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HOUSE BILL 2383
By Vaughan
SENATE BILL 2022
By Reeves
SB2022
012019
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AN ACT to amend Tennessee Code Annotated, Title 4 and
Title 54, relative to utility relocation projects.
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.
WHEREAS, the proposed legislation’s revised definition of "utility" simply aligns the
statute 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;
WHEREAS, because the Department already implements this policy and
reimbursements have been made for these categories of utilities under the existing framework,
the proposed legislation should not impose additional costs on the Department or require new
budgetary appropriations beyond current practice;
WHEREAS, the proposed legislation does not require the Department to increase
reimbursement amounts above current levels but simply codifies the existing two million five
hundred thousand dollars ($2,500,000) cap as a statutory minimum for relocation projects
whose costs exceed that amount while allowing the Commissioner 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;
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WHEREAS, by clearly articulating the factors the Commissioner must consider in
authorizing higher amounts – including project scale, utility service impacts, ratepayer
protection, environmental and right-of-way constraints, and schedule and design obligations
imposed by the Department – the legislation promotes financial prudence, administrative
transparency, and equitable treatment of utilities and their customers;
WHEREAS, this legislation 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 the 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
subsection (b) and substituting instead:
(b) The obligations of the utility, as defined in § 54-5-802, shall be to make or
suffer relocation required by the commissioner, and 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 pay all costs incurred in effecting relocation that
the state is not authorized to pay under this part or otherwise by law. It shall not be
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grounds for delay in relocation that a dispute exists over the cost of relocation or the
method of paying or sharing the cost.
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 to
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) In accordance with § 54-5-854, the utility shall either:
(A) Enter into a written agreement with the commissioner to
include the relocation as a part of, or in conjunction with, the department’s
highway construction contract; provided, however, that the agreement
may provide that the utility shall perform certain relocation work, and with
its own union employees if required under a negotiated organized labor
contract; but, in that case, the utility shall be required to 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
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(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 shall provide that,
in the event that the department does not undertake the highway
construction project within a specified time, the utility shall 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 and regulations governing
reimbursement of relocation costs to a utility as duly promulgated rules in accordance
with the Uniform Administrative Procedures Act, compiled in title l4, 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) shall be the actual cost of
the relocation to a utility.
(2) The reimbursement amount for projects exceeding two million five
hundred thousand dollars ($2,500,000) must be no less than two million five
hundred thousand dollars ($2,500,000) per project and must allow the
commissioner to authorize a higher amount.
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(3) In consideration of reimbursement amounts and any discretionary
increased reimbursement authorizations, the commissioner shall consider the
following factors:
(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, 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.
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(4) The eligible reimbursement shall be the amount authorized, including
any discretionary increase, under the rules and regulations in effect at the time
the utility relocation contract is executed by all parties.
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 shall 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 54-5-854, 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 the utility and ratepayers.
(2) If the plans submitted are not reasonable as described in subdivision
(c)(1), 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.
(3) The department shall communicate approval or direction to the owner
via certified mail.
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(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 shall be given reasonable advance notice of the date by certified mail via a
notice to proceed. The owner shall be free to order the required materials
associated with the proposed utility relocation or adjustment at this time. No
owner shall be notified to begin installation, relocation or adjustment until all
health, governmental, and environmental regulatory agencies have approved the
submitted plan where applicable.
(5) In the event the department and the owner fail to agree on a
reasonable plan and schedule of calendar days to install, relocate or adjust the
utility, the owner may proceed with the approved schedule under a reservation of
rights notice to the department. The notice shall be filed within ten (10) days of
the issuance of a notice to proceed by the department. The notice shall contain
the owner’s objections to the relocation schedule and shall state the reasons for
the objections. The reservation of rights shall become a part of the
administrative record for any subsequent contested case. If any subsequent
contested case results in a revised plan and schedule of calendar days, then any
penalty under subsections (g) and (h), shall be determined on the basis of the
revised schedule.
SECTION 7. 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
any part of the installation, relocation or adjustment, and the department requires any
additional relocation or adjustment, the department shall reimburse the owner for the
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additional cost incurred in accordance with the rules and regulations promulgated
pursuant to § 54-5-804(f).
SECTION 8. For the purposes of promulgating rules, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect July
1, 2026, the public welfare requiring it.