of the State containing a full discussion of the facts and law involved. The agency head may accept this statement or the assurances so qualified as constituting compliance with this section.

(c) A grant to or contract or agreement with a State agency shall contain provisions requiring the State agency to comply with these regulations to the extent determined under this section.

[38 FR 10623, Apr. 30, 1973, as amended at 42 FR 55807, Oct. 19, 1977]

§ 21.902 Execution and amendment of agreements.

Any grant to, or contract or agreement with a State agency under which Federal financial assistance is made available to pay all or part of the cost of any program or project which will result in the displacement of any person on or after January 2, 1971, shall include or be amended to include the cost of providing payments and services set forth in these regulations.

§ 21.903 Project cost.

The cost to a State agency of providing payments and assistance pursuant to these regulations shall be included as part of the cost of a program or project for which the Department furnishes financial assistance. The State agency will be eligible for Federal financial assistance with respect to such payments and assistance in the same manner and to the same extent as other program or project costs.

§ 21.904 Exception.

No payment or assistance under these regulations will be required of a State agency, or include as a program or project cost if the displaced person receives a payment required by the State law of eminent domain which is determined by the agency head to have substantially the same purpose and effect as the payment and assistance required by these regulations.

§ 21.905 Advances by Department.

If the agency head determines that it is necessary for the expeditious completion of a project, he may advance to the State agency the Federal share

of the cost of any payments or assistance required by these regulations.

§ 21.906 Housing standards.

The State agency will determine whether the replacement dwelling meets the standards prescribed under these regulations.

§ 21.907 Organization and facilities.

It will be the responsibility of the agency head to determine that the State agency provides adequate personnel and facilities to enable it to provide the payments and services required by these regulations.

§ 21.908 Compliance.

The Department will provide for the making of periodic inspections to ascertain whether payments and services are being provided and whether there is compliance otherwise with the assurances furnished.

§ 21.909 Records.

The grant to, or contract or agreement with the State agency shall provide that it will maintain such records as may be specified by the agency head for a period of 3 years and make them available to the agency head for inspection and audit at reasonable times.

§ 21.910 Performance by contract.

(a) The displacing agency may contract for the services specified in § 21.802 with any person or organiza tion if it finds that such contract will prevent unnecessary expense, avoid duplication of functions, and promote uniform administration of relocation assistance programs.

(b) The solicitation of proposals, contract provisions, and administration shall be in accordance with State laws and with procedures prescribed by the agency head, but shall as a minimum include provisions:

(1) Required by Federal regulations implementing Title VI of the Civil Rights Act of 1964 (Pub. L. 82-352), and

(2) Requiring records relating to the contract to be maintained for a period of not less than 3 years and be available for inspection by representatives

of the State agency and the agency head.

(c) In furnishing housing to the extent authorized under criteria and procedures set forth in § 21.109, the State agency shall, whenever practicable, utilize the services of State or local housing agencies, or other agencies having experience in the administration and conduct of similar housing assistance activities.

[38 FR 10623, Apr. 30, 1973; 42 FR 55807, Oct. 19, 1977]

§ 21.911 Furnishing real property.

Whenever real property is acquired by a State agency and furnished as a required contribution to a Federal project, the agency head may not accept such property unless such State agency has made all payments and provided all assistance and assurances as are required of a State agency by these regulations. The cost of such requirements will be paid by the State agency, except the agency head will pay the full amount of the first $25,000 of the cost of providing such payments and assistance in connection with each displacement occurring prior to July 1, 1972.

§ 21.912 State agency acting as agent for Federal project.

Whenever real property is acquired by a State agency at the request of the agency head for a Federal project, such acquisition shall be deemed for the purposes of these regulations as an acquisition by the agency head.

Subpart J-Real Property Acquisition

§ 21.1001 General.

(a) Application of this subpart to State agencies carrying out Federal financially assisted programs is mandatory where compliance is legally possible under State law and in any event State agencies will reimburse owners for necessary expenses as specified in §§ 21.1006(c) and 21.1007.

(b) The provisions of this subpart do not apply to donations of land or land exchanges.

§ 21.1002 Acquisition by agreement.

Every reasonable effort will be made to (a) acquire real property by agreements with owners based on negotiations, (b) assure consistent treatment for owners, and (c) accomplish negotiations expeditiously. In no event shall negotiations be deferred nor any other action coercive in nature taken in order to compel an agreement.

§ 21.1003 Appraisal.

(a) Prior to initiation of negotiations, an appraisal of the fair market value of the real property interest to be acquired will be made by a qualified land appraiser.

(b) The owner or his designated representative will be given a reasonable opportunity to accompany the appraiser during his inspection of the property.

(c) Any decrease or increase in the fair market value of the property prior to the date of the appraisal which is caused by the public improvement for which the property is acquired or by the likelihood that the property would be acquired for such improvement, other than due to physical deterioration within the reasonable control of the owner, will be disregarded in appraising the property.

(d) Where appropriate the estimate of the fair market value of the property to be acquired and the estimate of damages or offsetting benefits to the remaining property will be separately stated.

(e) Appraisers shall not give consideration to or include in their real property appraisals any allowances for the relocation benefits provided by these regulations.

(f) Each agency Head shall establish for all Federal or Federal financially assisted programs under his jursidiction, criteria for determining the qualifications of appraisers and a system of review of appraisals by qualified appraisers. Standards for appraisals used in such programs shall be consistent with the Uniform Appraisal Standards for Federal Land Acquisitions published in 1972 by the Interagency Land Acquisition Confer

ence.

13-006 0-83--27

§ 21.1004 Establishing just compensation.

(a) Prior to negotiations the displacing agency shall establish an amount it believes to be just compensation which in no event shall be less than the amount in the appraisal approved by the displacing agency.

(b) If the acquisition of only part of a property would leave its owner with an uneconomic remnant, the displacing agency shall offer to acquire the entire property.

§ 21.1005 Initiation of negotiations.

(a) When the just compensation has been established, a prompt offer will be made to acquire the real property for the full amount of the just compensation so established.

(b) When the offer is made, the owner of the real property will be proIvided with a written statement of (1) identification of the real property and the estate or interest therein to be acquired including the buildings, structures, and other improvements considered to be a part of the real property, (2) the amount of the estimated just compensation as determined by the acquiring agency and a summary statement of the basis therefor, and (3) if only a portion of the property is to be acquired, a separate statement of the estimated just compensation for the real property interest to be acquired and damages and benefits to the remaining real property, if any.

(c) The offer of just compensation does not preclude further negotiations with respect to the purchase price.

(d) Tenants occupying the property shall be given a displacement notice not later than when negotiations for the property are initiated with the owner.

(e) Contracts or options to purchase real property shall not provide for any payments for relocation costs or reference to such payments.

[38 FR 10623, Apr. 30, 1973; 42 FR 55807, Oct. 19, 1977]

§ 21.1006 Condemnation.

(a) The time of condemnation will neither be advanced, nor negotiations, condemnation and the deposit of funds in court be deferred, nor any other action coercive in nature taken

in order to compel and agreement on price.

(b) If the real property is to be acquired by condemnation, proceedings will be instituted promptly. No action will be taken intentionally which will make it necessary for an owner to institute legal proceedings to prove the taking of his real property.

(c) If the final judgment of the court in a condemnation case is that the acquiring agency cannot acquire the real property by condemnation, or if the proceeding in condemnation is abandoned by the acquiring agency, the acquiring agency must pay the owner of the property such sum as will reimburse the owner for his reasonable costs, disbursements and expenses, including reasonable attorney, appraisal and engineering fees actually incurred because of the condemnation proceedings. If this cost is not covered by a court order, nevertheless the acquiring agency shall pay to the owner such costs.

(d) When the declaration of taking is filed in a Federal condemnation proceeding, the estimated compensation shall be determined solely on the basis of the appraised value of the real property with no consideration being given to other payments provided for by these regulations.

§ 21.1007 Expenses incidental to transfer of title.

As soon as practicable after the date of payment of the purchase price or the date of deposit in court of funds to satisfy the award in a condemnation proceeding to acquire real property, the owner will be reimbursed to the extent the head of the displacing agency determines fair and reasonable, for expenses the owner necessarily incurred for:

(a) Recording fees, transfer taxes, and similar expenses incident to conveying the real property to the acquiring agency,

(b) Penalty costs for prepayment of any preexisting recorded mortgage entered into in good faith encumbering such real property, and

(c) The pro rata portion of real property taxes paid which are allocable to a period subsequent to the date of

vesting title in the acquiring agency, or the effective date of possession of such real property by the acquiring agency, whichever is earlier.

§ 21.1008 Buildings, structures and im

provements.

(a) Whenever any interest in real property is acquired, the acquiring agency shall acquire at least an equal interest in all buildings, structures, or other improvements located upon the real property which such acquiring agency requires to be removed from the real property, or which the acquiring agency determines will be adversely affected by the use to which such real property will be put.

(b) The following will apply in determining the just compensation for any such buildings, structures, or other im

provements:

(1) They will be deemed to be part of the real property to be acquired, notwithstanding the right or obligation of the tenant as against the owner of any other interest in the real property to remove them at the expiration of his term, and (2) the fair market value which such structures, buildings, or other improvements contribute to the fair market value of the real property to be acquired, or the fair market value of such buildings, structures, or other improvements for removal from the real property, whichever is greater, will be paid the tenant therefor, provided the tenant shall assign, transfer and release to the acquiring agency all his rights, title and interest in and to such improvements.

(c) Payments under this § 21.1008 will not be made which result in duplication of any payments otherwise authorized by law.

(d) Payments under this § 21.1008 will not be made unless the owner of the land involved disclaims all interest in such buildings, structures, or other improvements of the tenant.

(e) A tenant may reject payment under this § 21.1008 and obtain payment for the buildings, structures, or other improvements in accordance with any other applicable law.

Subpart A-General

§ 22.101 The Rural Development Act of 1972 (Pub. L. 92-419).

The Rural Development Act of 1972 (Pub. L. 92-419), herein called the Act consists of six titles designed to facilitate the development of rural communities through a series of authorizations including grants, loans, and administrative provisions. This Act adds new statutory rural development coordination responsibilities to certain Federal departments and agencies to be carried out under the leadership of the Secretary of Agriculture.

§ 22.102 Summary of authorities.

The purpose of this section is to give notice that certain authorities have been delegated by the Secretary of USDA agencies for implementation. New Secretarial delegations covering the Rural Development Act were effective May 31, 1973, and were published in the FEDERAL REGISTER June 7, 1973 (38 FR 14944-14953). These are as follows:

(a) Title I (38 FR 14948). Responsibility delegated to the Assistant Secretary for Rural Development. The responsibility for administering loan and grant authorities is redelegated to the Farmers Home Administration, except the responsibility for administering loan authorities with respect to rural electrification and telephone facilities and service which has been redelegated to the Rural Electrification Administration.

(b) Titles II (38 FR 14945-14948), III (38 FR 14945-14948), and V (38 FR 14945-14948. Responsibility delegated to the Assistant Secretary for Conservation, Research and Education and redelegated as follows:

(1) Titles II (38 FR 14951-14952) and III (38 FR 14951-14952) to the Administrator, Soil Conservation Service.

(2) Title V (38 FR 14949-14950) to the Administrators, Cooperative State Research Service and the Extension Service respectively.

(c) Title IV (38 FR 14945-14948). Responsibility delegated to the Assistant Secretary for Conservation, Research and Education and redelegated (38 FR 14950-14951) to the Chief of the Forest Service.

(d) Title VI, section 603 (38 FR 14948). Responsibility delegated to Assistant Secretary for Rural Development and redelegated (38 FR 14953) to the Administrator, Rural Development Service.

The Rural Development Act recognizes that many Federal departments and agencies of the executive branch of government administer programs and provide services which are applicable to the needs of rural communities. Section 603 of the Rural Development Act charges the Secretary of Agriculture with providing governmentwide leadership for, and with coordinating a nationwide rural development program. In such coordination, the Secretary shall seek measures that will achieve effective integration of relevant Federal services in rural areas as provided by Agriculture agencies and other Departments and agencies. This section also requires that the Secretary shall establish goals and report to the Congress on progress in complying with specified purposes of the Act. The Federal Regional Council will play a major role in coordination at the field level. An organic Act of the Department (7 U.S.C. 2201) has been amended to require the Secretary to add Rural Development to those purposes for which he is authorized to acquire and diffuse useful information.

§ 22.103 Purpose.

The purpose of these regulations is to establish the policies, procedures, and responsibilities required by section 603 of the Rural Development Act.

§ 22 104 General policy.

Federal implementation of the Act will be consistent with the President's policy of decentralized decisionmaking and administrative responsibility which gives fullest possible consideration to State and local rural development goals and priorities. As a result of section 817(4) of the Agriculture and Consumer Protection Act of 1973 (Pub. L. 93-86) which prohibits prior approval by any State officials of any loan or grant under any program authorized by Title I of the Rural Development Act of 1972 (Pub. L. 92-419), it