(a) Rural Development may take action to acquire real property directly upon the written request of the Governor of the State in which the real property is located. Rural Development will not acquire real property directly under this section without such a request.

(b) All requests for direct land acquisition should be submitted to the Rural Development State Director. The following conditions must be met prior to the submission of a request for direct acquisition by Rural Development:

(1) The State or local government serving the area must lack power to condemn land of this type for this purpose and must supply an opinion by the State Attorney General that this authority is lacking;

(2) The real property is to be used as a site for needed housing, public facilities, or services;

(3) The site acquisition is called for in a Rural Development approved plan;

(4) The site is specifically identified by a Rural Development approved plan;

(5) State and local governments have been unable to obtain the real property for a price which does not substantially exceed its fair market value; and suitable alternate sites are not available;

(6) The land is not Indian Trust land;

(7) The land is not U.S. Forest Service land; and

(8) There is legal authority to undertake the proposed project.

(c) Rural Development may acquire Federal real property not prohibited in paragraphs (b) (6) and (7) of this section for purposes contained in this subpart. Farm land (Class I and II) will not be considered unless there is no other suitable land available.

(d) If the State Director determines that no other suitable real property exists that can be obtained at a price which does not substantially exceed its fair market value, and if the appropriate State or local government lacks condemnation authority as evidenced by opinion from the Attorney General, and there is authority to undertake the proposed project, then the State Director shall follow the procedures set out in title 7, subtitle A, part 21 of the Code of Federal Regulations (Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) and immediately open negotiations to directly acquire the real property through purchase or trade.

(e) The Rural Development State Director may acquire real property by purchase to trade for other real property when Rural Development has been requested to acquire real property by the Governor of the State in which the real property is located.

(f) The Governor shall submit, with this request, a commitment from the State to acquire real property, together with a plan of compensation to Rural Development and evidence of the State's legal authority to enter into this agreement with Rural Development to accept the real property and repay Rural Development for the fair market value of the real property for the intended purpose.

(g) Real property acquired by Rural Development shall be transferred to the State requesting by a quitclaim deed for a price equal to the fair market value in accordance with the terms of a transfer agreement.

(h) After obtaining title to the real property and prior to transfer to the State, the property shall be managed by Rural Development in accordance with part 1955, subpart B of this chapter.

(i) The State Director shall inform the Governor that Rural Development real property acquisition is not likely to occur by purchase or trade if negotiations have failed to produce acceptable results within 90 days of the request for Rural Development acquisition of real property.