 
of the term in the implementing regulations for the Uniform Act at 49 
CFR 24.2(a)(21).
    This NPRM is proposing the addition of a definition for ``Real 
Estate Acquisition Management Plan (RAMP).'' A RAMP is a document 
describing the process a subgrantee (for example a local public agency 
receiving title 23 funds from an SDOT), non-SDOT grantee, or design-
build contractor may use to carry out a title 23 grant program or 
project. A RAMP describes how such party will comply with title 23 
requirements. A RAMP is used in lieu of developing a ROW manual or 
adopting the FHWA-approved SDOT ROW manual. The FHWA believes that use 
of a RAMP is appropriate for a subgrantee, non-SDOT grantee, or design-
build contractor if that party infrequently carries out title 23 
programs or projects, the program or project is non-controversial, and 
the project is not complex. A RAMP may only be used with the approval 
of FHWA or the SDOT, as discussed in section 710.201(d). The FHWA 
believes that a properly developed and approved RAMP can provide 
sufficient information and direction to assure that applicable title 23 
and Uniform Act requirements are met.
    This NPRM proposes to revise the definition of ``real property.'' 
Section 1302 of MAP-21 clarifies the types of

[[Page 70005]]

real property interests that can be acquired prior to completion of the 
NEPA review for a Federal-aid project by revising 23 U.S.C. 108 to 
replace the terms ``real property'' and ``right-of-way'' with ``real 
property interests.'' Prior to MAP-21, the statute used the terms 
``right-of-way'' and ``real property'' when describing eligibility (in 
23 U.S.C. 108(a)) and Federal-aid participation (in 23 U.S.C. 108(b) 
and (c)). Part 710 currently uses both terms in its various subparts. 
The FHWA proposes to modify the existing definition of ``real 
property'' to incorporate the term ``real property interests,'' as 
adopted in MAP-21, as an equivalent term. This NPRM uses the terms 
``real property'' and ``real property interests'' interchangeably.
    Under the definition of ``acquisition of a real property interest'' 
in 23 U.S.C. 108(d)(1), as enacted in MAP-21, real property interests 
include contractual rights to acquire an interest at a later date, and 
rights that restrict certain uses of the property for a specified 
period of time. Accordingly, this NPRM proposes adding such interests 
to the definition of ``real property.'' This will clarify that grantees 
may acquire limited, less-than-fee interests in property, including 
options, temporary development rights, and rights-of-first-refusal, 
that permit a grantee to ensure it can later purchase the real property 
needed for a project eligible for title 23 funding.
    This NPRM is proposing to revise the definition of ``right-of-way'' 
to include the use of real property for mitigation for a 
transportation-related facility. The FHWA believes that this change 
will clarify that mitigation property is an eligible expense when it is 
a required part of an approved transportation project under title 23.
    This NPRM proposes to add a definition for the term ``ROW manual.'' 
The FHWA believes it would be helpful to have the definition to support 
the changes proposed for section 710.201(d) that discuss ROW manuals 
and alternate procedures for non-SDOT parties.
    This NPRM proposes a new definition, ``ROW use agreement.'' With 
this rulemaking, FHWA is proposing to use the term ``ROW use 
agreement'' to encompass any non-permanent transfer of real property 
interests in the highway ROW. This definition covers use agreements for 
the use or occupancy of real property interests in the ROW short of a 
permanent conveyance. For example, this definition would cover leases, 
licenses, or permits for the use of real property interests within a 
highway ROW. The proposed definition includes clarifying language 
stating that these agreements are for time-limited non-highway purposes 
and that the proposed use of the real property interests covered by the 
agreement must not interfere with the highway facility. The discussion 
for section 710.405 contains additional information on ROW use 
agreements and the changes relating to the use and disposal of real 
property proposed in this NPRM.
    This NPRM proposes two changes to the definition of ``settlement.'' 
The FHWA proposes that the definition of ``legal settlement'' be 
modified to include agreements resulting from mediation and stipulated 
settlements approved by a court. The FHWA believes that this addition 
will clarify that agreements resulting from mediation and stipulated 
settlements are allowable under the current definition of legal 
settlement. The second revision is to change ``compensation'' to ``just 
compensation'' in the definition of a court settlement or award.
    The NPRM proposes to change the abbreviation adopted for ``State 
transportation department'' from ``STD'' to ``SDOT.'' This will be 
consistent with the form of reference preferred by the State 
transportation departments. Corresponding changes are proposed 
throughout part 710, to revise ``STD'' to ``SDOT.''
    This NPRM is proposing to add a definition of ``Stewardship/
Oversight Agreement'' that will replace the current definition of 
``oversight agreement.'' This change will eliminate inconsistency in 
the use of language in the regulation, will better define the intended 
meaning of the term, and better reflects current FHWA policy on the use 
of such agreements. The FHWA believes that this will clarify that any 
assignment of FHWA's Part 710 approvals or other responsibilities to 
the SDOT will be authorized by FHWA through provisions in the 
Stewardship/Oversight Agreement executed between FHWA and the SDOT. How 
such responsibilities will be carried out will be discussed in the SDOT 
ROW manual, but the authority for the SDOT to exercise the 
responsibilities derives from the Stewardship/Oversight Agreement.
    This NPRM includes a proposal to add a new definition, ``temporary 
development restriction.'' The purpose of this addition is to clarify 
that purchasing the right to restrict an activity on real property is a 
type of real property interest as defined in MAP-21 section 1302. The 
FHWA believes that this type of acquisition will be a valuable early 
acquisition tool.
    This NPRM is proposing to add a new definition, ``transportation 
project.'' The proposed definition, which uses the terms ``highway 
project,'' ``public transportation capital project,'' and ``multimodal 
project,'' will ensure that there is a clear distinction between the 
undertaking for the early acquisition of real property under section 
710.501 (the ``Early Acquisition Project'') and the project for which 
the real property would be used (the ``transportation project'').
    This NPRM proposes adding a statutory reference to the existing 
definition of ``Uniform Act.''

Subpart B--Program Administration

Section 710.201 Grantee and Subgrantee Responsibilities

    This NPRM proposes revising the title of section 710.201, which is 
currently ``State responsibilities,'' to ``Grantee and subgrantee 
responsibilities,'' and substantially reorganizing and rewriting the 
section to clarify the roles and responsibilities of grantees and their 
subgrantees in carrying out real property-related activities under 
title 23. These changes would recognize the increasing instances in 
which FHWA works with title 23 grantees other than SDOTs. However, the 
changes do not alter the basic nature of the Federal-aid highway 
program under chapter 1, title 23. In that program, the SDOT is the 
primary grantee and retains its special role and accompanying 
obligations.
    This NPRM proposes moving the discussion of program oversight from 
paragraph (b) to (a). The text in the new (a) would be revised, while 
the text in the newly-designated (b), relating to organizational 
requirements, would be unchanged except for updated references.
    The proposed revisions in the new paragraph (a) on program 
oversight include an introductory sentence that describes how Federal-
aid funds flow to the SDOT. A sentence is added to clarify that SDOTs 
are responsible for ensuring that activities by subgrantees and 
contractors on Federal-aid projects are carried out in compliance with 
State and Federal legal requirements. The proposed changes include the 
addition of a new sentence at the end of the paragraph clarifying that 
non-SDOT grantees of title 23 funds must comply with part 710 and are 
responsible for compliance by their subgrantees and contractors.
    Program oversight is a critical part of the title 23 program. Over 
the last several years, non-SDOT grantees, local public agencies, and 
other subgrantees have increasingly carried out and delivered title 23 
programs and projects. The FHWA believes that it is important

[[Page 70006]]

that this NPRM clarify grantee obligations for program compliance and 
oversight responsibility when subgrantees are performing project work, 
and to clarify the requirements and oversight relationship that 
subgrantees will be subject to when using or receiving title 23 funds 
or carrying out title 23-funded work. These clarifications do not 
create new requirements, but are intended to ensure that each grantee 
and subgrantee of title 23 funds understands the requirements and 
oversight roles attached to those funds.
    This NPRM proposes several revisions to section 710.201(c). The 
proposed language requires grantees to have an approved ROW manual that 
is up to date. The manual must include a section on oversight of 
subgrantees and contractors. In the case of SDOTs, this includes 
provisions on oversight of local public agencies.
    The proposed rule would require SDOTs to submit a revised ROW 
manual reflecting the provisions of the final rule to FHWA for review 
and approval not later than 2 years after publication of a final rule. 
The FHWA believes that the SDOT ROW manual is one of the primary tools 
of the Federal-State partnership. The approved SDOT ROW manual provides 
the detail needed to successfully carry out a ROW acquisition program 
and to ensure compliance with applicable statutes, regulations, and 
policies. The SDOT ROW manual also serves to document ROW processes and 
practices for use by State ROW personnel, local public agencies, 
affected individuals, and the FHWA.
    Appropriate ROW procedures are equally critical to the performance 
of other parties working to deliver projects funded under title 23. For 
non-SDOT parties, proposed section 701.201(d) contains three options 
for establishing approved ROW procedures. The first option is 
submission of a written certification that the party will use and adopt 
the FHWA-approved SDOT ROW manual. The second option is for the party 
to submit its own ROW manual for review and approval. Third, the party 
may submit a RAMP for review and approval. The FHWA believes that the 
number of non-SDOT grantees will continue to increase, as will the 
SDOTs' use of local public agencies to develop projects. The FWHA 
believes that effective oversight and stewardship are crucial on all 
title 23 projects and programs. The FHWA believes that the proposed 
changes provide several methods to achieve the desired stewardship and 
oversight outcomes while providing practical, easily achievable options 
for grantees and their partners.
    This NPRM proposes to relocate and revise the requirements of 
section 710.201(e) of the existing rule, which addresses adequacy of 
real property interests acquired for a project. The provision would 
become part of the acquisition provisions in proposed section 710.305. 
The FHWA believes this general provision more logically relates to 
acquisition than to the administrative provisions of section 710.201. 
This change is discussed in more detail in the analysis of section 
710.305(b).
    This NPRM proposes to redesignate existing section 710.201(f) 
(record keeping) as (e), and to clarify that the requirements apply to 
all acquiring agencies, as defined in 710.105. The NPRM also proposes 
revising the property management record keeping requirements to make 
them applicable to properties acquired with title 23 funds or 
incorporated into a title 23-funded program or project, regardless of 
whether such properties are managed by the SDOT. As previously noted, 
FHWA believes the role of non-SDOT parties in title 23 projects and 
programs will continue to evolve and grow. These proposed regulatory 
changes are designed to ensure that real property acquired with title 
23 funding is effectively and accurately recorded, and that title 23 
grantees carry out property management programs consistent with the 
requirements of this part.
    This NPRM proposes to redesignate existing section 710.201(g) 
(procurement) as (f), and to clarify that the provision is applicable 
to non-SDOT grantees. The FHWA believes that it is necessary to ensure 
that other grantees of title 23 funds meet the same requirements that 
SDOTs currently meet. This revision will further safeguard that title 
23 funds are used appropriately.
    This NPRM proposes to redesignate existing section 710.201(h) (use 
of public land acquisition organizations or private consultants) as 
(g). The proposed rule also would change the reference from ``SDT'' to 
``acquiring agency'' and add ``persons,'' as defined in this rule, as 
another party that an acquiring agency could use to carry out its 
acquisition authority. The FHWA believes that these revisions will 
provide additional flexibility to acquiring agencies and better reflect 
the range of resources agencies may use. This NPRM also proposes adding 
conservation organizations to the list of parties, to recognize what is 
likely to be a permanent role of such parties in projects such as those 
funded under TAP.
    This NPRM proposes to redesignate existing section 710.201(i) 
(approval actions) as (h). The NPRM proposes to retitle the provision 
as ``Assignment of FHWA approval actions to an SDOT.'' The proposed 
rule also would delete the existing references to the Interstate and to 
refocus the discussion on FHWA's responsibilities and the 
responsibilities that FHWA may assign to an SDOT under a Stewardship/
Oversight Agreement. The FHWA believes that these changes are needed to 
ensure that there is a clear understanding of the means by which SDOTs 
may assume performance of certain FHWA approval and other 
responsibilities under part 710, and to clarify the process that will 
be used to carry out the assumptions of responsibility under this part. 
These changes, together with the proposed clarifications to approval 
provisions such as those in subpart D (Real Property Management), will 
help resolve questions that have arisen since FHWA eliminated detailed 
real estate regulations through rulemakings spanning 1995 through 
1999.\6\ Those rulemakings resulted in FHWA adopting a system that 
permits SDOTs to assume responsibility for many of the required FHWA 
approvals required under earlier versions of the regulations governing 
real estate and ROW. The 1999 final rule, which in substance is the 
existing part 710, was designed to place primary responsibility for 
most Federal-aid project ROW approvals at the SDOT level. In practice, 
the regulation has proven insufficiently clear as to the needed 
approvals and related requirements. The changes proposed in this NPRM 
are intended to continue the practice of assigning the approvals to the 
SDOT, but to clarify the approvals that are needed.
---------------------------------------------------------------------------

    \6\ See 60 FR 56004 (November 6, 1995) (Advanced Notice of 
Proposed Rulemaking for Right-of-Way Program Administration); 61 FR 
18246 (April 25, 1996) (Interim Final Rule for Right-of-Way Program 
Administration); 63 FR 71238 (December 24, 1998) (Notice of Proposed 
Rulemaking for Right-of-Way Program Administration); and 64 FR 71284 
(Final Rule for Right-of-Way Program Administration).
---------------------------------------------------------------------------

    This NPRM proposes to relocate and revise existing sections 
710.201(j) (approval of just compensation) and 710.201(k) (description 
of the acquisition process). The sections would be moved to section 
710.305, becoming sections 710.305(c) and 710.305(d), respectively. The 
FHWA proposed the relocation because it believes these sections more 
logically relate to execution of the acquisition process than to the 
program administration topics covered in section

[[Page 70007]]

710.201. These sections are discussed in more detail in the analysis of 
section 710.305.

Section 710.203 Funding and Reimbursement

    This NPRM proposes several changes to the current section 710.203 
provisions on funding and reimbursement. These changes are needed to 
conform to provisions in MAP-21 section 1302, to clarify some aspects 
of the existing regulation, and to simplify the regulatory text where 
the existing text no longer serves a necessary function. This NPRM 
proposes to revise section 710.203(a) (General conditions), by 
inserting a reference to title 23 funds and adding a specific reference 
to mitigation property to the regulation's description of property 
acquisition costs that may be eligible for funding participation. This 
is consistent with FHWA's proposal, as described later in this NPRM, to 
delete section 710.513 on environmental mitigation, and instead to 
insert references to environmental mitigation or mitigation property 
where relevant in the regulatory text. The FHWA believes that 
streamlining this regulation by deleting the longer discussion of 
mitigation properties in section 710.513, and incorporating simple 
references at appropriate points in the regulation, will improve the 
clarity of the regulation.
    The proposed rule also would revise section 710.203(a)(2) by 
inserting a reference acknowledging that documents other than the 
traditional FHWA form for a ``project agreement'' may be used to embody 
the terms and conditions for title 23 funding. The FHWA concluded this 
revision would provide needed flexibility, especially in the case of a 
non-SDOT grantee.
    This NPRM proposes revising section 710.203(a)(3), which describes 
acquisition activities that can occur prior to completion of a NEPA 
decision for a project subject to title 23. In part, these changes are 
proposed for consistency with the early acquisition provisions in 23 
U.S.C. 108, as amended by section 1302 of MAP-21. Section 108 expressly 
permits certain acquisition activities prior to the completion of NEPA 
review for the overall project, and includes a provision on NEPA 
reviews for Early Acquisition Projects.
    The revisions to section 710.203(a)(3) also are intended to clarify 
the extent to which property valuation activities can occur prior to 
the NEPA decision. The proposed changes will add preparation of 
appraisals and appraisal waiver valuations to the list of activities 
that can be performed prior to the NEPA decision on the project. The 
NPRM proposes to delete ``necessary for the completion of the 
environmental process'' from that first part of paragraph (a)(3) as an 
outdated provision in light of MAP-21 and other changes and 
clarifications in the requirements governing the timing of activities 
on title 23 projects. The NPRM proposes adding a reference to 23 CFR 
646.204 after the term ``preliminary engineering,'' because section 
646.204 now provides a definition of preliminary engineering. The FHWA 
believes the proposed changes in section 710.203(a)(3) language 
relating to valuation work is an important clarification that will 
encourage grantees to begin preparation of appraisal and appraisal 
waiver documents early in the project development process. In many 
cases, beginning appraisal work early can result in time and cost 
savings later in the project development process, and those savings can 
outweigh the risk that some appraisals may not be needed or may need 
some revision as a result of final NEPA review and project alignment 
selection.
    This NPRM also proposes changes to section 710.203(a)(3), 
clarifying that negotiations must be deferred until after the NEPA 
decision, except in two cases: early acquisitions under section 
710.501, and hardship or protective acquisitions under section 710.503. 
The FHWA has responded to a number of requests for clarification on the 
timing of personal contact and appraisal preparation. In some cases, 
SDOTs have interpreted the existing regulation to prohibit early 
appraisal preparation because it prohibits contacting property owners. 
Contact with potentially affected property owners is required in order 
to prepare an appraisal. The FWHA believes that the revision is 
necessary to clarify that contact with potentially affected property 
owners is permissible for the purposes of developing an appraisal of 
real property.
    This NPRM is proposing some revision and clarification of sections 
710.203(b) (Direct eligible costs) and 710.203(d) (Indirect costs). The 
FHWA believes that it is important to clarify what constitutes eligible 
direct costs in the context of real property acquisition activities. 
The NPRM proposal clarifies that eligible direct costs associated with 
acquiring real property include costs typically incurred in acquiring 
real property interests, such as costs to prepare valuations and 
documents necessary to acquire the property, cost of negotiations, cost 
associated with closing, and costs of finalizing the acquisition. These 
ROW acquisition costs must be adequately documented as required by 2 
CFR part 225 Appendix A, Section (1). The FHWA also proposes to clarify 
that allowable indirect costs under an approved indirect cost 
allocation plan may be claimed consistent with 2 CFR part 225. The 
current regulation has been interpreted as allowing participation only 
in the cost of the real property. The FHWA has issued guidance in the 
form of questions and answers in the past that has restricted the 
eligibility of real property acquisition costs. The FHWA will revise 
that guidance to be consistent with the discussion in this NPRM and the 
final rule.
    The NPRM proposes to make the costs for real property interests 
such as options and temporary development rights eligible direct costs 
in section 710.203(b)(1)(iii). However, FHWA also believes that 
grantees and subgrantees likely will need additional guidance on the 
valuation of less-than-fee real property interests, such as options and 
other contractual rights to acquire an interest in land, rights to 
control use or development, leases, licenses, and any other similar 
action to acquire or preserve ROWs for a transportation facility. The 
FHWA believes the fact-specific and detailed nature of such questions 
is best handled through best practices-style guidance. If a final rule 
is adopted, the FHWA intends to develop guidance addressing approaches 
to valuation of the types of property interests listed above after the 
publication of the final rule.
    This NPRM proposes to revise section 710.203(b)(1)(iv) by adding 
language to include an acquiring agency's attorney's fees and to 
exclude other attorney's fees unless required by State law (including 
orders issued by courts of competent jurisdiction) or approved by FWHA. 
The FHWA believes that costs for outside counsel to represent the 
acquiring agency are a reasonable expense which can be incurred in the 
course of acquiring necessary real property.
    This NPRM proposes to revise section 710.203(b)(1)(v) by using the 
term ``waiver valuation'' instead of ``appraisal waiver,'' by adding 
``ROW'' to describe the manual referenced in the existing regulation 
and by inserting a reference to the RAMP alternative to a ROW manual. 
The FHWA believes that use of the term ``appraisal waiver'' is no 
longer accurate because the Uniform Act regulation at 49 CFR 
24.2(a)(33) defines the term ``waiver valuation'' and notes that a 
waiver valuation is not an appraisal.
    This NPRM proposes to revise section 710.203(b)(5) (Payroll-related 
expenses) to update the reference to the Federal

[[Page 70008]]

Office of Management and Budget (OMB) regulations. The OMB regulations 
have been codified at 2 CFR part 225 (formerly OMB Circular A-87). The 
proposed rule would add language recognizing the eligibility of a 
grantee's salary-related expenses when the grantee's employees work 
with an acquiring agency or a contractor on a particular project. 
Grantees must document such costs in accordance with 2 CFR part 225. 
This NPRM proposes to delete the last sentence in existing section 
710.203(b)(5) because technical guidance, including oversight of 
subgrantee and contractor compliance or performance, is generally an 
overhead expense. Those types of expenses are reimbursable under the 
indirect costs section of the regulations.
    This NPRM proposes to revise section 710.203(b)(6) (Property not 
incorporated into a project funded under title 23) by deleting the 
reference in paragraph (i) to the Transportation Enhancement Program 
and replacing it with a reference to the new TAP. Congress did not 
reauthorize the Transportation Enhancements Program in MAP-21, but 
instead included elements of that program in the newly enacted TAP, as 
described in MAP-21 Sections 1103 and 1122. Proposed changes related to 
TAP are discussed in more detail below in the summary of proposed 
changes to section 710.511.
    This NPRM proposes to revise section 710.203(b)(6)(ii) by adding a 
reference to alternate access points. The FHWA believes that this 
addition will further clarify that construction or maintenance of a 
title 23 eligible project may create the need to provide access outside 
the ROW to maintain access to that property. This would be treated as 
an eligible project activity.
    This NPRM proposes to revise section 710.203(d) (Indirect costs) to 
update the reference to OMB regulations which have been codified at 2 
CFR part 225 (formerly OMB Circular A-87). The proposed rule also would 
revise the paragraph to clarify that an SDOT may approve an indirect 
cost plan for its subgrantee unless the subgrantee has a rate approved 
by a cognizant Federal agency.

Subpart C--Project Development

    This NPRM proposes to modify subpart C on project development to 
streamline and clarify this subpart by eliminating redundant sections 
covering topics that are more appropriately addressed elsewhere in this 
regulation or are the subjects of other parts of title 23 CFR. The FHWA 
notes that these proposed revisions are not intended to substantively 
change the applicability or scope of the regulatory requirements 
pertaining to the project development process.
    The FHWA proposes to delete existing sections 710.303 (planning) 
and 710.305 (environmental analysis). The FHWA believes that the 
general discussion currently included in these sections neither adds to 
nor improves upon the information on the planning and environmental 
analysis found in 23 CFR part 450 and 23 CFR part 771.
    The FHWA proposes to renumber the sections in subpart C that follow 
section 710.305 in the existing regulation and revise all sections 
remaining in subpart C, as discussed below.

Section 710.301 General

    This NPRM proposes to revise 710.301 by listing each of the key 
steps in the project development process in the last sentence of the 
paragraph. The FHWA believes that this description of the key steps in 
the project development process will give sufficient information to 
provide a general understanding of the overall process.

Section 710.303 Project Authorization and Agreements

    The FHWA proposes to retitle this section, which appears as section 
710.307 in the existing regulation, by changing the existing header 
``Project Agreements'' to ``Project Authorization and Agreements.'' The 
change recognizes that project agreements no longer are the sole form 
of document used by FHWA to set forth the terms and conditions of 
funding and authorize project work.
    The proposed rule also would revise the section by adding new 
references to proposed early acquisition provisions in 710.501(d) and 
710.501(e). The result would be that section 710.303 would reflect the 
new early acquisition provisions in section 1302 of MAP-21. The NPRM 
proposes striking the last sentence of the existing provision, which 
contains transition language dating from a prior rulemaking. There 
should no longer be a need for the outdated transition provision.
    The NPRM proposes substituting the phrase ``Federal funding under 
title 23'' for ``Federal-aid'' in the first sentence of the existing 
section. This change would make it clear that the provision applies to 
all title 23-funded grants.

Section 710.305 Acquisition

    This section, which appears as section 710.309 in the existing 
regulation, would be revised to add a more complete description of the 
acquisition process. This NRPM proposes adding language to clarify that 
grantees are responsible for ensuring compliance with the oversight and 
other requirements in this section. The FHWA believes that program 
oversight is a critical part of the title 23 program and that it is 
more likely in the future that non-SDOT grantees and subgrantees will 
be active in delivering title 23-funded projects.
    This NPRM proposes a new section 710.305(b), inserting the 
provisions relating to the required acquisition of adequate real 
property interests for a project. The long-standing agency 
interpretation of the provision, formerly in 710.201(e), is that the 
project owner must own or control adequate real property interests to 
support the project. This view has not changed, but MAP-21's revisions 
to 23 U.S.C. 108 have made it necessary to address how paragraph (b) 
applies in the context of Early Acquisition Projects under 23 U.S.C. 
108(d) and 23 CFR 710.501. For example, States can now carry out 
reimbursement eligible early acquisitions by acquiring an option to 
purchase the real property at a later date, or by acquiring an interest 
that restricts certain activities on real property for a specific 
period of time.
    To address this additional flexibility, the proposed revisions 
would clarify that the real property interests acquired must be 
adequate for the purpose of the project. Less-than-fee types of 
interests may be adequate when carrying out an Early Acquisition 
Project, as defined in proposed section 710.105. Before beginning the 
transportation project, as defined in this NPRM, the grantee would 
still need to acquire adequate real property interests necessary for 
the construction, operation, and maintenance of the resulting facility 
and for the protection of both the facility and the traveling public.
    Proposed section 710.305(c), relocated from existing section 
710.201(j), addresses the approval of just compensation for acquired 
real property interests. The proposed rule would revise the heading to 
``Establishment and offer of just compensation.'' The revised language 
would include the phrase ``believed to be just compensation'' rather 
than ``determined to be just compensation.'' This new language would 
more appropriately and correctly describe what it is that an acquiring 
agency approves. An acquiring agency's process, as set forth in its 
approved ROW manual, should lead it to a good faith offer that it 
believes represents just compensation. In some cases, when there is a 
disagreement about just compensation, a court ultimately establishes 
just

[[Page 70009]]

compensation after hearing all of the facts. The revised language in 
proposed section 710.305(c) would expressly require the process to be 
done in accordance with the Uniform Act regulation at 49 CFR 24.102(d), 
which requires establishment and offer of an amount believed to be just 
compensation. The FHWA believes that these changes will provide a 
correct, clear, and concise discussion of requirements which will 
ensure that agencies appropriately establish offers of just 
compensation.
    Proposed section 710.305(d), relocated from existing section 
710.201(k), addresses the description of the acquisition process that 
acquiring agencies must provide to persons affected by title 23-funded 
acquisitions. This NPRM proposes to revise the existing language to 
clarify that the requirements of 49 CFR 24.5 (manner of notices), 
24.102(b) (notice to owner) and 24.203 (relocation notices) are 
applicable to transactions advanced under title 23. The FHWA believes 
that the proposed changes provide clear, understandable references to 
the Uniform Act provisions that define the processes used to acquire 
real property, and delineate the owner's rights, privileges, and 
obligations. These Uniform Act provisions are critical to the real 
property acquisition process. In particular, FHWA has noted that 
providing written descriptions of Uniform Act rights and benefits in 
languages other than English is necessary due to the variety of 
languages spoken by the owners and tenants that an acquiring agency may 
encounter during the acquisition of real property.

Section 710.307 Construction Advertising

    This NPRM proposes to revise the newly redesignated section 
710.307, which appears as section 710.311 in the current regulation, by 
updating references throughout to more accurately describe the parties 
affected by the section. The proposed rule also would update the 
description of the types of responsibilities that may be covered in the 
Stewardship/Oversight Agreement between FHWA and the SDOT. The changes 
will make the section consistent with MAP-21 revisions to 23 U.S.C. 
106.

Section 710.309 Design-Build Projects

    This newly redesignated section 710.309, which appears as section 
710.313 in the current regulation, would be updated in several ways. 
Paragraph (a) would be modified to update terms. The proposed terms 
would more accurately identify the parties affected by the section and 
would be consistent with other revisions throughout part 710. 
Similarly, technical corrections would be made to references and 
language in paragraph (b).
    This NPRM proposes to revise redesignated section 710.309(c) by 
deleting the first sentence, which presently discusses incorporation of 
ROW and clearance services into the design-build contract. The 
remainder of paragraph (c) would be revised to focus on options for ROW 
actions and approvals in the design-build setting. In all situations, 
the grantee is responsible for ensuring that construction activities do 
not have a material adverse impact on property owners whose property 
has not been acquired, whose relocation has not been completed, or who 
lawfully remain in the project area.
    This NPRM proposes to revise the redesignated section 710.309(d), 
to streamline it and focus on the role of the grantee (normally, the 
SDOT) in ensuring design-build contractors comply with applicable 
requirements. The NPRM proposes removing the detailed descriptions of 
ROW procedures in the existing (d)(1)(i)-(ii). In place of those 
paragraphs, the NPRM proposes to insert a new 710.309(d)(1) that would 
require the contractor to certify it will comply with an FHWA-approved 
ROW manual or RAMP in accordance with the provisions on ROW manuals and 
alternatives in sections 710.201(c) and (d). The FWHA believes that the 
current regulation in large part duplicates detailed material contained 
in SDOT ROW manuals, and the agency thinks it is appropriate to 
redirect the focus of the regulation to the use of an FHWA-approved ROW 
manual or RAMP. Under the proposed rule, an approved ROW manual or RAMP 
will provide direction as to what is required of a design-build 
contractor for the project. The FHWA believes these changes provide 
additional clarity to this section and will put proper emphasis on the 
use of an approved ROW manual or RAMP.
    This NPRM proposes to delete paragraph (d)(2) from the existing 
regulation, removing the discussion on acquisition and relocation plans 
and project tracking systems. This language is no longer necessary in 
light of the proposed revision of paragraph (d)(1) to require the 
design-builder to submit written certification that it will comply with 
the procedures in an approved ROW manual or RAMP.
    This NPRM proposes to redesignate the succeeding paragraph in the 
new section 710.309 to reflect the deletion of existing paragraph 
(d)(2). The NPRM proposes to revise the new section 710.309(d)(2), 
concerning the establishment of hold off zones, by making the creation 
of hold off zones mandatory rather than permissive when the relocation 
of displaced persons has not been completed. The FHWA believes that it 
is critical that a design-build project use a process to address and 
enforce protections that ensure that displaced persons are not subject 
to unwanted or harmful impacts or effects of construction.
    This proposed rule would eliminate the existing paragraphs (d)(4), 
(5), and (6), which address how to handle specific issues when 
relocations have not been completed. In place of those provisions, FHWA 
proposes to adopt a more general standard that focuses on the expected 
outcome when ongoing construction occurs in proximity to owners and 
tenants still in occupancy. The new language, which would appear in the 
redesignated 710.309(d)(3), would limit contractor's activities to 
those that the grantee determines do not have a material adverse impact 
on the quality of life of those occupying properties that have been or 
will be acquired for the project, but who have not yet relocated. The 
FHWA believes that the new language includes by implication the kinds 
of protections previously detailed in the existing regulation. The new 
language would also encompass other types of adverse impacts on such 
owners and tenants. These protections are the types of requirements 
that typically would be addressed in the approved ROW manual or RAMP, 
which design-build contractors now will have to follow. The FHWA 
believes project-specific aspects of these requirements are best 
addressed either in the project's contract documents, or as part of a 
project work plan.
    This NPRM would redesignate the remaining paragraph (d)(7) in the 
existing regulation as section 710.309(d)(4), and would update the 
terms used in the paragraph.
    This NPRM proposes to update the references in the redesignated 
section 710.309(e) to reflect the new section number for the regulatory 
language relating to construction advertising, section 710.307.

Subpart D--Real Property Management

    This NPRM proposes to restructure Subpart D by eliminating and 
revising the sections of this part of the regulation that currently 
cover air space, air rights, leasing and disposal. The FWHA believes 
that this part can be updated, clarified, and streamlined by 
consolidating and reorganizing the

[[Page 70010]]

requirements applicable to the management of real property interests, 
including alternate uses and permanent disposition of ownership rights. 
This NPRM proposes to update the real property management regulations 
by simplifying the categories of transactions and clarifying the 
applicable requirements when a grantee wishes to allow an alternate use 
of ROW or dispose of a real property interest altogether because it is 
not needed for highway purposes. Because the project owner typically is 
the grantee or subgrantee, the term ``grantee'' is used throughout this 
subpart where provisions are applicable to owners of real property 
interests purchased with title 23 funds or incorporated into a facility 
funded under title 23.

Section 710.401 General

    This NPRM proposes to revise 710.401 by eliminating the language 
about the change of access control and use of real property interests 
along the Interstate because that topic is addressed in sections 
710.403 and 710.405. The proposed rule would add language to this 
section that clarifies that grantees have oversight responsibilities 
for compliance of subgrantees with real property management 
requirements. This includes situations where the ROW is owned by the 
subgrantee.

Section 710.403 Management

    This NPRM proposes to revise 710.403 by inserting a new paragraph 
(a) before the existing paragraph (a) and redesignating the existing 
parts of this section accordingly. The new paragraph (a) would discuss 
the option for assignment to the SDOT of FHWA approval authorities 
through the use of the Stewardship/Oversight Agreement between FHWA and 
the SDOT. The FHWA believes that, in particular, disposal authority for 
actions off of the Interstate may be assigned to the SDOTs through the 
Stewardship/Oversight Agreement, provided that the assignments are 
written and that they specifically enumerate the approval authorities 
that are being assigned. Disposal and use of Interstate real property 
interests, and disposals at less than fair market value, will continue 
to require direct FHWA approval.
    This NPRM proposes to revise the redesignated section 710.403(b) 
(currently section 710.403(a)) by replacing ``boundaries'' with the 
phrase ``approved ROW limits or other project limits.'' This change 
acknowledges the evolution of title 23-funded projects to include some 
projects that are not linear, land-based highways. The NPRM would add a 
more detailed description of the standards that must be satisfied in 
order to permit non-highway uses of real property. The proposed 
language is consistent with the requirements in 23 CFR 1.23. The FHWA 
believes the changes would clarify the considerations that a grantee 
must take into account when evaluating potential alternate uses.
    This proposed rule would revise the redesignated section 710.403(c) 
(section 710.403(b) of the existing regulation) by adding language 
clarifying the reference to ``manual'' is to the approved ROW manual. 
The proposed rule also revises the regulatory text to clarify that the 
ROW manual or approved RAMP must have procedures for determining 
whether a real property interest is excess real property, which this 
NPRM proposes to define as a real property interest not needed 
currently or in the foreseeable future for transportation purposes or 
other uses eligible under title 23. Excess real property may be sold or 
otherwise permanently disposed of by the grantee. The new provision 
also would require the ROW manual to contain procedures for determining 
when a real property interest may be made available under a ROW use 
agreement for an alternate use that is consistent with the requirements 
described in proposed section 710.403(b). The NPRM would eliminate the 
explicit list of organizational units with which the grantee must 
coordinate when considering whether property is excess or can be made 
available for an alternate use. The FHWA believes grantees are best 
qualified to determine what type of internal coordination is 
appropriate.
    This NPRM proposes to revise redesignated section 710.403(d) 
(currently section 710.403(c)) to update the language on environmental 
review of ROW use agreements and disposals and clarify the scope of the 
provision. The NPRM proposes eliminating the reference to FHWA 
approval. This change is made to better reflect FHWA's use of the 
Stewardship/Oversight Agreement to permit an SDOT to assume 
responsibility for certain ROW use agreement and disposal 
determinations. The new paragraph retains the requirement for 
environmental review of such transactions pursuant to 23 CFR part 771. 
The changes to this paragraph would not affect any assignment of 
environmental review responsibilities entered into by FHWA and the 
SDOTs.
    This NPRM proposes to revise redesignated section 710.403(e) 
(currently section 710.403(d)) by adding language to clarify that the 
requirement to charge fair market value, except as provided in 
paragraph (e), applies to the use and disposal of all real property 
interests obtained with the assistance of title 23 funds. This revision 
is needed to eliminate confusion that has occasionally occurred in 
administration of the existing regulation. The NPRM proposes to delete 
language describing the principles guiding disposals. The principles 
and the requirements for fair market value and use of net proceeds are 
covered in detail in other parts of this and other sections in part 
710, making this language redundant. The NPRM also proposes clarifying 
the language in the paragraph relating to FHWA approval of a disposal 
at less than fair market value, as further described below.
    This NPRM proposes to revise newly numbered 710.403(e)(1) 
(currently 710.403(d)(1)) by rewording the language to clarify its 
intent and the long-standing FHWA interpretation of this exception to 
the fair market value requirement. The revised provision would state, 
in part, that the exception applies when it is in the overall public 
interest based on social, environmental, or economic benefits. The 
revision would use the word ``benefits'' in place of the current term 
``purposes.'' The FHWA believes that the change in language from 
``purposes'' to ``benefits'' more accurately describes how the public 
interest is determined and the type of effect that FHWA and the grantee 
reasonably must expect will result from this type of disposal in order 
to approve the less-than-fair-market-value transaction. The current 
regulation allows the SDOT or other grantee to use its ROW manual to 
describe the criteria for evaluating requests for less-than-fair-
market-value disposals on social, environmental, or economic grounds. 
The NPRM proposes to change from the current permissive language to a 
requirement that the approved ROW manual contain such criteria. The 
FHWA believes that the criteria for determining whether adequate 
social, environmental, or economic benefits are present must be clearly 
and unambiguously detailed in the approved ROW manual in order to 
clearly document the specific positive benefits that the grantee and 
public will be receiving as a result of the proposed disposal.
    The proposed rule would eliminate the current regulation's 
reference to 23 U.S.C. 142(f) in the existing section 710.403(d)(1). 
This change would be part of the creation of a paragraph in new section 
710.403(e)(5) that consolidates the regulatory provisions in part 710 
that address the issue of fair

[[Page 70011]]

market value when ROW will be used for publicly owned mass transit 
purposes. This proposed rule would use the regulatory text at 
710.405(c) of the existing regulation for the new section 
710.403(e)(5). The new regulation would change the numbering of the 
current sections 710.403(d)(2) through (4) to sections 710.403(e)(2) 
through (4), respectively.
    The NPRM would redesignate existing section 710.403(d)(5) as 
710.403(e)(6), and insert the word ``other'' into the text to clarify 
that the intent of the provision is to cover types of projects not 
otherwise listed in 710.403(e)(2) through (5). The proposed rule would 
modify the language in section 710.403(e)(6) to clarify that concession 
agreements affecting title 23-funded facilities are not exempt from 
fair market value requirements. The FWHA believes that this clean-up 
and reorganization will make it easier for grantees and other to 
understand and apply this part of the regulations.
    This NPRM proposes to revise section 710.403(f) (currently section 
710.403(e)) by clarifying that the Federal share of the net income from 
any alternate use or disposal of a real property interest obtained with 
title 23 funds must be used for title 23 eligible activities. This 
language implements 23 U.S.C. 156. The NPRM also proposes modifying the 
language at the end of paragraph (f) to more clearly state that the use 
of net income described in this part does not cause title 23 
requirements to apply to such use. The FHWA believes that these 
clarifications are necessary to ensure grantees clearly understand the 
requirements of 23 U.S.C. 156 that are reflected in section 710.403(f).
    This NPRM proposes to relocate the provision in the current 
regulation (now 710.403(f)) concerning the disposal of excess real 
property outside the ROW when no Federal funds were used to acquire it. 
The FHWA proposes to move the provision to a revised section 710.409 
that consolidates the provisions of the regulation relating to disposal 
of excess property. This change is proposed for purposes of clarity and 
streamlining.

Section 710.405 ROW Use Agreements

    This NPRM proposes to change the title of section 710.405 from 
``Air rights on the Interstate'' to ``ROW use agreements.'' This change 
supports other proposed changes to the section, discussed below.
    This NPRM would change the approach to property management by 
eliminating the current regulation's discussion of air space and air 
rights agreements in section 710.405. This NPRM also would eliminate 
the separate section on leasing in section 710.407. Instead, the 
proposed regulation would rely on the concept of ``ROW use agreements'' 
to handle leases and other time-limited non-highway uses both inside 
and outside of the approved ROW limits of all Federal-aid highways and 
transportation facilities, including Interstates. The process of 
deciding whether to grant a ROW use agreement would continue to include 
consideration of whether the proposed use will interfere with the 
transportation facility. The FHWA expects this evaluation process to 
embody the same considerations for protecting the transportation 
facility that the current regulation calls for in its air space, air 
rights agreements, and leasing provisions.
    The new section 710.405 proposed in this NPRM would eliminate use 
of the term ``airspace,'' and instead use ``real property interests,'' 
which is a term this NPRM proposes to make synonymous with the term 
``real property.'' As defined in section 710.105 of the current 
regulation, ``air space'' is the space located above and/or below a 
highway or other transportation facility's established grade line, 
lying within the horizontal limits of the approved ROW or project 
boundaries. Thus, ``air space'' is a subset of the entirety of the real 
property interests that make up full fee ownership of real property.
    This NPRM also proposes to eliminate use of the term ``air 
rights.'' An ``air rights'' agreement under the existing section 
710.405 is the method used to convey time-limited and/or permanent 
rights for an alternate use of air space. Under this NPRM, the 
regulation would use the term ``ROW use agreement'' when referring to a 
time-limited agreement to permit an alternate use of real property that 
is part of a title 23-funded facility or was acquired with title 23 
funds. A conveyance of permanent rights would be handled as a disposal.
    As discussed earlier in this NPRM, FHWA is proposing these changes 
because it believes the continued use of the terms ``air space'' and 
``air rights'' is unnecessarily confusing. In current title 23 real 
estate practice, the terms ``air space'' and ``air rights'' rarely 
describe the true nature and scope of the alternate use rights being 
granted. In addition, FHWA believes it is no longer necessary to call 
out air space separately from the remaining parts of the facility, as 
the agreement for the use should specify in detail the parts of the 
facility affected by the alternate use. In the agency's experience, the 
existing regulatory scheme involving ``air space'' and ``air rights'' 
is often challenging to administer, and FHWA believes it will be more 
effective for the regulations to focus on distinguishing between a 
grant of time-limited rights (ROW use agreements) and a conveyance of 
permanent rights (disposal).
    Accordingly, this NPRM proposes to rewrite section 710.405 to 
reflect proposed provisions on ROW use agreements. Language in the 
existing section that FHWA believes should apply to such agreements 
would be retained or updated. Proposed section 710.405(a) would contain 
a description of ROW use agreements and a number of general 
requirements applicable to those agreements. The proposed rule also 
would change section 710.405(a) by adopting a reference to highways, as 
defined in 23 U.S.C. 101(a), that received title 23 funds.
    Existing section 710.405 governs FHWA approval of air rights on the 
Interstate system and contains a list of transactions excluded from the 
section. This NPRM proposes retaining those listed exclusions that 
would remain in effect under the proposed ROW use agreement provisions 
in 710.405. The exclusion for non-Interstate highways now in section 
710.405(a)(2)(i) would be deleted, as it is no longer needed given the 
restructuring of this subpart. The deletion would not eliminate the 
authority to assign non-Interstate ROW use agreement approvals to SDOTs 
through the FHWA-SDOT Stewardship and Oversight Agreement. These 
changes in 710.405(a) are consistent with the NPRM's proposed 
simplified approach to management of alternate uses for all real 
property interests that are part of a Federal-aid facility or were 
acquired with Federal-aid funds.
    The deletion of the exception for non-Interstate highways would 
result in redesignating the remaining exceptions in 710.405(a)(2). This 
NPRM proposes to revise the redesignated section 710.405(a)(2)(ii) 
(section 710.405(a)(2)(iii) in the current regulation) by adding 
references to additional parts of the title 23 regulation that apply to 
the relocation of railroads or utilities. The FHWA believes that adding 
the additional references to this section provides clarity and 
additional detail, and makes it easier to determine when this section 
of the regulation applies.
    Section 710.405(b) is rewritten to reflect the applicability of the 
ROW use agreements to only time-limited rights, and to articulate a 
number of provisions such agreements must include. The requirements 
cover such topics as the term of the ROW use agreement, the design and 
location of the alternate use,

[[Page 70012]]

insurance to protect FHWA and the State, and compliance with 
nondiscrimination requirements. The FHWA considers this information as 
the minimum necessary to protect the Federal interest in facilities 
that would become subject to a ROW use agreement. The agency recognizes 
this type of detail was eliminated from FHWA real estate and ROW 
regulations in earlier rulemakings, previously referenced, based on the 
assumption the requirements would be embodied in other types of agency 
directives. However, FHWA has found the absence of this information 
from the regulations has made it more difficult for grantees and others 
to understand what is required.
    Proposed sections 710.405(c) and (d) set forth language taken from 
the leasing provision in section 710.407 of the current regulation. 
Those provisions, from existing sections 710.407(b) and (c), 
respectively, prohibit the use of Federal funds if an alternate use 
requires a change in the transportation facility, and require alternate 
uses to conform to design standards and safety criteria. The FHWA 
believes it is logical to place these provisions with the other 
requirements affecting ROW use agreements, since such agreements 
include lease transactions.
    This NPRM proposes addition of a new provision in section 
710.405(e) that incorporates into the regulation the application 
requirements that FHWA and the SDOTs have been using for some time when 
a third party wishes to obtain use rights in a Federal-aid facility. 
The requirements include submission of the identity of the party 
responsible for developing and operating the alternate use, a 
description of the proposed use and why it would be in the public 
interest, and information demonstrating the design and location of the 
proposed use will meet the requirements in section 710.405. The FHWA 
considers this information as the minimum necessary to allow adequate 
review of proposed alternate uses. As previously discussed, the agency 
recognizes this type of detail was eliminated from FHWA real estate and 
ROW regulations in earlier rulemakings. However, FHWA has found the 
absence of this information from the regulations has made it more 
difficult for grantees and others to understand what is required.

Section 710.407 Reserved

    As stated above, this NPRM proposes to delete existing section 
710.407, on leasing, and reserve the section for future use. The 
rationale for the proposal is discussed in detail in the discussion of 
section 710.405.

Section 710.409 Disposal of Excess Real Property

    This NPRM proposes changing the title of section 710.409 from 
``Disposals'' to ``Disposal of excess real property.'' This change is 
part of the proposed update in approach to real property management. 
This NPRM proposes to clarify that when a real property interest is not 
needed for the transportation facility now or in the foreseeable 
future, the grantee may determine it is excess real property and 
dispose of it in whole or in part. As previously mentioned, this NPRM 
also proposes changes to the definition of ``disposal'' in section 
710.105, to clarify a disposal involves the conveyance of permanent 
rights in excess real property, and that a disposal must meet the 
requirements in proposed 23 CFR 710.403(b). The proposed revisions to 
section 710.409 detail the requirements for carrying out a disposal. 
Much of the language in sections 710.409(a) through (d) is retained, 
although some changes are proposed to align the language with the new 
approach described above and to update the terminology and regulatory 
references.
    This NPRM proposes to delete the last sentence of existing section 
710.409(b), concerning SDOT use of a disposal listing to notify other 
Federal, State, and local agencies of a proposed disposal of excess 
real property. The FHWA believes the language is no longer necessary. 
The FWHA understands that SDOTs may decide to continue to use the 
disposal notification listing as a method of notifying State agencies 
of real property interests which the SDOT is considering disposing of 
and which may be of use to another State agency. The FHWA believes that 
SDOTs and other grantees may effectively use a number of other methods 
to meet the notification requirements of this paragraph.
    This NPRM proposes to delete the last sentence in section 
710.409(d) as duplicative of other parts of this regulation. The FHWA 
believes the requirements for disposals at less than fair market value 
are covered in the proposed section 710.403(e) and do not need to be 
restated in this paragraph.
    As discussed earlier in this NPRM, this proposed rule would move 
the provisions in existing section 710.403(f), concerning disposal of 
excess real property outside the approved ROW limit or project 
boundary, to a new section 710.409(e). The FHWA believes it is more 
logical to place the provision in this specific section on disposals, 
than to have it in section 710.403, which covers a broad range of 
management topics. This NPRM does not propose to substantively change 
existing section 710.403(f). For similar reasons, this NPRM proposes to 
relocate the provision on relinquishments from section 710.403(g) in 
the existing regulation, to a new section 710.409(f).
    This NPRM proposes adding a new section 710.409(g) to incorporate 
into the regulation the information required in order to approve a 
request for a disposal. This information largely mirrors the types of 
information that would be required to support a request for a ROW use 
agreement under proposed section 710.405(e). To avoid duplication, 
proposed section 710.409(g) would incorporate certain submission 
requirements by reference to provisions in 710.405(e)(1)-(9). The FHWA 
has found the absence of this information from the regulations has made 
it more difficult for grantees and others to understand what is 
required.

Subpart E--Property Acquisition Alternatives

Section 710.501 Early Acquisition

    The MAP-21 provides new and revised methods for early acquisition 
of real property, with potential for either reimbursement or credits of 
real property acquisition costs. The FHWA is proposing to revise and 
reorganize this section of the regulation to add the new authorities 
and the accompanying requirements for early acquisition authorized in 
section 1302 of MAP-21 (codified in 23 U.S.C. 108), and to better 
describe the early acquisition process. The new organization includes 
an introductory paragraph describing the options for early acquisition, 
a paragraph for State-funded early acquisition without Federal credit 
or reimbursement, a paragraph for State-funded early acquisition 
eligible for future credit, a paragraph for State-funded early 
acquisition eligible for future reimbursement, and a paragraph for 
federally funded early acquisition.
    The authorities for early acquisition in 23 U.S.C. 108 are granted 
to ``States.'' The FHWA acknowledges this limiting language. However, 
FHWA also considered how the States have administered the Federal-aid 
highway program over the years. The States have used their SDOTs as the 
primary title 23 grantee, but the SDOTs have worked through subgrantees 
such as local public agencies to deliver title 23-funded projects. 
Based on this history, FHWA concluded the use of the term ``State'' in 
section 108 was intended to be read broadly, to include political

[[Page 70013]]

subdivisions and instrumentalities of the State. Proposed section 
710.501 uses the term ``State agency'' to make it clear the early 
acquisition authorities apply not only to SDOTs, but also to other 
State and local governmental agencies.
    The NPRM proposes to retain the distinction in the current 
regulation between early acquisitions in section 710.501, and hardship 
acquisition and protective buying provisions in section 701.503, with 
respect to the treatment of properties subject to 23 U.S.C. 138 
(commonly known as ``section 4(f)'' properties). A section 4(f) 
property is publicly owned land of a public park, recreation area, or 
wildlife and waterfowl refuge of national, State, or local 
significance, or land of an historic site of national, State, or local 
significance. Early acquisition provisions have not allowed early 
acquisition of section 4(f) properties. By contrast, such properties 
may be acquired under hardship acquisition or protective buying 
provisions in 710.503 if the necessary reviews and determinations have 
been completed under 23 U.S.C. 138 and 16 U.S.C. 470(f) (commonly known 
as ``section 106'' and relating to historic properties). The FHWA 
believes this distinction is still appropriate because early 
acquisitions often occur before sufficient information about the 
transportation project is available to support the necessary 
evaluations and decisions. Hardship and protective purchases typically 
occur when the proposed transportation project for which the property 
would be needed is well into NEPA and other required environmental 
reviews, and substantially more information is available about the 
location, design, alternatives, and other factors that could affect the 
evaluations and decisions.
    This proposed rule would revise existing section 710.501(a) by 
changing the title to ``General,'' describing the various early 
acquisition alternatives available, and adding language to affirm that 
all early acquisition carried out under this section must conform to 
the requirements for real property acquisition for a title 23-funded 
project or program. The FHWA believes that it is necessary to add the 
language concerning the requirement that property acquired under this 
section conform to title 23 acquisition rules in order to avoid any 
confusion about whether the authorities in section 108 create 
exceptions to those requirements. If a grantee is acquiring property 
for a title 23-eligible project, then that property must be acquired in 
conformance with title 23 requirements in order to preserve eligibility 
for title 23 funding. In most cases, the requirements to preserve 
eligibility for funding are already being met by SDOTs and others when 
they acquire properties under the current provisions.
    This NPRM proposes to add a new section 710.501(b), State-funded 
early acquisition without Federal credit or reimbursement. Paragraph 
(b) clarifies long-standing acquisition requirements that a State 
agency must meet in order to maintain future project eligibility under 
title 23 if the State agency carries out early acquisitions without 
seeking credit or reimbursement for the costs from title 23 funds. The 
SDOTs increasingly choose to use their limited title 23 funds on other 
phases or parts of a project or program, and often do not seek credit 
or reimbursement for their early acquisition costs. In fact, those 
acquisitions can affect the eligibility of the entire project, making 
it important to ensure the SDOTs and other State agencies are aware of 
applicable requirements. If a State agency wants a project to be 
eligible for title 23 funds in any phase, title 23 acquisition 
requirements, including compliance with the Uniform Act, must be met. 
The FHWA believes that States already understand this point, but that 
it is important to remove any potential for confusion by expressly 
including the requirements and conditions in section 710.501(b) so that 
States can effectively ensure that a project remains eligible for 
Federal aid when carrying out State-funded early acquisitions.
    As a result of the new section 710.501(b), this NPRM proposes to 
redesignate existing sections 710.501(b) and 710.501(c) as sections 
710.501(c), and 710.501(d), respectively.
    This NPRM proposes to revise the redesignated section 710.501(c) to 
better describe the credit option for State-funded early acquisition. 
This section describes the requirements that must be met in order to 
maintain eligibility to use real property costs as a credit toward the 
State's share on a project or program receiving funds from the Highway 
Trust Fund. The NPRM proposes changing the wording in the first 
sentence from ``prior to executing a project agreement with the FHWA'' 
to ``prior to completion of the environmental review process for the 
transportation project.'' The FHWA believes this will be clearer and 
will better conform to the intent of 23 U.S.C. 108, as amended by MAP-
21. The NPRM does not propose any substantive changes to the list of 
conditions that must be met, although some minor updates in language 
are proposed. For clarity, this NPRM proposes adding cross-references 
in 710.501(c) to related provisions in 710.505(b) (Credit for 
donations) and 710.507 (State and local contributions).
    This NPRM also proposes to revise the redesignated section 
710.501(d) to better describe the option for State-funded early 
acquisition eligible for future reimbursement from apportioned title 23 
funds. This section incorporates requirements that State agencies must 
meet when carrying out early acquisition of real property interests and 
the State agency wishes to request reimbursement from title 23 
apportioned funds for the acquisition costs after the NEPA review for 
the entire project is complete. The NPRM substantially revises the 
existing regulation (now 710.501(c)) to conform to 23 U.S.C. 108(c), as 
amended by MAP-21. Under the NPRM, the detailed requirements of 23 
U.S.C. 108(c)(3), as well as the requirements of section 710.203(b) 
(relating to direct eligible costs), would be included by reference 
rather than described in a detailed list. The FHWA believes this is the 
best method to ensure that State agencies understand the requirements 
that must be met in order to successfully request reimbursement for 
acquisition costs under this authority.
    This NPRM proposes to add a new 710.501(e) to provide the 
requirements for using the new authority in 23 U.S.C. 108(d) for 
federally funded early acquisition of real property (an ``Early 
Acquisition Project''). Section 108(d), added by MAP-21 section 1302, 
gives States the ability to develop federally assisted projects or 
programs comprised solely of the early acquisition of real property 
interests that will be used for a proposed transportation project that 
has not yet completed the environmental review process. Section 108(d) 
requires the State agency to certify to the existence of eight 
conditions prior to FHWA authorization of title 23 apportioned funds to 
carry out early real property acquisition. This NPRM proposes a section 
710.501(e)(2) that follows the language in 23 U.S.C. 108(d)(3). This 
section would require the State agency to submit a certification 
stating each of the required conditions has been or will be satisfied.
    The FHWA would decide whether to concur with a certification based 
on the content of the certification and FHWA's knowledge of the 
project. The FHWA would request additional information to complete its 
evaluation of the certification, if needed. The FHWA does not believe 
it is practical to try to capture in regulation every scenario for 
complying with the requirements in 23 U.S.C. 108(d)(3)(B) and proposed 
710.501(e)(2). If implementation of these

[[Page 70014]]

provisions raises new questions, future guidance may be needed to 
answer specific questions that arise about the certification 
requirements and the FHWA concurrence determination processes. With the 
exception of the two areas discussed below, NEPA and condemnation, FHWA 
expects to wait until it has more experience administering the 
certification process before it considers issuing implementing 
guidance.
    The FHWA understands there are existing questions about how FHWA 
will evaluate the certifications relating to NEPA. The State agency 
must certify the proposed federally funded Early Acquisition Project 
will not cause any significant adverse environmental effects (23 U.S.C. 
108(d)(3)(B)(ii)), will not limit the choice of reasonable alternatives 
or influence the decision on the overall project (section 
108(d)(3)(B)(iii)), and does not prevent an impartial decision as to 
whether to accept an alternative being considered for the overall 
project (section 108(d)(3)(B)(iv)). This NPRM provides information on 
some of the considerations FHWA believes may be relevant to a decision 
whether to concur in the certification, but this discussion is not 
intended to be exhaustive or to limit future FHWA actions.
    As part of its determination whether to concur with the 
environmental aspects of a State agency certification under proposed 
710.501(e), FHWA may consider a number of factors such as:

    (1) Whether the Early Acquisition Project may cause negative or 
reduced public/agency confidence in the environmental review process 
for the proposed transportation project;
    (2) Potential impacts of financial and time commitments for the 
Early Acquisition Project(s) on the proposed transportation 
project's costs and schedule if an alternative ultimately is 
selected that will not require or use the properties acquired early; 
and
    (3) Possible effects of the Early Acquisition Project on the 
alternatives evaluation and selection process for the proposed 
transportation project, such as:
    (a) How the investment in Early Acquisition Project(s) affects 
the presentation of the alternatives in the proposed transportation 
project's environmental documents;
    (b) How the Early Acquisition Project(s) might affect early 
coordination with the public and participating agencies, and 
collaboration with participating agencies on the range of 
alternatives for the proposed transportation project and impact 
methodologies for alternatives analysis;
    (c) Whether the Early Acquisition Project(s) can reasonably be 
expected to cause lead agency decisionmakers to disproportionately 
support one alternative, while giving insufficient weight to 
information supporting other alternatives.

    Another certification requirement that may raise interpretive 
questions is the provision that federally funded early acquisition must 
be accomplished without the use, or threat of use, of eminent domain 
(23 U.S.C. 108(d)(3)(B)(vii) and proposed section 710.501(e)(2)(viii)). 
It is important to note that several States follow a process under 
which they use eminent domain to clear or quiet title to a property. 
The FHWA believes that after the property owner and the agency have 
reached a binding agreement on the purchase/sale of the real property 
for a project or program using the new federally funded early 
acquisition authority, States may use condemnation to clear or quiet 
title on the affected parcel without violating the statutory provision 
on condemnation.
    Consistent with 23 U.S.C. 108(d)(4) and NEPA, this NPRM proposes 
adding section 710.501(e)(4), concerning the environmental review 
process for an Early Acquisition Project funded under title 23. The 
NEPA evaluation should include consideration of both the impacts of the 
particular acquisition under review, and the impacts of other Early 
Acquisition Projects that will be carried out in connection with the 
same proposed transportation project. The FHWA's expectation is that, 
where multiple Early Acquisition Projects are carried out, the 
environmental reviews for all Early Acquisition Projects will meet NEPA 
requirements for evaluating cumulative impacts of both past, present, 
and reasonably foreseeable future Early Acquisition Projects. 
Information on the direct, indirect, and cumulative impacts of the 
early acquisition will be relevant to determining the NEPA class of 
action for the Early Acquisition Project, the acceptability of the 
impacts, and whether an Early Acquisition Project will cause 
significant adverse environmental effects under 710.501(e)(2)(iii). 
Consistent with 23 U.S.C. 108(d), under the proposed rule the NEPA 
review of an Early Acquisition Project would not include consideration 
of the direct, indirect, or cumulative impacts of the proposed 
transportation project for which the property is being purchased. The 
purpose of the new authority in 23 U.S.C. 108(d) is to allow an Early 
Acquisition Project to proceed even though NEPA is not complete for the 
proposed transportation project. Requiring NEPA evaluation of the 
impacts of the proposed transportation project before proceeding with 
the Early Acquisition Project would render the new authority in section 
108(d) meaningless.
    This new acquisition authority is premised on a ``buy and hold'' 
concept, in which the acquisition activity results only in a change in 
ownership of the real property interest, but otherwise typically 
maintains the pre-acquisition uses and conditions. The State agency, as 
part of the environmental review of the federally assisted Early 
Acquisition Project, must include an appropriate analysis of the 
impacts of the acquisition, including relocation, and any interim 
activity planned for the real property interests until the property is 
used for the proposed transportation project (such as property 
maintenance to maintain the existing condition of the property, or 
demolition for public safety reasons). This analysis will be used to 
determine whether the Early Acquisition Project's impacts are 
acceptable. The FHWA believes this approach is consistent with the 
limitation in 23 U.S.C. 108(d)(6), enacted under MAP-21. That provision 
does not allow federally assisted early acquired properties to be 
developed in anticipation of the proposed transportation project until 
the NEPA review process for the proposed transportation project is 
concluded. To facilitate understanding of the scope of this statutory 
language, this NPRM proposes a new section 710.501(f) that describes 
the types of development activities FHWA considers prohibited by the 
statute. This new section provides direction on what ``developed in 
anticipation of a project'' means. The proposed regulatory description 
of prohibited activities includes demolition, site preparation, 
clearing and grubbing, and construction that may have an adverse 
environmental impact or cause a change in the use or character of the 
real property. The FHWA believes that there may be very limited 
instances in which development activities may be appropriate. 
Accordingly, this NPRM proposes specific instances when it may be 
appropriate for FHWA to approve limited development activity based on 
public health or safety considerations.
    The NPRM also proposes adding language in 710.501(e)(4) stating 
that an Early Acquisition Project must comply with all applicable 
environmental laws. The MAP-21 changes to 23 U.S.C. 108 affect the NEPA 
review process, but do not alter or amend other environmental laws.
    This NPRM proposes adding a new 710.501(g), reflecting the 
reimbursement provisions in 23 U.S.C. 108(d)(7), as added by MAP-21 
section 1302. This new paragraph requires that when Federal-aid 
reimbursement has been

[[Page 70015]]

made for early acquired real property, the real property must be 
incorporated into a project eligible for surface transportation funds 
within the 20-year time period allowed by 23 U.S.C. 108(a)(2). If the 
State agency does not meet this requirement, FHWA will offset the 
amount reimbursed against funds apportioned to the State.
    Early acquisition provisions in both section 108(c) and (d) of 
title 23, as amended by MAP-21 section 1302, contain provisions 
designed to ensure early acquisitions fully satisfy Uniform Act 
requirements. Section 108(d)(3)(B)(viii) expressly states that the 
early acquisition may not reduce Uniform Act benefits or assistance to 
a displaced person. Consistent with that mandate, FHWA interprets the 
early acquisition provisions as subject to Uniform Act requirements in 
49 CFR part 24, and concludes that early acquisitions are not voluntary 
transactions within the meaning of 49 CFR 24.101. This NPRM proposes to 
add a new section, 710.501(h), addressing the timing of relocation 
assistance eligibility in the context of early acquisitions under 
section 710.501. The proposed section 710.501(h) provides that persons 
are eligible for relocation assistance when there is a binding written 
agreement between the acquiring agency and the property owner for the 
early acquisition of the real property interests. This would include 
tenants on properties acquired as an early acquisition, who would be 
eligible for relocation assistance when there is a binding written 
agreement between the acquiring agency and the property owner for the 
acquisition of any interests in the real property. The proposed section 
excludes situations, such as the use of an option agreement, that do 
not create an immediate commitment by the State agency to acquire and 
do not require an owner or tenant to relocate. In those cases, 
relocation eligibility does not occur until the State agency legally 
commits itself to acquiring the real property interest(s).

Section 710.503 Protective Buying and Hardship Acquisition

    This NPRM proposes updating references in section 710.503 and 
changing the term ``SDOT'' to ``grantee'' in several places. The NPRM 
also proposes revising section 710.503(d), relating to environmental 
decisions for proposed acquisitions under the protective buying and 
hardship acquisition provisions in 710.503, by adding new language 
clarifying that acquisitions under this section are subject to 
environmental review under part 771. This is a clarification of 
existing regulations. Often, such acquisitions meet the requirements 
for a categorical exclusion under 23 CFR 771.117(d)(12).

Section 710.505 Real Property Donations

    This NPRM proposes to revise 710.505(a), relating to the donation 
of real property for a title 23 project, by adding a requirement that 
the mandatory notification to the real property owner must be in 
writing. The FHWA believes that this type of documentation will help 
ensure that the property owners are fully and fairly informed, and will 
ensure the acquiring agency has the documentation necessary to support 
title 23 eligibility. The description of the required contents of the 
notice has been updated by revising the language describing valuation 
methods that can be used by an acquiring agency to develop an estimate 
of just compensation. This NPRM also changes the description of the 
notice requirements to include notice of financial and non-financial 
assistance available under applicable State law, as well as assistance 
available under the Uniform Act, to make this paragraph consistent with 
the cost eligibility provisions in section 710.203(b)(2)(ii). This NPRM 
proposes adding references in section 710.505(b) to the underlying 
statutory provision on donations.

Section 710.507 State and Local Contributions

    This NPRM proposes to revise section 710.507 to clarify that the 
requirements of 23 U.S.C. 323 must be met in cases involving State and 
local contributions. The proposed rule would reflect the 2005 repeal of 
23 U.S.C. 323(e), which was a special provision for contributions by 
local governments. The provisions governing credit for real property 
interests contributed to a project are now the same for State and local 
governments. This NPRM would implement this change by consolidating the 
provisions on local governments into 710.507(a) and (b).
    The NPRM proposes to modify existing section 710.507 by deleting 
paragraph (b), which contained an effective date related to a prior 
rulemaking, and redesignating paragraphs (c) through (e), accordingly. 
The FHWA believes that because nearly 15 years have passed since 
publication of this rule, the existing paragraph (b) is no longer 
relevant. However, if SDOTs are still carrying out projects or programs 
under agreements executed before June 9, 1998, the rules governing 
credits at the time of the project agreement for those projects would 
continue to apply. The NPRM also proposes to update references to other 
regulations in this part to conform to other proposed revisions to this 
regulation.

Section 710.509 Functional Replacement of Real Property in Public 
Ownership

    In addition to updating terms throughout the section, this NPRM 
proposes to modify section 710.509(b)(4), which governs the notices 
that must be provided when the acquiring agency considers the 
functional replacement of a publicly owned real property in lieu of 
paying fair market value for the property. The revision would add a 
requirement that notification to the owner agency of its right to 
receive just compensation must be in writing. This type of 
documentation will help ensure that the property owners are fully and 
fairly informed, and that the acquiring agency has the documentation 
necessary to support title 23 eligibility.

Section 710.511 Transportation Alternatives Program

    Congress did not reauthorize the Transportation Enhancements 
Program in MAP-21, but instead included elements of that program in the 
newly enacted TAP as described in MAP-21 Sections 1103 and 1122 
(codified at 23 U.S.C. 133(b)(11) and 213). This NPRM proposes to 
replace all references to transportation enhancements in the existing 
regulation with references to TAP and to rewrite this section to 
conform to TAP provisions. Any projects authorized under the former 
Transportation Enhancement Program will continue to be subject to the 
existing requirements.
    This NPRM proposes to revise and reorganize section 710.511(b). The 
requirements for Uniform Act compliance and applicability that are in 
sections 710.511(b)(1) and (2) of the existing regulation are 
consolidated and incorporated into proposed section 710.511(b)(1). This 
NPRM proposes to delete the exemption for acquisitions by conservation 
organizations that is contained in existing section 710.511(b)(2). This 
exclusion was contained in section 315 of the National Highway System 
Designation Act of 1995 (Pub. L. 104-59, 109 Stat. 588), and 
subsequently incorporated into part 710 at 710.511(b)(4). The reason 
for the proposed deletion is that this exemption from the Uniform Act 
requirements was eliminated when MAP-21 was enacted. Under MAP-21 
amendments to 23

[[Page 70016]]

U.S.C. 213(e), TAP projects are subject to Federal-aid highway 
requirements under title 23, with a limited exception for recreational 
trails projects. The Uniform Act provisions for voluntary acquisitions 
in the 49 CFR part 24 implementing regulations will continue to apply 
to such transactions.
    This NPRM proposes to modify section 710.511(c) by updating the 
description of the applicability of the Subpart D Real Property 
Management rules to TAP properties, by requiring the use of a TAP 
property agreement between the grantee and FWHA that specifies the 
expected useful life of the project and establishes a pro rata 
repayment if the acquired property in whole or part is used for another 
purpose. This requirement is needed to ensure TAP projects comply with 
the long-standing FHWA interpretation that this type of project, which 
often involves the use of leases and other time-limited property 
rights, must guarantee a project life of sufficient length to support 
the use of title 23 funds; and that if the project terminates early, 
title 23 funds that were approved for use for the stated project 
purpose are recovered.

Subpart F--Federal Assistance Programs

Section 710.601 Federal Land Transfers

    This NPRM proposes to revise section 710.601(a) to incorporate a 
conforming amendment in section 1104(c)(6) of MAP-21, which clarified 
that Federal land transfers are available for eligible highway projects 
that are not on a Federal highway system. This NPRM propose to revise 
section 710.601(b) to refer to the acquisition of ``real property'' 
rather than ``lands or interests in lands'' for consistency with the 
rest of part 710. This terminology change does not change the type of 
interests that can be acquired. The FHWA also proposes language in 
paragraph (b) on the eligibility for the use of authorities under 23 
U.S.C. 107(d) and 317, which permit FHWA to transfer real property from 
the United States to non-Federal owners. The change is to recognize 
that the two statutes have slightly different eligible entities, 
although both statutes make SDOTs eligible.
    In section 710.601(e), the qualifier ``For projects not on the 
Interstate System'' is proposed to be added to the second sentence, 
before the limitation that the land-management agency shall have a 
period of 4 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. Under section 107(d) of title 23, transfers of Federal 
property for the Interstate System are not subject to the designation 
of conditions or certification by the land-management agency. Finally, 
a new section 710.601(f) is proposed to clarify that FHWA can 
participate in costs incurred by the grantee and associated with 
Federal land transfers when the transferring Federal land-management 
agency is required to assess such costs as a condition of transfer. 
Current paragraphs (f) through (h) would be redesignated (g) through 
(i), and language would be added to clarify the process for carrying 
out a transfer of Federal lands. The NPRM proposes the addition of 
language in redesignated section 710.601(i), relating to property no 
longer needed for the title 23 project, to recognize the authority for 
alternate agreements when other Federal law does not permit a reversion 
of the property back to the United States or the original land-
management agency.

Section 710.603 Direct Federal Acquisition

    This rule proposes to revise and reorganize paragraphs (a)-(c) to 
clarify when FHWA may make a direct Federal acquisition from non-
Federal owners, and to clarify the slight differences in the processes 
to be followed for projects for the Interstate System and Defense 
Access Road projects, and other types of projects carried out by the 
FHWA Office of Federal Lands Highways. Proposed 710.603(a) would cover 
direct Federal acquisitions for Interstate System and for Defense 
Access Road projects. Proposed 710.603(b) would address other types of 
Federal acquisition of real property from non-Federal owners.
    The MAP-21 made several changes to the names of programs funded 
under chapter 2 of title 23 and this NPRM proposes to eliminate the 
list of program names in existing section 710.603(a). Language is 
proposed in new paragraphs (b) and (h) clarifying that FHWA may not 
accept jurisdiction for any property acquired, even temporarily. This 
addition is made to address questions that have arisen in in connection 
with such transfers. The FHWA carries out these transactions solely as 
a means of placing the property needed for a project into the ownership 
of the State or the applicant agency. There is no intention for FHWA to 
accept or retain land management authority, and the agency does not 
have the administrative means to manage or oversee such properties.
    In reorganizing section 710.603, FHWA considered eliminating the 
Federal acquisition provisions contained in proposed 710.603(b), which 
apply to projects other than Interstate Highways and Defense Access 
Roads. The FHWA asks for comments on whether the provision is needed, 
given that it is seldom used and the underlying statutory authority for 
Federal condemnation actions would remain available in appropriate 
situations.

Subpart G--Concession Agreements

    This NPRM proposes to change the ``State transportation 
department'' reference in 710.703(f) to ``SDOT,'' for consistency with 
the proposed reference changes throughout part 710.

PART 810--MASS TRANSIT AND SPECIAL USE HIGHWAY PROJECTS

Subpart A--General

Section 810.212 Use Without Charge

    This NPRM proposes to revise section 810.212 by striking the word 
``shall'' in the regulation and replacing it with ``may'' to eliminate 
an inconsistency between existing section 810.212 and other parts of 
applicable law. This will address a recurring question in recent years, 
which has been whether an SDOT is required to provide land needed for 
transit projects or programs 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 as is 
currently stated in section 810.212. Section 142(f) of title 23 U.S.C., 
states that a State shall be authorized to provide the land needed with 
or without charge. The existing regulation at 23 CFR 710.405(c) 
contains language that is consistent with the statute. This NPRM 
proposes to revise the language in section 810.212 to make it 
consistent with the statute and the part 710 regulation. Each State 
will continue to determine when State law, regulation, or policy allows 
or prohibits a conveyance without charge to a publicly owned mass 
transit authority for public transit purposes. This change will not in 
any way prohibit a State from providing land needed for transit 
projects or programs with no charge.

Rulemaking Analyses and Notices

    All comments received before the close of business on the comment 
closing date indicated above will be

[[Page 70017]]

considered and will be available for examination in the docket at the 
above address. Comments received after the comment closing date will be 
filed in the docket and will be considered to the extent practicable. 
In addition to late comments, the FHWA will also continue to file 
relevant information in the docket as it becomes available after the 
comment period closing date, and interested persons should continue to 
examine the docket for new material. A final rule may be published at 
any time after close of the comment period and after DOT has had the 
opportunity to review the comments submitted.
    The FHWA filed a redline version of parts 635, 710, and 810 in the 
docket to show all changes to the regulation text and facilitate public 
review and comment.

Executive Orders 12866 and 13563 (Regulatory Planning and Review) and 
DOT Regulatory Policies and Procedures

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). The FHWA 
has determined preliminarily that this action would not be a 
significant regulatory action under section 3(f) of Executive Order 
12866 and would not be significant within the meaning of DOT's 
regulatory policies and procedures (44 FR 11032). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. It 
is anticipated that the economic impact of this rulemaking would be 
minimal. The changes that this rule proposes are requirements mandated 
by MAP-21 which add new authorities for early acquisition of property 
to part 710, and clarify the Federal-aid eligibility of a broad range 
of real property interests that constitute less than full fee 
ownership. This NPRM also proposes to streamline program requirements, 
clarify the Federal-State partnership, and carry out a comprehensive 
update of part 710. Corresponding revisions are proposed for related 
regulations in 23 CFR parts 635 and 810 to help ensure consistency in 
interpretation of title 23 requirements, and to better align the 
language of the regulations with current program needs and best 
practices. This proposed rule would implement changes identified by the 
public in response to the DOT's initiative on Implementation of 
Executive Order 13563, Retrospective Review and Analysis of Existing 
Rules. The FHWA believes that the proposed streamlining and updating in 
this NPRM will result in a reduction of Federal requirements and will 
afford the States new flexibilities to more efficiently acquire real 
property.
    The FHWA has had an ongoing dialog with stakeholders and has 
developed the proposed rule in a manner that balances stake holders 
concerns and practical implementation issues to allow SDOTs to utilize 
the new flexibilities while minimizing their effects on existing 
requirements and procedures. The FHWA believes that this rule will be 
non-controversial due to the scope and nature of the proposed additions 
and changes to the regulation.
    The FHWA estimated the incremental costs associated with two new 
requirements proposed in this NPRM that represent a change to current 
practices for SDOTs and MPOs. These costs will be primarily incurred by 
SDOTs. The FHWA derived the costs \7\ of the two components by 
assessing the expected increase in level of effort from labor to update 
ROW manuals, and the increase in level of effort required to comply 
with new early acquisition requirements.
---------------------------------------------------------------------------

    \7\ The FHWA used salary data from Indeed Salary Search 
(www.indeed.com) which represents an index of salary information 
from job postings over the past 12 months to estimate labor costs.
---------------------------------------------------------------------------

    To estimate costs, FHWA first considered the costs associated with 
updating the SDOT ROW manual. The FHWA multiplied the level of effort, 
expressed in labor hours, with a corresponding loaded wage rate for the 
professional staff necessary to complete updates to the ROW manual. 
Following this approach the undiscounted incremental costs to comply 
with this rule are $890,000.\8\ These costs represent one time costs to 
implement this rule.\9\
---------------------------------------------------------------------------

    \8\ This estimate assumes that it will take approximately 225 
hours to complete necessary updates to a ROW manual, that a loaded 
rate of $76 per hour (Hourly rate $47.60 for a ROW manager; 
estimated loaded rate of 160% of hourly rate) for labor will be 
incurred and by estimating the costs to update 52 ROW manuals.
    \9\ After updating the ROW manual to incorporate this 
rulemakings changes, the states will resume their normal process of 
updating their manuals.
---------------------------------------------------------------------------

    Similarly, to estimate costs associated with complying with the new 
early acquisition requirements, FHWA multiplied the level of effort, 
expressed in labor hours, with a corresponding loaded wage rate for the 
professional staff necessary to comply with those requirements and use 
the new early acquisition flexibilities. Following this approach, the 
annual undiscounted incremental costs to comply with this rule are 
$950,000.\10\
---------------------------------------------------------------------------

    \10\ The FHWA calculated this by estimating that there would be 
260 Early Acquisition Projects per year which would require 
approximately 40 hours of time each to comply with requirements 
associated only with Early Acquisition Projects. The FHWA used a 
loaded rate $76 per hour (Hourly rate $47.60 and an estimated loaded 
rate of 160% of hourly rate) for labor will be incurred (based on 
the cost of a ROW manager's loaded hourly rate).
---------------------------------------------------------------------------

    The FHWA could not directly quantify the expected benefits due to 
data limitations and the amorphous and qualitative nature of the 
benefits from the proposed rule. The FHWA believes that significant new 
flexibilities in early acquisition will allow SDOTs to acquire real 
property interests earlier, ensuring parcel availability, ROW cost 
control and cost certainty, and fewer project delay claims due to ROW 
not being available. The FHWA believes that the expected qualitative 
and quantitative benefits from the use of the early acquisition 
flexibilities alone will exceed the cost of implementing the rule. In 
addition, the FHWA believes that significant benefits may accrue 
because this proposal clarifies and streamlines additional requirements 
including property management requirements, stewardship and oversight 
requirements, and Federal land transfer requirements. The FHWA invites 
comments on its cost estimates and discussion of benefits.
    These proposed changes are not anticipated to adversely affect, in 
a material way, any sector of the economy. In addition, these changes 
would not interfere with any action taken or planned by another agency 
and would not materially alter the budgetary impact of any 
entitlements, grants, user fees, or loan programs. Consequently, a full 
regulatory evaluation is not required.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), FHWA 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 
which includes SDOTs, Local Public Agencies, and other State 
governmental agencies.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose unfunded mandates as defined by 
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). 
This proposed rule will not result in the

[[Page 70018]]

expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $148.1 million or more in any one year (2 
U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform 
Act of 1995, FHWA would evaluate any regulatory action that might be 
proposed in subsequent stages of the proceeding to assess the effects 
on State, local, and tribal governments and the private sector. 
Additionally, the definition of ``Federal Mandate'' in the Unfunded 
Mandates Reform Act excludes financial assistance of the type in which 
State, local, or tribal governments have authority to adjust their 
participation in the program in accordance with changes made in the 
program by the Federal Government.

Executive Order 13132 (Federalism Assessment)

    Executive Order 13132 requires agencies to assure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial, direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. This proposed action has been analyzed in 
accordance with the principles and criteria contained in Executive 
Order 13132, and FHWA has preliminarily determined that this proposed 
action would not warrant the preparation of a federalism assessment. 
The FHWA has also determined that this proposed action would not 
preempt any State law or State regulation or affect any State's ability 
to discharge traditional State governmental functions.

Executive Order 13175 (Tribal Consultation)

    The FHWA has analyzed this action under Executive Order 13175 and 
believes that the proposed action would not have substantial direct 
effects on one or more Indian tribes; would not impose substantial 
direct compliance costs on tribal governments; and would not preempt 
tribal law. Therefore, a tribal summary impact statement is not 
required.

Executive Order 13211 (Energy Effects)

    The FHWA has analyzed this action under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The FHWA has determined that the proposed action 
is not a significant energy action under that order because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Therefore, a Statement of Energy 
Effects under Executive Order 13211 is not required.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities apply 
to this program. Local entities should refer to the Catalog of Federal 
Domestic Assistance Program Number 20.205, Highway Planning and 
Construction, for further information.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the OMB for 
collections of information they conduct, sponsor, or require through 
regulations. The PRA applies to Federal agencies' collections of 
information imposed on 10 or more persons. ``Persons'' include a State, 
territorial, tribal, or local government, or branch thereof, or their 
political subdivisions.
    This action contains amendments to the existing information 
collection requirements previously approved under OMB Control Number 
2125-0586. As required by the PRA, the FHWA has submitted these 
proposed information collection amendments to OMB for its review. This 
proposal rule requires additional information in the SDOT ROW manual. 
The FHWA estimates that the additional requirements will increase the 
total burden hours by 11,700, or an average of 225 hours per grantee.
    The FHWA invites interested parties to send comments regarding any 
aspect of this information collection, including: (1) Whether the 
collection of information is necessary; (2) the accuracy of the 
estimated burden; (3) ways to enhance the quality, utility, and clarity 
of the collection of information; and (4) ways to minimize the 
collection burden without reducing the quality of the information 
collected.

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 12898 (Environmental Justice)

    Executive Order 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, and DOT 
Order 5610.2(a) (the DOT Order), 91 FR 27534 (May 10, 2012) (available 
online at www.fhwa.dot.gov/enviornment/environmental_justice/ej_at_dot/order_56102a/index.cfm), require DOT agencies to achieve environmental 
justice (EJ) as part of their mission by identifying and addressing, as 
appropriate, disproportionately high and adverse human health or 
environmental effects, including interrelated social and economic 
effects, of their programs, policies, and activities on minority 
populations and low-income populations in the United States. The DOT 
Order requires DOT agencies to address compliance with Executive Order 
12898 and the DOT Order in all rulemaking activities. In addition, FHWA 
has issued additional documents relating to administration of Executive 
Order 12898 and the DOT Order. On June 14, 2012, FHWA issued an update 
to its EJ order, FHWA Order 6640.23A, FHWA Actions to Address 
Environmental Justice in Minority Populations and Low Income 
Populations (the FHWA Order) (available online at www.fhwa.dot.gov/legsregs/directives/orders/664023a.htm).
    The FHWA has evaluated this proposed rule under the Executive 
Order, the DOT Order, and the FHWA Order. The FHWA has determined that 
the proposed regulations, if finalized, would not cause 
disproportionately high and adverse human health and environmental 
effects on minority or low income populations. The proposed 
regulations, if finalized, would establish procedures and requirements 
for grantees and others when acquiring, managing, and disposing of real 
property interests. The EJ principles, in the context of acquisition, 
management, and disposition of real property, should be considered 
during the planning and environmental review processes for the 
particular proposal. The FHWA will consider EJ when it makes a future 
funding or other approval decision on a project-level basis.

Executive Order 13045 (Protection of Children)

    The FHWA has analyzed this action under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. The FHWA certifies that this proposed action would not concern 
an

[[Page 70019]]

environmental risk to health or safety that might disproportionately 
affect children.

Executive Order 12630 (Taking of Private Property)

    The FHWA does not anticipate that this proposed action would effect 
a taking of private property or otherwise have taking implications 
under Executive Order 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights.

National Environmental Policy Act

    Agencies are required to adopt implementing procedures for NEPA 
that establish specific criteria for, and identification of, three 
classes of actions: those that normally require preparation of an 
environmental impact statement; those that normally require preparation 
of an environmental assessment; and those that are categorically 
excluded from further NEPA review (40 CFR 1507.3(b)). The proposed 
action is the adoption of regulations that provide the policies, 
procedures, and requirements for acquisition, management, and disposal 
of real property interests for Federal and federally assisted projects 
carried out under title 23, U.S.C. The proposed action has no potential 
for environmental impacts until the regulations, if adopted, are 
applied at the project level. The FHWA would have an obligation to 
evaluate the potential environmental impacts of such a future project-
level action if the action constitutes a major Federal action under 
NEPA.
    This proposed action qualifies for categorical exclusions under 23 
CFR 771.117(c)(20) (promulgation of rules, regulations, and directives) 
and 771.117(c)(1) (activities that do not lead directly to 
construction). The FHWA has evaluated whether the proposed action would 
involve unusual circumstances or extraordinary circumstances and has 
determined that this proposed action would not involve such 
circumstances. As a result, FHWA finds that this proposed rulemaking 
would not result in significant impacts on the human environment.

Regulation Identification Number

    A 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 635

    Construction and maintenance, Grant programs-transportation, 
Highways and roads, Reporting and recordkeeping requirements.

23 CFR Part 710

    Grant programs-transportation, Highways and roads, Real property 
acquisition, Reporting and recordkeeping requirements, Rights-of-way.

23 CFR Part 810

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

    Issued on: November 6, 2014.
Gregory G. Nadeau,
Acting Administrator, Federal Highway Administration.

    In consideration of the foregoing, FHWA proposes to amend title 23, 
Code of Federal Regulations, parts 635, 710, and 810 as follows:

Title 23--Highways

PART 635--CONSTRUCTION AND MAINTENANCE

0
1. The authority citation for part 635 continues to read as follows:

    Authority:  Sec. 1525 of Pub. L. 112-141, Sec. 1503 of Pub. L. 
109-59, 119 Stat. 1144; 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 1.85(a)(1).

0
2. Sec.  635.309 is revised to read as follows:


Sec.  635.309  Authorization.

    Authorization to advertise the physical construction for bids or to 
proceed with force account construction thereof shall normally be 
issued as soon as, but not until, all of the following conditions have 
been met:
    (a) The plans, specifications, and estimates (PS&E) have been 
approved.
    (b) A statement is received from the State, either separately or 
combined with the information required by Sec.  635.309(c), that either 
all right-of-way (ROW) clearance, utility, and railroad work has been 
completed or that all necessary arrangements have been made for it to 
be undertaken and completed as required for proper coordination with 
the physical construction schedules. Where it is determined that the 
completion of such work in advance of the highway construction is not 
feasible or practical due to economy, special operational problems or 
the like, there shall be appropriate notification provided in the bid 
proposals identifying the ROW clearance, utility, and railroad work 
which is to be underway concurrently with the highway construction.
    (c) Except as otherwise provided for design-build projects in Sec.  
710.309 of this chapter and paragraph (p) of this section, a statement 
is received from the State certifying that all individuals and families 
have been relocated to decent, safe, and sanitary housing or that the 
State has made available to relocatees adequate replacement housing in 
accordance with the provisions of the 49 CFR part 24 and that one of 
the following has application:
    (1) All necessary ROWs, including control of access rights when 
pertinent, have been acquired including legal and physical possession. 
Trial or appeal of cases may be pending in court but legal possession 
has been obtained. There may be some improvements remaining on the ROW 
but all occupants have vacated the lands and improvements and the State 
has physical possession and the right to remove, salvage, or demolish 
these improvements and enter on all land.
    (2) Although all necessary ROWs have not been fully acquired, the 
right to occupy and to use all ROWs required for the proper execution 
of the project has been acquired. Trial or appeal of some parcels may 
be pending in court and on other parcels full legal possession has not 
been obtained but right of entry has been obtained, the occupants of 
all lands and improvements have vacated and the State has physical 
possession and right to remove, salvage, or demolish these 
improvements.
    (3) The acquisition or right of occupancy and use of a few 
remaining parcels is not complete, but all occupants of the residences 
on such parcels have had replacement housing made available to them in 
accordance with 49 CFR 24.204. Under these circumstances, the State may 
request the FHWA to authorize actions based on a conditional 
certification as provided in this paragraph (c)(3).
    (i) The State may request approval for the advertisement for bids 
based on a conditional certification. The Federal Highway 
Administration (FHWA) will approve the request unless it finds that it 
will not be in the public interest to proceed with the bidding before 
acquisition activities are complete.
    (ii) The State may request approval for physical construction under 
a contract or through force account work based on a conditional 
certification. The FHWA will approve the request only if FHWA finds 
there are exceptional

[[Page 70020]]

circumstances that make it in the public interest to proceed with 
construction before acquisition activities are complete.
    (iii) Whenever a conditional certification is used, the State shall 
ensure that occupants of residences, businesses, farms, or non-profit 
organizations who have not yet moved from the ROW are protected against 
unnecessary inconvenience and disproportionate injury or any action 
coercive in nature.
    (iv) When the State requests authorization under a conditional 
certification to advertise for bids or to proceed with physical 
construction where acquisition or right of occupancy and use of a few 
parcels has not been obtained, full explanation and reasons therefor, 
including identification of each such parcel, will be set forth in the 
State's request along with a realistic date when physical occupancy and 
use is anticipated as well as substantiation that such date is 
realistic. Appropriate notification must be provided in the request for 
bids, identifying all locations where right of occupancy and use has 
not been obtained. Prior to the State issuing a notice to proceed with 
construction to the contractor, the State shall provide an updated 
notification to FHWA identifying all locations where right of occupancy 
and use has not been obtained along with a realistic date when physical 
occupancy and use is anticipated.
    (v) Participation of title 23 of the United States Code funds in 
construction delay claims resulting from unavailable parcels shall be 
determined in accordance with Sec.  635.124. The FHWA will determine 
the extent of title 23 participation in costs related to construction 
delay claims resulting from unavailable parcels where FHWA determines 
the State did not follow approved processes and procedures.
    (d) The State transportation department (SDOT), in accordance with 
23 CFR 771.111(h), has submitted public hearing transcripts, 
certifications and reports pursuant to 23 U.S.C. 128.
    (e) An affirmative finding of cost effectiveness or that an 
emergency exists has been made as required by 23 U.S.C. 112, when 
construction by some method other than contract based on competitive 
bidding is contemplated.
    (f) Minimum wage rates determined by the Department of Labor in 
accordance with the provisions of 23 U.S.C. 113, are in effect and will 
not expire before the end of the period within which it can reasonably 
be expected that the contract will be awarded.
    (g) A statement has been received that ROW has been acquired or 
will be acquired in accordance with 49 CFR part 24 and part 710 of this 
chapter, or that acquisition of ROW is not required.
    (h) A statement has been received that the steps relative to 
relocation advisory assistance and payments as required by 49 CFR part 
24 have been taken, or that they are not required.
    (i) The FHWA has determined that appropriate measures have been 
included in the PS&E in keeping with approved guidelines, for 
minimizing possible soil erosion and water pollution as a result of 
highway construction operations.
    (j) The FHWA has determined that requirements of 23 CFR part 771 
have been fulfilled and appropriate measures have been included in the 
PS&E to ensure that conditions and commitments made in the development 
of the project to mitigate environmental harm will be met.
    (k) Where utility facilities are to use and occupy the right-of-
way, the State has demonstrated to the satisfaction of the FHWA that 
the provisions of 23 CFR 645.119(b) have been fulfilled.
    (l) The FHWA has verified the fact that adequate replacement 
housing is in place and has been made available to all affected 
persons.
    (m) Where applicable, area wide agency review has been accomplished 
as required by 42 U.S.C. 3334 and 4231 through 4233.
    (n) The FHWA has determined that the PS&E provide for the erection 
of only those information signs and traffic control devices that 
conform to the standards developed by the Secretary of Transportation 
or mandates of Federal law and do not include promotional or other 
informational signs regarding such matters as identification of public 
officials, contractors, organizational affiliations, and related logos 
and symbols.
    (o) The FHWA has determined that, where applicable, provisions are 
included in the PS&E that require the erection of funding source signs, 
for the life of the construction project, in accordance with section 
154 of the Surface Transportation and Uniform Relocation Assistance Act 
of 1987.
    (p) In the case of a design-build project, the following 
certification requirements apply:
    (1) The FHWA's project authorization for final design and physical 
construction will not be issued until the following conditions have 
been met:
    (i) All projects must conform with the statewide and metropolitan 
transportation planning requirements (23 CFR part 450).
    (ii) All projects in air quality nonattainment and maintenance 
areas must meet all transportation conformity requirements (40 CFR 
parts 51 and 93).
    (iii) The NEPA review process has been concluded. (See 23 CFR 
636.109).
    (iv) The Request for Proposals document has been approved.
    (v) A statement is received from the SDOT that either all ROW, 
utility, and railroad work has been completed or that all necessary 
arrangements will be made for the completion of ROW, utility, and 
railroad work.
    (vi) If the SDOT elects to include ROW, utility, and/or railroad 
services as part of the design-builder's scope of work, then the 
Request for Proposals document must include:
    (A) A statement concerning scope and current status of the required 
services or, in the case of right-of-way work, a certification in 
accordance with Sec.  710.309(d)(1) of this chapter; and
    (B) A statement which requires compliance with the Uniform 
Relocation and Real Property Acquisition Policies Act of 1970, as 
amended, 23 CFR part 710, and the acquisition processes and procedures 
are in the FHWA-approved ROW manual.
    (2) During a conformity lapse, an Early Acquisition Project carried 
out in accordance with Sec.  710.501 of this chapter or a design-build 
project (including ROW acquisition activities) may continue if, prior 
to the conformity lapse, the National Environmental Policy Act (NEPA) 
process was completed and the project has not changed significantly in 
design scope, FHWA authorized the early acquisition or design-build 
project, and the project met transportation conformity requirements (40 
CFR parts 51 and 93).
    (3) Changes to the design-build project concept and scope may 
require a modification of the transportation plan and transportation 
improvement program. The project sponsor must comply with the 
metropolitan and statewide transportation planning requirements in 23 
CFR part 450 and the transportation conformity requirements (40 CFR 
parts 51 and 93) in air quality nonattainment and maintenance areas, 
and provide appropriate approval notification to the design-builder for 
such changes.

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

0
3. The authority citation for part 710 is revised to read as follows:

    Authority: Secs.1302 and 1321, Pub. L. 112-141, 126 Stat. 405. 
Sec. 1307, Pub. L. 105-178, 112 Stat. 107; 23 U.S.C. 101(a), 107,

[[Page 70021]]

108, 111, 114, 133, 142(f), 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.

0
4. Revise subparts A through F to read as follows:
Subpart A--General
Sec.
710.101 Purpose.
710.103 Applicability.
710.105 Definitions.
Subpart B--Program Administration
710.201 Grantee and subgrantee responsibilities.
710.203 Title 23 funding and reimbursement.
Subpart C--Project Development
710.301 General.
710.303 Project authorization and agreements.
710.305 Acquisition.
710.307 Construction advertising.
710.309 Design-build projects.
Subpart D--Real Property Management
710.401 General.
710.403 Management.
710.405 ROW use agreements.
710.407 [Reserved]
710.409 Disposal of excess real property.
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 Alternatives Program.
Subpart F--Federal Assistance Program
710.601 Federal land transfers.
710.603 Direct Federal acquisition.

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, 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.

    (a) This part applies whenever title 23, United States Code, grant 
funding is used, including when grant funds are expended or participate 
in project costs incurred by the State or other title 23 grantee. This 
part applies to programs and projects administered by the Federal 
Highway Administration (FHWA) and, unless otherwise stated in this 
part, to all property purchased with title 23 grant funds or 
incorporated into a project carried out with grant funding provided 
under title 23, except property for which the title is vested in the 
United States upon project completion. Grantees are accountable to FHWA 
for complying with, and are responsible for ensuring their subgrantees, 
contractors, and other project partners comply with applicable Federal 
laws, including this part.
    (b) The parties responsible for ROW and real estate activities, and 
for compliance with applicable Federal requirements, can vary by the 
nature of the responsibility or the underlying activity. Throughout 
this part, the FHWA identifies the parties subject to a particular 
provision through the use of terms of reference defined as set forth in 
Sec.  710.105. It is important to refer to those definitions, such as 
``State Department of Transportation (SDOT),'' ``grantee,'' 
``subgrantee,'' ``State agency'' and ``acquiring agency,'' when 
applying the provisions in this part.
    (c) Where title 23 of the United States Code funds are transferred 
to other Federal agencies to administer, those agencies' ROW and real 
estate procedures may be utilized. Additional guidance is available 
electronically at the FHWA Real Estate Services Web site: http://www.fhwa.dot.gov/realestate/index.htm.


Sec.  710.105  Definitions.

    (a) Terms defined in 23 U.S.C. 101(a) and 49 CFR part 24 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 to a public way.
    Acquiring agency means a State agency, other entity, or person 
acquiring real property for title 23, United States Code, purposes. 
When an acquiring agency acquires real property interests that will be 
incorporated into a project eligible for title 23 grant funds, the 
acquiring agency must comply with Federal real estate and ROW 
requirements applicable to the grant.
    Acquisition means activities to obtain an interest in, and 
possession of, real property.
    Damages means the loss in the value attributable to remainder 
property due to the severance or consequential damages, as limited by 
State law, that arise when only part of an owner's real property is 
acquired.
    Disposal means the transfer by sale or other conveyance of 
permanent rights in excess real property, when the real property 
interest is not currently or in the foreseeable future needed for 
highway ROW or other uses eligible for funding under title 23 of the 
United States Code. A disposal must meet the requirements contained in 
Sec.  710.403(b). The term ``disposal'' includes actions by a grantee, 
or its subgrantees, in the nature of relinquishment, abandonment, 
vacation, discontinuance, and disclaimer of real property or any rights 
therein.
    Donation means the voluntary transfer of privately owned real 
property, by a property owner who has been informed in writing by the 
acquiring agency of rights and benefits available to owners under the 
Uniform Act and this section, 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 interests by 
an acquiring agency prior to completion of the environmental review 
process for a proposed transportation project, as provided under Sec.  
710.501 and 23 U.S.C. 108.
    Early Acquisition Project means a project for the acquisition of 
real property interests prior to the completion of the environmental 
review process for the transportation project into which the acquired 
property will be incorporated, as authorized under 23 U.S.C. 108 and 
implemented under Sec.  710.501. It may consist of the acquisition of 
real property interests in a specific parcel, a portion of a 
transportation corridor, or an entire transportation corridor.
    Easement means an interest in real property that conveys a right to 
use or control a portion of an owner's property or a portion of an 
owner's rights in the property either temporarily or permanently.
    Excess real property means a real property interest not needed 
currently or in the foreseeable future for transportation purposes or 
other uses eligible for funding under title 23, United States Code.
    Federal-aid project means a project funded in whole or in part 
under, or requiring an FHWA approval pursuant to provisions in, chapter 
1 of title 23, United States Code.
    Federally assisted means a project or program that receives grant 
funds under title 23, United States Code.
    Grantee means the party that is the direct recipient of title 23 of 
the United States Code funds and is accountable to FHWA for the use of 
the funds and for compliance with applicable Federal requirements.
    Mitigation property means real property interests acquired to 
mitigate

[[Page 70022]]

for impacts of a project eligible for funding under title 23 of the 
United States Code.
    Option means the purchase of a right to acquire real property 
within an agreed-to period of time for an agreed-to amount of 
compensation or through an agreed-to method by which compensation will 
be calculated.
    Person means any individual, family, partnership, corporation, or 
association.
    Real Estate Acquisition Management Plan (RAMP) means a written 
document that details how a non-State department of transportation 
grantee, subgrantee, or design-build contractor will administer the 
title 23 United States Code ROW and real estate requirements for its 
project or program of projects. The document must be approved by the 
SDOT, or by the funding agency in the case of a non-SDOT grantee, 
before any acquisition work may begin. It must lay out in detail how 
the acquisition and relocation assistance programs will be accomplished 
and any anticipated issues that may arise during the process. If 
relocations are reasonably expected as part of the title 23 project or 
program, the Real Estate Acquisition Management Plan (RAMP) must 
address relocation assistance and related procedures.
    Real property or real property interest means any interest in land 
and any improvements thereto, including fee and less-than-fee interests 
such as: temporary and permanent easements, air or access rights, 
access control, options, and other contractual rights to acquire an 
interest in land, rights to control use or development, leases, and 
licenses, and any other similar action to acquire or preserve ROW for a 
transportation facility. As used in this part, the terms ``real 
property'' and ``real property interest'' are synonymous unless 
otherwise specified.
    Relinquishment means the conveyance of a portion of a highway ROW 
or facility by a grantee under title 23, United States Code, or its 
subgrantee, to another government agency for continued transportation 
use. (See 23 CFR part 620, subpart B.)
    Right-of-way (ROW) means real property and rights therein obtained 
for the construction, operation, maintenance, or mitigation of a 
transportation or related facility funded under title 23, United States 
Code.
    ROW manual means an operations manual that establishes a grantee's 
acquisition, valuation, relocation, and property management and 
disposal requirements and procedures, and has been approved in 
accordance with Sec.  710.201(c).
    ROW use agreement means real property interests, defined by an 
agreement, as evidenced by instruments such as a lease, license, or 
permit, for use of real property interests for non-highway purposes 
where the use is in the public interest, consistent with the continued 
operation, maintenance, and safety of the facility, and such use will 
not impair the highway or interfere with the free and safe flow of 
traffic (see also 23 CFR 1.23). These rights may be granted only for a 
specified period of time because the real property interest may be 
needed in the future for highway purposes or other purposes eligible 
for funding 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:
    (i) 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.
    (ii) A legal settlement is a settlement reached by an authorized 
legal representative after filing a condemnation proceeding, including 
agreements resulting from mediation and stipulated settlements approved 
by the court in which the condemnation action had been filed.
    (iii) 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 just 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 department of transportation (SDOT) means the State highway 
department, transportation department, or other State transportation 
agency or commission to which title 23, United States Code, funds are 
apportioned.
    Stewardship/Oversight Agreement means the written agreement between 
the SDOT and FHWA that defines the respective roles and 
responsibilities of FHWA and the State for carrying out certain project 
review, approval, and oversight responsibilities under title 23, 
including those activities specified by 23 U.S.C. 106(c)(3).
    Subgrantee means a government agency or legal entity that enters 
into an agreement with a grantee to carry out part or all of the 
activity funded by title 23 of the United States Code grant funds. A 
subgrantee is accountable to the grantee for the use of the funds and 
for compliance with applicable Federal requirements.
    Temporary development restriction means the purchase of a right to 
temporarily control or restrict development or redevelopment of real 
property. This right is for an agreed to time period, defines 
specifically what is restricted or controlled, and is for an agreed to 
amount of compensation.
    Transportation project means any highway project, public 
transportation capital project, multimodal project, or other project 
that requires the approval of the Secretary. As used in this part, the 
term ``transportation project'' does not include an Early Acquisition 
Project as defined in this section.
    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 (Pub. L. 91-646, 
84 Stat. 1894; primarily codified in 42 U.S.C. 4601 et seq.), and the 
implementing regulations at 49 CFR part 24.

Subpart B--Program Administration


Sec.  710.201  Grantee and subgrantee responsibilities.

    (a) Program oversight. States administer the Federal-aid highway 
program, funded under chapter 1 of title 23, United States Code, 
through their SDOTs. The SDOT shall have overall responsibility for the 
acquisition, management, and disposal of real property interests on its 
Federal-aid projects, including when those projects are carried out by 
the SDOT's subgrantees or contractors. This responsibility shall 
include ensuring compliance with the requirements of this part and 
other Federal laws, including regulations. Non-SDOT grantees of funds 
under title 23 must comply with the requirements under this part, 
except as otherwise expressly provided in this part, and are 
responsible for assuring compliance by their subgrantees and 
contractors with the requirements of this part and other Federal laws, 
including regulations.
    (b) Organization. Each grantee and subgrantee, including any other 
acquiring agency acting on behalf of a

[[Page 70023]]

grantee or subgrantee, shall be adequately staffed, equipped, and 
organized to discharge its real property related responsibilities.
    (c) ROW manual. (1) Every grantee must ensure that its title 23-
funded projects are carried out using an FHWA-approved and up-to-date 
ROW manual or RAMP that is consistent with applicable Federal 
requirements, including the Uniform Act and this part. Each SDOT that 
receives funding under title 23, United States Code, shall maintain an 
approved and up-to-date ROW manual describing its ROW organization, 
policies, and procedures. Non-SDOT grantees may use one of the 
procedures in paragraph (d) of this section to meet the requirements in 
this paragraph. The ROW manual shall describe functions and procedures 
for all phases of the ROW program, including appraisal and appraisal 
review, waiver valuation, negotiation and eminent domain, property 
management, relocation assistance, administrative settlements and 
oversight of its subgrantees and contractors. The ROW manual shall also 
specify procedures to prevent conflict of interest and avoid fraud, 
waste, and abuse. The ROW manual shall be in sufficient detail and 
depth to guide the grantee, its employees, and others involved in 
acquiring, managing, and disposing of real property interests. 
Grantees, subgrantees, and their contractors must comply with current 
FHWA requirements whether or not the requirements are included in the 
FHWA-approved ROW manual.
    (2) The SDOT's ROW manual must be developed and updated, as a 
minimum, to meet the following schedule:
    (i) The SDOTs shall prepare and submit for approval by FHWA an up-
to-date ROW Manual by no later than 2 years after the publication of 
this rule.
    (ii) Every 5 years thereafter, the chief administrative officer of 
the SDOT shall certify to the FHWA that the current SDOT ROW manual 
conforms to existing practices and contains necessary procedures to 
ensure compliance with Federal and State real estate law and 
regulation, including this part.
    (iii) The SDOT shall update its ROW manual periodically to reflect 
changes in operations and submit the updated materials for approval by 
the FHWA.
    (d) ROW manual alternatives. Non-SDOT grantees, and all 
subgrantees, design-build contractors, and other acquiring agencies 
carrying out a project funded by a grant under title 23, United States 
Code, must demonstrate that they will use FHWA-approved ROW procedures 
for acquisition and other real estate activities, and that they have 
the ability to comply with current FHWA requirements, including this 
part. This can be done through any of the three procedures outlined in 
paragraphs (d)(1) through (3) of this section. Subgrantees, design-
build contractors, and other acquiring agencies carrying out a project 
for an SDOT submit the required certification and information to the 
SDOT, and the SDOT will review and make a determination on behalf of 
FHWA. Non-SDOT grantees submit the required certification and 
information directly to FHWA. Non-SDOT grantees are responsible for 
submitting to FHWA the required certification and information for any 
subgrantee, contractor, and other acquiring agency carrying out a 
project for the non-SDOT grantee.
    (1) Certification in writing that the acquiring agency will adopt 
and use the FHWA-approved SDOT ROW manual;
    (2) Submission of the acquiring agency's own ROW manual for review 
and determination whether it complies with Federal and State 
requirements, together with a certification that once the reviewing 
agency approves the manual, the acquiring agency will use the approved 
ROW manual; or
    (3) Submission of a RAMP setting forth the procedures the acquiring 
agency or design-build contractor intends to follow for a specified 
project or group of projects, along with a certification that if the 
reviewing agency approves the RAMP, the acquiring agency or design-
build contractor will follow the approved RAMP for the specified 
program or project(s).
    (e) 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 the later of either:
    (i) The date the SDOT or other grantee 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 of reimbursement for early acquisitions or credit 
toward the State share of a project is approved based on early 
acquisition activities under Sec.  710.501.
    (2) Property management records shall include inventories of real 
property interests considered excess to project or program needs, as 
well as all authorized ROW use agreements for real property acquired 
with title 23 of the United States Code funds or incorporated into a 
program or project that received title 23 funding.
    (f) Procurement. Contracting for all activities required in support 
of an SDOT's or other grantee's ROW projects or programs through the 
use of private consultants and other services shall conform to 49 CFR 
18.36, except to the extent that the procurement is required to adhere 
to requirements under 23 U.S.C. 112(b)(2) and 23 CFR part 172 for 
engineering and design related consultant services.
    (g) Use of other public land acquisition organizations, 
conservation organizations, or private consultants. The grantee may 
enter into written agreements with other State, county, municipal, or 
local public land acquisition organizations, conservation 
organizations, private consultants, or other persons to carry out its 
authorities under this part. Such organizations, firms, or persons must 
comply with the grantee's ROW manual or RAMP as approved in accordance 
with paragraphs (c) or (d) of this section. The grantee shall monitor 
any such real property interest acquisition activities to ensure 
compliance with State and Federal law, and is responsible for informing 
such persons of all such requirements and for imposing sanctions in 
cases of material non-compliance.
    (h) Assignment of FHWA approval actions to an SDOT. The SDOT and 
FHWA will agree in their Stewardship/Oversight Agreement on the scope 
of property-related oversight and approvals under this part that will 
be performed directly by FHWA and those that FHWA will assign to the 
SDOT. This assignment provision does not apply to other grantees of 
title 23 of the United States Code funds. The content of the most 
recent Stewardship/Oversight Agreement shall be reflected in the FHWA-
approved SDOT ROW manual. The agreement, and thus the SDOT ROW manual, 
will indicate which Federal-aid projects require submission of 
materials for FHWA review and approval. The FHWA retains responsibility 
for any action not expressly assigned to the SDOT in the Stewardship/
Oversight Agreement.


Sec.  710.203  Title 23 of the United States Code funding and 
reimbursement.

    (a) General conditions. Except as otherwise provided in Sec.  
710.501 for early acquisition, a State agency only may acquire real 
property, including mitigation property, with title 23 of the United 
States Code grant funds if the following conditions are satisfied:

[[Page 70024]]

    (1) The project for which the real property is acquired is included 
in an approved Statewide Transportation Improvement Program (STIP);
    (2) The grantee has executed a project agreement or other agreement 
recognized under title 23 of the United States Code reflecting the 
Federal funding terms and conditions for the project;
    (3) Preliminary acquisition activities, including a title search, 
appraisal, appraisal review and waiver valuation preparation and 
preliminary property map preparation can be advanced under preliminary 
engineering, as defined in 23 CFR 646.204, prior to completion of NEPA 
(42 U.S.C. 4321 et seq.) review, while other work involving contact 
with affected property owners for purposes of negotiation must normally 
be deferred until after NEPA approval, except as provided in Sec.  
710.501, early acquisition; and in Sec.  710.503 for protective buying 
and hardship acquisition; and
    (4) Costs have been incurred in conformance with State and Federal 
requirements.
    (b) Direct eligible costs. Federal funds may only participate in 
direct costs that are identified specifically as an authorized 
acquisition activity such as the costs of acquiring the real property 
incorporated into the final project and the associated direct costs of 
acquisition, except in the case of a State that has an approved 
indirect cost allocation plan as stated in Sec.  710.203(d) or 
specifically provided by statute. Participation is provided for:
    (1) Real property acquisition. Usual costs and disbursements 
associated with real property acquisition as 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) Ordinary and reasonable costs of acquisition activities, such 
as, appraisal, waiver valuation development, appraisal review, cost 
estimates, relocation planning, ROW plan preparation, title work, and 
similar necessary ROW related work;
    (iii) The compensation paid for the real property interest and 
costs normally associated with completing the purchase, such as 
document fees and document stamps. The costs of acquiring options and 
other contractual rights to acquire an interest in land, rights to 
control use or development, leases, ROWs, and any other similar action 
to acquire or preserve rights-of way for a transportation facility are 
eligible costs when FHWA determines such costs are actual, reasonable 
and necessary costs. Costs under this paragraph do not include salary 
and related expenses for an acquiring agency's employees (see payroll-
related expenses in paragraph (b)(5) of this section);
    (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. This includes reasonable acquiring agency 
attorney's fees, but excludes attorney's fees for other parties except 
where required by State law (including an order of a court of competent 
jurisdiction) or approved by FHWA; and
    (v) The cost of minimum payments and waiver valuation amounts 
included in the approved ROW manual or approved RAMP.
    (2) Relocation assistance and payments. Usual costs and 
disbursements associated with the following:
    (i) Relocation assistance and payments required under 49 CFR part 
24; and
    (ii) Relocation assistance and payments provided under the laws of 
the State that may exceed the requirements of 49 CFR part 24, except 
for relocation assistance and payments provided to aliens not lawfully 
present in the United States.
    (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 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. Salary and related expenses 
(compensation for personal services) of employees of an acquiring 
agency for work on a project funded by a title 23 of the United States 
Code grant are eligible costs in accordance with 2 CFR part 225 
(formerly OMB Circular A-87), as are salary and related expenses of a 
grantee's employees for work with an acquiring agency or a contractor 
to ensure compliance with Federal requirements on a title 23 project if 
the work is dedicated to a specific project and documented in 
accordance with 2 CFR part 225.
    (6) Property not incorporated into a project funded under title 23, 
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, eligible Transportation 
Alternatives Program (TAP) projects, sites for disposal of hazardous 
materials, environmental mitigation, environmental banking activities, 
or last resort housing; and
    (ii) Easements and alternate access not incorporated into the ROW. 
The cost of acquiring easements and alternate access points necessary 
for highway construction and maintenance outside the approved ROW 
limits 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 road or 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 acquiring agency for a project, as provided in 23 CFR 
part 140, subpart I, Reimbursement for Railroad Work, 23 CFR part 645, 
subpart A, Utility Relocations, Adjustments and Reimbursement, and 23 
CFR part 646, subpart B, Railroad-Highway Projects; and
    (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.
    (c) Withholding payment. The FHWA may withhold payment under the 
conditions described in 23 CFR 1.36 for failure 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 2 CFR part 225 (formerly OMB Circular A-87). Indirect 
costs may be included on billings after the indirect cost allocation 
plan has been prepared in accordance with 2 CFR part 225 and approved 
by FHWA, other cognizant Federal agency, or, in the case of an SDOT 
subgrantee without a rate approved by a cognizant Federal agency, by 
the SDOT. Indirect costs for an SDOT may include costs of providing 
program-level guidance, consultation, and

[[Page 70025]]

oversight to other acquiring agencies and contractors where ROW 
activities on title 23-funded projects are performed by non-SDOT 
personnel.

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 typically are planning, environmental review, project 
agreement/authorization, acquisition, construction advertising, and 
construction.


Sec.  710.303  Project authorization and agreements.

    As a condition of Federal funding under title 23 of the United 
States Code, the grantee shall obtain FHWA authorization in writing or 
electronically before proceeding with any real property acquisition 
using title 23 funds, including early acquisitions under Sec.  
710.501(e) and hardship acquisition and protective buying under Sec.  
710.503. For projects funded under chapter 1, title 23, United States 
Code, the grantee must prepare a project agreement in accordance with 
23 CFR part 630, subpart A. Authorizations and agreements shall be 
based on an acceptable estimate for the cost of acquisition.


Sec.  710.305  Acquisition.

    (a) General. The process of acquiring real property includes 
appraisal, appraisal review, waiver valuations, establishing estimates 
of just compensation, negotiations, relocation assistance, 
administrative and legal settlements, and court settlements and 
condemnations. Grantees must ensure all acquisition and related 
relocation assistance activities are performed in accordance with 49 
CFR part 24 and this part. If a grantee does not directly own the real 
property interests used for a title 23 of the United States Code 
project, the grantee must have an enforceable subgrant agreement or 
other agreement with the owner of the ROW that permits the grantee to 
enforce applicable Federal requirements affecting the real property 
interests, including real property management requirements under 
subpart D of this part.
    (b) Adequacy of real property interest. The real property interests 
acquired for any project funded under title 23 of the United States 
Code must be adequate to fulfill the purpose of the project. Except in 
the case of an Early Acquisition Project, this means adequate for the 
construction, operation, and maintenance of the resulting facility, and 
for the protection of both the facility and the traveling public.
    (c) Establishment and offer of just compensation. The amount 
believed to be just compensation shall be approved by a responsible 
official of the acquiring agency. This shall be done in accordance with 
49 CFR 24.102(d).
    (d) Description of acquisition process. The acquiring agency 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 this part, 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 in accordance with 49 CFR 
24.5, 24.102(b), and 24.203.


Sec.  710.307  Construction advertising.

    (a) The grantee must manage real property acquired for a project 
until it is required for construction. Except for properties acquired 
under the early acquisition provisions of Sec.  710.501(e), 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. The grantee 
shall develop ROW availability statements and certifications related to 
project acquisitions as described in 23 CFR 635.309.
    (b) The FHWA-SDOT Stewardship/Oversight Agreement will specify SDOT 
responsibility for the review and approval of the ROW availability 
statements and certifications in accordance with applicable law. 
Generally, for non-National Highway System projects, the SDOT has full 
responsibility for determining that right-of-way is available for 
construction. For non-SDOT grantees, FHWA will be responsible for the 
review and approval.


710.309  Design-build projects.

    (a) In the case of a design-build project, ROW must be acquired and 
cleared in accordance with the Uniform Act and the FHWA-approved ROW 
manual or RAMP, as provided in Sec. Sec.  710.201(c) and (d). The 
grantee shall submit a ROW certification in accordance with 23 CFR 
635.309(p) when requesting FHWA's authorization. The grantee shall 
ensure that ROW is available prior to the start of physical 
construction on individual properties.
    (b) The decision to advance a ROW segment to the construction stage 
shall not impair the safety or in any way be coercive in the context of 
49 CFR 24.102(h) with respect to unacquired or occupied properties on 
the same or adjacent segments of project ROW.
    (c) The grantee may choose not to allow construction to commence 
until all property is acquired and relocations have been completed; or, 
the grantee may permit the construction to be phased or segmented to 
allow ROW activities to be completed on individual properties or a 
group of properties, with ROW certifications done in a manner 
satisfactory to the grantee for each phase or segment.
    (d) If the grantee elects to include ROW services within the 
design-builder's scope of work for the design-build contract, the 
following provisions must be addressed in the request for proposals 
document:
    (1) The design-builder must submit written certification in its 
proposal that it will comply with the process and procedures in the 
FHWA-approved ROW manual or RAMP as provided in Sec. Sec.  710.201(c) 
and (d).
    (2) When relocation of displaced persons from their dwellings has 
not been completed, the grantee or design-builder shall establish a 
hold off zone around all occupied properties to ensure compliance with 
ROW procedures prior to starting construction activities in affected 
areas. The limits of this zone should be established by the grantee 
prior to the design-builder entering onto the property. There should be 
no construction-related activity within the hold off zone until the 
property is vacated. The design-builder must have written notification 
of vacancy from the grantee prior to entering the hold off zone.
    (3) Contractors activities must be limited to those that the 
grantee determines do not have a material adverse impact on the quality 
of life of those in occupied properties that have been or will be 
acquired.
    (4) The grantee will provide a ROW project manager who will serve 
as the first point of contact for all ROW issues.
    (e) If the grantee elects to perform all ROW services relating to 
the design-build contract, the provisions in Sec.  710.307 will apply. 
The grantee will notify potential offerors of the status of all ROW 
issues in the request for proposal document.

Subpart D--Real Property Management


Sec.  710.401  General.

    This subpart describes the grantee's responsibilities to control 
the use of real property acquired for a project in which Federal funds 
participated in any phase of the project. The grantee shall specify in 
its approved ROW manual or RAMP,

[[Page 70026]]

the procedures for the maintenance, ROW use agreements, and disposal of 
real property interests acquired with title 23 of the United States 
Code funds. The grantee shall assure that subgrantees, including local 
agencies, follow Federal requirements and approved ROW procedures as 
provided in Sec.  710.201(c) and (d).


Sec.  710.403  Management.

    (a) As provided in Sec.  710.201(h), FHWA and SDOT may use their 
Stewardship/Oversight Agreement to enter into a written agreement 
establishing which approvals the SDOT may make on behalf of FHWA, 
provided FHWA may not assign to the SDOT the decision whether to allow 
any ROW use agreements or any disposal on or within the approved ROW 
limits of the Interstate, including any change in access control. The 
assignment agreement provisions in Sec.  710.201(h) and this paragraph 
(a) do not apply to non-SDOT grantees.
    (b) The grantee must ensure that all real property interests within 
the approved ROW limits or other project limits of a facility that has 
been funded under title 23 of the United States Code are devoted 
exclusively to the purposes of that facility and the facility is 
preserved free of all other public or private alternative uses, unless 
such non-highway alternative uses are permitted by Federal law 
(including regulations) or the FHWA. An alternative use, whether 
temporary under Sec.  710.405 or permanent as provided in Sec.  
710.409, must be in the public interest, consistent with the continued 
operation, maintenance, and safety of the facility, and such use must 
not impair the highway or interfere with the free and safe flow of 
traffic (see also 23 CFR 1.23).
    (c) Grantees shall specify procedures in their approved ROW manual 
or RAMP for determining when a real property interest is excess real 
property and may be disposed of in accordance with this part, or is a 
real property interest that may be made available for an alternate use 
under a ROW use agreement. These procedures must provide for 
coordination among relevant State organizational units that may be 
interested in the proposed use or disposal of the real property. 
Grantees also shall specify procedures in their ROW manual or RAMP for 
determining when a real property interest is excess and when a real 
property interest may be made available under a ROW use agreement for 
an alternative use that satisfies the requirements described in 
paragraph (b) of this section.
    (d) Disposal actions and ROW use agreements, including leasing 
actions, are subject to 23 CFR part 771.
    (e) Current fair market value must be charged for the use or 
disposal of all real property interests if those real property 
interests were obtained with title 23, United States Code, funding 
except as provided in paragraphs (e)(1) through (6) of this section. 
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 requirement for charging fair market value must be 
submitted to FHWA in writing and may be approved by FHWA in the 
following situations:
    (1) When the grantee shows that an exception is in the overall 
public interest based on social, environmental, or economic benefits, 
or is for a nonproprietary governmental use. The grantee's ROW manual 
or RAMP must include criteria for evaluating disposals at less than 
fair market value, and a method for ensuring the public will receive 
the benefit used to justify the less than fair market value disposal.
    (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) Uses under 23 U.S.C. 142(f), Public Transportation. Lands and 
ROWs of a highway constructed using Federal-aid highway funds may be 
made 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.
    (6) Use for other transportation projects eligible for assistance 
under title 23 of the United States Code, provided that a concession 
agreement, as defined in Sec.  710.703, shall not constitute a 
transportation project exempt from fair market value requirements.
    (f) The Federal share of net income from the use or disposal of 
real property interests obtained with title 23 of the United States 
Code funds shall be used by the grantee for activities eligible for 
funding under title 23. Where project income derived from the use or 
disposal of real property interests is used for subsequent title 23-
eligible projects, the funds are not considered Federal financial 
assistance and use of the income does not cause title 23 requirements 
to apply.


Sec.  710.405  ROW use agreements.

    (a) A ROW use agreement for the non-highway use of real property 
interests may be executed with a public entity or private party in 
accordance with Sec.  710.403 and this section. Any non-highway 
alternative use of real property interests requires approval by FHWA, 
including a determination by FHWA that such occupancy, use, or 
reservation is in the public interest; is consistent with the continued 
use, operations, maintenance, and safety of the facility; and such use 
does not impair the highway or interfere with the free and safe flow of 
traffic as described in Sec.  710.403(b). Where the SDOT controls the 
real property interest, the FHWA may assign its determination and 
approval responsibilities to the SDOT in their Stewardship/Oversight 
Agreement.
    (1) This section applies to highways as defined in 23 U.S.C. 101(a) 
that received title 23, United States Code, financial assistance in any 
way.
    (2) This section does not apply to the following:
    (i) Uses by railroads and public utilities which cross or otherwise 
occupy Federal-aid highway ROW and that are governed by other sections 
of this title;
    (ii) Relocations of railroads or utilities for which reimbursement 
is claimed under 23 CFR part 140, subparts E and H, 23 CFR part 645, or 
23 CFR part 646, subpart B; and
    (iii) Bikeways and pedestrian walkways as covered in 23 CFR part 
652.
    (b) Subject to the requirements in this subpart, ROW use agreements 
for a time-limited occupancy or use of real property interests may be 
approved if the grantee has acquired sufficient legal right, title, and 
interest in the ROW of a federally assisted highway to permit the non-
highway use. A ROW use agreement must contain provisions that address 
the following items:
    (1) Ensure the safety and integrity of the federally assisted 
facility;
    (2) Define the term of the agreement;
    (3) Identify the design and location of the non-highway use;
    (4) Establish terms for revocation of the ROW use agreement and 
removal of improvements at no cost to the FHWA;
    (5) Provide for adequate insurance to hold the grantee and the FHWA 
harmless;
    (6) Require compliance with nondiscrimination requirements;
    (7) Require grantee and FHWA approval, and SDOT approval if the 
agreement affects a Federal-aid highway and the SDOT is not the 
grantee, for any significant revision in the design,

[[Page 70027]]

construction, or operation of the non-highway use; and
    (8) Grant access to the non-highway use by the grantee and FHWA, 
and the SDOT if the agreement affects a Federal-aid highway and the 
SDOT is not the grantee, for inspection, maintenance, and for 
activities needed for reconstruction of the highway facility.


Note to paragraph (b). Additional terms and conditions appropriate for 
inclusion in ROW use agreements are described in FHWA guidance at 
http://www.fhwa.dot.gov/real_estate/practitioners/right-of-way/corridor_management/airspace_guidelines.cfm.
    (c) Where a proposed use requires changes in the existing highway, 
such changes shall be provided without cost to Federal funds unless 
otherwise specifically agreed to by the grantee and FHWA.
    (d) Proposed uses of real property interests shall conform to the 
current design standards and safety criteria of FHWA for the functional 
classification of the highway facility in which the property is 
located.
    (e) An individual, company, organization, or public agency desiring 
to use real property interests shall submit a written request to the 
grantee, together with an application supporting the proposal. If FHWA 
is the approving authority, the grantee shall forward the request, 
application, the SDOT's recommendation if the proposal affects a 
Federal-aid highway, and the proposed ROW use agreement, together with 
its recommendation and any necessary supplemental information, to FHWA. 
The submission shall affirmatively provide for adherence to all 
requirements contained in this subpart and must include the following 
information:
    (1) Identification of the party responsible for developing and 
operating the proposed use;
    (2) A general statement of the proposed use;
    (3) A description of why the proposed use would be in the public 
interest;
    (4) Information demonstrating the proposed use would not impair the 
highway or interfere with the free and safe flow of traffic;
    (5) The proposed design for the use of the space, including any 
facilities to be constructed;
    (6) Maps, plans, or sketches to adequately demonstrate the 
relationship of the proposed project to the highway facility;
    (7) Provision for vertical and horizontal access for maintenance 
purposes;
    (8) A description of other general provisions such as the term of 
use, insurance requirements, design limitations, safety mandates, 
accessibility, and maintenance as outlined further in this section; and
    (9) An adequately detailed three-dimensional presentation of the 
space to be used and the facility to be constructed. Maps and plans may 
not be required if the available real property interest is to be used 
for leisure activities (such as walking or biking), beautification, 
parking of motor vehicles, public mass transit facilities, and similar 
uses. In such cases, an acceptable metes and bounds description of the 
surface area, and appropriate plans or cross sections clearly defining 
the vertical use limits, may be furnished in lieu of a three-
dimensional description, at the grantee's discretion.


Sec.  710.407  [Reserved]


Sec.  710.409  Disposal of excess real property.

    (a) Excess real property outside or within the approved right of 
way limits or other project limits may be sold or conveyed to a public 
entity or to a private party in accordance with Sec.  710.403 and this 
section. Approval by FHWA is required for disposal of excess real 
property unless otherwise provided in this section or in the FHWA-SDOT 
Stewardship/Oversight Agreement.
    (b) Federal, State, and local agencies shall be afforded the 
opportunity to acquire excess real property 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 grantee shall 
notify the appropriate agencies of its intentions to dispose of the 
real property interests determined to be excess.
    (c) The grantee may decide to retain excess real property to 
restore, preserve, or improve the scenic beauty and environmental 
quality adjacent to the transportation facility.
    (d) Where the transfer of excess real property 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 under Sec.  
710.403(e), 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.
    (e) No FHWA approval is required for disposal of excess real 
property located outside of the approved ROW limits or other project 
limits if Federal funds did not participate in the acquisition cost of 
the real property.
    (f) Highway facilities in which Federal funds participated in 
either the ROW or construction may be relinquished to another 
governmental agency for continued highway use under the provisions of 
23 CFR part 620, subpart B.
    (g) A request for approval of a disposal must demonstrate 
compliance with the requirements of Sec.  710.403 and this section, and 
must address the items in Sec. Sec.  710.405(b)(1), (3), (5), (6), (7), 
and (8), and 710.405(c) and (d). An individual, company, organization, 
or public agency requesting a grantee to approve of a disposal of 
excess real property within the approved ROW limits or other project 
limits, or to approve of a disposal of excess real property outside the 
ROW limits that was acquired with title 23 of the United States Code 
funding, shall submit a written request to the grantee, together with 
an application supporting the proposal. If the FHWA is the approving 
authority, the grantee shall forward the request, the SDOT 
recommendation if the proposal affects a Federal-aid highway, the 
application, and proposed terms and conditions, together with its 
recommendation and any necessary supplemental information, to FHWA. The 
submission shall affirmatively provide for adherence to all 
requirements contained in this section and must include the information 
specified in Sec.  710.405(e)(1) through (9).

Subpart E--Property Acquisition Alternatives


Sec.  710.501  Early acquisition.

    (a) General. A State agency may initiate acquisition of real 
property interests for a proposed transportation project at any time it 
has the legal authority to do so. The State agency may undertake Early 
Acquisition Projects before the completion of the environmental review 
process for the proposed transportation project for corridor 
preservation, access management, or other purposes. Subject to the 
requirements in this section, State agencies may fund Early Acquisition 
Project costs entirely with State funds with no title 23 of the United 
States Code participation; use State funds initially but seek title 23 
credit or reimbursement when the acquired property is incorporated into 
a transportation project eligible for Federal surface transportation 
program funds; or use the normal Federal-aid project agreement and 
reimbursement process to fund an Early Acquisition Project pursuant to 
paragraph (e) of this section. The early acquisition of a real property 
interest under this section

[[Page 70028]]

shall be carried out in compliance with all requirements applicable to 
the acquisition of real property interests for federally assisted 
transportation projects.
    (b) State-funded early acquisition without Federal credit or 
reimbursement. A State agency may carry out early acquisition entirely 
at its expense and later incorporate the acquired real property into a 
transportation project or program for which the State agency receives 
Federal financial assistance or other Federal approval under title 23 
of the United States Code for other transportation project activities. 
In order to maintain eligibility for future Federal assistance on the 
project, early acquisition activities funded entirely without Federal 
participation must comply with the requirements of Sec. Sec.  
710.501(c)(1) through (5).
    (c) State-funded early acquisition eligible for future credit. 
Subject to Sec. Sec.  710.203(b) (direct eligible costs), 710.505(b), 
and 710.507 (State and local contributions), Early Acquisition Project 
costs incurred by a State agency at its own expense prior to completion 
of the environmental review process for a proposed transportation 
project are eligible for use as a credit toward the non-Federal share 
of the total project costs if the project receives surface 
transportation program funds, and if the following conditions are met:
    (1) The property was lawfully obtained by the State agency;
    (2) The property was not land described in 23 U.S.C. 138;
    (3) The property was acquired, and any relocations were carried 
out, in accordance with the provisions of the Uniform Act and 
regulations in 49 CFR part 24;
    (4) The State agency complied with the requirements of title VI of 
the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4);
    (5) The State agency determined, and FHWA concurred, the early 
acquisition did not influence the environmental review process for the 
proposed transportation project, including:
    (i) The decision on need to construct the proposed transportation 
project;
    (ii) The consideration of any alternatives for the proposed 
transportation project required by applicable law; and
    (iii) The selection of the design or location for the proposed 
transportation project; and
    (6) The property will be incorporated into the project for which 
surface transportation program funds are received and to which the 
credit will be applied.
    (d) State-funded early acquisition eligible for future 
reimbursement. Early Acquisition Project costs incurred by a State 
agency prior to completion of the environmental review process for the 
transportation project are eligible for reimbursement from title 23 of 
the United States Code funds apportioned to the State once the real 
property interests are incorporated into a project eligible for surface 
transportation program funds if the State agency demonstrates, and FHWA 
concurs, that the terms and conditions specified in 23 U.S.C. 
108(c)(3), the requirements of Sec.  710.501(c)(1)-(5), and the 
requirements of Sec.  710.203(b) (direct eligible costs) have been met.
    (e) Federally funded early acquisition. The FHWA may authorize the 
use of funds apportioned to a State under title 23 of the United States 
Code for an Early Acquisition Project if the State agency certifies, 
and FHWA concurs, that all of the following conditions have been met:
    (1) The State has authority to acquire the real property interest 
under State law; and
    (2) The acquisition of the real property interest--
    (i) Is for a transportation project or program eligible for funding 
under title 23 of the United States Code;
    (ii) Does not involve land described in 23 U.S.C. 138;
    (iii) Will not cause any significant adverse environmental impacts 
either as a result of the Early Acquisition Project or from cumulative 
effects of multiple Early Acquisition Projects carried out under this 
section in connection with a proposed transportation project;
    (iv) Will not limit the choice of reasonable alternatives for a 
proposed transportation project or otherwise influence the decision of 
FHWA on any approval required for a proposed transportation project;
    (v) Will not prevent the lead agency from making an impartial 
decision as to whether to accept an alternative that is being 
considered in the environmental review process for a proposed 
transportation project;
    (vi) Is consistent with the State transportation planning process 
under 23 U.S.C. 135;
    (vii) Complies with other applicable Federal laws (including 
regulations);
    (viii) Will be acquired through negotiation, without the threat of, 
or use of, condemnation; and
    (ix) Will not result in a reduction or elimination of benefits or 
assistance to a displaced person required by the Uniform Act and title 
VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
    (3) The Early Acquisition Project is included as a project in an 
applicable transportation improvement program under 23 U.S.C. 134 and 
135 and 49 U.S.C. 5303 and 5304.
    (4) The environmental review process for the Early Acquisition 
Project is complete and FHWA has approved the Early Acquisition 
Project. Pursuant to 23 U.S.C. 108(d)(4)(B), the Early Acquisition 
Project is deemed to have independent utility for purposes of the 
environmental review process under NEPA. When the Early Acquisition 
Project may result in a change to the use or character of the real 
property interest prior to the completion of the environmental review 
process for the proposed transportation project, the NEPA evaluation 
for the Early Acquisition Project must consider whether the change has 
the potential to cause a significant environmental impact as defined in 
40 CFR 1508.27, including a significant adverse impact within the 
meaning of paragraph (e)(2)(iii) of this section. The Early Acquisition 
Project must comply with all applicable environmental laws.
    (f) Prohibited Activities. Except as provided in this paragraph, 
real property interests acquired under paragraph (e) of this section 
and pursuant to 23 U.S.C. 108(d) cannot be developed in anticipation of 
a transportation project until all required environmental reviews for 
the transportation project have been completed. For the purpose of this 
paragraph (f), ``development in anticipation of a transportation 
project'' means any activity related to demolition, site preparation, 
or construction that is not necessary to protect public health or 
safety. With prior FHWA approval, a State agency may carry out limited 
activities necessary for securing real property interests acquired as 
part of an Early Acquisition Project, such as limited clearing and 
demolition activity, if the activities are necessary to protect the 
public health or safety and are considered during the environmental 
review of the Early Acquisition Project.
    (g) Reimbursement. If Federal-aid reimbursement is made for real 
property interests acquired early under this section and the real 
property interests are not subsequently incorporated into a project 
eligible for surface transportation funds within the time allowed by 23 
U.S.C. 108 (a)(2), FHWA must offset the amount reimbursed against funds 
apportioned to the State.
    (h) Relocation Assistance Eligibility. In the case of an Early 
Acquisition Project, a person is considered to be displaced when 
required to move from

[[Page 70029]]

the real property as a direct result of a binding written agreement for 
the purchase of the real property interest(s) between the acquiring 
agency and the property owner. Options to purchase and similar 
agreements used for Early Acquisition Projects that give the acquiring 
agency a right to prevent new development or to decide in the future 
whether to acquire the real property interest(s), but do not create an 
immediate commitment by the acquiring agency to acquire and do not 
require an owner or tenant to relocate, do not create relocation 
eligibility until the acquiring agency legally commits itself to 
acquiring the real property interest(s).


Sec.  710.503  Protective buying and hardship acquisition.

    (a) General conditions. Prior to final environmental approval of a 
project, the grantee 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 grantee has complied with applicable public involvement 
requirements in 23 CFR parts 450 and 771;
    (3) A determination has been completed for any property interest 
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 grantee 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.
    (c) Hardship acquisitions. The grantee must accept and concur in an 
owner's 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 other property owners; 
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 is subject to environmental review under part 771 of this 
chapter. Acquisitions under this section shall not influence the 
environmental review of a transportation project which would use the 
property, including decisions about the need to construct the 
transportation project or the selection of an alternative.


Sec.  710.505  Real property donations.

    (a) Donations of property being acquired. A non-governmental owner 
whose real property is required for a title 23 of the United States 
Code project may donate the property. Donations may be made at any time 
during the development of a project. Prior to accepting the property, 
the owner must be informed in writing by the acquiring agency of his/
her right to receive just compensation for the property, the right to 
an appraisal or waiver valuation of the real property, and of all other 
applicable financial and non-financial assistance provided under 49 CFR 
part 24 and applicable State law. All donations of property received 
prior to the approval of the NEPA document for the project must meet 
the requirements 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 in accordance 
with 23 U.S.C. 323. As required by 23 U.S.C. 323(b)(2), 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. The grantee shall ensure sufficient documentation is developed 
to indicate compliance with paragraph (a) of this section and with the 
provisions of 23 U.S.C. 323, 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 and conveyances 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) Credit for State and local government contributions. If the 
requirements of 23 U.S.C. 323 are met, real property owned by State and 
local governments that is incorporated within a project receiving 
financial assistance from the Highway Trust Fund can be used as a 
credit toward the State's matching share of total project cost. A 
credit cannot exceed the State's matching share required by the project 
agreement. The grantee must ensure there is documentation supporting 
all credits, including the following:
    (1) A certification that the State or local government acquisition 
satisfied the conditions in Sec.  710.501(c)(1) through (6); and
    (2) Justification of the value of credit applied. Acquisition costs 
incurred by the State or local government to acquire title can be used 
as justification for the value of the real property.
    (b) Exemptions. Credits are not available for real property 
acquired with any form of Federal financial assistance except as 
provided in 23 U.S.C. 120(j), or for real property already incorporated 
into existing ROW and used for transportation purposes.
    (c) Contributions without credit. Property may be presented for 
project use with the understanding that no credit for its use is 
sought. In such case, the grantee shall assure that the acquisition 
satisfied the conditions in Sec.  710.501(c)(1) through (6).


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 project receiving grant funds 
under title 23 of the United States Code, in lieu of paying the fair 
market value for the real property, the acquiring agency may provide 
compensation by functionally replacing the publicly owned real property 
with another facility that will provide equivalent utility.
    (b) Federal participation. Federal-aid funds may participate in 
functional replacement costs only if the following conditions are met:
    (1) Functional replacement is permitted under State law and the 
acquiring agency 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 acquiring agency has informed, in writing, the public 
entity

[[Page 70030]]

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 acquiring agency determination that 
functional replacement is in the public interest; and
    (6) The real property is not owned by a utility or railroad.
    (c) Federal land transfers. Use of this section for functional 
replacement of real property in Federal ownership shall be in 
accordance with Federal land transfer provisions in subpart F of this 
part.
    (d) Limits upon participation. Federal-aid participation in the 
costs of functional replacement is limited to costs that are actually 
incurred in the replacement of the acquired land and/or facility and 
are--
    (1) Costs for facilities that 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 grantee determines that payments providing 
for functional replacement of public facilities are allowable under 
State law, the grantee will incorporate within its approved ROW manual, 
or approved RAMP, full procedures covering review and oversight that 
will be applied to such cases.


Sec.  710.511  Transportation Alternatives Program.

    (a) General. 23 U.S.C. 133(b) (11) and 213 authorize the 
expenditure of surface transportation funds for TAP projects. The TAP 
projects that 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 CFR, except as specified in 
paragraph (b)(2) of this section.
    (b) Requirements. (1) Acquisition and relocation activities for TAP 
projects are subject to the Uniform Act.
    (2) When a person or agency acquires real property for a project 
receiving title 23 of the United States Code grant funds on behalf of 
an acquiring agency with eminent domain authority, the requirements of 
the Uniform Act apply as if the acquiring agency had acquired the 
property itself.
    (3) When, subsequent to Federal approval of property acquisition, a 
person or agency acquires real property for a project receiving title 
23 of the United States Code grant funds, and there will be no use or 
recourse to the power of eminent domain, the limited requirements of 49 
CFR 24.101(b)(2) apply.
    (c) Property management and disposal of property acquired for TAP 
projects. Subpart D of this part applies to the management and disposal 
of real property interests acquired with TAP funds, including alternate 
uses authorized under ROW use agreements. A TAP project involving 
acquisition of any real property interest must have a TAP property 
agreement between FHWA and the grantee that identifies the expected 
useful life of the TAP project and establishes a pro rata formula for 
repayment of TAP funding by the grantee if--
    (1) The acquired real property interest is used in whole or in part 
for purposes other than the TAP project purposes for which it was 
acquired; or
    (2) The actual TAP project life is less than the expected useful 
life specified in the TAP property agreement.

Subpart F--Federal Assistance Program


Sec.  710.601  Federal land transfers.

    (a) The provisions of this subpart apply to any project constructed 
on a Federal-aid highway or under Chapter 2 of title 23, of the United 
States Code. 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 funding 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 
(Pub. L. 101-510, 104 Stat. 1808, as amended).
    (b) Under certain conditions, real property interests owned by the 
United States may be transferred to a non-Federal owner for use for 
highway purposes. Sections 107(d) and 317 of title 23, United States 
Code, establish the circumstances under which such transfers may occur, 
and the parties eligible to receive such transfers.
    (c) An eligible party may file an application with FHWA, or can 
make application directly to the Federal land management agency if the 
Federal land management 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 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 Federal 
land management agency will be notified and a right-of-entry requested. 
For projects not on the Interstate System, the Federal land management 
agency shall have a period of 4 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 reply period at 
the timely request of the Federal land management agency for good 
cause.
    (f) The FHWA may participate in the payment of fair market value or 
the functional replacement of impacted facilities under Sec.  710.509 
and the reimbursement of the ordinary and reasonable direct costs of 
the Federal land management agency for the transfer when reimbursement 
is required by the Federal land management agency's governing laws as a 
condition of the transfer.
    (g) Deeds for conveyance of real property interests owned by the 
United States shall be prepared by the eligible party and must be 
certified as being legally sufficient by an attorney licensed within 
the State where the real property is located. Such deeds shall contain 
the clauses required by FHWA and 49 CFR 21.7(a)(2). After the eligible 
party prepares the deed, it will submit the proposed deed with the 
certification to FHWA for review and execution.
    (h) Following execution by FHWA, the eligible party shall record 
the deed in the appropriate land record office and so advise FHWA and 
the affected Federal land management agency.
    (i) When the need for the interest acquired under this subpart no 
longer exists, the party that received the real

[[Page 70031]]

property must restore the land to the condition which existed prior to 
the transfer, or to a condition that is acceptable to the Federal land 
management agency to which such property would revert, and must give 
notice to FHWA and to the affected Federal land management agency that 
such interest will immediately revert to the control of the Federal 
land management agency from which it was appropriated or to its 
assigns. Where authorized by Federal law, the Federal land management 
agency and such party may enter into a separate agreement to release 
the reversion clause and make alternative arrangements for the sale, 
restoration, or other disposition of the lands no longer needed.


Sec.  710.603  Direct Federal acquisition.

    (a) The provisions of this paragraph (a) may be applied to any real 
property that is not owned by the United States and is needed in 
connection with a project for the construction, reconstruction, or 
improvement of any section of the Interstate System or for a Defense 
Access Road project under 23 U.S.C. 210, if the SDOT is unable to 
acquire the required ROW or is unable to obtain possession with 
sufficient promptness. If the landowner tenders a right-of-entry or 
other right of possession document required by State law any time 
before FHWA makes a determination that the SDOT is unable to acquire 
the ROW with sufficient promptness, the SDOT is legally obligated to 
accept such tender and FHWA may not proceed with Federal acquisition. 
To enable FHWA to make the necessary findings and to proceed with the 
acquisition of the ROW, the SDOT's written application for Federal 
acquisition must include the following:
    (1) Justification for the Federal acquisition of the lands or 
interests in lands;
    (2) The date FHWA authorized the SDOT to commence ROW acquisition, 
the date of the project agreement, and a statement that the agreement 
contains the provisions required by 23 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 SDOT'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 parts 771 and 
774 of this chapter, as applicable;
    (7) Adequate legal descriptions, plats, appraisals, and title data;
    (8) An outline of the negotiations that have been conducted with 
landowners;
    (9) An agreement that the SDOT will pay its pro rata share of costs 
incurred in the acquisition of, or the attempt to acquire, ROW; and
    (10) A statement that assures compliance with the applicable 
provisions of the Uniform Act. (42 U.S.C. 4601, et seq.)
    (b) Except as provided in paragraph (a) of this section, direct 
Federal acquisitions from non-Federal owners for projects administered 
by the FHWA Office of Federal Lands Highway may be carried out in 
accordance with applicable Federal condemnation laws. The FHWA will 
proceed with such a direct Federal acquisition only when the public 
agency responsible for the road is unable to obtain the ROW necessary 
for the project. The public agency must make a written request to FHWA 
for the acquisition and, if the public agency is a Federal agency, the 
request shall include a commitment that any real property obtained will 
be under that agency's sole jurisdiction and control and FHWA will have 
no jurisdiction or control over the real property as a result of the 
acquisition. The FHWA may require the applicant to provide any 
information FHWA needs to make the required determinations or to carry 
out the acquisition.
    (c) If the applicant for direct Federal acquisition obtains title 
to a parcel prior to the filing of the Declaration of Taking, it shall 
notify 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.
    (d) When the United States obtains a court order granting 
possession of the real property, FHWA shall authorize the applicant for 
direct Federal acquisition to immediately 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 applicant for direct 
Federal acquisition, as in the case of ROW acquired by an SDOT for 
Federal-aid projects; and
    (8) Instructions that the authority granted to the applicant for 
direct Federal acquisition is not intended to preclude the U.S. 
Attorney from taking action, before the applicant has made arrangements 
for removal, to reach a settlement with the former owner which would 
include provision for removal.
    (e) If the Federal Government initiates condemnation proceedings 
against the owner of real property in a Federal court and the final 
judgment is that FHWA 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.
    (f) 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, 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

[[Page 70032]]

    (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.
    (g) 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 SDOT, 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.
    (h) The deed from the United States to the State, or to the 
appropriate political subdivision thereof, or in the case of a Federal 
applicant for a direct Federal acquisition any document designating 
jurisdiction, shall include the conditions required by 49 CFR part 21 
and shall not include any grant of jurisdiction to FHWA. The deed shall 
be recorded by the grantee in the appropriate land record office, and 
the FHWA shall be advised of the recording date.
0
3. Revise Sec.  710.703(f) to read as follows:


Sec.  710.703  Definitions.

* * * * *
    (f) Highway agency in this subpart means any SDOT or other public 
authority with jurisdiction over a federally funded highway.

PART 810--MASS TRANSIT AND SPECIAL USE HIGHWAY PROJECTS

0
4. The authority citation for part 810 continues to read as follows:

    Authority:  23 U.S.C. 137, 142, 149 and 315; sec. 4 of Pub. L. 
97-134, 95 Stat. 1699; secs. 118, 120, and 163 of Pub. L. 97-424, 96 
Stat. 2097; 49 CFR 1.48(b) and 1.51(f).

0
5. Revise Sec.  810.212 to read as follows:


Sec.  810.212  Use without charge.

    The use and occupancy of the lands made available by the State to 
the publicly owned transit authority may be without charge. Costs 
incidental to making the lands available for mass transit shall be 
borne by the publicly owned mass transit authority.

[FR Doc. 2014-27275 Filed 11-21-14; 8:45 am]
BILLING CODE 4910-22-P


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