Right-of-Way and Real Estate, 57715-57741 [2016-19475]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 81, Number 163 (Tuesday, August 23, 2016)]
[Rules and Regulations]
[Pages 57715-57741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19475]



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Vol. 81

Tuesday,

No. 163

August 23, 2016

Part III





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; Final Rule

Federal Register / Vol. 81 , No. 163 / Tuesday, August 23, 2016 / 
Rules and Regulations

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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: Final rule.

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SUMMARY: The FHWA is revising 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 final rule 
addresses the use of those new early acquisition flexibilities. The 
FHWA is also updating the real estate regulations to reflect the 
agency's experience with the Federal-aid highway program since the last 
comprehensive rulemaking for part 710, which occurred more than a 
decade ago. The update clarifies the Federal-State partnership, 
streamlines processes to better meet current Federal-aid highway 
program needs, and eliminates duplicative and outdated regulatory 
language. The enactment of the Fixing America's Surface Transportation 
(FAST) Act had a minimal effect on this rule.

DATES: This final rule is effective September 22, 2016.

FOR FURTHER INFORMATION CONTACT: Arnold Feldman, Office of Real Estate 
Services, (202) 366-2028, email address: Arnold.Feldman@dot.gov; or 
Robert Black, Office of the Chief Counsel, (202) 366-1359, email 
address: Robert.Black@dot.gov; Federal Highway Administration, 1200 New 
Jersey Avenue SE., Washington, DC 20590. Office hours are from 7:30 
a.m. to 5:00 p.m., e.t., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION: 

Table of Contents for Supplementary Information

I. Background
II. Analysis of Comments
III. Rulemaking Analyses and Notices

Electronic Access and Filing

    This document and all comments received may be viewed online 
through the Federal eRulemaking portal at https://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.

I. Background

    The FHWA published a Notice of Proposed Rulemaking (NPRM) on 
November 24, 2014 (79 FR 69998), proposing to amend regulations 
governing the acquisition, management, and disposal of real property 
for transportation programs and projects receiving funds under title 
23, United States Code.
    Since the publication of the NPRM, the FAST Act was enacted into 
law on December 4, 2015. The FAST Act has minimal effect on this rule. 
The FAST Act at section 1109 repealed the Transportation Alternatives 
Program (TAP) (23 U.S.C. 213) and replaced it with a set-aside of 
Surface Transportation Block Grant (STBG) program funding for 
transportation alternatives (TA). The final rule has been changed to 
reflect the new program name.
    This final rule retains the major NPRM provisions without change. 
In particular, this final rule adds new authorities for early 
acquisition of property to part 710 and clarifies the Federal-aid 
eligibility of a broad range of real property interests that constitute 
less than full fee ownership. It streamlines program requirements, 
clarifies the Federal-State partnership, and provides a comprehensive 
update of part 710. Related regulations in 23 CFR parts 635 and 810 
were also updated to ensure consistency with the part 710 changes. The 
updates to 23 CFR parts 635, 710, and 810 better align the language of 
the regulations with current program needs and best practices.
    As proposed in the NPRM, important changes in the final rule 
include:
    (1) Expanding the permitted use of conditional right-of-way 
certifications that allows a grantee to proceed with construction 
contract bidding in certain situations where not all real property 
interests needed for the project have been acquired;
    (2) clarifying the roles and responsibilities of SDOTs, their 
subgrantees, and those entities carrying out a Federal-aid project on 
behalf of the SDOT;
    (3) clarifying the use of Stewardship/Oversight Agreements between 
FHWA and the SDOT, and specifying which approvals required under part 
710 are assigned to the SDOT;
    (4) providing authority as to how grantees other than the SDOT can 
use acceptable right-of-way (ROW) procedures other than the SDOT ROW 
manual to meet their compliance and oversight responsibilities for real 
property;
    (5) simplifying right-of-way use requirements, including combining 
the concepts of air space and air rights agreements into the one 
concept of ROW use agreements to handle leases and other time-limited 
non-highway uses;
    (6) eliminating detailed ROW requirements for design-build 
projects;
    (7) establishing a requirement for a real property agreement 
between FHWA and an acquiring agency for certain eligible 
transportation alternative projects funded under the STBG Program; and
    (8) implementing the early acquisition provisions of MAP-21 that 
improve a State's ability to preserve real property for a 
transportation facility.
    As part of the NPRM, FHWA estimated the incremental costs 
associated with the new requirements proposed in the NPRM that 
represented a change to current practices for State DOTs and 
Metropolitan Planning Organizations. 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 rule will clarify and streamline 
additional requirements including property management requirements, 
stewardship and oversight requirements, and Federal Land transfer 
requirements. The FHWA did not receive comments on its cost estimates 
or discussion of benefits.
    All comments received in response to the NPRM have been considered 
in adopting this final rule. Comments were received from 18 entities. 
The commenters included: 14 SDOTs, the American Association of State 
Highway Transportation Officials (AASHTO), one Federal Agency, one 
consultant, and one private citizen.

II. Analysis of Comments

    The following discussion summarizes the comments submitted to the 
docket on the NPRM, notes changes that have been made to the final 
rule, and states why certain recommendations or suggestions have not 
been incorporated into the final rule.

General Discussion of Comments

    In general, most of the commenters expressed support and 
appreciation for

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the revisions and concurred that the rule will improve efficiency, 
effectiveness, and accountability in the delivery of transportation 
programs and projects receiving funds under title 23 of the United 
States Code. Three commenters asked that FHWA include provisions for 
Construction Manager General Contractor (CMGC) and appraisal valuation 
waiver limits. Several commenters proposed that additional 
flexibilities be included in this final rule and also requested 
additional guidance or regulatory language on implementation of several 
provisions.
    The FHWA has responded to each comment received during the comment 
period and has made changes to the final rule where necessary. The FHWA 
is developing an implementation guide and a set of frequently asked 
questions to assist with the implementation of the final rule.

Comments on Construction Manager/General Contractor

    Two commenters, both from the California DOT (Caltrans), proposed 
to include CMGC in the final rule. One commenter suggested referencing 
it in the regulation at 23 CFR 635.309, the section on authorization of 
ROW and the other commenter suggested developing a new section of the 
regulation on CMGC. Also, Caltrans noted that CMGC methods are no 
longer a demonstration project but rather an alternative method of 
project delivery and as such, should be referenced by this section (23 
CFR part 635).
    The FHWA does not believe that incorporating CMGC by reference in 
23 CFR 635.309 will effectively address all issues pertinent to CMGC. 
The FHWA also does not believe that addressing CMGC is within the scope 
of this final rule on real estate acquisition, as CMGC is a broader 
topic focused primarily on contracting and project development issues. 
Although CMGC will not be further addressed in this final rule, FHWA 
published an NPRM on CMGC on June 29, 2015, at 80 FR 36939.

Comments on Right-of-Way Certification

    Several commenters (AASHTO, New York State DOT (NYSDOT), Oklahoma 
DOT (ODOT), and Washington State DOT (WSDOT)) supported providing 
additional flexibility in the use of conditional ROW certifications.
    The AASHTO suggested that a ROW certification should not be 
required as early as the submittal of Plans, Specifications, and 
Estimates (PS&E) to FHWA, but States should instead be allowed to 
provide this certification as late as 30 days prior to issuance of the 
Notice to Proceed (NTP).
    The FHWA does not believe that a standard allowing submission of a 
ROW certificate 30 days prior to issuance of a NTP is consistent with 
the purpose, intent, and timing of the ROW certificate. In part, a 
standard allowing submission of a certificate 30 days prior to the NTP 
may introduce uncertainty in the bid process, give rise to contractor 
delay claims, and may cause property owners to be more frequently in 
the path of construction. The FHWA believes that requiring a ROW 
certification at the time of PS&E, coupled with the flexibility to 
utilize conditional ROW certifications to allow advertising the project 
for bid while continuing to clear the ROW, strikes the appropriate 
balance between advancing a project while also ensuring property 
owners' rights are protected.
    The NYSDOT noted that it might be clearer to use terminology other 
than NTP since it is typically associated with design-build projects, 
not design/bid/build projects, and inquired whether the intent of this 
rule was to apply only to design-build projects. Also, NYSDOT suggested 
that it might be clearer to add the phrase ``or award'' to clarify that 
these provisions apply to either NTP or award.
    The FHWA clarifies in this final rule that the ROW certification 
requirements apply both to design-build projects and design/bid/build 
projects. The certification requirements for design-build projects are 
specifically addressed in Sec.  635.309(p). The FHWA does not believe 
that adding ``or award'' would be appropriate, as this addition could 
be interpreted as allowing construction to begin in instances where all 
properties have not been secured as a normal part of the process. This 
final rule clarifies that allowing construction to begin before all 
properties have been cleared should only be done in exceptional 
circumstances where it is in the public interest to proceed with 
construction before acquisition activities are complete.
    The ODOT expressed concern that the statement in the conditional 
ROW certification that the 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, may be subject to 
misinterpretation. Instead, ODOT suggested that if comparable housing 
is available for displaced persons, the requirements for approving a 
conditional ROW certification should be deemed to be met for all 
requests.
    The FHWA appreciates that the determination that comparable housing 
is available is an important milestone to ensure that displaced 
persons' rights are protected. However, ensuring that comparable 
housing is available is only one of several factors FHWA will consider 
in making such a determination. The SDOTs should work directly with 
their FHWA Division Office to develop additional details relevant to 
the use, consideration, and approval of conditional ROW certifications 
in their ROW manuals. In addition, the SDOT's Stewardship and Oversight 
agreement may serve to document approval authorities and reduce any 
uncertainty as to process.
    The WSDOT requested clarification on FHWA's expectation regarding 
the requirement to provide an updated notification prior to issuing an 
NTP when there are excepted parcels. It asked if there was an 
expectation that the ROW certificate be updated after bid opening, but 
prior to issuing the NTP.
    The final rule at Sec.  635.309(c)(3)(iv), states that ``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.'' The updated notification must be provided to FHWA prior 
to issuing an NTP. Updating the ROW certificate may be sufficient; 
however, FHWA leaves it to the discretion of the FHWA Division office 
to determine the type of form used to document the updated 
notification. The procedure must be documented in the State ROW manual.

Comment on Increasing the Threshold for an Appraisal and a Waiver

    One public agency, the U.S. Fish and Wildlife Service, requested 
that the threshold for an appraisal and a waiver valuation be 
increased.
    The FHWA believes that making the suggested changes would require 
changes to 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) 
regulation, which is outside of the scope of this rulemaking.

Comment on the Length of Occupancy Requirements

    The Connecticut DOT commented that because the length of occupancy 
requirements changed under MAP-21 (for home-owners it was reduced from 
180 to 90 days), it would seem logical that the ``valid lien'' 
requirement period for the determination of Mortgage

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Differential Payments would have been reduced to 90 days as well.
    The FHWA believes that making the suggested changes would require 
changes to the Uniform Act regulation, which is outside of the scope of 
this rulemaking.

Comments on New Terminology--Grantee/Subgrantee at Sec.  710.103 and 
Definition of Grantee at Sec.  710.105

    Three commenters, AASHTO, South Dakota DOT (SDDOT), and Colorado 
DOT (CDOT) expressed concern that the specific terms (including 
grantee, subgrantee, SDOT, and State) and the definition of grantee 
used to describe to whom and when the requirements of this rule apply, 
are unclear. In part, the commenters noted that they are primarily 
attempting to comply with eligibility requirements to receive 
reimbursement and do not believe that the use of grantee or other 
similar descriptors is an accurate use of the terms.
    In addition, Caltrans noted that the terms ``title 23 funds,'' 
``title 23 grant funds,'' ``grant funds provided under title 23,'' and 
``grant funds,'' are used interchangeably in the regulations and 
suggested that for purposes of clarity only one term be used to 
describe these funds.
    The FHWA acknowledges that the regulations cover a broad range of 
subjects and entities. The FHWA continues to believe that the scope of 
the regulations, the many parties referred to in the regulations, and 
the nature of each reference make it impractical to use a general 
definition and description. Doing so would lead to uncertainty about 
the applicability of provisions of this rule. As a result, this final 
rule will continue to include definitions for the terms ``grantee'' and 
``subgrantee.'' The term ``grantee'' is used to refer to all parties 
directly receiving title 23 grant funding. The term ``subgrantee'' is 
used to refer to parties receiving funding indirectly.

Comment on the Removal of ``Air Rights'' and ``Air Space'' Definition--
Sec.  710.105

    The WSDOT and a private citizen commented on the removal of the 
definition of air space. The WSDOT noted that the definition, although 
proposed to be deleted, was used in the regulations as a part of the 
definition for real property and real property interest. Also, the 
private citizen was concerned that eliminating the concepts of air 
space and air rights and instead using a ROW Use Agreement will mask 
the intent of the regulation and remove transparency.
    The FHWA recognizes that the term ``airspace'' is used in sections 
111(a) and 142(f) of title 23, U.S.C., as well as in FHWA regulations. 
The FHWA notes that the terms airspace and air rights are still valid 
description of a real property right; however, these terms are now 
referred to under a comprehensive title--``real property interest.'' 
The FHWA believes that the terms ``air rights'' and ``airspace'' are 
describing interests that do not need separate definitions. As defined 
in the current rule, air rights means real property interests defined 
by agreement, and conveyed by deed, lease, or permit for the use of 
airspace. Airspace is defined as that space located above and/or below 
a highway or other transportation facility's established grade line, 
lying within the horizontal limits of the approved right-of-way project 
boundaries. The FHWA believes that describing and granting requests 
using a singular comprehensive description rather than several 
definitions will ensure clarity within the regulation. Real property 
interests will no longer be granted by an air rights agreement; rather, 
FHWA will now use a blanket agreement called a ``ROW use agreement.'' 
The FHWA does not believe that using this type of agreement will result 
in any misuse because the requirements for considering and approving a 
proposed use have not changed. The intent is not to mask or to remove 
transparency, but rather to streamline this process by eliminating 
redundant terms and more effectively focus on the various highway uses 
and the impact on the facilities.

Comment on Mitigation Definition--Sec.  710.105(b)

    The Caltrans noted that including mitigation in the definition of 
ROW may result in delaying a ROW certification until all mitigation 
commitments are purchased. The Caltrans stated that these transactions 
are often between other States and/or Federal agencies and any 
significant time delay could impact construction advertisement and 
financial expenditures.
    The FHWA does not believe that the inclusion of the term 
``mitigation'' in the definition of ROW requires that all real property 
interests in mitigation properties necessary for the project be secured 
at the time of ROW certification or that it will necessarily cause 
other delays. The FHWA believes that real property interests in 
mitigation parcels needed for the project, to the extent practicable, 
should be secured and included in the ROW certification statement.
    Notification that real property interests in mitigation parcels 
needed for the project have not been secured at the time of ROW 
certification must be provided in the bid proposals identifying that 
work to ensure the contractor is aware that the process for acquiring 
the necessary real property interests will be underway concurrently 
with the highway construction. Consequently, proceeding with 
construction while attempting to secure real property interests needed 
for mitigation may create exposure to delay claims and other risks to 
the SDOT. While the FHWA does not believe that such risks will be 
great, SDOTs should carefully consider the risks.

Comment on Option Definition--Sec.  710.105(b)

    The CDOT agreed with the addition of the definition of ``option'' 
and the use of the term as it will ensure that eligibility requirements 
for reimbursement when an option is used are understood.
    The FHWA appreciates the comment and agrees that the definition is 
needed.

Comment on the RAMP (Real Estate Acquisition Plan) Definition--Sec.  
710.105(b)

    The NYSDOT requested that in addition to the definition of a RAMP 
in the final rule, a sample of a RAMP and what it includes should be 
added to the final rule.
    The FHWA does not believe that it is practical to provide samples 
of a RAMP or a list of what should be included in a RAMP in a way that 
addresses each SDOT's needs. The SDOTs should work with their 
respective FHWA Division office partners to develop updates to their 
ROW manual which lists requirements for a RAMP, and the process to be 
followed in requesting, reviewing, and approving a RAMP.
    The WSDOT stated that the definition of a RAMP included in the 
final rule should include information captured in the NPRM summary, 
which in part stated that the 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.
    The FHWA agrees with the comment that adding the information 
discussing the appropriate parties who may use a RAMP at Sec.  
710.201(d)(3) will provide needed details on appropriate use of RAMPs. 
The FHWA has incorporated the language in this final rule.

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Comment on ROW Use Agreement Definition--Sec.  710.105(b)

    Pennsylvania DOT (PennDOT) commented that the definition of a ROW 
use agreement should not include a highway occupancy permit because a 
highway occupancy permit is not a real property interest. The PennDOT 
expressed concern that the definition may lead to future ROW damage 
claims when the utility is required to relocate as a result of a 
highway project.
    The FHWA notes that the final rule definition does not specifically 
include highway occupancy permits, but instead focuses more broadly on 
non-highway uses. The final rule addresses utility permits at Sec.  
710.405(a)(2), which lists a number of exceptions that do not apply to 
the ROW use agreement, including utilities and railroads (which are 
governed by other sections of this title), bikeways, and pedestrian 
walkways.

Comment on Legal Settlement Definition--Sec.  710.105(b)

    Caltrans noted that this section references an ``authorized legal 
representative.'' Caltrans suggested deleting this reference and using 
instead the same statement found in Sec.  710.305(c), a ``responsible 
official of the acquiring agency.'' They commented that the term 
``legal'' seems to imply that the delegated representative must be an 
attorney.
    The FHWA agrees that a minor change is necessary to ensure that the 
applicability and meaning of this section is clear. The final rule now 
references a ``responsible official.'' The definition of ``legal 
settlement'' in the final rule is a settlement reached by an authorized 
legal representative or a responsible official of the acquiring agency 
that has the legal power vested in him or her by State law.

Comment on ROW Manual Requirements--Sec.  710.201(c)

    Caltrans suggested that the final rule include ``legal 
settlements'' in the list of ROW functions and procedures to be 
described in the ROW manual.
    The FHWA agrees that adding ``legal settlements'' to this list adds 
clarity and has made the change in this final rule. However, the 
requirements in this part of the regulation are not meant to be an 
exhaustive list of functions and procedures that must be described in 
the ROW manual, but rather a list that illustrates several of the 
functions and procedures. The FHWA believes that each SDOT should 
determine the appropriate functions to list in its ROW manual.

Comments on ROW Manual Alternative (RAMP)--Sec.  710.201(d)

    Six commenters (AASHTO, SDDOT, Caltrans, ODOT, Georgia DOT (GDOT), 
and Wisconsin DOT (WisDOT)), supported the requirement that a State ROW 
manual be used by all agencies in a State. The AASHTO and SDDOT voiced 
concern about the proposed allowance for use of alternatives to a State 
ROW manual, and noted that permitting the use of alternatives to the 
State ROW manual does not seem compatible with the statement in the 
NPRM that FHWA believes that it is necessary to ensure that other 
grantees of title 23 funds meet the same requirements that the SDOT 
currently meets.
    Caltrans commented that the oversight required to review 
alternatives to an approved SDOT ROW manual would be ``devastating'' 
because Caltrans is not sufficiently staffed to conduct these reviews. 
Several commenters (ODOT, GDOT and WisDOT), voiced similar concerns 
about the administrative effort necessary to review and approve 
alternatives to SDOT ROW manuals.
    The ODOT noted that FHWA anticipated in the NPRM that the number of 
non-State DOT grantees will continue to increase, and that the role of 
non-State DOT parties in title 23 projects and programs will continue 
to evolve and grow. The ODOT further noted that additional funding for 
increased oversight was not addressed in the proposed rulemaking and 
that it supports this measure, but only if the proper structure is put 
in place for the program to succeed.
    The GDOT commented that it believes that the creation of separate, 
local, right-of-way manuals and utilization of RAMPS that may conflict 
with SDOT manuals could create challenges as SDOTs provide oversight 
and issue ROW certifications.
    The FHWA appreciates the insight provided in the comments regarding 
the potential difficulties and costs of allowing alternatives to the 
use of an approved SDOT ROW manual. However, a number of the commenters 
incorrectly assumed that the use of an alternative to SDOT ROW manuals 
did not require SDOT permission. If an SDOT subgrantee would like to 
use an alternative to an SDOT ROW manual, it must first gain the SDOT's 
permission to do so. The FHWA has added language to this section 
clarifying that the ROW manual options can only be used with SDOT 
approval. The FHWA understands that not all SDOTs will permit the use 
of alternatives to the SDOT ROW manual. In developing a SDOT ROW 
manual, the SDOT must clearly state whether it will allow alternatives. 
If allowed, the manual must also include the SDOTs process for 
considering use of an alternative to the SDOT ROW manual and that the 
review and approval process for that alternative must be clearly 
documented.
    The WisDOT requested that FHWA ensure that under the final rule 
SDOT's would have the authority to approve any RAMP or ROW Manual 
agreements developed by an entity that requires WisDOT oversight. The 
WisDOT was concerned about reviewing, approving, and cataloging the 
many RAMPs that local public agencies (LPA) may submit. It noted that 
WisDOT has drafted and maintained a LPA ROW manual which municipalities 
are already required to use and they felt that this process would be 
consistent with the rule's flexibility.
    The FHWA agrees that the final rule does not require the use of 
alternatives to the SDOT ROW manual and thus ensures that an SDOT will 
have the discretion to decide whether or not to permit the use of a 
RAMP or other alternative to a ROW manual.

Comment on Assignment of FHWA Approval Actions to a SDOT--Sec.  
710.201(h)

    The Idaho Transportation Department (ITD) and WSDOT expressed 
concern regarding FHWA's proposed revisions pertaining to SDOT 
assumption of some of FHWA's approvals and property related oversight. 
They noted that the current regulation states that the SDOT and the 
FHWA will agree on the scope of property related oversight and approval 
actions that the FHWA will be responsible for. The NPRM proposed 
changing this language to provide that FHWA will be responsible for 
``any action not expressly assigned to the State DOT'' in the 
Stewardship/Oversight Agreement between the State DOT and FHWA. The 
commenters requested that FHWA expand on this statement to clarify its 
intent.
    After considering these comments, FHWA is retaining the language 
with one clarifying change. The FHWA inserted ``approval'' into the 
sentence so that it now reads as follows: ``The FHWA retains 
responsibility for any approval action not expressly assigned to the 
SDOT in the Stewardship/Oversight Agreement.'' This change clarifies 
that only the FHWA approvals and property-related oversight that FHWA 
transfers to the SDOT must be in the Stewardship/Oversight Agreement. 
The FHWA notes that in accordance with long-standing policy and the 
provisions of 23 U.S.C. 106(c), FHWA

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uses the Stewardship/Oversight Agreement executed between FHWA and the 
SDOT to document the transfer of responsibility for an array of project 
decisions from FHWA to the SDOT. This policy of using the Stewardship/
Oversight Agreement as the vehicle for transferring FHWA decisionmaking 
authority to the SDOT applies across the Federal-aid highway program, 
except in certain limited instances where stand-alone agreements are 
contemplated by statute (such as the assignment of environmental review 
responsibilities to States under 23 U.S.C. 327 and programmatic 
categorical exclusion agreements under Section 1318(d)(3) of MAP-21).
    Accordingly, approvals and property-related oversight that will be 
made by the SDOT instead of FHWA must be documented in the applicable 
Stewardship/Oversight Agreement. The SDOT ROW manual cannot be used to 
assign or delegate decisionmaking authority to the SDOT, or to expand 
decisionmaking authority transferred to the SDOT under the Stewardship/
Oversight Agreement. Any decisionmaking action not expressly given to 
the SDOT under the Stewardship/Oversight Agreement is retained by FHWA. 
There are many ROW oversight and project development activities that 
SDOTs carry out that do not involve an approval or property related 
oversight under the law (including regulations). Those other types of 
actions are documented in the SDOT ROW manual, which details how such 
responsibilities will be carried out by the SDOT, but will not 
typically be included in the Stewardship/Oversight Agreement.
    The WSDOT inquired about programmatic agreements and whether a 
programmatic agreement would override a Stewardship/Oversight 
agreement.
    As noted in response to the previous comment, any transfer of FHWA 
decisionmaking responsibilities for real estate matters to the SDOT 
must be through the applicable Stewardship/Oversight Agreement. Any 
other agreements and the SDOT ROW manual must be consistent with the 
Stewardship/Oversight Agreement.

Comments on the List of Activities Allowed Prior to NEPA (National 
Environmental Policy Act)--Sec.  710.203(a)(3)

    The ODOT commented that it strongly endorses the revisions 
regarding the preparation of appraisals, appraisal reviews, and 
appraisal waivers that can occur prior to completion of a NEPA decision 
for a project subject to title 23. It estimates that this change will 
reduce the preconstruction phase by up to 3 months. The WSDOT also 
requested that preliminary relocation planning activities be added as 
an eligible activity in 23 CFR 710.203(a)(3) and as an eligible expense 
in Sec.  710.203(b).
    The final rule states that contact with potentially affected 
property owners is permissible for the purposes of developing an 
appraisal of real property. All negotiations and interviews with 
potentially displaced persons must be deferred until after the NEPA 
decision, except in two cases: 1) Early acquisitions under Sec.  
710.501; and 2) hardship or protective acquisitions under Sec.  
710.503. However, FHWA agrees that certain relocation planning 
activities and associated expenses which do not require personal 
contact or interviews with those who may be displaced should be 
eligible activities prior to a NEPA decision. The final rule allows 
eligibility for these preliminary relocation planning activities 
including, but not limited to, costs associated with developing a list 
of comparables, identifying replacement neighborhoods, and documenting 
available public services. This list is not exclusive.

Comments on Including Closing and Other Acquisition Cost--Sec.  
710.203(b)

    The CDOT provided comments supporting the inclusion of closing and 
other acquisition-related costs as eligible for reimbursement. The ITD 
welcomed the discussion and explanation of eligible costs. Three 
commenters (AASHTO, CDOT, and NYSDOT) commented that the subsection of 
the final rule allowing the costs associated with administrative 
settlements (in accordance with 49 CFR 24.102(i)), legal settlements, 
court awards, and costs incidental to the condemnation process, should 
specifically include the phrase ``closing and other acquisition-related 
costs'' so that it would be clear that these costs are also officially 
eligible for reimbursement.
    The FHWA agrees that adding language from the NPRM preamble which 
directly addressed eligibility for these costs to the regulation will 
help to further clarify that costs associated with closing and costs of 
finalizing the ROW acquisition are direct eligible costs. The FHWA 
included a provision in this final rule at Sec.  710.203(b)(1)(vi) 
which states that ordinary and reasonable costs in closing and 
finalizing the acquisition are reimbursable. However, FHWA does not 
believe that including an exhaustive list of eligible costs in this 
regulation, which would include costs associated with closing or 
finalizing the acquisition, is practical or necessary. Each grantee is 
expected to determine and document in its SDOT ROW manual what are 
considered customary and usual costs in that State.

Comments on Reimbursement of Attorney Fees--Sec.  710.203(b)(1)(iv)

    The AASHTO supported including agency attorney fees and excluding 
other attorney fees, unless required by State law or approved by FHWA.
    Two commenters, CDOT and NYSDOT, provided comments on reimbursement 
of attorney's fees. The CDOT stated that it supports including 
reimbursement of the acquiring agency's attorney fees and excluding 
other attorney fees unless required by State law or approved by FHWA. 
The NYSDOT asked whether the regulations should also include a 
provision for reimbursement of attorney fees for other parties (i.e., 
property owner).
    The FHWA appreciates CDOT's support of the reimbursement of 
acquiring agency's attorney fees. As a result no changes were made. 
Also, FHWA is aware that several States have statutes requiring 
reimbursement of a property owner's attorney fees, but notes that a 
number of States have no such statute. The FHWA agrees that a decision 
to provide for reimbursement of a property owner's attorney fees is 
appropriately left to State law and is more appropriately addressed and 
documented in the SDOT ROW manual.

Comment on Waiver Evaluation Instead of Appraisal Waiver --Sec.  
710.203(b)(1)(v)

    The AASHTO and CDOT commented that the use of the term ``waiver 
valuation'' instead of ``appraisal waiver'' is an improvement and that 
it relates more closely to the language in 49 CFR part 24.
    The FHWA appreciates the comment and agrees that ``waiver 
valuation'' is a more appropriate term. As a result, the final rule now 
uses the term wavier valuation.

Comment on Alternate Access Point Eligible Expense--Sec.  
710.203(b)(6)(ii)

    The AASHTO and CDOT commented that adding a reference to 
``alternate access points'' in this section and making expenses related 
to the provision of ``alternate access points'' outside the ROW an 
eligible expense for reimbursement was appreciated.
    The FHWA appreciates the comment and agrees. No additional changes 
were made to this section of the regulation.

[[Page 57721]]

Comment on Non-State DOT Grantee Projects--Sec.  710.307(b)

    The ITD requested clarification of the last sentence of Sec.  
710.307(b). It felt that the sentence was too general and it was not 
clear whether FHWA would review the subgrantee projects done through 
our oversight and administration.
    The definition of a ``grantee'' found at Sec.  710.105(b) states 
that grantee is a ``party that directly receives title 23 funds and is 
accountable to the FHWA for the use of such funds and for compliance 
with applicable Federal requirements.'' As a result, a non-State DOT 
grantee would be a recipient of Federal funds directly from FHWA, 
thereby requiring FHWA to provide review and approval of ROW 
availability statements, certifications, and other project 
documentation in accordance with applicable law. Subgrantees are not 
direct recipients of Federal funds since they receive their funds 
through the SDOT. The direct recipient of Federal funds in this rule is 
referred to as the SDOT, who in turn provides the Federal funds to the 
subrecipient. As such, the SDOT, not FHWA, is required to provide 
oversight and administration to the subrecipient.

Comments on Design-Builder Use of ROW Manual or RAMP--Sec.  
710.309(d)(1)

    Several commenters expressed appreciation for clarification of the 
design-build requirements. However, four commenters (AASHTO, Caltrans, 
GDOT and PennDOT) noted that all projects should be required to use the 
SDOT ROW manual and should not be allowed to use a RAMP. The PennDOT 
was concerned that allowing the use of a RAMP would effectively 
supersede the SDOT's oversight role.
    The FHWA understands that several of the commenters interpreted the 
new RAMP flexibility within this final rule as allowing either FHWA or 
a subgrantee to approve use of a RAMP. The FHWA appreciates the 
question and clarified in the regulation that an SDOT or other grantee 
that is responsible for oversight must first make a determination that 
it will allow the use of a RAMP by its subgrantee. The SDOTs may choose 
one of three procedures to demonstrate that the FHWA-approved ROW 
procedures will be followed. According to Sec. Sec.  710.201(d)(1) 
through (3), an acquiring agency may use: (1) The FHWA-approved SDOT 
ROW manual; (2) its own ROW manual which must be approved by the 
reviewing agency that it meets Federal and State requirements; or (3) a 
RAMP setting forth the procedures the acquiring agency will follow 
which must be approved by the reviewing agency. The decision as to 
which procedure is allowed is ultimately left to the discretion of the 
SDOT for all programs which use Federal-aid funds supplied by the SDOT.

Comment on Park and Ride Lots and Air Rights--Sec.  710.403(b)

    The AASHTO was concerned that Sec.  710.403(b) could possibly be 
interpreted as restricting beneficial non-highway uses, such as parking 
within the Interstate ROW, which could have a negative impact on Park 
and Ride lots and air space leases.
    Park and Ride lots continue to be subject to the requirements and 
conditions of 23 U.S.C. 137 and 23 CFR 810.106. The FHWA does not 
believe that the requirements of 23 CFR 710.403(b) can be read as 
prohibiting park and ride lots or creating additional conditions for 
permitting them. In order to clarify this point, FHWA has added 
language to the final rule referencing 23 U.S.C. 137 and 23 CFR 
810.106.

Comments on Determining Excess Property in ROW Manual or RAMP--Sec.  
710.403(c).

    The ITD requested that the section begin with the following 
statement: ``The purpose of this section is . . . .'' It commented that 
the section is new and believed that the additional language would help 
to better provide insight into the purpose of the section.
    The FHWA appreciates the suggestion but believes that the first 
sentence adequately states the subject of the paragraph--that grantees 
shall specify their procedures in their approved ROW manual or RAMP.
    The NYSDOT strongly preferred keeping the list of organizational 
units with whom the grantee must coordinate to make a determination of 
excess property in the regulations. It feared that once the final rule 
is published, it may appear that the requirements for coordination 
among organization units had been reduced, which would diminish the 
importance of following the prescribed process of circulating an excess 
determination request through the organizational units.
    The FHWA understands the commenter's concern. However, the removal 
of the list of organizational units was not intended to reduce the 
requirements. Each State has its own internal structure and processes 
that differ. The FHWA believes SDOTs are best qualified to determine 
what type of internal coordination is appropriate. The FHWA notes that 
the process used and the determination of which organizational units 
should be contacted are to be documented in the State ROW manual, which 
FHWA approves.

Comments on Charging Fair Market Value--Sec.  710.403(e)

    The PennDOT requested that Sec.  710.403(e) be revised to include 
the following statement: ``. . . submitted to FHWA in writing and may 
be approved by FHWA (if not assigned to SDOT) in the following 
situations . . . .''
    The FHWA uses the Stewardship/Oversight Agreement executed between 
FHWA and the SDOT to document the transfer of responsibility for an 
array of project decisions from FHWA to the SDOT. However, making an 
exception to the requirement to charge fair market value is not an 
action that FHWA may delegate or assign. The FHWA retains that approval 
authority. As a result, no change was made to the language.
    The NYSDOT requested clarification of the phrase ``must be in the 
public interest.'' It asked whether that phrase would preclude the SDOT 
from issuing an Alternate Use and Occupancy permit for fair market 
value unless it makes a public interest determination.
    The FHWA requires a public interest determination if the real 
property interest lies within the ROW limits, even though fair market 
value is charged. A public interest determination is needed in the 
following cases: (1) Proposing to use the existing ROW for a non-
highway, alternate use (with the exception of permits issued for 
construction of a highway project such as utility permits.) (See 
Sec. Sec.  710.405(a)(1)(2)); and (2) If real property interests inside 
or outside the ROW limits are sold or leased for less than fair market 
value (See Sec.  710.403(e)). The FHWA does not require a public 
interest determination if the property is located outside of the ROW 
and sold or leased for fair market value.
    The PennDOT also requested further explanation of what information 
would be acceptable to provide assurance that the public receives 
benefit to justify less than fair market value.
    As stated in the preamble of the NPRM, 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 FHWA believes this final rule provides the SDOT and the 
FHWA Division Office the flexibility to determine and document the 
criteria necessary to justify whether adequate

[[Page 57722]]

social, environmental, or economic benefits are present to determine a 
fair return.

Comments on ROW Use Agreements for Non-Highway Use--Sec.  710.405(a)

    The ITD requested a definition for ROW use agreement and was unsure 
of what uses can be included in the agreement, and also asked where 
bikeway and pedestrian walkways issues are explained in the final rule. 
The ODOT expressed concern that ROW use agreement is too broadly 
applied in this rule and may impact future permitting activities, such 
as utility permits, which are not properly the subject of ROW use 
agreements.
    To address these comments, FHWA added clarifying language to this 
part (``except for the Interstate highways'') to ensure that the 
delegation questions above are clearly addressed for the Interstate. 
The FHWA provides a definition of the ROW use agreement in the final 
rule at Sec.  710.105(b). To determine if a non-highway use is allowed 
within the ROW limits, the request must meet the terms and conditions 
outlined in Sec.  710.405. However, there are exceptions where the ROW 
use agreement does not apply, including railroads, public utilities, 
bikeways and pedestrian walkways (see Sec.  710.405(a)(2)). Although 
the previous terms, ``air rights or air space,'' have been replaced 
with ``real property interests,'' the FHWA fully expects the SDOT 
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.

Comments on Information Needed To Protect Federal Interest in 
Facilities.-- Sec.  710.405(b)

    The PennDOT requested a revision to the language at 23 CFR part 
710.405(b)(7) to add ``if not assigned to SDOT'' when requiring FHWA 
approval if the agreement affects a Federal-aid highway.
    The FHWA agrees and made the requested revision in order to clarify 
this sentence.
    The PennDOT also requested that FHWA delete the references to a 
guidance document for additional terms and conditions appropriate for 
inclusion in the ROW use agreements. The PennDOT requested that any 
regulatory requirements for ROW use agreements be listed directly in 
the regulation. It reasoned that guidance can be revised outside the 
regulatory review process. If this reference remains in the regulation, 
the SDOT requested that the language be clarified so that it is clear 
that the other terms and conditions listed in the guidance are not 
mandatory requirements.
    The FHWA referenced the air rights guidance to provide additional 
terms that SDOTs might employ in ROW use agreements, as needed. As 
such, the reference to air rights will remain. However, language will 
be added to clarify that the terms and conditions in the guidance 
document are not mandatory requirements.
    In addition, PennDOT suggested that Sec.  710.405(d) be revised if 
it is applied to the disposition of excess ROW since it should not have 
to conform to the current design and safety criteria. However, if there 
are proposed changes to the highway as a result of the proposed use of 
the excess ROW, then PennDOT agrees it would require compliance with 
current design and safety criteria.
    The FHWA believes that in a situation where property within the 
project limits is determined by the SDOT to be in excess of its needs, 
the SDOT and FHWA Division office must ensure the proposed use and 
improvement to the excess ROW is in the public need and/or interest.

Comments on Application Requirements for Use of ROW Interests--Sec.  
710.405(e)

    The CDOT asked for clarification and guidance on how to document 
that the ROW use agreement is in the public interest.
    The purpose of the phrase ``public interest'' is to require the 
development of a determination of whether the proposed use is 
consistent with public need and/or interest. The final rule does not 
require a specific standard or require that indicators be considered. 
Each SDOT should set the standards for documenting public interest in 
its ROW manual. Measures that might be used may include a benefit to 
the public expected from the proposed use, addressing a long standing 
public need, a financial benefit to the public from the use, or a 
social or environmental benefit from the use.
    The Caltrans, NYSDOT, and PennDOT questioned whether the use of 3D 
plans should be necessary in all cases and also pointed out that 3D 
plans were not defined.
    The FHWA or the grantee may require 3D plans or presentations on 
major projects such as air rights involving highway tunnels, subway 
tunnels, railroad tunnels, above and underground parking decks, etc. 
However, if the real property interest is used as vacant land, leisure 
activities (such as walking or biking), beautification, parking of 
motor vehicles, public mass transit facilities which do not require 
subsurface construction, excavation or other disturbance (such as a bus 
shelter) and similar uses, then 3D plans normally would not be 
required. The FHWA added the language ``if required by FHWA or the 
Grantee'' to add clarity. The FHWA does not believe that a definition 
of 3D plans is necessary because, as used in this rule, there is no one 
single standard that may be used. The FHWA expects that when 3D 
presentations are necessary, that the 3D plans will adequately depict 
the proposed use and its impacts.

Comments on Disposal of Excess Property--Sec.  710.409

    The Colorado DOT and PennDOT were concerned that a request for 
disposal must comply with some of the criteria required for ROW use 
agreements. They reasoned that if a property is determined to be 
excess, then it should be subject only to the requirement that the SDOT 
receive fair market value for its disposal and that any potential use 
of the property need not be considered.
    The FHWA has reviewed the regulation and agrees that applying all 
of the requirements and criteria applicable to a lease or other 
temporary ROW use agreement to a disposal action is overly broad. The 
FHWA has revised this section and eliminated the specific references to 
requirements in Sec. Sec.  710.403 and 710.405, which are focused on 
ROW use agreement actions.

Comment on Property Acquisition Alternatives--Sec.  710.501

    The CDOT noted that the proposed regulations provide a process for 
approving early acquisitions which gives an additional tool to deliver 
projects efficiently and effectively.
    The FHWA appreciates the comment. No changes were made to this 
section of the regulation.

Comment on State Funded Early Acquisition Eligible for Future Credit--
Sec.  710.501(c)

    The ITD asked if a SDOT can acquire property using State funds and 
be credited toward its non-Federal share of the project cost up to the 
maximum limit of its financial involvement.
    The FHWA has not included a change in the final rule to allow for 
what amounts to a method to apply excess credit to another project. The 
allowance for a credit continues to be a credit for costs of acquiring 
property for the project as part of the agency's non-

[[Page 57723]]

Federal share. Any costs which exceed the non-Federal share for that 
project are not creditable in most instances.

Comment on Timing of FHWA Concurrence--Sec.  710.501(c)(5)

    The PennDOT asked for clarification on ``the timing of obtaining 
FHWA concurrence during the project development process for early 
acquisitions.''
    The FHWA emphasizes that State funded early acquisition continues 
to be an at-risk acquisition for the SDOT. To be eligible for Federal-
aid participation, the concurrence provided for in this section 
requires that the environmental review process for the transportation 
project be completed and that each of the six criteria in this section 
are determined to have been met. Each SDOT should specify the process 
and timing for seeking a credit in its ROW manual. A ROW certification 
would be one appropriate milestone for requesting a credit; other 
milestones might include when the project reaches a specified 
percentage of project completion or when the project is determined to 
have been completed.

Comments on State Funded Early Acquisition Eligible for Future 
Reimbursement--Sec.  710.501(d)

    The PennDOT commented that it would like the regulation to list the 
terms and conditions of 23 U.S.C. 108(c)(3) rather than just reference 
the statute.
    The FHWA agrees that this change will make it easier for the user 
of this regulation and has added the terms and conditions found at 23 
U.S.C. 108(c)(3) to the regulatory text.
    The WisDOT commented that it has concerns about the requirement 
that a State must have a mandatory comprehensive and coordinated land 
use, environment, and transportation planning process under State law 
and that the acquisition be certified by the Governor. The WisDOT was 
also concerned about meeting the requirements of statewide and 
nonmetropolitan planning as a part of this requirement. Further, WisDOT 
asked for clarification on meeting the requirements of this part and 
inquired about the possibility of getting a waiver for this 
requirement.
    The FHWA does not have legal authority to issue a waiver for this 
statutory requirement. However, FHWA is completing a research project 
to examine several States that have processes that may be consistent 
with these requirements. The FHWA will share the research findings on 
its Web site as soon as the final report is completed. The FHWA 
believes that providing examples of processes will give interested 
SDOTs a starting point in determining if they have a process that meets 
the requirements for statewide and nonmetropolitan planning contained 
in 23 U.S.C. 108(c)(3).

Comments on Federally-Funded Early Acquisition--Sec.  710.501(e)

    Several commenters (AASHTO, GDOT, CDOT, ITD, and WisDOT) provided 
comments on various parts of this section. The AASHTO and GDOT both 
welcomed the new authority for federally funded early acquisitions, but 
expressed concerns that procedural and documentation requirements could 
deter States from taking advantage of this new flexibility. They 
encouraged FHWA to implement this new authority in a way that avoids 
unnecessary administrative burdens and provides a high degree of 
consistency and predictability in FHWA's decisions.
    The FHWA agrees that it is important to ensure that unnecessary 
administrative burdens do not deter the implementation of these 
flexibilities. The FHWA believes that SDOTs can develop and provide the 
required documents with the least administrative burden that is 
practical. The FHWA will continue to work with the SDOTs to ensure that 
FHWA's decisionmaking process is transparent, efficient, and 
reasonable.
    The AASHTO and the CDOT commented that the factors listed in the 
preamble which address what FHWA may consider when deciding whether to 
approve a federally funded early acquisition are above and beyond the 
list of factors that must be covered in the State's certification under 
23 CFR 710.501(e)(1) through (e)(4).
    As noted in the NPRM, FHWA does not believe that it is practical to 
try to capture in the regulation every scenario for complying with the 
requirements in 23 U.S.C. 108(d)(3)(B). The preamble discussion did not 
create a list of factors that will be applied to every decision, but 
rather factors that it may consider and that SDOTs should also consider 
when carrying out federally funded early acquisition. The FHWA noted in 
the preamble that it expects to wait until it has more experience 
administering the certification process before considering issuing 
implementation guidance. This continues to be FHWA's position. In the 
interim, FHWA will work directly with SDOTs considering a federally 
funded early acquisition to address any questions that may arise about 
the discretionary factors to ensure that SDOTs can use these 
flexibilities.

Comment on Allowing 4(f) Property Acquisition--Sec.  710.501(e)(2)(ii)

    The AASHTO, CDOT, and GDOT requested that FHWA reconsider the 
requirement in Sec.  710.501(e)(2)(ii) that federally funded early 
acquisitions may ``not involve land described in 23 U.S.C. 138.'' Such 
lands are commonly known as ``Section 4(f) property,'' which is defined 
in 23 CFR 774.17 as ``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.'' The commenters suggested a more flexible approach, such 
as one that would allow for a case-by-case determination regarding 
early acquisition for Section 4(f) properties. Specifically, they 
suggested that the involvement of Section 4(f) resources could be 
listed as one of the factors that the FHWA considers in deciding 
whether to approve Federal funds for an early acquisition. They felt 
that this flexibility may be especially helpful when the Section 4(f) 
status of a property is uncertain, as would be the case with some 
historic properties.
    The FHWA revised the final rule to provide additional flexibility 
by clarifying that the acquisition of a Section 4(f) property itself is 
prohibited but that all acquisitions that may involve a Section 4(f) 
property are not expressly prohibited. For example, if all of the other 
provisions in Sec.  710.501(e) are met, a property that is adjacent to 
a Section 4(f) property could be acquired. Section 701.501(e)(2)(i) now 
states that the acquisition of the real property interest does not 
require FHWA approval under 23 CFR 774.3.
    The FHWA did not adopt the request for case-by-case exceptions for 
early acquisition of a Section 4(f) property because the Section 4(f) 
regulation does not include such an exception. In addition, the 
regulations implementing Section 106 of the National Historic 
Preservation Act, 36 CFR part 800, do not contain an exception from 
consultation when the eligibility of a property is undetermined. 
However, as noted in the NPRM, the option of acquiring a Section 4(f) 
property early by using hardship acquisition and protective buying 
remains a viable alternative for SDOTs should the need arise. This 
alternative is more appropriate because a hardship acquisition or 
protective buying occurs when the proposed transportation project, for 
which the property would be needed, has progressed into the NEPA phase 
when more specific information is available about the location, design, 
alternatives, and other factors. This

[[Page 57724]]

information is necessary to determine what the requisite Section 4(f) 
determination and Section 106 consultation requirements are. Therefore, 
hardship acquisition and protective buying continue to be the only 
options that FHWA believes are appropriate for early Section 4(f) 
property acquisition.

Comments on Acquiring by Negotiation--Sec.  710.501(e)(2)(viii)

    The WisDOT commented that it supports allowing a ``friendly 
condemnation'' to clear or quiet the title for real property interests 
acquired as part of a federally funded early acquisition project. In 
part of its comment, it referenced complex acquisitions as being a 
determining factor in the use of condemnation to clear title.
    The FHWA is not proposing that a complex acquisition would 
necessarily be a requirement for using condemnation to clear title, but 
rather condemnation to clear title would be used in cases where the 
property owner and the agency have a binding agreement of sale, but 
cannot clear title for any number of reasons.

Early Acquisition Project Included as a Project in STIP/TIP--Sec.  
710.501(e)(3)

    The AASHTO, GDOT, CDOT, and ITD asked about the definition of an 
early acquisition project in this part of the regulation and asked FHWA 
to clarify in either the preamble or rule that compliance with this 
requirement does not necessarily mean that each individual acquisition 
be included as a separate project in the Transportation Improvement 
Plan (TIP). They requested that the final rule clarify that a package 
of related acquisitions--e.g., all acquisitions for a project or 
portion of a project--can be included as a single line item within a 
TIP. In addition, ITD asked if there could be a generic project named 
``early acquisition.''
    A generic project named ``early acquisition'' would not meet the 
requirements. This final rule includes language which in part requires 
that each federally funded early acquisition project must be added as a 
separate project in the TIP or State Transportation Improvement Plan 
(STIP). Since a number of conditions and issues surround each early 
acquisition project, transparency is essential to provide proper 
management of these projects.
    The AASHTO, CDOT, and GDOT correctly note that ``. . . all 
acquisitions for a project or portion of a project can be included as a 
single line item within a TIP.'' The NPRM and this final rule include a 
definition of early acquisition project which states: ``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.'' In most cases, acquisition of 
parcels unrelated to a specific project or portion of a project does 
not meet the definition or requirements of an early acquisition project 
in this regulation. A generic project or a statewide project for all 
early acquisitions would not, therefore, meet the requirements of this 
final rule.

Comments on Prohibited Activity--Sec.  710.501(f)

    The AASHTO, GDOT, ITD, and WisDOT commented on the prohibited 
activities described in this part. The AASHTO and Georgia DOT agreed 
with the language stating that a State may carry out 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. They felt that this language 
helps to clarify that the statute's prohibition against ``developing'' 
property acquired as part of an early acquisition project does not 
prevent the State from taking actions necessary to protect the public 
health and safety.
    The ITD asked if their assumption is correct that a SDOT can take 
ownership of real property before the completion of the NEPA process 
for the transportation project but not allow a change to the property's 
use or configuration in any way that might impact the NEPA process 
(except for the certain health and welfare reasons).
    The FHWA agrees that ITD's understanding is correct. The NPRM 
preamble provided a detailed discussion of prohibited activities which, 
in part, states that 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 ``buy and hold'' approach is consistent with 
the limitation in 23 U.S.C. 108(d)(6). That provision does not allow 
real property interests acquired as part of a federally assisted early 
acquired project to be developed in anticipation of the proposed 
transportation project until the NEPA review process for the proposed 
transportation project is concluded. The language in the final rule 
provides direction on what ``developed in anticipation of a project'' 
means. Prohibited activities include 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. There may be very limited instances in which development 
activities may be appropriate.
    The WisDOT was concerned that it would not be allowed to perform 
demolition or site preparation on properties it purchases as an early 
acquisition with Federal funding until the environmental review is 
done. It noted that depending on how long the review takes, there are 
concerns with vandalism on the property and the cost of managing 
(maintenance, snow removal, grass cutting, etc.) the property until 
such time the environmental review is finished. It stated that certain 
activities are allowed to protect public safety, but that it would need 
guidance and clarification on that.
    The FHWA agrees that there will be costs associated with managing 
and maintaining real property interests acquired as a federally funded 
early acquisition. The WisDOT is also correct that certain activities 
necessary to protect the public health or safety which were considered 
during the environmental review for the early acquisition project can 
be carried out. The FHWA will consider developing additional guidance 
to further answer questions that may arise about prohibited activities 
for real property interest acquired as part of a federally funded early 
acquisition project.

Comment on Reimbursement--Sec.  710.501(g)

    The ITD commented that the definition of ``offset'' in this section 
was not clear and asked if ``offset'' and ``local match'' are the same, 
and

[[Page 57725]]

requested clarification on both the intent and purpose for this 
section.
    Local match and offset are not the same concepts. Local match 
allows for a credit based on contributions made towards the local share 
of the cost of a project. As explained in the NPRM, this section 
requires that when Federal-aid reimbursement has been 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. Offset in this context means a 
reduction in the States apportionment of title 23 funds. However, a 
local match refers to the Federal matching requirement on federally 
funded or assisted project or program funds--i.e. the portion of the 
total project cost that a State or local is required to contribute is 
commonly called the local match. The use of FHWA funds on a project 
typically requires a 10 percent or 20 percent local match of funds.

Comment on Relocation Assistance Eligibility--Sec.  710.501(h)

    The AASHTO and GDOT commented that the language in the rule helps 
to ensure that relocation assistance can be provided at the time early 
acquisition occurs and need not wait until project construction.
    The FHWA appreciates the comment and believes it is important to 
reiterate that the purpose of this provision is to establish relocation 
eligibility when there is a binding written agreement between the 
acquiring agency and the property owner for the early acquisition of 
the real property interests.

Comments on Protective Buying and Hardship Acquisition--Sec.  710.503

    Two SDOTs and one private citizen commented on this section of the 
regulation. The ITD commented that the definition of ``project'' in 
this section is not clear. They requested clarification of what would 
need to be in the TIP or whether the early acquisition would need to be 
in the TIP itself.
    The FHWA agrees that the term ``transportation project'' should be 
used in this section to clarify which activities the regulation is 
referring and what must be included in the TIP. The FHWA has revised 
the regulatory text accordingly. Transportation project as used in this 
regulation is defined in part as excluding early acquisition projects. 
In order to request reimbursement of hardship or protective buying 
costs (referred to as early acquisitions in the question) one of the 
requirements for this part is that the transportation project be 
included in the currently approved STIP. Hardship and Protective Buying 
is not early acquisition as used in this regulation. One private 
citizen requested that the use of option purchase contracts be added in 
addition to the protective buying and hardship acquisition approaches. 
The private citizen believes that this would be consistent with the 
intent of changes in MAP-21 related to advocating enhanced program 
delivery initiatives.
    The FHWA recognizes the need to enhance program delivery 
initiatives as established by the expanded definition of real property 
interests. The expanded definition includes the use of option purchase 
contracts as a tool to acquire or preserve an interest in land. This 
rule does allow for the purchase of real property interests which by 
definition at Sec.  710.105(b) does include options. Therefore, options 
could be used as a tool to acquire or preserve an interest in land when 
necessary.
    The WisDOT commented that it was pleased that there was a 
possibility for reimbursement of funds spent on early acquisitions, but 
were generally concerned about the scope of the requirements of this 
part and the early acquisition part.
    The FHWA believes that this rule balances the need to provide 
specific requirements for reimbursement against the need to provide 
flexibility. The FHWA is planning the development of an implementation 
guide and Frequently Asked Questions, which will address these two 
topics in more detail.

Comments on Real Property Donations--Sec.  710.505

    The ITD and NYSDOT provided comments on this section. The ITD asked 
about a timeframe for determining fair market value, citing concerns 
about frequent changes in the real estate market and project influences 
on value. Further, it requested that FHWA establish a timeframe for 
determining fair market value in the regulation.
    The FHWA believes the regulatory language in 23 CFR 710.507(b) 
addresses both questions. Specifically, the language requires that the 
credit to the State's matching share for donated property be based on 
fair market value established on the earlier date, either the date on 
which the donation becomes effective, or the date on which equitable 
title to the property vests in the State. Also, the fair market value 
may not include increases or decreases in value caused by the project.
    The NYSDOT commented that it would like language added to Sec.  
710.505(a) to ensure that it's clear that Federal and State 
requirements on property donation must be followed.
    The FHWA added ``subject to applicable state laws'' to this section 
of the regulatory text. However, FHWA cannot give a blanket approval of 
State laws, rules, and regulations since there may be some that 
conflict with Federal law.

Comment on State and Local Contributions--Sec.  710.507

    The NYSDOT raised a question about whether credits for State and 
local contribution under this regulation would be subject to different 
rules. It believes the NPRM supports this interpretation because the 
NPRM stated in part that the provisions for credit for real property 
interests contributed to a project are not the same for State and local 
governments. It recommends that the wording in Sec.  710.507 be changed 
to say that the real property can be used as a credit toward ``the 
State's or local government's matching share.''
    The FHWA reviewed the NPRM and does not agree that the NPRM 
preamble creates separate standards for State and local credit. The 
FHWA notes that the NPRM stated that, ``The provisions governing credit 
for real property interests contributed to a project are now the same 
for State and local governments.'' The FHWA agrees that a clarification 
describing to whom these credit provisions apply would improve the 
regulation. The FHWA changed the wording in Sec.  710.507 from 
``State'' to ``Grantee or Subgrantee'' to more clearly describe the 
party receiving a credit for the State or local government 
contribution.

Comment on Functional Replacement--Sec.  710.509

    The NYSDOT asked whether local public agencies would be eligible 
for providing functional replacements if they acquired real property 
interests from a publicly owned facility unless a State law prohibits 
it, and whether the SDOT could decide not to provide a functional 
replacement.
    The FHWA holds SDOTs responsible for ensuring that activities by 
subgrantees (local public agencies in the context of this question), 
and contractors on Federal-aid projects are carried out in compliance 
with State and Federal legal requirements. Because SDOTs are 
responsible for oversight and stewardship of activities carried out by 
subgrantees (local public agencies in the context of this question), 
each SDOTs ROW manual must clearly detail the process for considering 
requests for functional replacements including

[[Page 57726]]

whether State law, regulation, or policy allow local public agencies to 
carry out functional replacements.

Comment on Transportation Alternatives (TA)--Sec.  710.511

    On December 4, 2015, the FAST Act was signed into law. The FAST Act 
eliminated the MAP-21 Transportation Alternatives Program (TAP) and 
replaced it with a set-aside of Surface Transportation Block Grant 
(STBG) program funding for transportation alternatives (TA). As a 
result of these changes, references to the program name in this section 
of the final rule have been updated so that they are consistent with 
the FAST Act.
    The AASHTO commented on Transportation Alternatives that ``States 
support the provision of having all property subject to the same 
requirements.''
    The FHWA agrees that properties on TA projects should be subject to 
the Uniform Act and Federal-aid highway requirements under title 23.

Comment on Federal Land Transfers--Sec.  710.601(b) and (e)

    The FHWA has made a clarification to Sec.  710.601(b) by adding the 
phrase (``SDOTs and their Nominees'') to the end of this section. The 
FHWA believes that this will addresses comments which, in part, asked 
for clarification regarding which entities the regulation was referring 
to in this section.
    The AASHTO, CDOT, PennDOT, and SDDOT all requested that a Federal 
land management agency (FLMA) should have a maximum period of 4 months, 
or less, in order to respond to a Federal land transfer request and 
ensure timely ROW clearance and project delivery.
    The FHWA appreciates the importance of timely project delivery 
while allowing sufficient time for a FLMA to review the request and 
determine conditions necessary for the adequate protection and 
utilization of the reserve; or to determine whether the proposed 
appropriation is contrary to the public interest or inconsistent with 
the reserved purposes. The FHWA is unable to make the requested change 
because 23 U.S.C. 317(b) requires 4 months for the FMLA to process the 
Federal land transfer request. The FHWA believes that the 4-month 
timeframe is sufficient for the FLMA's review of the request.

Comment on Direct Federal Acquisition--Sec.  710.603(a)

    The WSDOT commented that it believes the word ``not'' should be 
removed from the first sentence of this section. ``The provisions of 
this paragraph may be applied to any real property that is not owned by 
the United States and is . . . .''
    The FHWA does not agree that the word ``not'' should be removed. 
The authority provided by this section does not allow for condemnation 
of Federal Government real estate. The authority and process for 
acquiring real property owned by the Federal Government is provided in 
the Federal Land Transfers section at Sec.  710.601. The first sentence 
has not been modified by deleting the word ``not.''

III. Rulemaking Analyses and Notices

    The FHWA considered all comments received before the close of 
business on the extended comment closing date indicated above, and the 
comments are available for examination in the docket (FHWA-2014-0026) 
at Regulations.gov. The FHWA also considered comments received after 
the comment closing date to the extent practicable.

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 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 will be minimal. The 
changes in this rule 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 final rule also 
streamlines program requirements, clarifies the Federal-State 
partnership, and carries out a comprehensive update of part 710. 
Corresponding revisions have been made to 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 final rule 
implements 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 
streamlining and updating in this final rule 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 final rule in a manner that balances stakeholders' 
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 is non-
controversial due to the scope and nature of the proposed additions and 
changes to the regulation.

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 final rule on 
small entities and anticipates that this action will not have a 
significant economic impact on a substantial number of small entities 
which includes SDOTs, LPAs, and other State governmental agencies.

Unfunded Mandates Reform Act of 1995

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

[[Page 57727]]

has been analyzed in accordance with the principles and criteria 
contained in Executive Order 13132, and FHWA has determined that this 
final action does not warrant the preparation of a federalism 
assessment. The FHWA has also determined that this final 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 this final action does not have substantial direct 
effects on one or more Indian tribes, does 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 final rule 
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 Office of 
Management and Budget (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 is covered by the existing information collection 
requirements previously approved under OMB Control Number 2125-0586. 
The existing information collection is set to expire on September 30, 
2016. As required by the PRA, any amendments resulting from this final 
will be incorporated into the existing information collection when it 
is renewed prior to expiration in September 2016.

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 final rule under the Executive Order, 
the DOT Order, and the FHWA Order. The FHWA has determined that the 
final rule will not cause disproportionately high and adverse human 
health and environmental effects on minority or low income populations. 
This final rule establishes 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 final rule will not concern an 
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 final rule 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)). This final rule 
adopts 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 
final rule has no potential for environmental impacts until the 
regulations 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 action qualifies for categorical exclusions under 23 CFR 
771.117(c)(20) (promulgation of rules, regulations, and directives) and 
Sec.  771.117(c)(1) (activities that do not lead directly to 
construction). The FHWA has evaluated whether the final rule would 
involve unusual circumstances or extraordinary circumstances and has 
determined that this final rule would not involve such circumstances. 
As a result, FHWA finds that this final rulemaking would not

[[Page 57728]]

result in significant impacts on the human environment.

Regulation Identification Number

    A Regulation Identification Number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects

23 CFR Part 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: August 8, 2016.
Gregory G. Nadeau,
Administrator.
    In consideration of the foregoing, FHWA amends title 23, Code of 
Federal Regulations, parts 635, 710, and 810 as follows:

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. Section 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 paragraph (c) of this 
section, 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 ROW, 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 ROW have not been fully acquired, the 
right to occupy and to use all ROW 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 Federal Highway Administration (FHWA) to authorize actions 
based on a conditional certification as provided in this paragraph.
    (i) The State may request approval for the advertisement for bids 
based on a conditional certification. The 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 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 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.

[[Page 57729]]

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 Sec.  645.119(b) of this chapter 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 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).
    (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 Sec.  
636.109 of this chapter).
    (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 Act, 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) 
(42 U.S.C. 4321, et seq.) 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.g

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, 
108, 111, 114, 133, 142(f), 156, 204, 210, 308, 315, 317, and 323; 
42 U.S.C. 2000d et seq., 4633, 4651-4655; 2 CFR 200.311; 49 CFR 
1.48(b) and (cc), 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.
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

[[Page 57730]]

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 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: https://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 mean 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) of this part. 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 23 CFR 
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 of this part. 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 
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 for impacts of a project eligible for funding under title 23.
    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 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 projects 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 part 620, subpart B of this chapter.)

[[Page 57731]]

    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.
    Settlement means the result of negotiations based on fair market 
value in which the amount of just compensation is agreed upon for the 
purchase of real property or an interest therein. This term includes 
the following:
    (1) An administrative settlement is a settlement reached prior to 
filing a condemnation proceeding based on value related evidence, 
administrative consideration, or other factors approved by an 
authorized agency official.
    (2) A legal settlement is a settlement reached by an authorized 
legal representative or a responsible official of the acquiring agency 
who has the legal power vested in him by State law, 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.
    (3) A court settlement or court award is any decision by a court 
that follows a contested trial or hearing before a jury, commission, 
judge, or other legal entity having the authority to establish the 
amount of 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 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 ensuring 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 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) to meet the requirements in this paragraph; 
however, the ROW manual options can only be used with SDOT approval and 
permission. 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, legal 
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 August 23, 2018.
    (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

[[Page 57732]]

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 following methods:
    (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 to the 
grantee 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)(i) 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). The 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.
    (ii) 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.
    (e) Record keeping. 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 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 2 CFR 
200.317, 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 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 approval action not 
expressly assigned to the SDOT in the Stewardship/Oversight Agreement.


Sec.  710.203  Title 23 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 grant funds if 
the following conditions are satisfied:
    (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 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, 
preliminary property map preparation and preliminary relocation 
planning activities, limited to searching for comparable properties, 
identifying replacement neighborhoods and identifying available public 
services, can be advanced under preliminary engineering, as defined in 
Sec.  646.204 of this chapter, prior to completion of the National 
Environmental Policy Act (NEPA) (42 U.S.C. 4321, et seq.) review, while 
other work involving contact with affected property owners for purposes 
of negotiation and relocation assistance 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)

[[Page 57733]]

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;
    (v) The cost of minimum payments and waiver valuation amounts 
included in the approved ROW manual or approved RAMP; and
    (vi) Ordinary and reasonable costs associated with closing, and 
costs of finalizing the acquisition.
    (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 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 (TA) 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, and 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 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, 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.

[[Page 57734]]

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 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 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 23 CFR 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.


Sec.  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.  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.  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, the procedures for the maintenance, 
ROW use agreements, and disposal of real property interests acquired 
with title 23 funds. The grantee shall ensure 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 to allow any ROW 
use agreement 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 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 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

[[Page 57735]]

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). Park and Ride lots are exempted from the provisions 
of this part. Park and Ride lots requirements are found 23 U.S.C. 137 
and 23 CFR 810.106.
    (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. 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 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). Except for Interstate 
Highways, 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, if not assigned to SDOT, 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, 
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.
    (9) Additional terms and conditions appropriate for inclusion in 
ROW use agreements are described in FHWA guidance at https://www.fhwa.dot.gov/real_estate/right-of-way/corridor_management/airspace_guidelines.cfm. The terms and conditions listed in the 
guidance are not mandatory requirements.
    (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, and the SDOT's

[[Page 57736]]

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 if required by FHWA 
or the grantor. 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(a), (c), 
(d), (e), (f) 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(a), (c), (d), (e), 
(f) and this section. 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 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 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 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 
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.  710.501(c)(1) through (5).
    (c) State-funded early acquisition eligible for future credit. 
Subject to Sec.  710.203(b) (direct eligible costs), Sec.  710.505(b), 
and Sec.  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;

[[Page 57737]]

    (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 
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 the requirements of Sec.  
710.501(c)(1) through (5), and the requirements of Sec.  710.203(b) 
(direct eligible costs) have been met. The State agency must 
demonstrate that it has met the following requirements, as set forth in 
23 U.S.C. 108(c)(3):
    (1) Any land acquired, and relocation assistance provided, complied 
with the Uniform Act;
    (2) The requirements of title VI of the Civil Rights Act of 1964 
have been complied with;
    (3) The State has a mandatory comprehensive and coordinated land 
use, environment, and transportation planning process under State law 
and the acquisition is certified by the Governor as consistent with the 
State plans before the acquisition;
    (4) The acquisition is determined in advance by the Governor to be 
consistent with the State transportation planning process pursuant to 
23 U.S.C. 135;
    (5) The alternative for which the real property interest is 
acquired is selected by the State pursuant to regulations issued by the 
Secretary which provide for the consideration of the environmental 
impacts of various alternatives;
    (6) Before the time that the cost incurred by a State is approved 
for Federal participation, environmental compliance pursuant to the 
National Environmental Policy Act has been completed for the project 
for which the real property interest was acquired by the State, and the 
acquisition has been approved by the Secretary under this Act, and in 
compliance with section 303 of title 49, section 7 of the Endangered 
Species Act, and all other applicable environmental laws that shall be 
identified by the Secretary in regulations; and
    (7) Before the time that the cost incurred by a State is approved 
for Federal participation, the Secretary has determined that the 
property acquired in advance of Federal approval or authorization did 
not influence the environmental assessment of the project, the decision 
relative to the need to construct the project, or the selection of the 
project design or location.
    (e) Federally funded early acquisition. The FHWA may authorize the 
use of funds apportioned to a State under title 23 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 that will not require FHWA approval under 23 CFR 774.3;
    (ii) 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;
    (iii) 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;
    (iv) 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;
    (v) Is consistent with the State transportation planning process 
under 23 U.S.C. 135;
    (vi) Complies with other applicable Federal laws (including 
regulations);
    (vii) Will be acquired through negotiation, without the threat of, 
or use of, condemnation; and
    (viii) 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)(ii) 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, ``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.

[[Page 57738]]

    (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 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 
transportation 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 transportation 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 (54 U.S.C. 306108), (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 project may donate the 
property. Donations may be made at any time during the development of a 
project subject to applicable State laws. 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 grantee or subgrantee's matching share of total 
project cost. A credit cannot exceed the grantee or subgrantee'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 23 CFR 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 23 CFR 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, 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

[[Page 57739]]

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 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.

    (a) General. 23 U.S.C. 133(h) sets aside an amount from each 
State's Surface Transportation Block Grant apportionment for 
Transportation Alternatives (TA). The TA 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 TA 
projects are subject to the Uniform Act.
    (2) When a person or agency acquires real property for a project 
receiving title 23 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 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 TA 
projects. Subpart D of this part applies to the management and disposal 
of real property interests acquired with TA funds, including alternate 
uses authorized under ROW use agreements. A TA project involving 
acquisition of any real property interest must have a real property 
agreement between FHWA and the grantee that identifies the expected 
useful life of the TA 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 TA project purposes for which it was 
acquired; or
    (2) The actual TA project life is less than the expected useful 
life specified in the real property agreement.

Subpart F--Federal Assistance Programs


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 (SDOTs and their 
nominees).
    (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. 4321, et seq.) and any other applicable 
Federal environmental laws, including the National Historic 
Preservation Act (54 U.S.C. 306108), 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 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

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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 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 may not be applied to any real 
property that is 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.
    (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

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reimburse the owner to the extent deemed fair and reasonable, the 
following costs:
    (1) Recording fees, transfer taxes, and similar expenses incidental 
to conveying such real property to the United States;
    (2) Penalty costs for prepayment of any preexisting recorded 
mortgage entered into in good faith encumbering such real property; and
    (3) The pro rata portion of real property taxes paid which are 
allocable to a period subsequent to the date of vesting title in the 
United States or the effective date of possession, whichever is the 
earlier.
    (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
5. 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
6. 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
7. 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. 2016-19475 Filed 8-22-16; 8:45 am]
 BILLING CODE 4910-22-P