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Chapter 13 Right of Way
Contents
13.1 General ........................................................................................................................ 1
13.2 Federal-Aid and the Federal/State/Local Public Agency Relationship ......................... 2
FHWA Role ............................................................................................................... 2
Caltrans Role ............................................................................................................ 2
Caltrans District Roles ............................................................................................... 3
Monitoring Findings ................................................................................................... 4
Violations of What Caltrans Considers to Be Good Business Practice ..................... 4
Violations of Practices Where Correction is Mandatory............................................. 4
Qualifying Local Public Agencies .............................................................................. 4
Local Public Agency Role .......................................................................................... 4
Qualification Levels ................................................................................................... 5
Qualification Term ..................................................................................................... 5
Withdrawal of Qualification ........................................................................................ 5
Appraisal Review Qualification .................................................................................. 5
Non-Qualified Local Public Agencies – Options ........................................................ 6
Selection of Consultants ............................................................................................ 6
Consultant Contracts ................................................................................................. 7
Contract Administration ............................................................................................. 8
13.3 Master Agreement ........................................................................................................ 8
Program Supplement Agreement .............................................................................. 8
13.4 Right of Way Authorization ........................................................................................... 8
Project Programming ................................................................................................. 9
Request for Authorization to Proceed with Right of Way ........................................... 9
Authorization to Begin Right of Way Work (E-76) ................................................... 10
13.5 Preliminary Right of Way Activities ............................................................................. 10
Request Authorization to Proceed with Preliminary Engineering ............................ 10
Preliminary Studies ................................................................................................. 10
Field Reviews .......................................................................................................... 11
Preliminary Engineering Right of Way Checklist ..................................................... 11
13.6 National Environmental Policy Act ............................................................................. 12
Preliminary Environmental Review .......................................................................... 12
Public Hearings ....................................................................................................... 12
The Environmental Document ................................................................................. 13
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13.7 Projects Requiring Right of Way/Property Rights ....................................................... 13
The Right of Way Estimate ...................................................................................... 14
Advance Acquisition/Hardship/Protection ................................................................ 14
Relocation Planning ................................................................................................ 15
Railroad Operating Facilities ................................................................................... 15
13.8 Appraisals .................................................................................................................. 15
Prepare Final Right of Way Requirements/Appraisal Maps .................................... 16
Appraise Right of Way, Determine Fair Market Value ............................................. 16
Appraisal and Just Compensation for Temporary Real Property Rights ................. 16
Appraisal Review .................................................................................................... 17
Appraisal Waiver Valuation ..................................................................................... 17
Separation of Appraisal and Acquisition Functions ................................................. 17
Dual Appraisal Report ............................................................................................. 18
13.9 Right of Way Acquisition ............................................................................................ 18
Condemnation/Eminent Domain ............................................................................. 20
Relocation Assistance ............................................................................................. 20
General Requirements ............................................................................................ 20
Property Management ............................................................................................. 21
Special Requirements ............................................................................................. 21
Excess Lands (Acquisition and Disposal) ................................................................ 21
13.10 Right of Way Certification ........................................................................................... 22
Certification Forms .................................................................................................. 22
Utility Relocation ..................................................................................................... 22
Project Certification – Right of Way Required ......................................................... 22
Levels of Certification .............................................................................................. 23
Time Requirements for Right of Way Certifications ................................................. 24
Age of Right of Way Certifications ........................................................................... 25
13.11 Emergency Relief Project Certification ....................................................................... 25
Emergency Opening Phase .................................................................................... 25
Permanent Restoration Phase ................................................................................ 26
Right of Way Certification Form - Discussion .......................................................... 26
Status of Required Right of Way ............................................................................. 26
Rights of Entry ......................................................................................................... 26
Status of Access Control ......................................................................................... 26
Status of Affected Railroad Operating Facilities ...................................................... 27
Material and Disposal Sites ..................................................................................... 28
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Utility Relocation ..................................................................................................... 28
Right of Way Clearance .......................................................................................... 28
Airspace Agreements .............................................................................................. 28
Compliance with the Relocation Assistance Program ............................................. 29
Environmental Mitigation ......................................................................................... 29
Acceptance of Right of Way Certification ................................................................ 29
13.12 Reimbursement/Fiscal Policy ..................................................................................... 30
Purpose ................................................................................................................... 30
Reimbursement Process Overview – Caltrans ........................................................ 30
Reporting Costs ...................................................................................................... 30
Progress Payments ................................................................................................. 31
Reimbursement of Local Public Agency’s Expenditures ......................................... 31
Reimbursement Invoices/Progress Payment Request ............................................ 31
Salaries and Wages ................................................................................................ 32
Operating Expenses – Project Related ................................................................... 32
Cost Accumulation Centers ..................................................................................... 32
Costs of Management ............................................................................................. 32
Final Payment/Project Completion .......................................................................... 32
Final Cost Adjustments ........................................................................................... 33
The Final Report of Right of Way Expenditures ...................................................... 33
Final Vouchering ..................................................................................................... 33
Record Retention .................................................................................................... 34
Federal Policies Specifically Related to the Reimbursement of Right of Way Costs34
Acquisitions ............................................................................................................. 34
Acquisition of Uneconomic Remnants ..................................................................... 35
Acquisition of Property Specifically for Exchange ................................................... 35
Functional Replacement .......................................................................................... 35
Condemnation Deposits and Interest Thereon ........................................................ 35
Klopping .................................................................................................................. 36
Goodwill .................................................................................................................. 36
Personal Property.................................................................................................... 36
Defendant’s Costs in Connection with Condemnation Action .................................. 36
Utility Relocation ..................................................................................................... 36
Demolition and Clearance ....................................................................................... 37
Relocation Assistance Program .............................................................................. 37
Disposition of Excess Lands ................................................................................... 37
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Sales of Excess - Damages .................................................................................... 38
Exchange Transactions ........................................................................................... 38
Right of Way Sales Credits ..................................................................................... 39
Rental Income and Expense and Disposition of Improvements .............................. 39
13.13 Terms and Definitions ................................................................................................ 40
13.14 References ................................................................................................................. 43
Figures
Figure 13-1: Right of Way Procedures Flowchart .................................................................... 44
Figure 13-2: Right of Way Certifications with Railroad Facilities .............................................. 45
Exhibits
Exhibit 13-A: Short Form Right of Way Certification Local Assistance Project
Exhibit 13-B: Right of Way Certification Local Assistance Project (Off State Highway System)
Exhibit 13-C: Consultant Selection Criteria and Guide
Exhibit 13-D: Uniform Relocation Act Benefits Summary
Exhibit 13-E: Preliminary Engineering Right of Way Checklist
Exhibit 13-F: Local Public Agency Real Property Services Checklist
All LAPM Exhibits are located at:
https://dot.ca.gov/programs/local-assistance/forms/local-assistance-procedures-manual-forms
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Chapter 13 Right of Way
13.1 General
The intent of this chapter is to provide Local Public Agencies (LPAs) with the basic
understanding of Right of Way (R/W) procedures for locally sponsored federal-aid transportation
projects. LPAs, which will be actively involved in R/W acquisition and relocation, must comply
with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as
amended in 1987 (the Uniform Act). This law can be found in Chapter 10 of the
Caltrans Right
of Way Manual, FHWA Project Development Guide (Appendices A and B), and 49 CFR 24.
Note: The Uniform Act must be followed on all LPA projects even if no federal funds are used
for the acquisition of R/W for the project. Although substantial responsibility for the
administration of LPA projects has been delegated to Caltrans (see Caltrans Role
below), FHWA has retained the overall responsibility for compliance with the Uniform
Act. Towards this end, FHWA periodically performs Process Reviews of LPA projects to
ensure that the Uniform Act requirements are being met.
In addition, LPAs must also comply with all requirements of Title VI of the 1964 Civil Rights Act
on federal-aid projects. This is to ensure that all services and/or benefits derived from any R/W
activity will be administered without regard to race, color, gender, or national origin (see FHWA
Project Development Guide, Appendix C-12). Right of Way refers to the real property rights,
which LPAs must possess to construct local assistance transportation projects utilizing federal
funds. The provisions of this chapter apply to all local assistance projects involving federal funds
off the State Highway System (SHS), whether or not these funds are expended for purchase of
real property rights. When LPA projects are performed on the SHS or any portion thereof, the
LPA must follow the Caltrans manuals that apply to the work being done, among them, is the
Caltrans Right of Way Manual and Cooperative Agreement Manual.
Note: Cooperative Agreements are defined as any formal agreement between Caltrans and
the LPA for a project on the SHS wherein the parties share in the development activities.
If there are Cooperative Agreements covering responsibilities or obligations for the
respective portions of the project, these agreements must be listed on the R/W
Certification form.
The Caltrans Right of Way Manual is used for projects on the SHS, either conventional
highways or expressways and freeways. The manual has approximately 575 forms and exhibits
that are extremely useful and necessary to perform all of the various R/W functions. These
forms and exhibits, as well as 17 chapters of R/W processes and procedures are available to all
LPAs for use in performing their R/W work. Caltrans projects may generally be larger than many
LPA projects, but the R/W processes and procedures are the same as those performed by
LPAs for their projects.
LPAs are encouraged to access the Caltrans Right of Way Manual at:
https://dot.ca.gov/programs/right-of-way/right-of-way-manual
.
The US Constitution and the Bill of Rights provide authority to acquire property by eminent
domain for a public project. The Uniform Relocation Assistance and Real Property Acquisitions
Policies Act of 1970, as amended (42 U.S.C.4601 et seq.), provides the rules and processes to
exercise this authority whenever a project benefits from federal funds. Affected property owners
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and those displaced by the project are entitled to fair, equitable and consistent treatment and
due process of law to determine compensation. These laws and regulations are also intended
as a safeguard to ensure that federal funds are not unnecessarily or inappropriately expended.
The information in this section has been compiled from many sources, but the underlying
federal and state laws remain unchanged. This chapter should not be used as a substitute for
these laws, statutes, regulations, policies, and/or procedures when conducting R/W activities
using federal funds.
Note: All documents and papers related to a project must carry the federal-aid project number
for identification.
13.2 Federal-Aid and the Federal/State/Local Public Agency Relationship
The Federal Highway Administration (FHWA) is the federal agency most typically involved in
transportation projects undertaken with federal funding for the programs discussed in this
LAPM. It has the authority and responsibility for implementing and monitoring federal laws,
regulations, and executive orders affecting these programs. When a project utilizes federal
funding, the FHWA is involved pursuant to these responsibilities and the delegations described
below.
Caltrans is granted major delegations of authority from FHWA under 23 U.S
.C.106(c) and the
FHWA/Caltrans Joint Stewardship and Oversight Agreement (S&O). Further, Caltrans has
passed on these delegations to LPA partners to the greatest extent possible. With each
delegation goes the responsibility for initiating and completing each project phase in accordance
with the appropriate state and federal laws and regulations without extensive FHWA or state
oversight.
FHWA Role
FHWA is responsible for the following project activities, for all federal-aid projects:
• Obligation of federal funds
• Approval of E-76 for R/W activities and utilities under the Alternate Procedure
• Approval of Early Acquisition, Protective Buying or Hardship Acquisition
• Approval of R/W Certification Level 3/3W for projects on the National Highway System,
pursuant to the current S&O
• Approval of R/W Certification Level 3/3W for all interstate projects, pursuant to the
current S&O
For additional details on the FHWA/Caltrans relationship, refer to LAPM Chapter 2: R
oles and
Responsibilities.
Caltrans Role
When federal funding is used in any phase of a Local Assistance project, FHWA places overall
responsibility for the acquisition of R/W and the relocation of individuals, businesses, and
utilities with Caltrans. Caltrans in turn has delegated substantial authority to LPAs. On these
federal-aid projects, all R/W activities must be conducted in accordance with the Caltrans Right
of Way Manual.
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When the project requires the relocation of utility facilities, Caltrans is responsible for approval
of the Exhibit 14-C: FHWA Specific Authorization/ Approval Utility Agreement. More information
is available in LAPM Chapter 14: Utility Relocation. These agreement forms are both part of
form RW 13-15, found in Chapter 13: Utility Relocation of the Caltrans Right of Way Manual.
Caltrans is responsible for fully informing LPAs of their responsibilities accompanying federal-
aid transportation projects by ensuring that every LPA receives all current regulations and
procedural instructions affecting R/W activity, and on request will provide training, guidance, and
advice on R/W matters. Further information is provided in the Caltrans Right of Way Manual.
FHWA’s Project Development Guide and Caltrans Right of Way Manual are available to each
LPA. Refer to Figure 13-1, Right of Way Procedures Flowchart, in this chapter which gives an
overview of the R/W process.
Caltrans District Roles
When questions arise in the development of a federal-aid project, or if it is determined that
property rights will be required on the project, the Caltrans District Local Assistance Engineer
(DLAE) should be promptly notified. The DLAE has the overall responsibility as liaison with each
LPA in that district. In addition, each district has an R/W Local Programs Coordinator who is
responsible for working with each LPA whose projects involve federal funds.
As part of the overall responsibility assigned to Caltrans by FHWA, Caltrans R/W is required to
monitor LPA’s procedures for R/W appraisal, acquisition, relocation assistance, property
management, excess land disposal, and utility relocations on all local assistance projects for
compliance with applicable state and federal laws and regulations.
The Monitoring Process
The District R/W Local Programs Coordinator will monitor R/W activities at any time during the
project to ensure that such activities are performed in compliance with state and federal laws
and regulations. Acquisition and relocation activities must be in conformance with the Uniform
Act, Federal Stewardship requirements, the FHWA Project Development Guide, and the
Caltrans Right of Way Manual. All R/W functional areas are subject to review. These reviews
should occur at each R/W activity, so any deficiencies discovered can be corrected, prior to
moving onto the next R/W activity (e.g., Appraisals reviewed prior to start of Acquisitions,
Acquisition contracts prior to offer, Administrative Settlements when appropriate, relocation
assistance documents, etc.). Spot-check monitoring will normally be limited to no more than
25% of the total work performed. Additional reviews must be made only when violations are
discovered and then only to determine if the violations are prevalent or one-time occurrences
(see Monitoring Findings below). The reviewer must bring all violations discovered to the
attention of the LPA. It is the LPA’s responsibility to ensure correction. The selection of projects
that will be monitored must be at the discretion of the district based on staff availability,
familiarity with the LPA, the project, and consultants which may be used, as well as the
complexity of the R/W issues. Monitoring will usually use checklists or outlines to guide the
review. Both entry and exit conferences will be conducted to advise LPA staff of the scope and
findings of the monitoring visit. A written report will usually be provided to the LPA, though not
necessarily at the time of the exit conference.
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Monitoring Findings
Ideally, the monitoring review will discover compliance with all applicable laws and regulations.
Occasionally however, there may be other results with findings having different levels of
seriousness.
Violations of What Caltrans Considers to Be Good Business Practice
These are practices of the LPA which could be improved with the result being a more efficient or
effective operation and/or reduced chance that more serious violations will occur subsequently.
LPAs will be advised of these observations, but there is no penalty associated with
noncompliance. LPAs are free to adopt suggested changes or not as their management
judgment indicates.
Violations of Practices Where Correction is Mandatory
LPAs will be expected to change their practices to conform to Caltrans requirements. For
qualified agencies, failure to do so may jeopardize their qualification status for future projects. In
addition, serious violations of this nature must be corrected, particularly when it appears that a
violation of property owner’s rights is involved. LPAs will be advised in writing of such violations
and of the corrective actions to be taken. During the time the LPA is taking the corrective
actions, federal reimbursement may be withheld. Failure to complete the corrective actions
within reasonable time periods may result in withdrawal of federal funding for the project.
Qualifying Local Public Agencies
Caltrans qualifies LPAs to perform their own R/W functions (see Qualification of Local Public
Agencies below). Caltrans also provides training and guidance to LPAs seeking assistance on
federal-aid projects.
Local Public Agency Role
Certification of Projects
The LPA will certify that all Uniform Act compliance requirements have been met on federal-aid
projects.
Qualification of Local Public Agencies
Caltrans has an agreement with FHWA that allows LPAs to be qualified in advance to perform
all or some R/W activities based on the LPA’s qualifications, the size of their staff and their
ability to perform the technical work and subsequent reviews. Caltrans District R/W staff
conducts a qualification review to determine if the LPA is adequately staffed, organized, and has
the necessary expertise to perform R/W work properly and timely. The agency must agree to
conform to Caltrans policies and procedures in order to meet state and federal requirements.
The review is necessary before the LPA can begin R/W work on a federal-aid project. To
become qualified, the LPA must first contact the District Right of Way Local Programs
Coordinator, requesting approval of qualification status. The Coordinator will then meet with the
LPA’s Right of Way/Real Property Department to explain state and federal requirements and
what must be done to become qualified. The Coordinator will request copies of organizational
charts, staff resumes and duty statements, and will see that the agency has all needed material:
the Caltrans Right of Way Manual, any necessary policy and procedure memos, and current
copies of Titles 23 and 49 of the CFRs. The manuals must be in sufficient detail to adequately
describe operational procedures for the functional areas to be certified so as to provide
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adequate instructions to Right of Way/Real Property employees on how to perform their
assigned duties.
Qualification Levels
The LPA may have experienced staff but not in sufficient number to be qualified for every R/W
function. The following levels of qualification can be obtained with prior Caltrans Region/District
approval:
Level 1: Staff is qualified to do technical work in one or more specific functional areas.
These areas will be shown in the qualification approval. As an example, some
smaller rural agencies have sought approval to perform only appraisal or
acquisition functions.
Level 2: Staff is qualified to do technical work in more than one functional area, but not in
all. There is sufficient staff available to perform these functions on more than one
project at a time.
Level 3: Staff is large enough and qualified to do technical work in all functional areas.
Qualification Term
Level 1, 2, and 3 approvals are good for three years and require a review at the end of that time.
Additional ongoing reviews will be needed if LPA staffing changes. It is the LPA’s responsibility
to ensure they renew their qualification with CT prior to expiration and that their qualification is
active during the entire term of a project’s right of way phase.
See Chapter 17: Local Programs of the Caltrans Right of Way Manual f
or additional information
on LPA Qualifications.
Withdrawal of Qualification
It is important to note that the qualification status can be withdrawn if deficiencies are found and
not corrected, or if the staffing and experience levels change so that the LPA can no longer
meet the minimum requirements. At the time each agency is notified of its qualification level, the
agency is told to inform Caltrans if there are any major personnel changes which would impact
its ability to perform the respective R/W functions.
Appraisal Review Qualification
On federal-aid projects, a formal review of the appraisal is necessary in order to establish the
Fair Market Value for the property (49 CFR 24.104: Review of Appraisals). A consultant review
appraiser must have a valid general license issued by the Department of Consumer Affairs –
Bureau of Real Estate Appraisers (BREA). The review appraiser must determine that the
appraisal meets applicable appraisal requirements and must, prior to acceptance, seek
necessary corrections or revisions.
If the review appraiser is unable to approve or recommend approval of the appraisal, the
reviewer may develop additional documentation in accordance with Section 24.103 to support
an approved or recommended value. The reviewer must state the basis for the value
conclusion. If the LPA receives a qualification status Level 1 or 2 without having the staff or
means to perform the appraisal review function, the LPA must hire either a qualified licensed
consultant (see Local Public Agency Selection of Consultants below), or another LPA qualified
to perform the appraisal review function.
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Note: Only the LPA can determine the just compensation to be paid. Another agency or
consultant cannot do so.
Non-Qualified Local Public Agencies – Options
LPAs that are not qualified to perform any or all of the respective R/W functions necessary for
the project must either hire another LPA qualified to perform those functions, or directly hire a
consultant who meets the consultant selection criteria discussed below.
Non-qualified LPAs have the following choices in hiring consultants:
• Contract with a qualified LPA
• Contract with a private consultant(s) to perform one or more R/W specialties: Appraisals,
Appraisal Review, Acquisitions, or Relocation Assistance
• Contract with an R/W Project Management consultant
• Utilize a mixture of LPA staff and the resources available as mentioned in the first two
items above
• Contract with a Turnkey consultant who can perform all R/W functions
Note: It is the LPA’s responsibility to verify that the consultants have the necessary
certificates/licenses to perform the R/W functions needed for the LPA’s project.
Selection of Consultants
The authority for selection of private sector consultants to perform R/W functions on federal-aid
projects has been delegated to the LPAs. The selection process will be administered by the LPA
in accordance with LAPM Chapter 10: Consultant Selection, using criteria from Exhibit 13-C:
Consultant Selection Criteria and Guide prepared by Caltrans to establish recommended
minimum experience levels and to evaluate the qualifications of prospective consultant firms.
When substantially different R/W services are needed, it is incumbent on the LPA to repeat the
consultant selection process in choosing a consultant for those different services. The District
Right of Way Local Programs Coordinator can provide additional assistance if needed.
The L
PA should be advised that caution must always be exercised in the choice of a consultant,
particularly with regard to the firm’s experience on past projects and the firm’s references. Each
project and each agency have unique demands and just because a prospective consultant may
meet the broad qualifications contained in the Consultant Selection Criteria, it does not also
mean that the consultant meets the LPA’s requirements. The LPA is responsible for maintaining
written documentation concerning the consultant selection process to ensure that the
procedures comply with the Exhibit 13-C: Consultant Selection Criteria and Guide
. Thi
s
information should be made available to Caltrans as part of the Caltrans monitoring process.
LPAs ar
e responsible and accountable for the actions of their consultants in properly executing
their duties and activities in accordance with the Uniform Act. The LPA retains the ultimate
responsibility for signing the R/W Certifications. Also, LPAs receiving federal funds must take
affirmative steps to assure that Disadvantaged Business Enterprise (DBE) consultants have
ample opportunity to compete for consultant work. Such steps include soliciting DBE firms, and
when feasible, organizing the project schedule and task requirements to encourage participation
by DBE firms.
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Consultant Contracts
Competitive bidding is one of the cornerstones of a financially successful project. The
competitive bid process is required for new contracts and/or replacing an expired contract.
LPAs must not enter into a contract or renew an expired contract without completing the
competitive bid process. Seeking bids from qualified firms will ensure that the LPA is getting the
most reasonable price. Prior to soliciting bids, careful consideration should be given to defining
the scope of the consultant’s work, estimating the cost of the consultant’s work, determining the
type of contract needed, and deciding whether to seek bids on a project-by-project or time-base
method.
The project-by-project method is appropriate for use when the LPA has only one project or has
an extensive project expected to last more than 36 months. Under this method the consultant
performs the tasks exclusively on the designated project until completion. All four commonly
used contracts are suitable for use with the project-by-project method and include:
• Actual Cost plus Fixed Fee
• Cost per Unit of Work
• Specific Rates of Compensation
• Lump Sum
The time-base method is appropriate for LPAs with multiple projects occurring simultaneously.
This method is more cost-effective as the agency is not required to complete the competitive bid
process for each individual project. Under this approach the same consultant can perform R/W
tasks on different projects during the contract term. The maximum contract length is 36 months.
If the contract needs to be extended due to unforeseen circumstances, the LPA must complete
Exhibit 12-F: Cost-Effectiveness/Public Interest Finding
and submit it to the DLAE along with a
written justification. The contract may be extended once with a maximum length of 12 months.
Of the four types of contracts noted above, it is not appropriate to use the Lump Sum contract
with the time-base method. The LPA which enters into a contract with a consultant for the
performance of R/W work retains ultimate responsibility for the actions of the consultant.
Caltrans has established broad criteria for use in evaluating the qualifications in the respective
R/W functions, but Caltrans is in no way liable either for devising such criteria or for the
performance of consultants chosen by the LPA. In the event the actions or performance of the
consultant result in a loss of federal funds for the project, it is the sole responsibility of the LPA
to repay these funds.
Consultants must perform R/W functions to the same standards, practices, rules, and
regul
ations as the LPA. The District R/W Local Programs/Assistance staff will monitor the work
products of the consultants using the guidelines discussed under The Monitoring Process in
Section 13.2: Federal-Aid and the Federal/State/Local Agency Relationship
.
The LPA responsibilities also include the following in connection with project completion:
• A formal review of the appraisal (noted above) is required when federal funds are used
for any portion of the project.
• An establishment of just compensation is necessary prior to negotiations with property
owners. The LPA must approve the fair market value appraisal and determine what
compensation is to be paid in projects involving the acquisition of real property. This is a
federal requirement and cannot be delegated to the consultant.
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• The assignment of a Contract Manager who is knowledgeable in all aspects of the
project is needed to serve as the contact person during the course of the project (see
Contract Administration below).
• If the LPA has any questions or concerns regarding the hiring of R/W Consultants, they
are encouraged to contact the nearest District Right of Way Office for assistance or
guidance.
Contract Administration
The LPA must designate a Contract Manager to act as the official representative of the agency
with full authority and responsibility to manage the contract. In addition to the duties listed in
LAPM Chapter 10: Consultant Selection for the Contract Manager, R/W projects also require the
following:
• Performing a functional review for each R/W activity
• Approving and coordinating all consultant activities
• Approving requests for payment (after completion of the work)
• Preparing interim/final contract completion reports and performance evaluations
13.3 Master Agreement
A master agreement is required with the LPA whenever federal funds are to be used on a local
transportation project. In the master agreement, the LPA agrees to comply with all federal and
state laws, regulations, policies, and procedures relative to the design, R/W acquisition,
construction, and maintenance of the completed facility. It is normally processed
once with the agency when it begins its first federal-aid funded project. The Local Agency-State
Master Agreements are occasionally updated and re-executed to account for changes in laws
and policies.
Program Supplement Agreement
The Program Supplement Agreement (PSA) supplements the Master Agreement and formalizes
the financial responsibilities and provisions for each specific federal-aid funded project. The
PSA identifies the reimbursable phase(s) of work in addition to the types and amounts of federal
and local funds used to finance the locally sponsored project. It is the contractual basis for the
state to reimburse the LPA for work done.
Special covenants or clauses in the supplement agreement define the agency’s specific
responsibilities in implementing and maintaining the project. Others define state or local
responsibilities for providing project funds.
13.4 Right of Way Authorization
When federal funds are to be used for R/W costs, Exhibit 7-B: Field Review Form and the R/W
estimate must be completed, and National Environmental Policy Act (NEPA) approval obtained
before requesting authorization. If federal-aid is sought for any phase of the project, all R/W
activities must conform to federal requirements. Failure to conform to these requirements will
jeopardize federal funding.
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Note: If any R/W activities are performed prior to authorization, those activities are normally
ineligible for reimbursement later. Requests for authorization should be submitted to the
DLAE. If the request is complete, the DLAE will initiate the authorization process.
Project Programming
The initial step in obtaining federal-aid on a local assistance project involves selecting and
programming the project into a federally approved Transportation Improvement Program. This
will require careful estimates of the costs involved for all phases of the project including
preliminary and construction engineering, utility relocation, R/W (if additional property interests
are required), and construction. Real property rights that are acquired for an LPA project must
be sufficient for all activities necessary for the construction of the project and for the ongoing
operation and maintenance of the facility when completed. It is the responsibility of the LPA to
determine the property rights that will be necessary for each project and that these rights are
sufficient for the project. Procedures to program projects can be found in the
Local Assistance
Program Guidelines (LAPG) Chapter 1: Introduction/Overview, and LAPG Chapter 2: Financing
the Federal-Aid Highway Program. Questions concerning project programming should be
referred to the DLAE.
Request for Authorization to Proceed with Right of Way
After a project is selected and programmed in a Federal Approved State Transportation
Improvement Program (FSTIP), the LPA should then contact the DLAE to obtain authorization
to receive federal funds. The authorization must precede any activities for which
reimbursement
will be requested. When the project requires the relocation of utility facilities, the request must
include a listing of each affected utility company together with an estimate of the cost of
relocation for each company and a request for approval of the use of the Alternate Procedure.
The LPA is responsible for initiating LAPM 3-A: Project Authorization/Adjustment Request
through Caltrans to FHWA. For additional details, please refer to LAPM Chapter 3: Project
Authorization.
The project authorization obligates FHWA to reimburse allowable project costs and confirms
that federal funds are available in the amount requested for that project. However, this is subject
to the condition that acquisition of R/W may only commence after the necessary requirements
have been met, including NEPA compliance. The LPA must prepare a Request for Authorization
package (see LAPM Chapter 3
) and c
ertify to the accuracy of all the data on the forms.
Separate work authorizations and fund obligations are normally made for preliminary
engineering, R/W, and construction, if federal funds are to be used for these phases of the
project. The authorization to proceed must be obtained prior to starting an item of work for which
the agency will seek reimbursement.
When the D
LAE determines that the project has been authorized and obligated, an
Authorization to Proceed is printed which shows the authorization and obligation dates. This
form is then sent to the LPA as verification that they may begin with that phase of the project
and subsequently be eligible for reimbursement. If the project cannot be authorized, the LPA is
informed and advised what corrective actions are necessary.
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Authorization to Begin Right of Way Work (E-76)
Each phase (capital/support) or function (appraisal, acquisition, utility relocation, property
management, or excess land sales) of R/W claimed for reimbursement must be programmed
and authorized by an E-76 prior to beginning that phase or function. Any work done prior to
authorization will be ineligible. An E-76 may program multiple phases.
LPAs may not proceed with final design or request for authorization to proceed with R/W or
construction until full compliance with the provisions of NEPA have been documented and
approved by Caltrans. Failure to follow this requirement will make the project ineligible for
FHWA reimbursement. Upon final environmental approval, it is incumbent upon the DLAE to
provide the LPA with immediate notification and a copy of the signed Categorical
Exemption/Categorical Exclusion Determination Form or approved environmental document
Finding of No Significant Impact (FONSI) or Record of Decision (ROD), so the LPA can
commence with final design and/or request authorization to proceed with R/W activities.
Preliminary acquisition activities, including a title search and preliminary property map
preparation, necessary for the completion of the environmental process can be advanced under
preliminary engineering prior to NEPA compliance while other work involving contact with
affected property owners must normally be deferred until NEPA approval, except as provided in
23 CFR 710.503, for protective buying and hardship acquisition, and in 23 CFR 710.501, early
acquisition. Only under these exceptional circumstances will the agency be allowed to acquire
property prior to environmental approval. For example, the agency may acquire property in
advance of the normal schedule if the owner claims hardship, or the property must be protected
from future development. Appropriate documentation must accompany the request to FHWA for
approval of Hardship and Protection acquisitions. When making these advanced acquisitions,
ensure that the intent of the Uniform Act and the NEPA are not circumvented. For additional
information, please refer to Chapter 5: Hardship and Protection of the
Caltrans Right of Way
Manual, or contact Caltrans Right of Way Local Programs Coordinator in your area.
13.5 Preliminary Right of Way Activities
Request Authorization to Proceed with Preliminary Engineering
Separate work authorizations and fund obligations are normally made for Preliminary
Engineering (PE), R/W (including appraisal, acquisition, relocation assistance, and utility
relocation) and Construction phases, if federal funds are to be used in each of these phases.
Preliminary Studies
At this early stage in the development process, it is crucial to correctly evaluate the project
requirements: namely, the limits, location (including existing utilities), scope, costs, and whether
any additional R/W will be required. Each agency should establish a process for accumulating
this data, which will play an integral part in successfully completing the Field Review, the
Preliminary Environmental Study (PES) Form (Exhibit 6-A), the Preliminary Engineering Right of
Way (PERW) Checklist (Exhibit 13-E), and the Plans, Specifications & Estimate (PS&E) for the
project.
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Field Reviews
Formal Field Reviews, which may include FHWA and Caltrans representatives are not required
on LPA transportation projects off of the National Highway System (NHS). For additional details,
see LAPM Chapter 7: Field Review. However, Field Reviews are suggested practice for all
complex projects. A representative from FHWA and Caltrans Right of Way should be consulted
on all FHWA Risk-Based Involvement (RBI) projects. All requests for FHWA participation should
be coordinated through the DLAE. LPAs should complete the PES Form and the first two pages
of the Field Review Form prior to requesting a Field Review. If it appears that additional R/W will
be required, one of the intended results of the Field Review is to provide sufficient data to
complete the R/W estimate (see
Section 13.7: Project Requiring Right of Way/Property Rights,
subtitle: R/W Estimate in this chapter). The information contained in these two documents is
crucial in obtaining FHWA authorization to proceed further with the next stage of the project
(see Section 13.4: Right of Way Authorization, subtitle: Request for Authorization to Proceed
Right of Way).
The Field Review process brings together all interested parties in order to reach an agreement
on the important aspects of the project, including such items as the design features, alternative
proposals for building the project, respective responsibilities of the various agencies involved,
level of documentation required in the NEPA process, and whether a public hearing will be
necessary. For R/W objectives, the Field Review may confirm the need to acquire R/W and
relocate the occupants, or relocate utilities and/or railroad facilities, which can significantly affect
the project development, in particular, the costs and scheduling. The review also facilitates the
identification of compensable property interests plus uncovering project requirements such as
the need for temporary construction easements, or permits to enter. Therefore, it is strongly
encouraged that the Caltrans Right of Way Coordinators be invited to participate in the Field
Reviews, as their assistance could be extremely helpful.
When the preliminary review is completed, the LPA is responsible for completing the Field
Review Form. If there are R/W requirements for the project, the Division of Local Assistance
Area Engineer (DLAE) should forward a copy of this form to the Right of Way Local Programs
Coordinator. For NHS projects, all appropriate forms and attachments must be completed. For
non-NHS projects, the two-page Field Review Summary must be completed at a minimum.
Items 7 and 9 apply to R/W issues.
Preliminary Engineering Right of Way Checklist
During preliminary studies, the LPA must complete Exhibit 13-E: Preliminary Engineering Right
of Way (PERW) Checklist in conjunction with the PES Form (Exhibit 6-A) and submit to the
DLAE. The DLAE will forward the form to the District Right of Way Local Programs Coordinator.
This form is required with or without a project field review being completed.
The purpose of the PERW Checklist is to help LPAs, their Right of Way Agents and/or Right of
Way Consultants determine if there are right of way involvements such as fee or temporary right
of way acquisitions, utility conflicts, relocations, etc. at the project initiation stage. It will provide
the information needed to complete an accurate right of way estimate and notify the District
Right of Way Local Programs Coordinator of upcoming projects with right of way involvement to
allow real-time monitoring. This earlier engagement will also provide both the LPA and the
District Right of Way Local Programs Coordinator the opportunity to discuss Caltrans policies
and processes necessary for compliance with the Uniform Act.
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13.6 National Environmental Policy Act
All LPA federal-aid transportation projects off the SHS must comply with the provisions of the
National Environmental Policy Act (NEPA) and the implementing of regulations (23 CFR 771).
LPAs may not proceed with final design, R/W acquisition, or project construction until full
compliance with the NEPA has been documented and approved by Caltrans.
The level of documentation required in the NEPA process will vary depending upon the NEPA
Class of Action. A proposed major highway or a new highway on a different alignment, for
example, will normally require an extensive study, an Environmental Impact Statement (EIS),
while minor improvements to existing highways such as a roadway intersection signal
installation may require only a short analysis, a Categorical Exclusion (CE). All LPA projects
must demonstrate compliance with NEPA and other federal environmental laws before
proceeding with R/W work or the final design of a project.
Preliminary Environmental Review
Exhibit 6-A: Preliminary Environmental Study (PES) is designed to identify such items as the
existing conditions in the project area, environmental issues that may require further study, and
the need for public hearing, or resource, or regulatory agency permit. Question No. 24 in Exhibit
6-A and Exhibit 6-B: Instructions for Completing the Preliminary Environmental Study (PES)
Form specifically relate to R/W impacts and a “yes” answer would indicate that further action is
necessary.
Note: Upon completion of the Exhibit 6-A
, if questions 23-32 are marked “yes,” or if the PES
results in an Environmental Assessment or Environmental Impact Statement:
a. Title VI implementation and outreach may be triggered. Any vital public
communication must be translated and accessible when a significant number or
percentage of the population is eligible to be served, or likely to be directly
affected by the program/activity.
b. The LPA must contact the District Senior Environmental Planner and the District
Senior Right of Way Agent to inform them the agency may implement Title VI
and outreach for this project.
Public Hearings
In general, public hearings should be held for a project if there is substantial environmental
controversy, if there is widespread interest in holding the hearing, or if an agency with
jurisdiction over the project requests one. The procedures for holding hearings, including the
requirements for notifying the public, the contents of the notification, scheduling, and the hearing
process are all discussed in LAPM Chapter 8: Public Hearings
. Federal regulations require
public hearings under certain circumstances. For example, projects being processed with an
Environmental Assessment (EA) require a public hearing when significant amounts of R/W will
be required for the project. Public hearings are also required during the circulation period of all
draft EISs. Public involvement is advantageous because it can broaden the agency’s knowledge
of the project area. If a public hearing is to be held and additional R/W or property rights will be
required for the project, R/W personnel should be involved as early as possible. A public forum
offers an excellent opportunity to discuss the acquisition and relocation impacts with the
affected persons.
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The importance of explaining these projects within the context of a public hearing cannot be
overstated. One of the most difficult aspects of any project is the displacement of people and/or
personal property. Project construction activities can have very serious economic and social
impacts on the affected region, including adverse impacts in the traffic patterns, business
operations, and the lives of its citizens. Those who are displaced must relocate and reestablish
their residence or business in a new area. As a result, those most directly affected are often
emotionally impacted, apprehensive of the changes due to the project, and need detailed
information on the R/W procedures and their rights. The public hearing is often their first real
opportunity for information and contact with project representatives. One of the keys to a
successful project may be the cooperation engendered at the first public hearing. As the project
progresses, there may be a need for additional hearings devoted solely to R/W issues and
impacts.
The Environmental Document
Depending upon the potential for impact, there are three NEPA Classes of Action under which a
federal-aid project may be processed. These include: Categorical Exclusion (CE) determination,
an Environmental Assessment (EA), or Environmental Impact Statement (EIS) document. The
purpose of the environmental determination or document is to disclose to the public and
decision makers the proposed action, potential environmental impacts, and propose avoidance,
minimization, and mitigation measures to offset adverse impacts. R/W acquisition and activities
associated with the action must be considered as part of the scope of the action. The
environmental investigation and environmental determination or document must also address
impacts associated with R/W activities. Guidance on analyzing impacts associated with R/W
acquisition and use is provided in the Standard Environmental Reference (SER)
.
13.7 Projects Requiring Right of Way/Property Rights
Local federally-funded projects involving the acquisition of R/W should be discussed with the
District R/W Local Programs Coordinator as early as possible in the project development stage.
Exhibit 13-E:
PERW Checklist has been developed as a tool used in identifying potential right of
way conflicts and notifies the R/W Coordinator to monitor the project. Exhibit 13-E must be
completed in conjunction with the PES form (Exhibit 6-A). A signed copy is sent to the DLAE
who forwards it to the Right of Way Coordinator. It will alert staff of potential right-of-way
acquisitions and/or utility conflicts on a proposed federal aid project. The form also alerts the
LPA that they will need to hire Right of Way Consultants if they are not a qualified agency.
There are several reasons for this. As noted above, while some PE activities (i.e., ordering title
reports, preparing base maps and appraisal maps, conducting project-wide comparable sales
searches, gathering cost estimates and completion of the appraisal) may be conducted and
subsequently reimbursed by FHWA prior to NEPA compliance, the majority of R/W activities
(such as, initiation of negotiations with property owners, relocating displaced persons, and utility
relocations) may not be performed on federal-aid projects prior to NEPA compliance. This
restriction minimizes the potential for predetermined project site or alignment selection.
Note: Although appraisals may be completed prior to NEPA, appraisals in an active market
may be outdated in a very short time. Also offers/negotiations with property owners must
occur promptly, potentially leading to unnecessary reappraisal activity, if started too
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early. Chapter 8 of the Caltrans Right of Way Manual defines “promptly” as, within thirty
(30) days of the approval of appraisal.
While Draft and Final EAs and EISs may identify the preferred alternative, the selected
alternative must not be announced until the FONSI and ROD has been completed. More
detailed discussion of the pre-requisites for R/W activities are provided in Caltrans Right of Way
Manual Chapters 3.08.00.00 and 7.01.06.00.
The Right of Way Estimate
If property rights are necessary, the next phase in the project development is the completion of
the R/W Estimate. The estimate is of primary importance in the cost-efficient delivery of the
project.
This process and subsequent document provide a detailed analysis of the following:
• Type of properties to be acquired
• The size and number of the parcels
• If displacement is to occur, what is the nature (e.g., residential or commercial), how
many are affected, and what is the projected timing
• How much time and what personnel are needed to appraise and acquire the R/W and
perform any necessary relocation work, including utilities
The estimate for any liability for utility relocations should include:
• The estimated fair market value of the properties to be acquired
• The anticipated relocation assistance payments
• The portion of the LPA’s liability to relocate utility facilities outside of the R/W
An accurate estimate of R/W costs based on current market data is essential for forecasting
capital expenditures and future staffing needs. For example, overestimating may result in
deferring, down-scoping, or eliminating a project; underestimating could affect the financial
ability to build the project or inadequate staffing needs. The District R/W staff may assist the
LPA in preparing and reviewing the estimate documents.
Rough estimates are often prepared during the preliminary phase of a project. However, these
estimates should be updated prior to use in a budgeting or programming document. Maps
should be available once the project scope is defined. Detailed maps are critical in preparing
good R/W estimates.
Advance Acquisition/Hardship/Protection
Hardship acquisitions are situations where unusual circumstances have befallen the owner(s) of
the property and are aggravated or perpetuated because of the proposed project and cannot be
solved by the owner without acquisition by the LPA.
Protection acquisitions occur when property is purchased in advance of normal acquisition to
prevent development on a proposed alignment. If the purchase were deferred, the result would
be higher acquisition, relocation, and/or construction costs. LPAs may acquire hardship and
protection properties with their own funds prior to NEPA compliance without jeopardizing federal
participation in future programmed project costs. These advance acquisitions require prior
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FH
WA approval, and any such acquisition must comply with the Uniform Act if the LPA
anticipates seeking reimbursement for the acquisition costs when the project is approved for
federal-aid. The LPA should immediately contact the District Right of Way Local Programs
Coordinator regarding FHWA approval before proceeding with any acquisition. See Chapter 5
for process and procedures of the Caltrans Right of Way Manual
.
Relocation Planning
When projects involve displacement, the successful resolution of the needs of those displaced
requires careful planning. Housing resources must meet the needs of the displaced in terms of
size, price, location and timely availability. Advisory services and various notices to vacate,
some with specific timing requirements, must be provided. Businesses must be given
assistance in relocating with minimal disruption during the move. Payments must be made to
displaced persons at the time they are needed during the move to the new location. These
things do not happen automatically, they require planning. FHWA has long stressed the need
for relocation planning.
Congress gave new emphasis to the need for consideration of the impacts of displacement in
the 1987 Amendment to the Uniform Act. 49 CFR 24.205(a), states that planning may involve a
relocation survey or study which may include the following: (1) An estimate of the number of
households to be displaced including information such as owner/tenant status, estimated value
and rental rates of properties to be acquired, family characteristics, and special consideration of
the impacts on minorities, the elderly, large families, and the handicapped when applicable, (2)
An estimate of the number of comparable replacement dwellings in the area (including price
ranges and rental rates) that are expected to be available to fulfill the needs of those
households displaced. When an adequate supply of comparable housing is not expected to be
available, consideration of housing of last resort actions should be instituted, (3) An estimate of
the number, type and size of the businesses, farms, and nonprofit organizations to be displaced
and the approximate number of employees that may be affected, and (4) Consideration of any
special relocation advisory services that may be necessary from the displacing agency and
other cooperating agencies.
Railroad Operating Facilities
Railroad companies determine which of their facilities are operating or non-operating. The
operating facilities can be affected by a construction project in several ways, each of which
requires different processing. Because of the time required to reach agreement with the
respective railroad companies and because of the complexities involved with these agreements,
special care should be given to any project where railroad involvement is possible. For
additional information, refer to Chapter 8: Acquisitions, (Railroad) of the
Caltrans Right of Way
Manual. Please see Figure 13-2: Right of Way Certification Process with Railroad Facilities for a
process diagram.
13.8 Appraisals
The Uniform Act contains basic requirements for the appraisal of real property acquired for
public purposes. These basic requirements apply to all federal-aid projects. For additional
details, refer to 49 CFR 24.102, 103 and 104, and Chapter 7: Appraisals of the Caltrans Right of
Way Manual.
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Prepare Final Right of Way Requirements/Appraisal Maps
Before commencing appraisal activities, the final R/W or appraisal maps must be completed.
The appraisal report, when completed, should contain additional diagrams, sketches, or maps
as necessary to understand the property valuation. Significant topography maps should be
included for partial acquisitions. The appraiser is responsible for the completeness of the maps
and for requesting delineation of pertinent data including, in particular, the area of the taking,
and any remainder
parcels.
Appraise Right of Way, Determine Fair Market Value
Prior to commencing appraisal work on parcels required for the project, the appraiser must
advise the property owner of the decision to appraise the property. The notice must be in writing
and covers the following:
• A specific area being considered for a particular public use, i.e., the project.
• The fact that the owner’s property lies within the project area.
• All or a portion of the owner’s property (which should be generally described) may be
acquired for public use.
The letter must offer the owner (or the owner’s representative)
the opportunity to accompany
the appraiser on an inspection of the property. It will give reasonable advance notice. There is
no mandatory format for the notice; however, see Chapter 7, Exhibit 7-EX-17: Notice of
Decision to Appraise of the Caltrans Right of Way Manual
f
or a suggested format. The owner
will also be given a written explanation of the agency’s land acquisition procedures. A booklet
entitled Your Property, Your Transportation Project, will satisfy this requirement. Title VI
brochures should also be sent to the property owners.
All real property rights (both temporary and permanent) must be appraised, and the acquiring
agenc
y must also establish an amount it believes to be just compensation (49 CFR 24.102)
before the initiation of negotiations with the owner. Although Fair Market Value sets the basis for
just compensation, the two amounts may differ because of unusual circumstances. The Code of
Civil Procedure defines Market Value as: (a) The fair market value of the property taken is the
highest price on the date of valuation that would be agreed to by a seller, being willing to sell but
under no particular or urgent necessity for doing so, or obliged to sell, and a buyer being ready,
willing and able to buy but under no particular necessity for so doing, each dealing with the
other with full knowledge of all the uses and purposes for which the property is reasonably
adaptable and available, and (b) The fair market value of property taken for which there is no
relevant comparable market is its value on the date of valuation as determined by any method
of valuation that is just and equitable.
Appraisal and Just Compensation for Temporary Real Property Rights
A temporary real property right, such as a temporary construction easement (TCE), is a property
encumbrance and acquisition item as defined in 23 CFR 710.105 - Easement. TCE
encumbrances are for a specific anticipated use over a specified time period [window of when
proposed construction activity(ies) may occur]. Although actual and physical use of a property
may be anticipated for a limited duration within the specified time period, the property is
considered burdened and encumbered for the entire duration of when the anticipated
construction activity(ies) may occur. The valuation and offer of just compensation must therefore
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consider and evaluate the damages to the remainder due to the TCE term, including impacts to
the owner's loss of utility and enjoyment of the encumbered area, and whether the impacts are
consistent throughout or varying, for the duration of the entire TCE term/window period of
potential activity (EIS).
In order to comply with possession and control requirements of 23 CFR 635.309(c) the TCE
commencement date must begin on or before the project's Right of Way Certification date.
Should the TCE expire before the construction is complete, a revised appraisal and agreement
with the property owner (including the additional calculated compensation) is required prior to
the Agency's continued possession of the property [49 CFR 24.101(C)(2), 49 CFR 24.101(d)
and 49 CFR 24.103(a)]. Please also see Right of Way Manual Chapter 7, Section 7.04.08.00.
Appraisal Review
As noted above, on federal-aid projects, a formal review of the appraisal is necessary (see 49
CFR 24.104). If the LPA is using a private sector review appraiser, the review appraiser must
have a valid California license issued by the state Office of Real Estate Appraisers (OREA). If
the project sponsor is a qualified agency and performing its own appraisal work, the Department
of Consumer Affairs – Bureau of Real Estate Appraisers (BREA) has held that, as employees of
a public agency, neither the appraiser, nor the review appraiser needs such a license. The
review appraiser must determine whether the appraisal meets applicable requirements and
make any necessary corrections or revisions.
If the review appraiser is unable to approve or recommend approval of the appraisal, the
reviewer may develop additional documentation to support what is felt to be an approved or
recommended value unless it meets the requirements of an Appraisal Waiver Valuation as
discussed below. The reviewer must state the basis for the value conclusion. The Uniform Act
makes it clear that the LPA must establish an amount believed to be just compensation.
Therefore, if another agency or a consultant does an appraisal review, the acquiring agency
must retain the responsibility for establishing an estimate of just compensation. Another agency
or a consultant cannot do so.
Appraisal Waiver Valuation
When the LPA determines that the valuation problem is uncomplicated and the market value is
estimated at $10,000 or less based on a review of available data, the appraisal can be waived.
In this case, the LPA will prepare a Waiver Valuation. The $10,000 amount includes any
damages to the remainder property but excludes any non-substantial construction contract
work. This information is consistent with 49 CFR 24.102(c)(2). The Waiver Valuation cannot be
used as a basis for deposit when obtaining an Order for Possession. If condemnation is needed,
an appraisal must be completed.
Separation of Appraisal and Acquisition Functions
LPAs should maintain a separation of the appraisal and acquisition functions, except that the
same person can appraise and acquire a parcel if the total valuation excluding non-substantial
construction contract work is $10,000 or less. This dollar limit also applies to appraisal revisions
where the appraiser was previously assigned to negotiate the parcel. The valuation document
can be either an appraisal or Waiver Valuation.
When the same person prepares the appraisal and does the acquisition, the appraisal should
contain a statement substantially as follows: I understand that I may be assigned as the
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Acquisition Agent for one or more parcels contained in this report, but this has not affected my
professional judgment or influenced my opinion of value.
All railroad properties should be valued in the full, narrative format. The Non-complex Valuation
of $10,000 or less and the Determination of Just Compensation (waiver of appraisal) formats
must not be used. Railroad parcels are not eligible for the one-agent appraise/acquire process.
This also includes the appraisal and acquisition of a temporary construction easement from the
railroad. For additional details refer to Section 7: Appraisals of the
Caltrans Right of Way
Manual.
Dual Appraisal Report
Caltrans policy no longer requires dual appraisal reports. LPAs may determine that a dual report
is needed to ensure the owner receives a fair market value offer. Dual appraisal reports should
be considered for unusually large or complicated parcels or parcels exceeding $500,000 in
value. This amount includes improvements pertaining to realty, severance damages, and
construction contract work.
Consider the following when determining which parcels require dual appraisal reports:
• There is a serious question as to highest and best use.
• Market data is inconclusive because of its scarcity and/or absence of established
patterns and value conclusions must, therefore be based primarily on opinion.
• There are substantial improvements not compatible with the highest and best use of the
land. In other words, there is a high degree of economic obsolescence.
• A significant portion of the appraised value is severance damages or there is a
substantial question regarding damages or benefits.
• The value of the land is primarily on a development-analysis approach, or there is
reliance on a specific plan of proposed development.
Dual appraisals must be separate and fully independent in calculations, analysis, and
conclusions. This will give a better basis for determining market value and help ensure a sound
offer. The appraisers and the LPA management are responsible for maintaining the fact, spirit,
and appearance of this independence.
13.9 Right of Way Acquisition
The Uniform Act contains basic requirements for the acquisition of real property, which apply to
all projects. For additional details, refer to 49 CFR 24 and to the Chapter 8: Acquisition of the
Caltrans Right of Way Manual.
Prior to initiating negotiations for the acquisition of real property, the agency must establish an
amount it believes to be just compensation and must make a written offer to the owner(s) to
acquire the property for the full amount so established. All LPAs are encouraged to establish a
Nominal (minimal) dollar amount of Just Compensation for any private property right needed to
complete a project. Thus, estimated or appraised property rights acquired, rented, or used for a
project would be consistent from project to project. In no event, shall such amount be less than
the agency’s approved appraisal of the fair market value of the property. The agency should
make every effort to acquire the property by negotiation. Any increase or decrease in the value
of the property to be acquired prior to the date of valuation caused by the transportation project
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must be disregarded in determining the compensation for the property. All property owners must
be provided a copy of the approved appraisal, Appraisal Summary Statement or Valuation
Summary Statement and Summary Statement Relating to the Purchase of Real Property or an
Interest Therein. See Right of Way Manual Chapter 8, Section 8.02.00.00 for additional
information.
The acquisition agent is responsible for securing all property rights necessary to certify the
project (See Right of Way Certifications in this chapter).
Note: If a private sector consultant is used in the acquisition phase, the consultant must have a
valid California Real Estate Broker’s license, or Salesperson’s license if supervised by a
licensed Real Estate Broker. All R/W Contracts must be approved for content and signed
or initialed by the Real Estate Broker or Principal of the Company.
By signing the R/W Contract, the Broker or Principal of the Company acknowledges
responsibility for a complete file. See Exhibit 13-C: Consultant Selection Criteria and Guide
, in
this chapter.
The general Uniform Act requirements are as follows:
• All real property rights (both temporary and permanent) must be appraised, and the
acquiring agency must also establish an amount it believes to be just compensation (49
CFR 24.102) before the initiation of negotiations with the owner.
• The written offer must be made promptly in the full amount of the appraisal and contain a
summary for its basis.
• At least a 90-day written notice must be given to all lawful occupants.
[This is a Relocation Assistance Program (RAP) requirement per 49 CFR 24.203(c)].
• The owner’s incidental escrow cost must be paid.
• A written (parcel) diary must be maintained.
Permit to Enter and Construct (PTE&C) or Equivalent Document
The only appropriate scenario for use of a Permit to Enter and Construct (PTE&C) or LPA
equivalent document, for access/use of a grantor’s property to accommodate construction
work/activity is one for which all of the following conditions must exist: 1) the subject property is
located within the project area; however, the work identified is not within the construction project
scope, 2) Access to subject property is not required in order to construct the project, 3) The
access is to the grantor’s benefit and not the benefit of the project, 4) Construction of the project
can be completed without the need to condemn for subject access. Consult with your District
Right of Way Coordinator(s) if you have any questions regarding use of a PTE&C, or its
equivalent, versus a Temporary Construction Easement (TCE) for access/use of a grantor’s
property to accommodate construction work/activity.
Permit to Enter (PTE) for Environmental or Geological Studies
Written permission from a grantor via a Permit to Enter or equivalent document must be
obtained to allow access for the purpose of Environmental Studies or Geological Studies.
Subject permit may be non-compensable or compensable, depending on resulting property
impacts, if any. Please contact your District Right of Way Local Programs Liaison for any
additional guidance, if needed.
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Condemnation/Eminent Domain
Eminent Domain is the inherent power of government to acquire property for public use. The
Fifth and Fourteenth Amendments to the U.S. Constitution and Article I of the California
Constitution provide that such private property must not be taken without just compensation.
Condemnation is the legal proceeding by which the power of eminent domain is exercised.
Public agencies may condemn private property provided that the governing body of the
condemning agency (e.g., the Board of Supervisors or City Council) adopts a Resolution of
Necessity at a public hearing. The owner(s) must be provided advance notice of the hearing. If
the owner(s) believe that their property should not be required, they have the right to appear at
the hearing and contest the adoption of the Resolution of Necessity. Great care must be taken
in the exercise of the power of eminent domain. The process is discussed in detail in Chapter 9
of the Caltrans Right of Way Manual
.
Relocation Assistance
The Uniform Act also contains basic requirements when displacement occurs as a result of the
transportation project. These requirements are found at 49 CFR 24 Subparts C, D and E. The
relocation procedures are also discussed in detail in the Caltrans Right of Way Manual, C
hapter
10: Relocation Assistance. The purpose of the Uniform Act is to assure fair and equitable
treatment of displaced persons, so that such persons do not suffer disproportionate injury from
projects designed to benefit the public as a whole. It is important to understand that successful
relocation is essential not only to those displaced but also to the progress of the entire highway
project.
While the LPA needs information about any displacement, which will occur because of
the project, the displaced persons have an equal or greater need for information
about the benefits, the eligibility requirements to obtain these benefits, and the appeal process
in the events these benefits are denied. FHWA has prepared a broadly written brochure entitled
Your Rights and Benefits as a Displaced Person. The brochure explains these matters and is
intended to be used by relocation agents and at public hearings. Copies are available from the
District R/W Local Programs Coordinator. In addition, FHWA has also prepared a more specific
explanation of these benefits and the requirements to obtain them. This summary should
minimize any disruption caused by the move and maximize the likelihood of a successful
relocation. A copy of this summary is provided as
Exhibit 13-D
: Uniform Relocation Act Benefits
Summary.
General Requirements
The relocation agents and any private sector consultants should meet the selection criteria
found in Exhibit 13-C: Consultant Selection Criteria and G
uide.
The relocation activities should be coordinated with both the appraisal and acquisition functions.
It is crucial to ensure that:
• Timely calls are made
• Proper entitlements and advisory services are provided
• Relocation Assistance Program (RAP) payments are timely and properly calculated
• The appeal process is communicated to the displaced
• Diaries are maintained
• All notices (Eligibility, Vacate, or Entitlement) are timely
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Property Management
Property management includes the administration of property acquired for transportation
projects. FHWA regulations for the property management function are found in 23 CFR 710.
These policies and procedures apply to all real property acquired by LPAs in connection with
projects where federal funds participate in any phase of the project. Federal funds may be used
to cover the net costs incurred in leasing, rental, maintenance, disposal of improvements, and
the clearance of the property. LPAs must refer to Chapter 11: Property Management of the
Caltrans Right of Way Manual
f
or guidelines on inventory and management of properties
purchased for construction. Upon acquisition, Exhibit 13-F: Local Public Agency Real Property
Services Checklist must be completed and kept in the file.
The management and administration of acquired property includes:
• An inventory of all improvements acquired as part of the R/W
• An accounting of the property management expenses and the rental payments received
• An accounting of the disposition of improvements and the salvage payments received
Special Requirements
If a private consultant provides property management services, the firm must have a valid
California Real Estate Broker’s license and a minimum of two (2) years’ experience at the
working level in management of rental properties.
See Chapter 17: Local Programs, Exhibit 17- EX 13: Consultant Selection Criteria and Guide of
the Caltrans Right of Way Manual f
or more information. Former owners and tenants subject to
termination by the LPA on short notice will not be charged more than fair market rents.
Excess Lands (Acquisition and Disposal)
Excess land consists of real property rights/title to which is vested in the LPA’s name, and which
is determined and certified to not be required for rights of way or other roadway purposes of the
agency.
Excess land may be created in several ways. Landlocked or uneconomic remnants not
required for the project may have been acquired. Down-scoped projects, superseded highway
segments, route rescissions, and lands decertified at the request of adjoining owners may also
create excess.
Federal funds cannot be used for the purchase of any property not incorporated into the project,
with the exception of purchases of an uneconomic remnant as determined by the appraiser.
Properties purchased for a project must be inventoried, with excess identified with a plan for
disposition. LPAs are directed to follow the Caltrans Right of Way Manual Chapter 16 for
disposal procedures which include appraisal requirements and types of disposals.
The regulations covering acquisition and disposal of Excess Lands are found in 23 CFR 710
and 771. FHWA no longer requires reimbursement of the federal share of proceeds from the
sale of excess real property. LPAs must use these funds for subsequent Title 23 U.S.C. eligible
projects. LPAs may consider creating a dedicated Title 23 (highway) account where proceeds
from the sale of excess will be deposited and only used for Title 23 projects. See 23 CFR
710.403(e).
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Per Caltrans DLA policy, excess exchange or sale transaction must occur within two years after
opening the roadway to traffic, or within two years after submitting the final voucher to the
FHWA (whichever is earlier).
13.10 Right of Way Certification
When the LPA performs R/W activities on a federally assisted local project, the LPA prepares
the R/W Certification. Prior to submission, a valid NEPA document is required. If it is over 3
years old, a re-evaluation is necessary (23 CFR 771.129 and LAPM Chapter 6, Section 6.3).
The R/W Certification is necessary prior to authorization for construction and must be consistent
with the project’s approved PS&E (23 CFR 635.309). The purpose of the R/W Certification is to
document that any interests necessary for the project have been, or are being secured, and
physical obstructions including buildings, utilities, and railroads have been, or will be removed,
relocated, or protected as required for construction, operation, and maintenance of the
proposed facility. The R/W Certification also documents that R/W activities, including the
relocation of any displaced persons, are conducted in accordance with applicable state and
federal laws and regulations.
Note: For projects requiring CTC allocation approval, see
LAPG Chapter 25: S
tate Programs
for Local Agency Projects.
Certification Forms
A separate R/W Certification must be completed by LPAs for each local assistance project even
if no R/W is required for the project. All Certifications can be prepared using forms specified by
Caltrans (see Exhibits 13-A: Short Form Right of Way Certification Local Assistance Project and
Exhibit 13-B: Right of Way Certification Local Assistance (Off-State Highway System) and
Exhibit 17-EX-18 Right of Way Certification (On-System) in Chapter 17 of the Caltrans Right of
Way Manual). The format of the R/W Certification form contains specific wording required by
FHWA. Changes made in wording could invalidate the certification and must be pre-approved
be District/HQ RW. Also, do not delete any of the numbered sections. However, within the
numbered sections, the LPA should use only the portions applicable to the project being
certified. Data supporting all the project right of way activities (e.g., acquisitions, relocation
assistance, railroad, and utility improvements, etc.) are also required at the time of submittal and
must be consistent with the final project plans. See list of support documents at:
https://dot.ca.gov/programs/right-of-way
/local-programs.
Note: Exhibit 13-A is intended for projects that do not require R/W acquisition, relocation
assistance, have no railroad involvement, and the only utility relocation involvement is
limited to utility cover adjustments.
Utility Relocation
LPA transportation projects often involve utility relocation. For utility relocation details refer to
LAPM Chapter 14: Utility Relocation and Chapter 13 -
Utility Relocation in the Caltrans Right of
Way Manual.
Project Certification – Right of Way Required
When additional property rights are required for a local federal-aid project, it is necessary for the
agency to certify that these rights were acquired in conformance with the Uniform Act. All LPAs
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will certify their own projects, but it is of crucial importance to adhere to the CFRs and the
Caltrans Right of Way Manual that incorporate these federal regulations so that any state or
federal funds to be used for the project are not jeopardized. This emphasizes the gravity for
non-qualified LPAs in the selection of qualified consultants or in contracting with a qualified LPA
to perform the respective R/W functions for them.
Levels of Certification
There are four levels of R/W Certification, which are discussed below.
Certification No. 1
This level of certification documents the following:
• All the work is within existing R/W acquired for a previous construction project and all
new work will be within that existing R/W.
OR
• Acquisitions are complete (escrow’s closed and/or Final Orders of Condemnation
recorded).
AND/OR
• There are effective Orders for Possession on all remaining un-acquired parcels.
AND
• All occupants have vacated the lands and improvements.
• Relocation Assistance and payment requirements have been met.
• All necessary material and/or disposal sites have been secured.
• All encroachment and/or construction permits have been obtained.
AND
• All Rights of Way clearance, utility, and railroad work has been completed, or all
necessary arrangements have been made (Utility Notices issued, demolition contracts
awarded, railroad contracts executed) for the work to be undertaken and completed as
required for proper coordination with the physical construction schedules.
Certification No. 2
This level of certification documents the following:
All the requirements for R/W Certification No. 2 are the same as for Certification No. 1, except
that one or more parcels are in the agency’s possession by virtue of effective Rights of Entry or
an Agreement for Possession and Use. Similar documents, such as a permit, license, or an
approved R/W Contract with an effective right of possession date, also require the use of a
Certification No. 2. See limitations on use of Rights of Entry contained in Section 13.11 - Rig
hts
of Entry.
Conditional Certification No. 3
This level of certification documents the following:
All requirements are the same as for Certification No. 1, except legal possession or right of
occupancy and use of a few remaining parcels are not complete. A Certification No. 3 may only
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be used in an exceptional circumstance, on a very limited basis, and must be accompanied by a
full written justification.
At a minimum, the justification must include the following:
1. An outline of the very unusual circumstances that require early advertisement.
2. A statement how and/or why it is believed to be in the public’s interest.
3. A statement that a Resolution of Necessity has been approved on all parcels yet to be
acquired.
4. The reason why a Certification No. 1 or No. 2 is not possible.
5. Anticipated actual dates when legal possession and physical occupancy and use will be
obtained and substantiation that such dates can be met (a copy of the executed Order of
Possession or Right of Entry can be attached to satisfy this requirement).
6. A statement that all remaining residential occupants have had replacement housing
made available to them. For additional information, see Chapter 10: Relocation
Assistance of the Caltrans Right of Way Manual.
7. A statement assuring that occupants of residences, businesses, farms, or nonprofit
organizations who have not yet moved from the R/W are protected against unnecessary
inconvenience and disproportionate injury, or any action coercive in nature.
8. Identification of each parcel on which legal possession and/or right of occupancy and
use has not been obtained.
9. Bids cannot be opened until the Certification No. 3 is upgraded to a Certification No. 2.
NOTE: Per CTC guidelines, a Conditional Certification No. 3 is not acceptable for
seeking a funds vote from the CTC.
Special Certification No. 3 with a Work-Around (3W)
This special R/W Certification 3W may be used only in the most extraordinary circumstances.
The LPA must show that there is a critical need to advertise and award the project and describe
in detail the extraordinary circumstances. If federal funds are involved in any portion of the
project, including construction, and if required by the current Stewardship and Oversight
Agreement (S&O), approval of the work-around must be obtained from Caltrans and possibly
FHWA in advance of certifying the project for advertising. This certification will allow physical
construction of a project to commence while occupants of businesses, farms, or nonprofit
organizations remain within the R/W. All occupants of residences must have had replacement
housing made available to them in accordance with the Uniform Act. The certification must be
completed in a timely manner, with proper and complete documentation and justification. Should
the LPA anticipate a need to certify the R/W for a project under this type of certification, the
District R/W Coordinator should be contacted as soon as the circumstances are confirmed
during the PS&E stage.
Time Requirements for Right of Way Certifications
Under ideal conditions, a Certification No.1 would be completed for each project at the PS&E
stage. Because this is not always possible, the lower levels of certification allow projects to
proceed within limitations while the remaining necessary rights are acquired. The LPA must
transmit all certifications to the DLAE for all federal-aid projects along with the Request for
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Authorization. All certifications must be reviewed and accepted by Caltrans Division of Right of
Way. Certification No’s. 1 and 2 are approved at the district level. Certification No’s. 3 and 3W
require headquarters acceptance and may require FHWA approval pursuant to the current
Stewardship and Oversight Agreement.
In those cases when a project advances to advertising with a Conditional Certification No. 3, an
upgraded Certification No. 1 or No. 2 must be received by the DLAE a minimum of 15 working
days prior to bid opening date. In rare cases where a Special Certification No. 3W is used, an
Updated Special Certification No. 3W must be provided to the DLAE no later than 15 working
days prior to bid opening. The Certification No. 3W does not need to be raised to a Certification
No. 1 or No. 2, but must be updated to provide any progress pertaining to the work-around
parcel(s).
For a full discussion on R/W Certification and their usage, see Chapter 14: Right of Way
Certification and 17.08.06.00 of the Caltrans Right of Way Manual
.
Age of Right of Way Certifications
RW Certifications over a year old from the time the LPA submits the RFA for CON phase must
be updated to confirm there are no project scope changes and re-certified. Additionally, the
NEPA must be re-evaluated if older than 3 years from the time the LPA submits the RW
Certification.
13.11 Emergency Relief Project Certification
Emergency Opening Phase
Emergencies require rapid response. A R/W Certification for Emergency Opening (EO) work is
not required until after the roadway is opened. Upon FHWA approval of the Damage
Assessment Form (DAF), actions to advertise, award and administer Emergency Relief (ER)
projects may proceed without going through the usual R/W steps. EO work performed outside
existing LPA right of way is extremely rare. If R/W acquisition is required for EO work,
immediately contact your District Right of Way Local Programs Liaison for guidance. See
LAPG
Chapter 11: Emergency Relief for further discussion.
After the facility has been reopened, the emergency actions must be reviewed for R/W
implications. If either persons or properties were affected during the emergency repair phase,
even temporarily, appropriate steps must be taken to ensure compliance with the Uniform Act.
This may include appraisal and purchase of the real property rights, or relocation assistance,
required to perform the ER construction activities.
Following the review, and any required subsequent actions necessary to comply with the
Uniform Act have been completed, a R/W Certification meeting the Level 1 requirements
detailing the R/W activities required must be prepared for each project that has been completed
using a PS&E (generally a non-force account project) and submitted to the DLAE or District R/W
Local Programs Coordinator. See LAPG Chapter 11
for further discussion. Al
l Permanent
Restoration (PR) work follows the standard federal-aid process and therefore requires complete
R/W certification prior to processing the construction E-76.
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Permanent Restoration Phase
Once the facility has been reopened and the emergency is over, any further work to restore or
improve the facility is no longer exempted from the requirements for certification prior to
advertising or obtaining bids. Restoration projects must follow the procedures outlined in this
chapter. See LAPG Chapter 11: Emergency Relief,
f
or further discussion.
Right of Way Certification Form - Discussion
In order to assist the LPA in completing the certification form, the following explanations are
provided for each of the items, which appear on the certification. For additional information, see
Chapter 14: Right of Way Certification of the Caltrans Right of Way Manual.
Status of Required Right of Way
All new property rights required for a project must be included in the R/W Certification. This
includes any interests in real property that lie outside of the existing R/W boundary lines, as well
as regular parcels acquired by deed, Final Orders of Condemnation, and Orders for Possession.
It also includes temporary interests such as Rights of Entry (see Rights of Entry below),
construction or access easements, permits to enter during construction (including any Caltrans
encroachment permits), or licenses. It is important to include the expiration date of any
temporary rights in the certification, so that they may be evaluated in terms of the construction
schedule.
Rights of Entry
The use of Rights of Entry is limited to emergency and exceptional situations only and require
pre-approval from Caltrans Division of Right of Way and Land Surveys (Headquarters) and the
Federal Highway Administration.
In accordance with Caltrans policy and 49 CFR 24.102(j), funds must be made available to the
property owner for their withdrawal and use prior to the owner surrendering possession of their
property. Owners must acknowledge they have been advised of their right to receive immediate
compensation and have waived that right, agreeing to be compensated at a later date with
interest. LPAs must also deposit funds into escrow prior to obtaining possession. A Right of
Entry allows an agency representative to enter someone’s property for a specific purpose at a
specified time. Only in emergency and/or exceptional situations when the LPA would normally
acquire the needed interest, but the owner cannot or will not provide an executed R/W contract,
shall use of a right of entry be considered. An acceptable form/format for Right of Entry is the
state’s Agreement for Possession and Use, Exhibit 8-EX-25 of the Caltrans Right of Way
Manual. The Right of Entry will not be utilized if the project will displace people or impact
improvements of a significant nature.
Status of Access Control
Access to the project must be adequate to meet the needs during construction. At the same
time, access rights for persons whose property abuts on the project boundaries cannot be
denied or unreasonably restricted, unless other access is available or provided to the owner
during construction. If no access can be provided, the owner is entitled to compensation during
the course of construction.
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Status of Affected Railroad Operating Facilities
The local public agency must confirm that all arrangements have been made with the railroad.
If railroad-operating R/W is not within the project limits or ends two feet of the rail crossing, then
none would be noted on the certification form. Railroads are considered clear for advertising
when all arrangements have been made with the railroad for entry on to their property and/or for
working on or near the tracks. Types of agreements that may be required include acquisition
contracts for fee, easement (permanent or temporary) or Right of Entry, construction and
maintenance agreements, or service contracts. Contact the railroad for specific requirements.
Railroad Involvement and Project Deliverables:
Clearance of construction projects that involve railroads consists of the following three distinct
and mandatory project deliverables:
1. CPUC Application Approval of Project Railroad Plans for final project PS&E
2. Identification and acquisition of railroad real property rights
3. Obtaining an agreement with the railroad for physical construction of the project
California Public Utilities Commission Application Approval Required for PS&E
Pursuant to Public Utilities Code sections 1201-1220, the California Public Utilities Commission
(CPUC) has jurisdictional authority over all railroad crossings, including the exclusive power to
determine and prescribe the manner, including the particular point of crossing, and the terms of
installation, operation, maintenance, use, and protection of each crossing of one railroad by
another railroad, …of each crossing of a public or publicly used road or highway by a railroad or
street railroad, of a street by a railroad or of a railroad by a street.
CPUC Rule 3.9 requires submittal of an application to construct a railroad across a public road,
highway or street.
Acquisition of Railroad Real Property Rights
Real property rights consist of any additional area from the railroads whether above, at, or
below-grade and/or subsurface, whether temporary, permanent or otherwise, in fee, easement,
or temporary construction easement. These are R/W acquisition items separate and distinct
from the agreement for physical project construction requiring compliance.
Agreement with Railroad for Physical Project Construction
Railroad owners typically require the railroad construction activities be performed by their own
forces at project cost. Therefore, an agreement to memorialize the performance of work, liability,
cost, and future maintenance with the completed highway facility (such as a Construction and
Maintenance Agreement) must be fully executed prior to commencement of construction.
Railroad companies determine which of their facilities are operating or non-operating. The
operating facilities can be affected by a construction project in several ways, each requiring
different processes. Because of the time required to reach an agreement with the respective
railroad companies, and because of the complexities involved with these agreements, special
care should be given to any project where railroad involvement is possible.
Early discussions should take place with the District Right of Way Local Programs Coordinator
on the specific project requirements necessary to successfully process an R/W Certification.
Please refer to Chapter 8, Section 8.69.00 of the Caltrans Right of Way Manual
(
Acquisitions –
Railroads) for a detailed discussion on this topic.
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Material and Disposal Sites
When projects involve the excavation or importation of soils and other materials to or from a
material and/or disposal site, separate agreements providing for the use of the sites, the
owner’s name, and the duration of the agreement must be listed.
Note: Typically, on LPA projects, there is excess material, which the contractor disposes of as
part of the contract. The disposal site is not a project need. Under these circumstances,
in completing the R/W Certification, “no” should be the response.
Only when a separate disposal site is necessary as a part of the project should the “yes”
answer be given.
Utility Relocation
It is the LPA’s responsibility to provide for the relocation, protection, or removal of all private and
public utility facilities which conflict with the construction of the proposed project. It is necessary
to reach agreement concerning: (1) the date by which the relocation will be completed, (2) the
financial liability for the relocation costs with each of the utility companies having facilities within
the project area or that are affected in some way by the project, and (3) who will perform the
utility relocation work.
Note: 23 CFR 635.309(b) requires utility arrangements to be completed prior to project
construction except where it is determined such work is not feasible or practical. Federal
participation in the utility relocation costs is a R/W issue and not a construction matter,
even if the relocation will occur during construction. A separate Authorization Approval
must be received prior to any utility relocation.
LAPM Chapter 14: Utility Relocation
provides a detailed discussion of the specific authorization requirements and approval
process.
Right of Way Clearance
The preliminary investigations included in the field review will reveal the presence of any
improvements or physical obstructions that must be removed prior to construction. Care should
be taken in arranging for the removal of these items in order to properly coordinate with the
construction schedule.
Airspace Agreements
Airspace right of way use agreements are revenue-producing agreements for parcels within
(above or below) the operating R/W. When subsequent projects are proposed, which affect the
airspace areas or pose a problem for the Lessee’s use of the site, the agreement must be
terminated, modified, suspended, or cancelled, according to the subject area’s specific
agreement terms. Care must be taken in drafting an airspace agreement to ensure there is
language in the lease addressing lease termination, modification, suspension, and/or
cancellation due to either temporary or permanent project impacts. It is recommended that
Lessor negotiate a lease where Lessee-incurred costs due to temporary or permanent project
impacts are the responsibility of the Lessee. Any Lessee-incurred costs paid by Lessor due to
agreement termination, modification, suspension, or cancellation because of temporary or
permanent project impacts shall not be federally reimbursable. Any arrangements for the
Lessee’s relocation must be coordinated according to the agreement terms prior to certifying the
project.
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Compliance with the Relocation Assistance Program
The Uniform Act prescribes certain benefits and protections for persons displaced by local
projects which are funded in whole or in part with federal money. Among the benefits the
Uniform Act provides are relocation payments for residential displaced persons and for
businesses, farms, and nonprofit organizations. The Uniform Act also provides certain
protections, such as requiring the availability of replacement housing for residential displaced
persons, minimum standards for such housing, and assurances that displaced persons have
sufficient time in which to choose their replacement properties. Finally, the Uniform Act provides
for certain advisory services for displaced persons. Each of these legal requirements must be
satisfied and then addressed in the R/W Certification.
Environmental Mitigation
When an approved NEPA document includes mitigation commitments involving the acquisition
of property, a list of those commitments along with the date each parcel is expected to be
acquired, must be listed on the R/W Certification. While wetland and floodplain mitigation is
mainly the responsibility of the project engineer and their environmental staff and/or consultant,
the mitigation measures involving the acquisition of property to accommodate replacement
wetlands is the responsibility of the District R/W staff. To ensure the most efficient and
expeditious implementation of mitigation commitments, it is imperative that the LPA project
engineer, District Right of Way Engineer, and District Environmental staff collaborate closely on
the acquisition of mitigation parcels and the subsequent implementation of mitigation measures.
Acceptance of Right of Way Certification
When there are R/W issues involved, the LPA will certify that the issues have been resolved.
Because LPAs are now certifying their own projects, it should be stressed that the authorized
official or designated alternate executing the certification must be certain that the proper R/W
procedures have been followed and that the requirements of the Uniform Act have been met. All
LPAs may certify their own projects but it is of crucial importance to adhere to state and federal
standards, so that the federal funds for the project will not be jeopardized. This emphasizes the
gravity for non-qualified agencies in the selection of qualified consultants or in contracting with a
qualified agency to perform the various R/W functions. Upon receipt, the District Right of Way
Local Programs Coordinator will review the certification to see that each item has been
completed in compliance with federal and state laws and regulations and if applicable, the date
by which the R/W will be cleared.
If all of the R/W issues have been dealt with in a satisfactory manner, both duplicate originals
will be accepted, and a signed original copy will be returned to the LPA. If there are irregularities
in the certification and it cannot be accepted as submitted, the Right of Way Local Programs
Coordinator will return the certification to the LPA with an explanation as to why it cannot be
accepted and the steps that are necessary for acceptance.
Certifications No. 1 and 2 will be accepted in the district. Certifications No. 3 and 3W will be
forwarded to Caltrans headquarters for review and may require FHWA’s approval pursuant to
the current Stewardship and Oversight Agreement (S&O).
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13.12 Reimbursement/Fiscal Policy
Purpose
This section contains critical requirements and basic principles relating to the eligibility of R/W
transactions for federal reimbursement. From this overview, the LPA should be able to
understand the overall federal and state requirements. Detailed procedures are found in LAPM
Chapter 5: Invoicing.
Reimbursement Process Overview – Caltrans
Caltrans receives federal funds on a reimbursement basis. This means Caltrans must first
obtain an Authorization to Proceed (E-76), incur costs, and bill the FHWA for payment before
receiving payment. Federal funds are received by Caltrans as reimbursement for federally
eligible expenditures.
As noted above, the normal sequence of events to obtain prior Federal Authorization and
reimbursement through Caltrans is:
a. Obtain authorization to begin work. Federal authorization is gained by obtaining an E-76,
Approval to Proceed which means funding is available. Only eligible expenditures
incurred for work after the date FHWA approves the request are reimbursable.
b. Reimbursement is limited to the amount shown on the E-76. However, the amount can
be revised. If necessary, execute a revised E-76 with FHWA. The revised E-76 is used
to increase or decrease the federal funding limit shown on previous agreements.
c. Submit progress payment invoices during the course of the work and a final invoice upon
completion, along with the other documents discussed below.
d. Final Voucher Project with FHWA after work is completed. Caltrans may audit project
charges to ensure that FHWA is billed for all federally eligible expenses. When Caltrans
has billed FHWA for all expenses, it sends vouchering documents to FHWA and closes
out the project.
Project costs incurred prior to approval of the E-76 are ineligible for federal reimbursement.
Charges incurred for eligible costs after the E-76 is signed are federally reimbursable. Actual
federal reimbursement is not made until an E-76 is approved and executed. If there is no
Program Supplement or an award package for construction, no reimbursement will be given
even if the E-76 is approved and executed. Progress payments can be made during the R/W
phase. Upon completion of a project, Caltrans may audit the charges and close out the project.
If the LPA wants federal participation for a Hardship or Protection parcel, federal approval must
be obtained in advance of the NEPA compliance. If approval is not obtained, the LPA should be
aware that the acquisition must still comply with the Uniform Act in order to be eligible for federal
reimbursement for other project costs.
Reporting Costs
FHWA has approved the Caltrans Cost Accounting and Cost Coding Systems. FHWA has
agreed as to which Caltrans activities and expenditures are eligible for reimbursement for each
phase of work. These agreements are incorporated into the Caltrans accounting system, coding
instructions, and manuals to serve as a model for LPAs.
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The LPA must be able to separate all costs, and code them as eligible or ineligible. Caltrans will
review this breakdown to ensure only eligible costs are reimbursed.
R/W costs are recorded in the Caltrans Accounting System in the following two categories:
• Capital Outlay
• Incidental (Support)
Capital Outlay consists of those R/W costs necessary to acquire and clear R/W for the
construction of the project. All Capital Outlay costs must be charged to a specific project. In
order to meet the FHWA requirements, Capital R/W costs must be documented in sufficient
detail to determine eligibility. This includes transactions for land, improvements, damages, utility
relocation, demolition and clearance, relocation assistance, condemnation deposits and income
and expense relating to sale of improvements.
Incidental costs include personnel and operating expenses of the R/W functions, which produce
the Capital Outlay payments. The term Incidental Cost is used by FHWA, and Support Cost is
used by Caltrans. A federal project number is assigned to each project and must be noted on all
project documents.
Progress Payments
Procedures for submitting invoices for payment are discussed at considerable length in LAPM
Chapter 5: Invoicing. Reference should be made to that chapter for an explanation of these
procedures and sample invoice forms.
Reimbursement of Local Public Agency’s Expenditures
Reimbursement of LPA’s costs on federal-aid projects follows the same requirements as for
Caltrans, State-funded projects. The major difference between State-funded and local
assistance funded projects is that project expenditures for local projects are not entered initially
into the Caltrans mainline accounting system. Local projects are accounted for and maintained
within the LPA’s project and fiscal system. The LPA is responsible for correctly identifying and
segregating reimbursable costs as prescribed by federal and state requirements.
LPAs submit individual project claims to Caltrans periodically. Caltrans is responsible for
obtaining reimbursement from FHWA for the LPAs. This is accomplished through the Caltrans
Current Billing and Reporting System (CBARS). Project claims are entered into the Caltrans
Accounting System and become part of the Current Bill submitted to FHWA. Caltrans makes
payment of the funds to the LPA from the highway account, and Caltrans then receives
reimbursement from FHWA through the Current Bill. Whenever possible, reimbursement for
final R/W costs should be claimed at the time they are known rather than waiting for the final
project costs.
Reimbursement Invoices/Progress Payment Request
Procedures for submitting invoices for payment are discussed at considerable length in LAPM
Chapter 5: Invoicing.
Reference should be made to LAPM Chapter 5 for an explanation of these procedures and
sample invoice forms.
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Salaries and Wages
Generally, salaries, wages, and related costs, (e.g., travel and per diem) are eligible for federal
reimbursement when incurred by employees who directly or indirectly are working on project
related activities. Reimbursable activities for the acquisition of Rights of Way are:
• Preparation of R/W maps and deeds
• Surveying pertaining to R/W engineering needs only
• Making economic studies and other related preliminary work
• Appraisal for parcel acquisition
• Review of appraisals
• Parcel negotiations
• Preparation for the trial of condemnation cases
• Management and disposition of properties acquired
• Negotiations for utility relocation
• Relocation advisory assistance activities
Operating Expenses – Project Related
Title and escrow costs are project-related capital expenses that are eligible for federal
reimbursement. Direct payment to title and escrow companies should be recorded against
capital outlay support EA (Phase 2). Escrow closing statements and title company billings
should be retained in the project file to support costs claimed on a Progress Payment Request.
Cost Accumulation Centers
Cost accumulation centers may be used to capture related types of costs for later distribution to
all projects or other benefiting activities for which work was performed during the accounting
period. These are small items of costs that affect several projects and may be eligible for
reimbursement, but will result in a disproportionate amount of time and number of documents
for separate project accounting in relation to the amount of costs involved.
Costs of Management
The costs of management, general supervision, and other administrative support activities
above the first level are usually eligible for reimbursement as indirect costs.
Final Payment/Project Completion
When the project is complete, the final request for payment must be submitted to the DLAE as
part of the Final Report of Expenditures. The procedures for submitting the final invoice and
other supporting documents are discussed in detail in LAPM Chapter 17: Project Completion.
Included in LAPM Chapter 17 are samples of each document. The final invoice will be reviewed
in the district by the DLAE prior to payment. The final invoice for R/W costs should be submitted
as soon as these costs are known in order to expedite the audit of the claim and
reimbursement. The Final Report should contain final R/W maps for the project, a list of the
parcels acquired for the project, and a breakdown of the R/W costs incurred.
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After the final invoice is received, the Caltrans Audit Branch in Sacramento may perform an
audit. An audit is done to verify that the expenses claimed for reimbursement were actually
incurred, were eligible, and sufficiently documented. If exceptions are found, the LPA will be
asked to justify or support the costs. Any costs which cannot be justified or supported must be
declared ineligible for federal reimbursement and the LPA will be required to repay these funds.
Final Cost Adjustments
Generally, the R/W boundary lines determine the eligibility of R/W costs. Only those parcels
within the R/W lines are eligible. This eligibility determination is made parcel by parcel at the
time of acquisition and again when the As Built lines are known. Adjustment of eligibility of costs
is necessary when the As Built lines are different from the lines at the time of acquisition. It is
recommended that the LPA prepare a Parcel List (see discussion below and Exhibit 17-K,
Attachment 1 - Sample Final Report) to be used as a control to assure that the accounting is
complete and accurate as related to the final lines. The Parcel List will show which parcels need
costs adjusted to the final R/W lines.
The Final Report of Right of Way Expenditures
Procedures to be followed at the completion of the project are discussed in LAPM Chapter 17:
Project Completion. The discussion includes sample documents and the supporting documents
to be submitted when final payment is sought, and a project is being closed out. When the
project is complete, a summary of the progress payments is submitted on a Final Report of
Right of Way Expenditures, Form FM 1592A (see Exhibit 17-K: S
ample Report of Completion of
Right of Way Expenditures). This claim should be submitted when final R/W costs are known in
order to expedite the audit of the claim and reimbursement. This report is due within six months
of completion of acquisition. The final Report must also include the following:
• Preparation of R/W maps and deeds
• S
urveying pertaining to R/W engineering needs only
• Making economic studies and other related preliminary work
• Appraisal for parcel acquisition
• Review of appraisals
• Parcel negotiations
• Preparation for the trial of condemnation cases
• Management and disposition of properties acquired
• Negotiations for utility relocation
• Relocation advisory assistance activities
The total participating costs should equal the Participating Costs to Date as shown on the Final
Progress Payment Request (Form FM 1592A).
Final Vouchering
The last phase of a federal-aid participating project is the final vouchering and closing of the
project. This step is very important. After the project has been completed, a final voucher must
be prepared and submitted to the FHWA as an E-76 by the Division of Accounting. The final
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voucher is a segregated summary of the project’s total costs and a determination of the final
federal share. Caltrans Division of Accounting uses the LPA’s Final Report as the basis for the
final voucher. The Final Report of R/W Expenditures must follow the Detail Estimate submitted
to the FHWA.
Record Retention
Per 23 CFR 710.201(e), the acquiring agency must 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 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
Section 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 R/W use agreements for real
property acquired with Title 23 funds or incorporated into a program or project that received
Title 23 funding.
Note: All documents and papers related to the project must carry the federal-aid project number for
identification. Additionally, since these records are subject to Public Records Act requests at
any time, it is highly recommended and prudent to keep these records digitally or otherwise
beyond the 3-year minimum. Per 2 CFR 200.333(c), records must be kept until agency
disposal of the facility.
Federal Policies Specifically Related to the Reimbursement of Right of Way Costs
The R/W lines determine the eligibility of R/W acquisition costs. Generally, costs for parcels
inside the R/W lines are eligible; those outside are ineligible. However, there are some
exceptions to the general rule that must be dealt with on an individual basis (e.g., an
improvement which needs to be removed would be eligible for reimbursement). The following
are current federal policies that are to be used for claiming R/W costs for federal
reimbursement.
Acquisitions
Federal participation in R/W costs requires prior authorization from FHWA. In order to obtain
this authorization, it is necessary to identify the acquisition costs, and the phase for which
authorization is being requested. Costs to be reimbursed with federal funds for eligible parcel
acquisition reimbursement, initiation of acquisition (first written offer) cannot begin until the E-76
has been approved by FHWA. 23 CFR 710.203(a)(3) provides specific preliminary acquisition
activities that can occur under the preliminary engineering phase.
The following describes the three basic parcel types as related to the proposed R/W line:
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• A Core Parcel is one which is acquired in its entirety (full acquisition) whether or not the
parcel lies entirely within the proposed R/W lines.
• An Excess Parcel is that portion of a property not within the R/W lines that is acquired,
even though it is not needed for construction or maintenance of the highway facility. In
some cases, the acquisition costs for excess parcels may be eligible for reimbursement
(23 CFR 710.203(b)(7)).
• A Non-Core Parcel is one which is not required in its entirety (partial acquisition) leaving
the grantor with ownership of an adjacent remainder.
Federal-aid authorization/agreement is required for both Full Acquisition and Partial Acquisition.
Acquisition of Uneconomic Remnants
If prior FHWA approval has been secured, federal funds can participate in the acquisition costs
of uneconomic remnants.
Acquisition of Property Specifically for Exchange
Acquisition of property specifically for exchange occurs where the agency agrees to obtain
property for the grantor in exchange for the required R/W. This occurs primarily in connection
with public utilities or other public agencies where substitute property is acquired by the LPA to
replace property required for the project. Both properties must be appraised. The costs of such
acquisition are chargeable directly to the R/W Capital Outlay EA. This type of acquisition is
treated as acquisition of replacement property. Without prior federal approval, reimbursement
cannot be obtained.
Functional Replacement
This involves the replacement of real property in public ownership, either lands or facilities, or
both, acquired for a highway project with other lands or facilities which will provide equivalent
utility. FHWA has specific procedures, which must be followed, and requirements, which must
be met if the costs for a functional replacement property are to be reimbursed. These
procedures are discussed in 23 CFR 710.509. For additional information, see Chapter 7:
Appraisals and Chapter 8: Acquisitions of the Caltrans Right of Way Manual
.
Condemnation Deposits and Interest Thereon
The amounts deposited in court in connection with the condemnation of a parcel are
reimbursable. Subsequent progress billings must account for differences between the original
amount deposited and the amount of the final settlement or award.
When settlements include interest, such interest payments can only be claimed for federal
reimbursement in specified situations. Participation is available for a period not to exceed 45
days, if court procedures result in the owner not being able to withdraw a deposit made in
support of an Order for Possession. If the deposit is available and the owner declines to
withdraw it, any subsequent interest payment is ineligible for reimbursement.
Interest is reimbursable on the amount of an award in excess of the original deposit from the
date of the original deposit until date of settlement or award. If court procedures prevent
immediate delivery of the excess amount due following settlement or award, participation in
interest on the excess amount for a period not to exceed 45 days is available. Participation may
be allowed in the required interest payment on the excess until 45 days after final determination
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when the LPA has appealed an award. Federal participation is not allowed in interest costs
based on appraised fair market value of the property, when a Right of Entry has been secured
except in cases of unusual circumstances and with prior approval of the FHWA.
Interest on amount of award over the deposit is an eligible expense with certain limits. Interest is
not eligible for federal reimbursement for nonparticipating costs such as acquired excess land,
goodwill awards, or awarded defendant court costs.
Klopping
Klopping Damages (frustrated development rights) are always ineligible costs. The only
damages that are eligible are those created by the before and after values to the remaining
property.
Goodwill
Awards or settlements involving loss of goodwill, interest on goodwill, and defendant’s costs in a
goodwill action are all now eligible for federal reimbursement. Costs to appraise goodwill and/or
try a goodwill action are also eligible for reimbursement.
Personal Property
As a general rule, costs for the purchase of personal property are ineligible for federal
reimbursement. An exception would be where it is necessary to acquire the furniture of a
furnished apartment.
Defendant’s Costs in Connection with Condemnation Action
Federal participation is not allowed when the LPA, found to be noncompliant, is ordered to pay
for the costs of a property owner’s attorney fees, appraiser fees, expert witness fees or similar
costs which are incurred by the property owner in connection with acquisition of R/W, through
condemnation proceedings or awarded as court costs in litigated cases.
Utility Relocation
The following must exist for reimbursement of utility relocation costs and/or to be eligible for
reimbursement:
• An E-76 for Preliminary Engineering – Utility must be approved before any preliminary
utility design work is commenced.
• An E-76 for Utility Alternate Procedure together with a list of every utility company’s
facility to be adjusted and the best available estimate of the cost involved must be
approved before any relocation work can commence for any of the affected utility
facilities. See 23 CFR, 645.119(e)(2).
• An FHWA Specific Authorization (form RW 13-15) must be approved by Caltrans for
each utility relocation listed on the E-76 before any relocation construction work can
commence. The Specific Authorization must be supported by a Report of Investigation,
Utility Agreement, Notice to Owner (NTO) and other documentation as outlined in
Chapter 13: Utility Relocation of the Caltrans Right of Way Manual and
LAPM Chapter
14: Utility Relocation.
• The FHWA Approval of Utility Agreement (also form RW 13-15) must be approved by
Caltrans before reimbursement is requested from FHWA.
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• Immediately after Caltrans approves the Utility Agreement, authorized expenditures by
the utility company can be reimbursed. No audit is necessary and receipts for payments
are not required by FHWA before progress payments are made.
• Final payments can be reimbursed only when costs for the utility work covered by the
agreement are supported by evidence of payment by the LPA with fully itemized billings.
• Costs must be identified in each Utility Agreement.
Demolition and Clearance
The federal government will participate in demolition costs of improvements on or within the
R/W lines, provided the improvements involved are demolished subsequent to the authorization
date of the project. This can occur regardless of whether or not the federal government
participated in the cost of acquisition of the improvements. If federal funds did not participate in
acquisition, then demolition must be separately authorized. The federal government may also
participate in clearance and demolition costs on improvements on a parcel outside the R/W
lines as long as the parcel was acquired solely for an exchange and is eligible for federal
participation. When a demolition contract includes improvements not eligible for participation, a
separate bid item should be established in the bid proposal for the ineligible improvements so
that the costs may be segregated. When improvements purchased with federal participation are
sold for salvage, federal funds are to be credited with the proceeds of the sale. It should be
stressed that whenever possible, improvements should be sold with the excess land rather than
demolished to provide an income rather than incur an expense.
Relocation Assistance Program
Federal and state laws require that relocation assistance be provided to any person, household,
business, farm, or nonprofit organization displaced because of the acquisition of real property by
a public entity for public use. Basically, there are two programs:
• The Relocation Advisory Assistance Program, which aids in locating suitable
replacement properties.
• The Relocation Payments Program, which provides payments for certain costs in
relocating.
LPAs must comply where federal funds are to be used for the acquisition or construction for the
proposed project. The Relocation Assistance Program (RAP) is a complex
program and will not be covered here. Chapter 10 of the Caltrans Right of Way Manual provides
detailed instructions on eligibility.
Disposition of Excess Lands
For accounting purposes, excess land is defined as that portion of any acquisition of R/W that
lies outside the established R/W line and is not needed for the construction or maintenance of
the highway facility. The only exceptions are the acquisition of property for replacement housing
purposes according to 49 CFR 24.404(c)(1)(vi), and the acquisition of property specifically for
the purpose of exchange with another governmental agency to establish uniform right of way
lines or utility company to relocate outside out of the right of way lines. LPAs should talk with
their Right of Way Liaison regarding following the provisions for last resort housing purposes in
replacement housing situations and must assure that the situation had been addressed in the
project NEPA document.
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The disposal of excess land is accomplished in the following number of ways: competitive bid
sales, direct sales to adjoining owners for properties not appropriate for public auction, fair
market value exchanges, or incorporation into the R/W, or inclusion into the right of way under a
new project. Federal funds cannot be used for the purchase of any property not incorporated
into the project, with the exception of purchases of uneconomic remnant as determined by the
appraiser.
Sales of Excess - Damages
Federal regulations require that sales of excess properties shall be at fair market value. FHWA
prior approval is required for all disposals of right of way within the interstate. Further, disposals
of any property with federal-aid at less than fair market rate must be approved by FHWA.
Disposals at less than fair market for other public uses, such as parks, must include a
reversionary clause in the deed if the property is used for any other such purposes other than
what it what originally sold for (23 CFR 710.409(d)).
Local public agencies will not request federal reimbursement moneys on the acquisition of
excess parcels, but in the rare instances where federal participation is involved in excess
acquisition (such as the purchase of an uneconomic remnant), the subsequent sale or disposal
of the parcel may not require the LPA to return a portion of the proceeds to FHWA. However,
the proceeds of the sale must be used for subsequent Title 23 U.S.C eligible projects. The
LPA’s accounting procedures must be able to track these Title 23 funds.
On federal-aid projects, damages (actual and reasonable selling or fix-up expenses) may be
claimed by the LPA to FHWA for reimbursement under the following conditions:
• Excess must have been acquired in connection with the project and with federal
participation in R/W costs authorized for the parcel.
• Per Caltrans DLA policy, excess exchange or sale transaction must occur within two
years after opening the roadway to traffic, or within two years after submitting the final
voucher to the FHWA (whichever is earlier).
• Excess exchange or sale transaction must involve the complete disposal of the entire
parcel. Interim transactions, such as sale or exchange of a portion of the parcel or sale
of improvements should be noted for ultimate determination of total gain or loss.
• LPA receives less than the fair market value of the excess when the excess is sold or
exchanged (such as property being converted to a park or an eminent domain action),
as approved by FHWA prior to disposal.
Exchange Transactions
When LPA-owned land is exchanged for other land to be incorporated into the R/W of a federal-
aid project, all lands exchanged shall be at fair market value as determined by a qualified
appraiser and confirmed by review appraisal in conformance with the Uniform Act policies and
procedures. The value of the exchanged agency owned land may be applied toward the non-
federal match share on the project. However, federal participation will not exceed the federal
share of the fair market value of the land being acquired.
Note: FHWA involvement will be during the acquisition of an exchanged parcel and the
disposal of the exchanged parcel.
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The accounting requirements to record the exchange transaction involve consideration of the
following:
• The Phase 9 or R/W EA is charged for the market value of the R/W acquired.
• Damages on the exchange of the excess may be claimed if the LPA receives less than
the exchanged land’s fair market value, such as a property being used as a public park
or through eminent domain action.
• Federal reimbursement for the market value of exchanged, cash, and construction
features may not exceed the total market value of the R/W parcel being purchased.
Excess Parcels need not have been acquired on a federal-aid project to allow reimbursement of
market value. However, in order to receive severance damages reimbursement (including
selling costs), LPAs may only claim the costs of the sale on parcels that federal aid was used to
acquire.
Right of Way Sales Credits
Excess Land sales credits are due to FHWA when R/W bought with federal funds are sold on
the rare occasion where there is an alignment change and property may be declared to be
excess. The following time limits apply:
If excess R/W results from an alignment change:
• Excess should be disposed of before final vouchering of the project or no later than two
years from the time the highway is opened to traffic, whichever is earlier.
• An extension of time limits can be granted by the FHWA.
• If property is not sold within the approved time limit, the cost of the excess acquisition
must be credited to the project.
• If within ten years of the modification or termination action the resulting excess property
is neither sold, nor reused on another federal project, then the FHWA must receive credit
for the market value of the property at the end of ten years. If the parcel is on a
terminated project, prior federal approval is required for disposal (23 CFR 480).
• When crediting federal funds is required, the cost of the disposition may be offset
against the sales price.
• Except for parcels on the Interstate program, the disposal of excess resulting from a
project’s termination is treated the same as any other disposal. The parcel can then be
used for another highway project without giving a credit to FHWA.
• The net proceeds of the sales credit should be shown on the Progress Payment
requests as credit to the project’s capital costs. This procedure reduces acquisition costs
and payment due to the LPA.
Rental Income and Expense and Disposition of Improvements
Vacated or improved land, acquired prior to actual need for highway construction may be
available for rent. FHWA participates in rental income and property management expenses if
the property was acquired with federal funds.
Rental account records must be maintained to record income and direct expenses identifiable to
a parcel. Eligible property management costs include costs such as repairs to a rental unit,
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activities of a rental agent, or advertising. Any rental income or expense apportioned to a
property’s excess portion is ineligible for federal participation. The federal share of net rental
income should be shown on the Progress Payment Requests as a credit to the project, or a
deduction from any payment due to the LPA. The LPA should separate costs incurred to collect
rent on a parcel-by-parcel basis, and then offset the costs against the actual rent collected.
Accounting records must be maintained for the disposition of improvements. Net income from
the sale of improvements, except those on excess land, is shown as a credit to the project. In
rare instances, improvements on right of way are disposed through the excess disposal
process. Cost of the sale of improvements within the R/W is considered an expense that is a
debit item and may be applied to gross sales proceeds. These credits are considered an
acquisition expense and not a property management/disposal expense.
13.13 Terms and Definitions
Access Rights – The right of ingress and/or egress to and from a property which abuts on an
existing street or highway. Access rights cannot be denied or unreasonably be restricted, unless
other access is available. If it is not, compensation is paid for this restriction of access.
Advanced Acquisition – The acquisition of property by the LPA temporarily using their own
funds prior to NEPA approval of the environmental document. To be eligible for future federal
reimbursement, R/W activities must have been performed in accordance with all federal/state
guidelines and the property acquired must be included in the R/W for the project. The two types
of Advance Acquisition are Hardship and Protection.
Bundle of Rights – Ownership of real property includes many rights, such as the right of
occupancy and use, the right to sell it in whole or in part, the right to bequeath, and the right of
transfer by contract for a specific period of time. It is also referred to as the benefits to be
derived by the occupancy and use of the real estate.
Damages – The loss in the value of the remainder in a partial acquisition of a property.
Dedication – Pursuant to the police power of government, this involves the setting aside of
property for public use without compensation as a condition precedent to the granting of a
permit, license, or zoning variance by a local governmental agency. The property owner must
initiate contact with the LPA for a request to develop before the LPA can proceed with
dedication requirements.
Donation – The voluntary conveyance of real property without compensation which may be
utilized for an improvement project. Donations of future R/W can only be accepted if the offer to
donate is done voluntarily by the property owner who is advised of the right to receive an
appraisal but signs a written waiver of the right to be compensated. R/W that is donated for
federal-aid transportation projects must also comply with the provisions of NEPA, even if no
other R/W or rights in real property are required for the project.
Easement – The right or privilege to use real property (including access rights) is distinct from
the ownership of real property.
Eminent Domain – The inherent power reserved by government to acquire private property
rights by due process of law when the necessity arises. When exercising this right, two basic
requirements must be met: the use must be public, and just compensation must be paid to the
owner prior to taking possession of the property.
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Environmental Mitigation – Measure necessary to mitigate adverse impacts resulting from a
federal-aid transportation project. Mitigation must represent a reasonable public expenditure
after considering the impacts of the action and the benefits of the proposed mitigation
measures. Mitigation measures typically assist in compliance with federal statutes (example:
Federal Endangered Species Act), Executive Orders (example: E.O. 11990 Protection of
Wetlands, E.O. 11998 Protection of Floodplains) or Administrative regulation or policy. In some
instances mitigation will require the acquisition of alternate sites to replace wildlife habitat or
wetlands, or by building sound walls for noise attenuation.
Excess – Property acquired for a project but which is in excess of the R/W requirements.
Excess is created when there is a design change or when additional property was acquired to
avoid an uneconomic remnant. Whenever there is federal participation in R/W acquisition, any
subsequent decertification and ensuing disposal (sale or trade) of the newly created excess
land requires FHWA’s prior approval.
Fee Simple – An absolute ownership without limitations or restrictions but subject to the
inherent powers of government; namely, eminent domain, escheat, police power, and taxation.
Hardship – A situation where unusual personal circumstances not shared by others (example;
financial, or health) accrue to an owner of property and are aggravated or perpetuated by the
pending project and can only be resolved by early acquisition of the property by the agency.
Protection – A situation where substantial building activity or appreciation of vacant land value
is likely to occur and early acquisition by the agency is needed to prevent development of the
site and avoid higher acquisition, relocation, or construction costs in the future.
Note: Hardship and Protection acquisitions must comply with the Uniform Act, Title VI of the
Civil Rights Act, and 49 CFR 24. LPAs must ensure all R/W activities comply with these
criteria to avoid jeopardizing federal participation in subsequent project costs.
Hazardous Materials/Waste – A material is hazardous if it poses a threat to human health or
the environment. The term hazardous waste is applicable to storage, deposit, or contamination,
involving a hazardous material which has escaped or has been abandoned. It can be defined in
general terms as any of the following:
• Flammable
• Reactive (subject to spontaneous explosion or fire) substances
• Corrosive/Toxic
Regulations require all toxic substances be removed in accordance with applicable
environmental laws prior to a public project proceeding to construction.
Highway Easement – A right or rights granted or acquired for the construction, maintenance,
and operation of a highway, which does not transfer fee title.
Inverse Condemnation – The legal process initiated by a property owner to claim
compensation for the taking of, or damages to, his property as a result of a public project.
Just Compensation – The offer amount an agency establishes prior to the initiation of
negotiations. The amount must not be less than the approved appraisal of the fair market value
of the property, taking into account the value of allowable damages or benefits to any remaining
property.
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Local Public Agency – A unit of government (e.g., county, city, and municipality) authorized to
undertake a project for which federal-aid is requested. This is sometimes referred to as local
public agency.
Market Value – The California Code of Civil Procedure Section 1263.320 defines Fair Market
Value of property acquired as:
a. The highest price on the date of valuation that would be agreed to by a seller, being
willing to sell but under no particular or urgent necessity for doing so, nor obliged to sell,
and a buyer being ready, willing and able to buy but under no particular necessity for
doing so, each dealing with the other with full knowledge of all the uses and purposes for
which the property is adaptable and available.
b. The fair market value for which there is no relevant comparable market is its value on
the date of valuation as determined by any method of valuation that is just and equitable.
Negotiation – The process of communication whereby an agreement is arrived at for the
voluntary transfer of ownership at terms mutually acceptable to all parties of interest.
Partial Acquisition – The taking of only a part of a property for public use under the power of
eminent domain and for which just compensation must be paid, offsetting the damages and/or
special benefits to the remaining property.
Permit to Enter and Construct/Construction Permit – Used when temporary rights are
needed to perform work solely for the owner’s benefit. These documents provide no permanent
rights to the LPA (and the rights would not be condemned). Permits to Enter would also be used
to collect data for hazardous waste or soil analysis and for environmental analysis. It is possible
to make payment for a Permit to Enter, when appropriate.
Real Estate – Refers to the physical land and appurtenances including structures affixed
thereto.
Relocation Assistance – The process by which a government agency meets the legal
requirements for providing relocation services, moving cost payments, increased costs to find
and acquire replacement property for all eligible individuals, families, and business displaced by
a project. (Not to be confused with relocation of utilities).
Remainder – Property remaining in possession of the owner after a partial acquisition.
Required Right of Way – Any interests in real property required for the project that lay outside
the existing R/W line. Includes any requirements from state or LPA-owned excess land, land
purchased for other projects, and land purchased by other agencies.
Right of Entry – A document used to obtain permission to enter and perform some activity prior
to the effective date of an R/W Contract or an Order for Possession. It must not be used to
certify control of R/W for the project, except in emergency situations only. Solicitation of Rights
of Entry prior to the appraisal process should be restricted to circumstances, which are
exceptional or emergency in nature. Ordinarily, the Right of Entry will not dislocate people or
impact improvements of a significant nature. In all instances when a Right of Entry is secured,
the document must explain the provisions for use, disposal, amount, and the time period (see
Rights of Entry in Section 13.11: Right of Way Certification Form Discussion
). Rights of Entry
should not be confused with Temporary (Construction) Easement.
Local Assistance Procedures Manual Chapter 13
Right of Way
Page 43 of 45
January 2024
Right of Way Certification – A written statement prepared by the LPA summarizing the status
of all R/W related matters with respect to a proposed construction project. An authorized
Caltrans R/W representative will accept the R/W Certification.
Slope, Drainage, or Utility Easements – Easements for these purposes, covering areas which
will either remain permanently under the acquiring agency control, or be relinquished, or
conveyed to a utility owner by agreement.
Temporary Easement – A property right which is required for only a limited time period. On a
specific date, all of the acquiring agency’s interest in the area is terminated. An example is a
Temporary (Construction) Easement that is used when the agency must enter a property for
temporary use during construction of the project. There must be a specified time period for
which the temporary right exists which is sufficient to allow for delays in advertisement of the
project and for the anticipated construction order of work.
Turnkey Consultant – A consulting firm that would be considered a Multifunctional
Organization. A firm that provides the expertise in all areas of R/W (Appraisal, Acquisition,
Relocation Assistance, Utilities, Property Management, Excess Lands).
Uneconomic Remnant – A remainder of land so small or irregular that it has little or no value or
utility to the owner.
13.14 References
23 Code of Federal Regulations, Part 710 and 771
https://www.fhwa.dot.gov/real_estate/uniform_act/program_administration/lpa_guide/ch20.cfm
49 Code of Federal Regulations, Part 24
https://www.ecfr.gov/cgi-bin/text-
idx?c=ecfr&SID=ed0244e664c6a24e7f62848547de88f9&tpl=/ecfrbrowse/Title49/49cfr24_main_02.tpl
23 Code of Federal Regulations, 635.309
https://www.ecfr.gov/current/title-23/chapter-I/subchapter-G/part-635/subpart-C/section-635.309
Caltrans Right of Way Manual
https://dot.ca.gov/programs/right-of-way/right-of-way-manual
Local Assistance Program Guidelines (LAPG)
https://dot.ca.gov/programs/local-assistance/guidelines-and-procedures/local-assistance-program-
guidelines-lapg
Local Assistance Procedures Manual (LAPM)
https://dot.ca.gov/programs/local-assistance/guidelines-and-procedures/local-assistance-procedures-
manual-lapm
Standard Environmental Reference (SER)
https://dot.ca.gov/programs/environmental-analysis/standard-environmental-reference-ser
Title VI of the 1964 Civil Rights Act
https://www.justice.gov/crt/fcs/TitleVI
Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970
http://www.fhwa.dot.gov/real_estate/publications/act.cfm
Local Assistance Procedure Manual Chapter 13
Right of Way
Page 44 of 45
January 2024
Figure 13-1: Right of Way Procedures Flowchart
Approval
to
Proceed
(Support
Cost)
Caltrans/FHWA
Activities
Local Agency
Right of Way
Activities
Approve
Environmental
Clearance
Approval
to
Proceed
(Capital Cost)
Contact
Owner
and
Make Fair
Market Value
Offer
Complete
Advance
Aquisitions
*Hardship
*Protection
Preliminary
R/W
*Studies
*Estimates
*Utilities
Complete
Preliminary
R/W
Engineering
*Title Report
*Surveying
*Base Map
Accept R/W
or No
Certification
Conduct
Field Review
Contract with
Qualified
Agency
or Consultant
to Perform
R/W
Activities
Complete
Final
R/W
Appraisal
Maps
Utility Relocations
*Issue Notices to Utility
*Develop Agreements with Utility Owners
*Relocate Utilities
Utility Relocation,
if any, must be
coordinated with
Construction
Obligate
Funds for
Construction
Prepare
Final
Report
of
R/W
Expend-
itures
Construct
Project
Local Agency
Engineering
Activities
Provide
Relocation
Assistance
and
Advisory
Services
(RAP)
Acquire
R/W
(Legal
Possession)
Conduct
Property
Management
Activities
Rentals
Clearance
Excess Lands
Develop
R/W
Certification
Develop
PS&E
Conduct
Field Review
Prepare
Final
Design and R/W
Requirements
Develop
Preliminary Design
Environmental
Analysis,
Design
If necessary,
Condemnation
Proceedings
Approval
to
Proceed
(Utilities)
Appraise
R/W
Determine
Fair Market
Value
Obtain
Environmental
Clearance
and
Approve
Attend Field Review
(Optional)
Provide Monitoring/
Guidance
Local Assistance Procedure Manual Chapter 13
Right of Way
Page 45 of 45
January 2024
Figure 13-2: Right of Way Certifications with Railroad Facilities
