Typically, right-of-way for a Federal-aid highway project is purchased after the environmental analysis has been completed and a project agreement executed. However, in view of rapid development and escalating real estate costs in many areas, a project sponsor may find that acquisition early in project development-or even before project development begins-is advantageous. In fact, in some cases, early acquisition may be the only practical way to preserve a highway corridor before rising costs or entrenched development make acquisition almost impossible. For this reason, Federal law allows for reimbursement of advance acquisition of right-of-way under certain conditions.
=> When can Federal funds be used for early acquisition of right-of-way?
Early acquisition of right-of-way for a highway project can be reimbursed in two circumstances. First, the purchase of a particular parcel or limited number of parcels may be reimbursed prior to final environmental approval if necessary to prevent imminent development and increased costs on the preferred location ("protective purchase"). Second, subject to certain conditions, the purchase of right-of-way acquired in advance of any Federal approval or authorization can be used as a credit for the non-Federal match required on a Federal-aid project or reimbursed by Federal funds ("early acquisition").
=> Under what conditions can a "Protective Purchase" of right-of-way be made before environmental approval is obtained?
Prior to final environmental approval for a project, the project sponsor may request 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. To do this, the following conditions must be met:
• On the TIP/STIP. Inclusion of project in the currently approved STIP (which includes metropolitan TIPs in whole or by reference).
• Public Involvement Completed. The project sponsor has complied with applicable public involvement requirements for planning and environmental review.10
• Section 4(f) Determination. If the property includes a park, a recreation area, a historic property, or a refuge, FHWA must have made a determination under Section 4(f) of the DOT Act of 1966 that there is no other prudent and feasible alternative to using this property.11
• Completion of Historic Preservation Process. Procedures of the Advisory Council on Historic Preservation are completed if the parcels contain historic properties.
• Imminent Development. The project sponsor must clearly demonstrate that development of the property is imminent and that such development would limit future transportation choices. A significant increase in cost may be considered as an element justifying a protective purchase.
• No Influence on Environmental Analysis. The advance acquisition will not influence the environmental assessment of a project, including the decision relative to the need to construct the project or the selection of a specific location.
=> Under what conditions can a project sponsor get credit for or be reimbursed for the acquisition of right-of-way made prior to the execution of a project agreement?
Although real property to be used in a highway project may be acquired at any time the project sponsor has legal authority to do so, the cost of its acquisition typically cannot be reimbursed if it is acquired prior to the execution of a project agreement. However, Federal law does allow acquisition costs for any property that is ultimately incorporated into a Federal-aid highway project to be credited to the non-Federal matching share if the following conditions are met:
• Not a Section 4(f) Property. The property was not a park, recreation area, refuge, or historic property;
• Compliance with Uniform Act. The property was acquired in compliance with the Uniform Act;12
• Compliance with Non-Discrimination Laws. The property was obtained in compliance with applicable Federal non-discrimination laws; and
• No Influence on Environmental Assessment. The State and the FHWA must concur that acquisition of the right-of-way will have no influence on the environmental assessment of the project.
Further, Federal law allows for reimbursement of acquisition costs for any property incorporated into a Federal-aid highway project if the following additional conditions are met:
• Compliance with Planning and Environmental Laws. Prior to the acquisition, the Governor determines and certifies that the acquisition is consistent with the transportation planning process and applicable environmental laws.
• EPA Concurrence with No Influence on Environmental Assessment. Prior concurrence was obtained from the Environmental Protection Agency that the action did not influence the environmental assessment of the project.
The amount of the reimbursement may be based on either the current fair market value or the historic acquisition cost of such lands, depending on the method that has been adopted by the State. For more information on early acquisition or protective buying of right-of way, see http://www.fhwa.dot.gov/realestate/21final.htm.
____________________________________________________________________________________
10 See http://www.fhwa.dot.gov/environment/pubinv2.htm and http://www.fhwa.dot.gov/planning/citizen/citizen1.htm for more information on public involvement requirements for highway projects.
11 See Section III, B of this Manual for further information on the requirements of Section 4(f).
12 See Section III, B of this Manual for information regarding the application of the Uniform Act.