B-192863, MAY 23, 1979, 58 COMP.GEN. 559

B-192863: May 23, 1979

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IS INAPPLICABLE TO FEDERAL GOVERNMENT OR STATE AGENCY ACQUISITION OF PROPERTY FOR A PROGRAM OR PROJECT UNDERTAKEN BY A FEDERAL AGENCY OR WITH FEDERAL FINANCIAL ASSISTANCE. WHERE PROPERTY OWNER IS NOT DISPLACED OR RELOCATED AS A RESULT OF SUCH ACQUISITION. PROVISIONS OF TITLE III ARE MANDATORY. TITLE III IS APPLICABLE TO ACQUISITION OF ANY INTEREST IN REAL PROPERTY. EVEN WHERE ACQUISITION IS FUNDED SOLELY BY LOCAL FUNDS. IF UNDERLYING PROGRAM OR PROJECT IS FEDERALLY ADMINISTERED OR ASSISTED. 42 U.S.C. 4601 ET SEQ (1976) AFFECTS LONG-STANDING DEFINITION OF JUST COMPENSATION WHICH REQUIRES LANDOWNER TO BE PUT IN AS GOOD SHAPE PECUNIARILY AS HE OR SHE WOULD HAVE BEEN IF PROPERTY HAD NOT BEEN TAKEN.

B-192863, MAY 23, 1979, 58 COMP.GEN. 559

REAL PROPERTY - ACQUISITION - RELOCATION COSTS - UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970 TITLE II OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, PUB. L. NO. 91-646, 84 STAT. 1894, 42 U.S.C. 4601 ET SEQ. (1976), IS INAPPLICABLE TO FEDERAL GOVERNMENT OR STATE AGENCY ACQUISITION OF PROPERTY FOR A PROGRAM OR PROJECT UNDERTAKEN BY A FEDERAL AGENCY OR WITH FEDERAL FINANCIAL ASSISTANCE, WHERE PROPERTY OWNER IS NOT DISPLACED OR RELOCATED AS A RESULT OF SUCH ACQUISITION. REAL PROPERTY - ACQUISITION -CONDEMNATION PROCEEDINGS - UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970 TITLE III OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, PUB. L. 91-646, 84 STAT. 1894, 42 U.S.C. 4601 ET SEQ. (1976), SETS FORTH UNIFORM AND EQUITABLE PROCEDURES FOR THE TAKING OF REAL PROPERTY BY FEDERAL GOVERNMENT OR BY STATE AGENCIES RECEIVING FEDERAL FINANCIAL ASSISTANCE. PURSUANT TO SECTION 305, PROVISIONS OF TITLE III ARE MANDATORY, TO THE EXTENT PRACTICABLE, UPON STATES AS CONDITION TO THEIR RECEIPT OF FEDERAL FINANCIAL ASSISTANCE. TITLE III IS APPLICABLE TO ACQUISITION OF ANY INTEREST IN REAL PROPERTY, INCLUDING EASEMENTS, EVEN WHERE ACQUISITION IS FUNDED SOLELY BY LOCAL FUNDS, IF UNDERLYING PROGRAM OR PROJECT IS FEDERALLY ADMINISTERED OR ASSISTED. REAL PROPERTY - ACQUISITION - REIMBURSEMENT ADEQUACY NOTHING IN THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, PUB. L. NO. 91-646, 84 STAT. 1894, 42 U.S.C. 4601 ET SEQ (1976) AFFECTS LONG-STANDING DEFINITION OF JUST COMPENSATION WHICH REQUIRES LANDOWNER TO BE PUT IN AS GOOD SHAPE PECUNIARILY AS HE OR SHE WOULD HAVE BEEN IF PROPERTY HAD NOT BEEN TAKEN. WHERE TAKING OF EASEMENTS HAS, IN FACT, BENEFITTED REMAINDER OF LANDOWNER'S PROPERTY WHICH WAS NOT TAKEN, ACCRUING BENEFIT IS TO BE SET OFF AGAINST VALUE OF PROPERTY INTEREST ACTUALLY TAKEN. WHEN DIRECT BENEFITS TO LANDOWNER EXCEED VALUE OF EASEMENT TAKEN, NO MONETARY COMPENSATION IS REQUIRED. IN OUR VIEW, THE ENVIRONMENTAL PROTECTION AGENCY MAY USE ANY WIDELY ACCEPTED APPRAISAL METHOD WHICH TAKES BOTH DIRECT BENEFITS AND DAMAGES INTO ACCOUNT. REAL PROPERTY - ACQUISITION REIMBURSEMENT -ADEQUACY NOTHING IN THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, PUB. L. NO. 91-646, 84 STAT. 1894, 42 U.S.C. 4601 ET SEQ. (1976), PREVENTS AN OWNER-- WHO RECEIVES GOVERNMENT OR STATE AGENCY OFFER TO PURCHASE REAL PROPERTY FOR NO LESS THAN APPRAISED FAIR MARKET VALUE OF PROPERTY-- FROM WILLINGLY AND KNOWINGLY SELLING PROPERTY FOR LESS THAN AMOUNT OFFERED, AND THE GOVERNMENT OR STATE AGENCY FROM PURCHASING PROPERTY FOR LESSER AMOUNT.

TO THE HONORABLE GILLESPIE V. MONTGOMERY, HOUSE OF REPRESENTATIVES, AND THE HONORABLE JOHN C. STENNIS, UNITED STATES SENATE, MAY 23, 1979:

THIS IS IN RESPONSE TO THE REQUEST SUBMITTED JOINTLY BY YOU, SENATOR JOHN C. STENNIS, AND FORMER SENATOR JAMES O. EASTLAND, THAT WE DETERMINE WHETHER THE RANKIN COUNTY (MISSISSIPPI) REGIONAL SEWER SYSTEM IS SUBJECT TO THE REQUIREMENTS OF SECTION 305 OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, PUB. L. NO. 91-646, 84 STAT. 1894, JANUARY 2, 1971, 42 U.S.C. 4601 ET SEQ. (1976) (ACT), WITH RESPECT TO THE ACQUISITION BY THE SYSTEM OF EASEMENTS NECESSARY TO THE CONSTRUCTION OF SEWAGE AND WATER SYSTEMS.

IN ORDER TO ASSIST US IN RESPONDING TO YOUR INQUIRY, WE REQUESTED A REPORT FROM THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY (EPA) SETTING FORTH THE AGENCY'S VIEWS ON THIS QUESTION, AND THE LEGAL AUTHORITY FOR ITS POSITION. AFTER SOME INITIAL DELAY, WE RECEIVED TWO REPORTS FROM EPA. THIS OPINION IS BASED ON THESE REPORTS AS WELL AS ON OUR INTERPRETATION OF THE ACT IN LIGHT OF THE FACTS YOU OUTLINED IN YOUR CORRESPONDENCE WITH US.

TITLE II OF THE ACT, WHICH CONTAINS THE RELOCATION ASSISTANCE PROVISIONS, ESTABLISHES A UNIFORM POLICY FOR THE FAIR AND EQUITABLE TREATMENT OF PERSONS DISPLACED AS A RESULT OF FEDERAL AND FEDERALLY ASSISTED PROGRAMS. SEE SECTION 201 OF THE ACT, 42 U.S.C. 4621. TITLE II OF THE ACT APPLIES ONLY TO "DISPLACED PERSONS" AS THAT TERM IS DEFINED IN SECTION 101(6) OF THE ACT, 42 U.S.C. 4601(6).

YOUR LETTER STATES THAT "THE PROCESS OF SECURING EASEMENTS, AS WELL AS THE ACTUAL CONSTRUCTION OF THE SEWER SYSTEM, WILL NOT RESULT IN ANY RELOCATION OR DISPLACEMENT OF PERSONS OR BUSINESSES OR FARMS." ON THE BASIS OF THIS STATEMENT, IT IS OBVIOUS THAT THERE ARE NO "DISPLACED PERSONS" AS A RESULT OF THE ACQUISITION OF THE SUBJECT EASEMENTS BY THE SYSTEM. FOR THIS REASON WE AGREE THAT THE PROVISIONS OF TITLE II OF THE ACT ARE INAPPLICABLE TO THE SITUATION YOU DESCRIBE. SEE BEIARD POULAN DIVISION OF EMERSON ELECTRIC COMPANY V. DEPARTMENT OF HIGHWAYS, STATE OF LOUISIANA, 441 F.SUPP. 866, 872 (W.D.LA. 1977). HOWEVER, THIS DOES NOT MAKE THE ENTIRE ACT INAPPLICABLE.

TITLE III OF THE ACT, WHICH CONTAINS THE REAL PROPERTY ACQUISITION POLICIES PROVISIONS, SETS FORTH UNIFORM AND EQUITABLE NATIONWIDE PROCEDURES FOR THE TAKING OF REAL PROPERTY BY THE FEDERAL GOVERNMENT OR BY STATE AGENCIES RECEIVING FEDERAL FINANCIAL ASSISTANCE. SECTIONS 301 304 OF THE ACT, 42 U.S.C. 4651-4654, BY THEIR TERMS APPLY TO FEDERAL AGENCIES ACQUIRING REAL PROPERTY FOR FEDERAL PROJECTS. SECTION 305, 42 U.S.C. 4655, MAKES COMPLIANCE WITH THE PROVISIONS OF THE PRECEDING SECTIONS MANDATORY, TO THE GREATEST EXTENT PRACTICABLE UNDER STATE LAW, UPON THE STATES AND THEIR AGENCIES AS A CONDITION TO THEIR RECEIPT OF FEDERAL FINANCIAL ASSISTANCE. SECTION 101(3) OF THE ACT DEFINES "STATE AGENCY" TO INCLUDE DEPARTMENTS, AGENCIES, OR INSTRUMENTALITIES OF A STATE OR OF A POLITICAL SUBDIVISION OF A STATE. WE ASSUME THAT THE RANKIN COUNTY REGIONAL SEWER SYSTEM IS SUCH A STATE AGENCY.

FURTHER, THE ACT IS APPLICABLE EVEN THOUGH ONLY EASEMENTS ARE BEING ACQUIRED. NEITHER SECTION 305 NOR ANY OTHER PROVISION OF THE ACT SPECIFICALLY DEFINES THE TERM "ACQUISITION" OR SETS FORTH WHAT TYPES OF INTERESTS IN REAL PROPERTY ARE COVERED THEREBY. WE BELIEVE IT CLEAR, HOWEVER, THAT THE PROVISIONS OF THE ACT APPLY WHEN AN EASEMENT IS BEING ACQUIRED. SEE, E.G., SECTIONS 301(8) AND 302(A) OF THE ACT, BOTH OF WHICH SPEAK OF ACQUISITION OF ANY INTEREST IN REAL PROPERTY. IN THIS REGARD, AT 40 C.F.R. 4.600, EPA HAS PROMULGATED A REGULATION WHICH BY ITS TERMS MAKES TITLE III REQUIREMENTS APPLICABLE TO THE ACQUISITION OF EASEMENTS FOR EPA ADMINISTERED OR EPA ASSISTED PROJECTS. SEE ALSO THE UNPUBLISHED DECISION IN CITY OF FAYETTEVILLE, ARKANSAS V. HARRIS, CIVIL NO. F-76-45-C (W.D.ARK., FILED AUGUST 17, 1977). (COPY ELIMINATED FROM THIS PUBLICATION.)

YOU POINT OUT IN YOUR LETTER THAT UNDER THE APPLICABLE LAW, THE SUBJECT EPA GRANT FUNDS CANNOT BE USED FOR LAND ACQUISITION COSTS, INCLUDING THE ACQUISITION OF EASEMENTS. YOU QUESTION WHETHER, SINCE ONLY LOCAL FUNDS ARE BEING USED TO SECURE THE EASEMENTS, THE PROVISIONS OF TITLE III OF THE ACT APPLY. WE BELIEVE THEY DO.

THE FACT THAT ONLY LOCAL FUNDS ARE BEING USED TO ACQUIRE THE EASEMENTS IS NOT CONTROLLING ON THE ISSUE OF THE APPLICABILITY OF SECTION 305, AND OF THE ACT AS A WHOLE, TO SUCH ACQUISITIONS. RATHER, IT IS A QUESTION OF WHETHER THE UNDERLYING PROJECT FOR WHICH THE EASEMENTS ARE REQUIRED IS FINANCED IN WHOLE OR IN PART BY FEDERAL FINANCIAL ASSISTANCE. SEE, E.G., LAKE PARK HOME OWNERS ASSOCIATION V. H.U.D., 443 F.SUPP. 6 (S.D. OHIO 1976), WHERE IN INTERPRETING THE APPLICABILITY OF SECTION 101(6) OF THE ACT THE COURT STATED IN PERTINENT PART:

THE PERTINENT QUESTION ARISING FROM SUCH LANGUAGE (ACQUISITION OF PROPERTY FOR A PROGRAM OR PROJECT UNDERTAKEN WITH FEDERAL FINANCIAL ASSISTANCE) IS NOT WHETHER FEDERAL MONIES DIRECTLY FUNDED THE ACQUISITION OF THE REAL PROPERTY INVOLVED, BUT WHETHER THE STATE PROGRAM OR PROJECT WHICH RESULTED IN THE ACQUISITION WAS FEDERALLY ASSISTED. * * * THE STATUTE TURNS ON WHETHER THERE IS FEDERAL FUNDING OF THE PROGRAM OR PROJECT, NOT WHETHER THE FUNDS CAN BE TRACED DIRECTLY TO THE ACQUISITION OF A PARTICULAR PARCEL OF REAL ESTATE. ID., AT 8 9.

IN SUBSEQUENT LETTERS, WE WERE REFERRED TO RHODES V. CITY OF CHICAGO, USE OF SCHOOLS, 516 F.2D 1373 (7TH CIR. 1975), AND GOOLSBY V. BLUMENTHAL, 590 F.2D 1369 (1979), REHEARING EN BANC, AFF'G IN PART, REV'G IN PART 581 F.2D 455 (5TH CIR. 1978), WHICH IT WAS FELT MIGHT HAVE A BEARING ON THE QUESTION PRESENTED. THE COURT IN RHODES HELD THAT SECTION 305 OF THE ACT "IS APPLICABLE ONLY WHEN FEDERAL FINANCIAL ASSISTANCE IS USED IN OR DIRECTLY SUPPORTS THE PROPERTY ACQUISITIONS," RHODES V. CITY OF CHICAGO, SUPRA, AT 1377. IN THAT CASE, THE FEDERAL ASSISTANCE WAS MERELY THE BROAD RANGE OF EDUCATIONAL ASSISTANCE WHICH, DIRECTLY OR INDIRECTLY, FLOWED TO THE CITY. NONE OF THESE FUNDS HAD ANY PARTICULAR RELATIONSHIP TO THE CONDEMNATION PROCEEDINGS INVOLVED IN THAT CASE. IN THE INSTANT CASE, EVEN THOUGH FEDERAL FUNDS ARE NOT "USED IN" THESE PURCHASES, THE ACQUISITION OF EASEMENTS IS, AS WE UNDERSTAND IT, NECESSARY FOR AND DIRECTLY RELATED TO THE SUBJECT SEWER PROJECT.

THE COURT OF APPEALS IN GOOLSBY V. BLUMENTHAL, SUPRA, REVERSED IN PERTINENT PART AN EARLIER PANEL OPINION AND AFFIRMED THE JUDGMENT OF THE DISTRICT COURT HOLDING THAT THE UNIFORM RELOCATION ACT DOES NOT APPLY TO PROJECTS IN WHICH THE ONLY FEDERAL INVOLVEMENT IS THE PRESENCE OF FEDERAL REVENUE SHARING FUNDS. THIS DECISION IS BASED ON THE TERMS OF THE STATE AND LOCAL FISCAL ASSISTANCE ACT OF 1972 (REVENUE SHARING ACT), 31 U.S.C. 1221 ET SEQ (1976), WHICH EXCLUDE THE APPLICATION OF ACTS NOT SPECIFICALLY MENTIONED IN THE BODY OF THE REVENUE SHARING ACT, 590 F.2D AT 371. FACT, THE COURT DISTINGUISHES THE REVENUE SHARING ACT FROM THE MORE CUSTOMARY BLOCK GRANT PROGRAMS TO WHICH THE UNIFORM RELOCATION ACT DOES APPLY, 590 F.2D AT 1372. FOR THIS REASON, WE BELIEVE THIS DECISION IN INAPPLICABLE TO THE QUESTION PRESENTED HERE.

THUS, RHODES AND GOOLSBY ARE NOT CONTROLLING IN THIS SITUATION, AND THE SYSTEM MUST COMPLY WITH THE PROVISIONS OF TITLE III OF THE ACT IN ACQUIRING EASEMENTS FOR THE SEWER PROJECT. THESE PROVISIONS INCLUDE, INTER ALIA, (1) AN AGENCY OFFER TO PURCHASE REAL PROPERTY IN AN AMOUNT BELIEVED TO BE JUST COMPENSATION, BUT IN NO EVENT LESS THAN THE AGENCY'S APPRAISED FAIR MARKET VALUE OF THE PROPERTY, SECTION 301(3), 42 U.S.C. 4651(3); (2) REIMBURSEMENT TO THE OWNER OF THE PROPERTY OF CERTAIN EXPENSES INCURRED INCIDENTAL TO THE TRANSFER OF TITLE TO THE AGENCY, SECTION 303, 42 U.S.C. 4653; AND (3) PAYMENT OF SPECIFIED LITIGATION EXPENSES RESULTING FROM CONDEMNATION PROCEEDINGS WHERE JUDGMENT IS AGAINST THE AGENCY, SECTION 304, 42 U.S.C. 4654.

WE RECOGNIZE THAT THESE REQUIREMENTS CAN RESULT IN SUBSTANTIAL COSTS BEING INCURRED BY THE ACQUIRING AGENCY, BUT ARE AWARE OF NOTHING IN THE LEGISLATION OR ITS HISTORY THAT INDICATES A CONGRESSIONAL INTENT TO EXEMPT FROM THE CLEAR REQUIREMENTS OF THE ACT THE ACQUISITION OF EASEMENTS FOR INTERCEPTOR SEWER LINES BEING FINANCED IN PART BY EPA.

IN A REPORT TO US FROM THE ASSISTANT GENERAL COUNSEL OF EPA, THE AGENCY HAS RECOGNIZED THE CONCERNS OF STATE AGENCIES CAUSED BY THESE INCREASED COSTS, AND STATES THAT THE KEY TO THESE CONCERNS "IS THE TREATMENT OF BETTERMENT IN THE ACQUISITION OF EASEMENTS." ACQUISITION OF ALL INTERESTS IN REAL PROPERTY IS COVERED BY SECTION 301(3) OF THE ACT, WHICH PROVIDES IN PERTINENT PART:

(3) BEFORE THE INITIATION OF NEGOTIATIONS FOR REAL PROPERTY, THE HEAD OF THE FEDERAL AGENCY CONCERNED SHALL ESTABLISH AN AMOUNT WHICH HE BELIEVES TO BE JUST COMPENSATION THEREFOR AND SHALL MAKE A PROMPT OFFER TO ACQUIRE THE PROPERTY FOR THE FULL AMOUNT SO ESTABLISHED. IN NO EVENT SHALL SUCH AMOUNT BE LESS THAN THE AGENCY'S APPROVED APPRAISAL OF THE FAIR MARKET VALUE OF SUCH PROPERTY. ANY DECREASE OR INCREASE IN THE FAIR MARKET VALUE OF REAL PROPERTY PRIOR TO THE DATE OF VALUATION CAUSED BY THE PUBLIC IMPROVEMENT FOR WHICH SUCH PROPERTY IS ACQUIRED, OR BY THE LIKELIHOOD THAT THE PROPERTY WOULD BE ACQUIRED FOR SUCH IMPROVEMENT, OTHER THAN THAT DUE TO PHYSICAL DETERIORATION WITHIN THE REASONABLE CONTROL OF THE OWNER, WILL BE DISREGARDED IN DETERMINING THE COMPENSATION FOR THE PROPERTY.

THE AGENCY CONSISTENTLY HAS HELD THAT THESE PROVISIONS APPLY TO THE ACQUISITION OF EASEMENTS FOR FEDERAL OR FEDERALLY-ASSISTED PROJECTS, SEE, 40 C.F.R. 4.600 AND IN ITS APPRAISALS HAS IGNORED ALL INCREASES OR DECREASES IN THE VALUE OF THE PROPERTY CAUSED BY ACTUAL OR CONTEMPLATED ACQUISITION FOR A PUBLIC IMPROVEMENT. IT NOW PROPOSES A NEW POLICY, AND TO CONSTRUE SECTION 301 BASED ON THE INTERPRETATION SET FORTH IN THE UNIFORM APPRAISAL STANDARDS FOR FEDERAL LAND ACQUISITIONS, WHICH PERMITS THE USE OF A "BEFORE AND AFTER" METHOD OF DETERMINING THE FAIR MARKET VALUE OF EASEMENTS.

IN ITS REPORT, EPA PROVIDED AN ILLUSTRATION OF ITS UNDERSTANDING OF THE APPLICATION OF THE "BEFORE AND AFTER" METHOD OF APPRAISAL WHERE LAND VALUE INCREASES BECAUSE OF THE PUBLICLY FINANCED PROJECT.

FOR EXAMPLE, ON JANUARY 1, THE PROPERTY VALUE OF THE LAND IS $100,000. THEN, ON FEBRUARY 1, A MUNICIPALITY ANNOUNCES A SEWER INTERCEPTOR LINE CONSTRUCTION PROJECT TO BE FUNDED BY FEDERAL FUNDS. THE LAND VALUE RISES TO $120,000 AS A RESULT OF THE ANNOUNCEMENT. ON MARCH 1, THE APPRAISAL IS MADE AND THE FAIR MARKET VALUE IS ESTIMATED TO BE $100,000. THE $120,000 FIGURE IS NOT TAKEN INTO CONSIDERATION BECAUSE UNDER 42 U.S.C. 4651(A) (SIC) THE $20,000 INCREASE WAS CAUSED BY THE ANNOUNCEMENT OF THE PROJECT. THE APPRAISAL ALSO ESTIMATES THAT AFTER THE PROJECT IS COMPLETED, THE FAIR MARKET VALUE OF THE PROPERTY WILL BE $135,000. BECAUSE THERE IS AN INCREASE IN PROPERTY VALUE FROM $100,000 TO $135,000, IT IS OUR INTERPRETATION THAT THE LANDOWNER NEED NOT BE COMPENSATED UNDER TITLE III OF THE ACT FOR THE ACQUISITION OF A SEWER EASEMENT FOR THE FEDERALLY FUNDED PROJECT. OTHERWISE, THE LANDOWNER WILL RECEIVE A WINDFALL. SEE BAUSMAN (SIC) V. ROSS, 167 U.S. 548, 570 (1897). UNDER THIS INTERPRETATION THE VAST MAJORITY OF EASEMENT QUESTIONS UNDER THE ACT WOULD BE ELIMINATED.

THIS INTERPRETATION APPEARS TO REQUIRE EPA TO SET OFF AGAINST THE APPRAISED FAIR MARKET VALUE OF THE EASEMENT, THE AMOUNT OF INCREASED VALUE IT ESTIMATES WILL ACCRUE TO THE REMAINING PROPERTY AS A RESULT OF THE BENEFIT CONFERRED ON THE PROPERTY BY THE PROGRAM OR PROJECT, EVEN TO THE POINT OF ELIMINATING ALL COMPENSATION FOR THE EASEMENT.

WE WOULD PREFER NOT TO COMMENT ON THE USE OF ANY PARTICULAR APPRAISAL METHOD AT THIS TIME. IT IS CLEAR, HOWEVER, THAT UNDER THIS ACT LANDOWNERS ARE ENTITLED TO RECEIVE "JUST COMPENSATION." THE OWNER IS "ENTITLED TO RECEIVE THE VALUE OF WHAT HE HAS BEEN DEPRIVED OF, AND NO MORE. TO AWARD HIM LESS WOULD BE UNJUST TO HIM; TO AWARD HIM MORE WOULD BE UNJUST TO THE PUBLIC." BAUMAN V. ROSS, SUPRA, AT 574-575. THIS INVOLVES CONSIDERATION OF DAMAGES ON THE ONE HAND AND BENEFITS ON THE OTHER. AARONSON V. UNITED STATES, 79 F.2D 139 (D.C. CIRCUIT 1935). AS THE SUPREME COURT HAS STATED:

THE CONSTITUTIONAL PROHIBITION AGAINST UNCOMPENSATED TAKING OF PRIVATE PROPERTY FOR PUBLIC USE IS GROUNDED UPON A CONCEPTION OF THE INJUSTICE IN FAVORING THE PUBLIC AS AGAINST AN INDIVIDUAL PROPERTY OWNER. BUT IF GOVERNMENTAL ACTIVITIES INFLICT SLIGHT DAMAGE UPON LAND IN ONE RESPECT AND ACTUALLY CONFER GREAT BENEFITS WHEN MEASURED IN THE WHOLE, TO COMPENSATE THE LANDOWNER FURTHER WOULD BE TO GRANT HIM A SPECIAL BOUNTY. SUCH ACTIVITIES IN SUBSTANCE TAKE NOTHING FROM THE LANDOWNER.

UNITED STATES V. SPONENBARGER, 308 U.S. 256, 266-267 (1939). SEE ALSO UNITED STATES V. MILLER, 317 U.S. 369, 373-376 (1943); ARK-MO. FARMS, INC. V. UNITED STATES, 530 F.2D 1384, 1386 (CT.CL. 1976); HARTWIG V. UNITED STATES, 485 F2D 615 (CT.CL. 1973); UNITED STATES V. 3,317.39 ACRES OF LAND, JEFFERSON COUNTY, ARK., 443 F.2D 104 (8TH CIR. 1971); UNITED STATES V. 901.89 ACRES OF LAND, TENN., 436 F.2D 395, 398 (6TH CIR. 1970); AND 6,816.5 ACRES OF LAND, RIO ARRIBA CO., N.M. V. UNITED STATES, 411 F.2D 834 (10TH CIR. 1969). THERE IS NOTHING IN THE UNIFORM RELOCATION ACT WHICH AFFECTS THIS LONG-STANDING DEFINITION OF JUST COMPENSATION WHICH REQUIRES THAT THE LANDOWNER BE PUT IN AS GOOD SHAPE PECUNIARILY AS HE OR SHE WOULD HAVE BEEN IF THE PROPERTY HAD NOT BEEN TAKEN. WHERE THE TAKING OF EASEMENTS HAS, IN FACT, BENEFITTED THE REMAINDER OF THE LANDOWNER'S PROPERTY WHICH WAS NOT TAKEN, THE ACCRUING BENEFIT MAY BE SET OFF AGAINST THE VALUE OF THE PROPERTY INTEREST ACTUALLY TAKEN. WHEN THE DIRECT BENEFITS TO THE LANDOWNER EXCEED THE VALUE OF THE EASEMENT TAKEN, NO MONETARY COMPENSATION IS REQUIRED. IN OUR VIEW, EPA MAY USE ANY APPRAISAL METHOD WHICH TAKES BOTH THE DIRECT BENEFITS AND THE DAMAGES INTO ACCOUNT IN DETERMINING "JUST COMPENSATION."

WHETHER OR NOT PAYMENT MUST BE MADE TO INDIVIDUAL LANDOWNERS, EPA STATES THAT IN ITS CONSTRUCTION GRANT PROGRAM AUTHORIZED BY TITLE II OF THE CLEAN WATER ACT, 33 U.S.C. 1281 ET SEQ., AS AMENDED, "THE PROCESS OF OBTAINING EASEMENTS IN COMPLIANCE WITH THE (UNIFORM RELOCATION) ACT ENTAILS A CONSIDERABLE AMOUNT OF PAPERWORK AND EFFORT FOR GRANTEES."

FOR EXAMPLE, THE GRANTEE MUST APPRAISE THE VALUE OF EACH INDIVIDUAL EASEMENT AND GIVE THE LANDOWNER THE WRITTEN RESULTS THEREOF AND, WHERE APPLICABLE, AN OFFER OF MONEY NOT LESS THAN THE APPRAISED VALUE. THE LANDOWNER IS STATUTORILY ENTITLED TO PARTICIPATE IN THE APPRAISAL PROCESS. THESE ACTIVITIES ENTAIL TIME, EFFORT AND EXPENSE EVEN IF NO MONEY IS PAID FOR THE ACTUAL ACQUISITION OF THE EASEMENTS. EPA SUGGESTS THAT SINCE THERE ARE OTHER FEDERAL AGENCIES WITH SIMILAR PROGRAMS "A RECOMMENDATION FROM YOUR OFFICE TO THE CONGRESS FOR FURTHER STUDY OF POSSIBLE AMENDMENT TO THE LEGISLATION WOULD UNDOUBTEDLY BE WELCOMED BY NUMEROUS GRANTEES IN THE EPA PROGRAM AND OTHER SIMILAR PROGRAMS WHICH REQUIRE THE ACQUISITION OF EASEMENTS." WE MIGHT POINT OUT THAT THE ONLY ABSOLUTELY DEFINITIVE WAY OF DETERMINING WHETHER AN INDIVIDUAL LANDOWNER RECEIVES MORE IN BENEFIT THAN THE VALUE OF THE EASEMENT TAKEN IS TO PERFORM APPRAISALS ON EACH LANDOWNER'S PROPERTY. HOWEVER, IF EPA, AND ANY OTHER INTERESTED AGENCY, COULD RELIABLY DEMONSTRATE THAT ALL LANDOWNERS UNDER ANY PARTICULAR PROGRAM WOULD BE BENEFITTED, AN AMENDMENT TO THE UNIFORM RELOCATION ACT WOULD RELIEVE GRANTEES OF CERTAIN RESPONSIBILITIES (SUCH AS MAKING INDIVIDUAL APPRAISALS) WHICH DO NOT BENEFIT THE LANDOWNERS WOULD APPEAR TO BE SENSIBLE.

A SUBSEQUENT LETTER FROM YOU RAISED AN ADDITIONAL ISSUE, WHICH IN THIS PARTICULAR CIRCUMSTANCE APPEARS TO BE IN LARGE PART MOOT DUE TO OUR ANSWERS ABOVE. SPECIFICALLY, YOU ASK WHETHER EASEMENTS (OR BY EXTENSION, ANY INTEREST IN PROPERTY TO BE ACQUIRED) CAN BE PURCHASED BY THE STATE AGENCY FOR AN AMOUNT LESS THAN THE APPRAISED VALUE, WHERE THE SELLERS ARE WILLING TO ACCEPT NOMINAL CONSIDERATION ONLY. PROVIDED THAT THE ACQUIRING AGENCY MEETS ITS OBLIGATIONS UNDER THE ACT TO OFFER JUST COMPENSATION FOR THE PROPERTY, WE ARE AWARE OF NO STATUTORY PROHIBITION AGAINST THE CONSUMMATION OF A SALE FOR LESS THAN THE FAIR MARKET VALUE IF THE OWNER IS WILLING TO SELL ON THAT BASIS.

THE PURPOSE OF THE ACT'S REQUIREMENTS IS TO PROTECT INDIVIDUAL PROPERTY OWNERS FROM THE SUPERIOR NEGOTIATING POSITION THAT THE FEDERAL GOVERNMENT OR STATE AND LOCAL GOVERNMENT (FOR FEDERALLY ASSISTED PROJECTS) ENJOY. ONCE THE PROPERTY OWNER RECEIVES THE GOVERNMENT'S OFFER FOR THE AMOUNT WHICH THE AGENCY HAS DETERMINED TO BE JUST COMPENSATION FOR THE PROPERTY, WHICH AMOUNT MAY BE NO LESS THAN THE AGENCY'S APPROVED APPRAISAL OF THE FAIR MARKET VALUE OF THE PROPERTY, THE PROPERTY OWNER MAY ACCEPT THAT AMOUNT OR NEGOTIATE FOR A DIFFERENT AMOUNT. IN MOST CASES WE WOULD ASSUME THAT A PROPERTY OWNER WOULD NOT BE INTERESTED IN ACCEPTING LESS THAN THE FULL AMOUNT OF THE GOVERNMENT'S OFFER AND ANY NEGOTIATION WOULD BE FOR THE PURPOSE OF OBTAINING A HIGHER PAYMENT. HOWEVER, IN THOSE SITUATIONS WHERE THE OWNER KNOWINGLY AND WILLINGLY WANTS TO ACCEPT A LESSER PAYMENT FOR THE PROPERTY, WE SEE NOTHING IN THE ACT REQUIRING HIM TO TAKE THE FULL AMOUNT PROFFERED BY THE AGENCY, NOR ARE WE AWARE OF ANYTHING REQUIRING, IN THOSE CIRCUMSTANCES, THAT THE AGENCY ACTUALLY PAY THE FULL AMOUNT. IT WOULD BE INCUMBENT, OF COURSE, UPON THE HEAD OF THE FEDERAL AGENCY INVOLVED BOTH AS TO FEDERAL PROJECTS AND FEDERALLY ASSISTED PROJECTS OVER WHICH HE HAS JURISDICTION, TO ASSURE THAT PRESSURE IS NOT PLACED ON PROPERTY OWNERS TO ACCEPT LESS THAN THE AMOUNTS TO WHICH THEY ARE ENTITLED.

ACCORDINGLY, IF THE RANKIN COUNTY SEWER SYSTEM OFFERS TO PURCHASE AN EASEMENT FROM A REAL PROPERTY OWNER FOR NO LESS THAN THE APPROVED APPRAISAL OF THE FAIR MARKET VALUE OF SUCH PROPERTY, THERE IS NOTHING IN THE ACT WHICH WOULD PREVENT THAT OWNER, UPON RECEIPT OF SUCH AN OFFER, FROM WILLINGLY SELLING THE PROPERTY FOR LESS THAN THE AMOUNT OFFERED BY THE SYSTEM, AND THE SYSTEM FROM BUYING THE EASEMENT FOR THE LESSER AMOUNT.

WE TRUST THAT THIS INFORMATION WILL BE HELPFUL TO YOU.