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Section 3: Right of Way Costs

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Preliminary Requirements

The “Released-Limited for Preliminary Utility Activities” project status establishes a point in time by which eligible costs for preliminary utility activities (i.e. utility investigations to determine the necessity for required utility adjustments, design of utility relocation plans, and ordering materials that require extended lead times) may be incurred. However, no physical adjustment of an eligible utility’s facilities can commence under the terms of this type of release. Prior to incurring any costs for the actual adjustment of any utility facility, the project must have the appropriate authority to proceed in addition to an executed utility agreement or date of eligibility.

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Utilities Presently Located on Interstate Right of Way

Under provisions of Minute Order No. 47268, the State will participate in the cost of utility work on the National System of Interstate and Defense Highways in accordance with provisions contained in Transportation Code §203.092. Under those provisions, the State is required to reimburse utilities for all adjustments eligible for Federal participation on the National System of Interstate and Defense Highways. The cost of adjusting facilities, or portions thereof, presently occupying public right of way by statutory right has, therefore, been declared eligible for State cost participation. A ruling by the United States Supreme Court states, however, that if a relocating utility is presently in the State’s right of way, the State is not required to purchase right of way for ownership by the utility for relocation of its facilities. This ruling would not affect a joint-use agreement previously entered into between the State and the utility.

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Utilities Presently Located on Private Right of Way

When highway construction necessitates the adjustment of utility facilities that are presently occupying right of way in which the utility holds a valid property interest, reimbursement may be claimed for 100% of the necessary replacement right of way cost.

Where a utility has an existing installation on private right of way and proposes to request reimbursement for all, or part, of the right of way costs incurred in making the required adjustment, the agreement must be supported by affidavits using ROW-U-1A, ROW-U-1B, or ROW-U-1C, as appropriate, with proper instruments of conveyance, or by a Quitclaim Deed. When the District determines that it is more desirable to submit an Attorney’s Certificate, the staff attorney will certify that the utility has a valid interest. The attorney will complete the certificate for inclusion in the agreement submission, indicating type and dimensions of ownership with appropriate sketches, as necessary for clarification purposes. This information is necessary to support eligibility of right of way reimbursement claims.

Conversely, when the utility does not propose to make claim for reimbursement of right of way costs incurred in the adjustment, the requirement for the affidavit or property interest certificate is waived.

In some cases, when affidavit ROW-U-1A, ROW-U-1B, or ROW-U-1C, as appropriate, is submitted, it will be found that the instruments defining the utility owner’s property interest cannot be properly tied to right of way maps or parcels appearing thereon. In these cases, the District will be supplied with information necessary for tying each instrument to current ownerships, as they appear on the right of way map for the project. This may be done by written information or by sketches accompanying the submission. Furnished information must substantiate ownership when properties presently lie within the limits of public right of way, if such location is occupied by other than statutory right. These situations will normally exist when a utility was installed on an easement before acquisition of the original right of way.

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Utilities Presently Located On Both Public and Private Right of Way

In many instances, a single adjustment will involve facilities located on both public and private right of way. In these cases, the State’s participation in total right of way costs attributable to the adjustment will be proportional to the abandoned public and private property interest within the proposed right of way limits. If all adjustment work is confined to the facility that occupies the utility property interest, the State will reimburse 100% of all right of way costs incurred in making the required adjustment. The State’s participation must be limited to replacement-in-kind of the utility’s property interest, including length, width, and type. This is to be considered a broad statement of policy for use as guidance under normal conditions. There will be special situations requiring deviation from this rule. Such situations should be submitted to ROW Division for decision. It is, however, TxDOT’s intent to reimburse those utilities fully authorized by law, and special situations will be decided based on the intent of the Supreme Court ruling. When exceptional handling appears necessary, obtain the approval of ROW Division.

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Utilities as a Real Estate Acquisition

When a utility owns or occupies right of way, or has plant facilities located on land owned by the utility and existing facilities are no longer needed or are not part of the utility’s system requirements for delivering service to the public, payment for the land or utility facilities needed to accommodate construction should be handled as a right of way acquisition matter. The land and facilities must therefore be appraised for acquisition.

For example, when a utility has several facilities on a crossing and parallel location that must be removed but not replaced, one of the following procedures should be used.

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  • The crossing and parallel segment may be considered jointly as a utility adjustment project, as allowed under Federal and State law. TxDOT will participate in the costs to remove all of the existing facilities, but will require salvage credit for all of the recovered materials because the facilities are considered as one unit and are being functionally replaced. This procedure may be followed regardless of whether the utility facilities are located on public or private right of way.
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  • If this work is considered as two separate work units, the crossing is to be processed as a utility adjustment project and the parallel segment is to be considered as a right of way acquisition item. Under this procedure, it is necessary to determine whether the utility has a compensable interest along the parallel segment. When the parallel utility facilities are located on public property by statutory right and must be removed, removal costs are ineligible for TxDOT participation. TxDOT will not participate in the costs of salvage, nor require salvage credit for those facilities. It will be necessary at the agreement stage to make a determination regarding the method to be used in prorating the costs of removal, salvage, and salvage credits between the eligible and ineligible costs at the billing stage. This may be accomplished by the use of a ratio, based on the number of poles or length of line for pipelines, or on a cost factor.

Other items that may need to be examined to determine if they are eligible for right of way acquisition are as follows:

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  • Control of access rights to property owned for the purpose of utility facilities, if the facilities can be accessed from another location.
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  • Substations, water treatment plants, and power plants that are no longer needed to maintain utility capabilities, or may be made obsolete by other methods that are the result of adjustments to their facilities in other locations.
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  • Water wells or cathodic protection wells that do not need to be replaced.
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  • Excess property located around utility facilities, if the acquisition will not hinder the function of the facilities.

Property owned by the utility for the purpose of housing personnel, equipment, or materials should always be acquired by the right of way acquisition process.

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