(a) A private entity may participate in a department highway construction project through a gift of money or tangible goods.

(b) The department may accept private participation in a department highway construction project only if it determines that the private participation will serve the interest of the traveling public.

(c) A gift governed by this section must meet all the requirements of this subchapter, including, when required, commission approval and the execution of a donation agreement.

(d) In addition to the requirements of §1.504 of this subchapter, a donation agreement governed by this section shall include the following provisions.

(1) Funding arrangement. The agreement shall specify the portion of construction costs, as defined in §15.56 of this title (relating to Local Financing of Highway Improvement Projects on the State Highway System), to be paid by each party.

(2) Indirect Costs. For service projects, as defined in §15.56 of this title, the private entity shall be responsible for all indirect costs, as identified by the department.

(3) Interest. The department will not pay interest on funds provided by the private entity. Funds provided by the private entity will be deposited and retained in the state treasury.

(4) Conditions. The agreement shall establish any conditions on the donation, including the method and timing of the donation. If the donation is a gift of money, full payment must be received before the department incurs any costs for the project.

(5) Responsibilities of the parties. The agreement shall identify the responsibilities of each party.

(6) Design and construction. (A) All aspects of the project shall be carried out in compliance with applicable federal and state laws and regulations. (B) The project shall be designed in accordance with the latest department policies, procedures, standards, and guidelines. (C) The department shall award and manage all construction work.

(7) Termination. If the private entity 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 portion of the project in which the private entity was participating.

Source Note: The provisions of this §1.506 adopted to be effective June 20, 2002, 27 TexReg 5252