(a) Purpose. Transportation Code, Section 222.051 authorizes a local government to finance the construction of an approved project for the state highway system. This section prescribes the conditions under which a local government may finance the construction of an approved highway improvement project, and the conditions under which the commission may approve reimbursement of the local government's contribution. This section also prescribes the conditions under which a local government may finance the construction of a service project.
(b) Definitions. The following words and terms when used in this section shall have the following meanings, unless the context clearly indicates otherwise.
  (1) Approved highway improvement project - A highway improvement project on the state highway system identified in the statewide transportation plan or a regional transportation plan.
  (2) Construction costs - Costs associated with preliminary engineering, construction engineering, construction, right-of-way acquisition, and all other costs directly related to the approved highway improvement project. For service projects, the construction costs will also include all indirect costs as identified by the department's cost accounting system.
  (3) Service project - A highway improvement project requested by a local government which provides limited benefits to the general traveling public. These projects are not an integral part of the state transportation system and primarily provide new or improved access to abutting property.
(c) Request. A local government may request approval from the department to fund the construction cost of an approved highway improvement project or a service project. The request for an approved highway improvement project shall state whether the local government desires reimbursement of its contribution, subject to the considerations outlined in subsection (e) of this section.
(d) Project approval.
  (1) Approved highway improvement projects.
    (A) Approval authority. The executive director is authorized to approve requests to finance an approved highway improvement project, based on the considerations in subparagraph (B) of this paragraph.
    (B) Considerations. In approving a request to finance an approved highway improvement project, the executive director will consider:
      (i) statewide transportation needs;
      (ii) regional economic impact;
      (iii) North American Free Trade Agreement implications;
      (iv) local government needs;
      (v) environmental impact and any requirements for environmental mitigation; and
      (vi) any other considerations relating to the benefit to the state, the traveling public, and the operations of the department.
  (2) Service Projects.
    (A) Approval authority. A request to finance a service project may be approved by the following authority, based on the considerations in subparagraph (B) of this paragraph:
      (i) district engineer for projects with a total cost estimated at less than $300,000;
      (ii) executive director for projects with a total cost estimated at $300,000 or more.
    (B) Considerations. In approving a request to finance a service project, the executive director or district engineer will consider:
      (i) local transportation needs;
      (ii) regional economic impact;
      (iii) safety implications of the proposed project;
      (iv) environmental impact and any requirements for environmental mitigation; and
      (v) any other considerations relating to the benefit to the state, the traveling public, and the operations of the department.
    (C) Indirect Costs. For service projects, a local government may request a waiver from the executive director for the collection of indirect costs. In approving the local government's request for a waiver, the executive director will consider:
      (i) local economic impact,
      (ii) residual public benefit,
      (iii) local government needs, or
      (iv) any other considerations relating to the benefit to the state, the traveling public, or the operation of the department.
  (3) Agreement and conditions.
    (A) If the department approves a project under this subsection, the local government and the department will enter into an agreement as specified in §15.52 of this subchapter, except that construction costs shall be as defined in this section.
    (B) If a local government withdraws from the project after the agreement is executed, it shall be responsible for all direct and indirect project costs incurred by the department for the items of work in which the local government is participating.
    (C) All aspects of the project will be carried out in compliance with applicable federal and state laws and regulations.
    (D) The project shall be designed in accordance with the latest department policies, procedures, standards, and guidelines. All plans, specifications, and estimates shall be approved by the department prior to advertisement for bids on the project.
(e) Reimbursement approval.
  (1) Considerations. If requested by the local government and if funds are available, the commission may reimburse the local government for all or a portion of its contributions to an approved highway improvement project approved under this section. In approving reimbursement, the commission will consider:
    (A) statewide transportation needs;
    (B) needs of the local government;
    (C) economic benefit to the state; and
    (D) any other considerations relating to the benefit to the state, the traveling public, and the operations of the department.
  (2) Agreement. If approved for reimbursement under this subsection, the department will enter into an agreement with the local government as specified in §15.52 of this subchapter.

Source Note: The provisions of this §15.56 adopted to be effective September 26, 1996, 21 TexReg 8957; amended to be effective September 23, 1997, 22 TexReg 9260; amended to be effective July 23, 2000, 25 TexReg 6810