Read the full stored bill text
<BillNo> <Sponsor>
SENATE BILL 1792
By Reeves
SB1792
010876
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 4 and
Title 54, relative to utility relocation projects by the
department of transportation.
WHEREAS, the department of transportation's current Policy No. 340-07, "Utility
Relocations from Public Highway Rights-of-Way Under T.C.A. § 54-5-804," already identifies
"Water, Wastewater, Gas Distribution/Transmission, Electric Distribution/Transmission,
Communication, CATV, Phone, Fiberoptic, Broadband, Street Lighting, Other" among the
eligible utility categories for relocation reimbursement; and
WHEREAS, this act's revised definition of "utility" simply aligns Tennessee Code
Annotated, Section 54-5-804, with the existing policy's language and clarifies that modern
digital, broadband, and fiber optic infrastructure are included, thereby reflecting current practice
rather than expanding the scope of reimbursable entities; and
WHEREAS, because the department already implements this policy and
reimbursements have been made for these categories of utilities under the existing framework,
this act should not impose additional costs on the department or require new budgetary
appropriations beyond current practice; and
WHEREAS, this act does not require the department to increase reimbursement
amounts above current levels but simply codifies the existing $2.5 million cap as a statutory
minimum for relocation projects whose costs exceed that amount while allowing the
commissioner of transportation the discretion to authorize a higher reimbursement, thereby
providing predictability for utilities without mandating increased costs to the State, as any
reimbursement above the floor remains discretionary rather than automatic; and
WHEREAS, by clearly articulating the factors the commissioner must consider in
authorizing higher amounts, including project scale, utility service impacts, ratepayer protection,
- 2 - 010876
environmental and right-of-way constraints, and schedule and design obligations imposed by
the department, this act promotes financial prudence, administrative transparency, and
equitable treatment of utilities and their customers; and
WHEREAS, this act advances the public interest by reducing the risk of cost-shifting to
utilities and ultimately to ratepayers, ensuring that essential utility service providers remain
whole when required to relocate infrastructure in state highway rights-of-way, and by reinforcing
this State's commitment to modern infrastructure investment and broadband deployment; now,
therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 54-5-802, is amended by deleting
subdivision (8) and substituting instead:
(8) "Utility" means a privately, publicly, or cooperatively owned line, facility, or
system used, available for use, or formerly used to transmit or distribute electricity,
liquids, steam, sewerage, water, fuel gas, natural gas, telephone or telegraph services,
broadband internet or fiber optic services, telecommunication services, or other
materials to the public.
SECTION 2. Tennessee Code Annotated, Section 54-5-803, is amended by deleting the
language "as defined in § 54-5-802" in subsections (a) and (c) and by deleting subsection (b)
and substituting instead:
(b) The obligations of the utility are to make or suffer relocation required by the
commissioner, to relocate cooperatively and in the reasonable manner and time as
prescribed or approved by the commissioner as set forth in § 54-5-804 and § 54-5-854,
and to pay all costs incurred in effecting relocation that the state is not authorized to pay
under this part or otherwise by law. The existence of a dispute over the cost of
- 3 - 010876
relocation or the method of paying or sharing the cost is not a ground for delay in
relocation.
SECTION 3. Tennessee Code Annotated, Section 54-5-804, is amended by deleting
subsection (a) and substituting instead:
(a) The commissioner shall reimburse a utility for the cost of relocation, including
a utility performing its own relocation through its employees or a contractor, subject to
the reimbursement requirements set forth in rules pursuant to subsection (f), and shall
include the cost as a highway construction project cost, where the cost of relocation
arises from the relocation of a utility facility located on a public highway right-of-way and
the highway construction project is undertaken by the department, subject to the
following conditions:
(1) The utility shall fully comply with § 54-5-854(b), including the
preparation and submission to the department of the utility's relocation plan, cost
estimate, and schedule of calendar days for completing the relocation, within the
time period specified or within an additional time that may be allowed under § 54-
5-854(b); and
(2) The utility shall either:
(A) Enter into a written agreement with the commissioner to
include the relocation as a part of the department's highway construction
contract; provided, however, that the agreement may provide that the
utility must perform certain relocation work, and with its own union
employees if required under a negotiated organized labor contract, but, in
that case, the utility must reimburse the department for all relocation costs
if it fails to timely perform its relocation work as provided in the agreement
with the commissioner; or
- 4 - 010876
(B) Enter into a written agreement with the commissioner to
remove all utility facilities that conflict with the highway construction, as
determined by the department, prior to the letting of the department's
construction contract, and otherwise perform and complete the utility
relocation in accordance with approved relocation plans and schedule of
calendar days; provided, however, that the agreement must provide that if
the department does not undertake the highway construction project
within a specified time, then the utility must be reimbursed for the
relocation work it has timely performed in accordance with the approved
plans and schedule.
SECTION 4. Tennessee Code Annotated, Section 54-5-804, is amended by adding the
following as a new subsection:
(f) The commissioner shall establish rules governing reimbursement of
relocation costs to a utility in accordance with the Uniform Administrative Procedures
Act, compiled in title 4, chapter 5, and subject to the following:
(1) The reimbursement amount for relocation projects costing less than
two million five hundred thousand dollars ($2,500,000) must be the actual cost of
the relocation to a utility;
(2) The reimbursement amount for projects costing two million five
hundred thousand dollars ($2,500,000) or more must be no less than two million
five hundred thousand dollars ($2,500,000) per project and the commissioner
may authorize a higher amount;
(3) In consideration of reimbursement amounts and discretionary
increased reimbursement authorizations under subdivision (f)(2), the
commissioner shall consider the following factors:
- 5 - 010876
(A) The scope, scale, and complexity of the overall project
necessitating utility relocation;
(B) The nature, extent, and complexity of the utility relocation
work required, including engineering, design, permitting, and construction
components;
(C) The financial, operational, and service impacts on the affected
utility or utilities, including impacts on service reliability, infrastructure
integrity, and the continuity of utility operations;
(D) The effect of required relocation on the utility's ratepayers,
including potential cost burdens and the utility's duty to maintain just and
reasonable rates;
(E) Any extraordinary or unforeseen conditions contributing to
increased relocation costs, including geographic, environmental, geologic,
or right-of-way constraints;
(F) The extent to which the department's project schedule, design
requirements, or right-of-way acquisition timelines impact the cost and
feasibility of the utility relocation;
(G) The availability, adequacy, and cost of alternative relocation
routes or methods; and
(H) Any other factor the commissioner determines relevant to
ensuring that utility relocation costs are reasonable, equitable, and do not
impose undue financial hardship on utilities or their ratepayers; and
(4) The eligible reimbursement must be the amount authorized, including
any discretionary increase, under the rules in effect at the time the utility
relocation contract is executed by all parties.
- 6 - 010876
SECTION 5. Tennessee Code Annotated, Section 54-5-806, is amended by deleting
subsection (a) and substituting instead:
(a) The policy, principles, and reimbursement provisions of this part apply
equally to all utilities, whether public, private, or cooperatively owned, that furnish utility
service, including, but not limited to, electricity, liquids, steam, sewerage, water, fuel gas,
natural gas, telephone or telegraph services, broadband internet or fiber optic services,
and telecommunication services through a system of pipes, conduits, cables, or wires
devoted to public utility service.
SECTION 6. Tennessee Code Annotated, Section 54-5-852, is amended by deleting
subdivision (8) and substituting instead:
(8) "Utility facility" means lines, pipes, or other systems used, available for use,
or formerly used to transmit or distribute electricity, liquids, steam, sewerage, water, fuel
gas, natural gas, telephone or telegraph services, broadband internet or fiber optic
services, telecommunication services, or other materials.
SECTION 7. Tennessee Code Annotated, Section 54-5-854, is amended by deleting
subsection (c) and substituting instead:
(c)
(1) After the owner has submitted its plan and schedule of calendar days,
the department must approve them if reasonable. Plans submitted by the owner
are considered reasonable if the proposal would effectuate the relocation at the
lowest cost to ratepayers.
(2) If the plans submitted are not reasonable as described in subdivision
(c)(1), then the department may otherwise reasonably direct the owner to install,
relocate, or adjust its utility facilities in accordance with an approved plan and
schedule of calendar days.
- 7 - 010876
(3) The department shall communicate approval or direction to the owner
via certified mail.
(4) The department shall establish the date on which the owner may
begin the installation, relocation, or adjustment of its utility facilities, and the
owner must be given reasonable advance notice of the date by certified mail via
a notice to proceed. The owner is free to order the required materials associated
with the proposed utility relocation or adjustment at this time. An owner must not
be notified to begin installation, relocation, or adjustment until all health,
governmental, and environmental regulatory agencies have approved the
submitted plan where applicable.
(5) If the department and the owner fail to agree on a reasonable plan
and schedule of calendar days to install, relocate, or adjust the utility, then the
owner may proceed with the approved schedule under a reservation of rights
notice to the department. The notice must be filed within ten (10) days of the
issuance of a notice to proceed by the department. The notice must contain the
owner's objections to the relocation schedule and must state the reasons for the
objections. The reservation of rights must become a part of the administrative
record for a subsequent contested case. If a subsequent contested case results
in a revised plan and schedule of calendar days, then a penalty under
subsections (g) and (h) must be determined on the basis of the revised schedule.
SECTION 8. Tennessee Code Annotated, Section 54-5-854(d), is amended by deleting
subsection (d) and substituting instead the following:
(d) After the owner has completed the installation, relocation, or adjustment, or a
part of the installation, relocation, or adjustment, and if the department requires an
additional relocation or adjustment, then the department shall reimburse the owner for
- 8 - 010876
the additional cost incurred in accordance with the rules promulgated pursuant to § 54-5-
804(f).
SECTION 9. For the purpose of promulgating rules, this act takes effect upon becoming
a law, the public welfare requiring it. For all other purposes, this act takes effect January 1,
2027, the public welfare requiring it.