Historical Note

Former Rule, ASHC Resolution. Former Section R17-3-10 renumbered without change as Section R17-3-102 (Supp. 88-4). Repealed effective May 31, 1991 (Supp. 91-2).

ARTICLE 2. MANAGEMENT OF CONTRACTOR BIDDING

R17-3-201. General

A. Definitions.

1. "Application" means a request for contractor prequalification, consisting of an application booklet available from the Department's office of Contracts and Specifications, and a financial statement prepared according to the requirements of this subsection and R17-3-202.

2. "Board" means the Contractor Prequalification Board.

3. "Compiled financial statement" means a financial statement prepared for form, appropriateness, and arithmetic accuracy. It does not express an opinion or provide any assurance regarding the financial statement.

4. "Contractor" means the individual, partnership, firm, corporation, joint venture, or any combination acceptable to the Department, that seeks to contract with the Department for constructing or reconstructing state transportation facilities, unless the context requires otherwise.

5. "Contractor prequalification" means the Department's process of review and evaluation of a contractor's work history and current financial condition before a contractor is allowed to submit a proposal for constructing or reconstructing state transportation facilities.

6. "Department" means the Arizona Department of Transportation.

7. "Examined financial statement" means a financial statement that includes the amounts and disclosures in the firm's financial statement, an assessment of the accounting principles used and the significant estimates made by management, and an evaluation of the overall financial statement presentation.

8. "Financial statement" means a financial report prepared according to generally accepted accounting principles by an independent certified public accountant or an independent public accountant. The financial statement includes a cover letter on the accountant's letterhead, a balance sheet, a statement of cash flows, an income statement, and all notes and appropriate supporting schedules.

9. "Joint venture" means the combination of two or more contractors for the purpose of submitting a proposal to the Department and performing a contract for constructing or reconstructing state transportation facilities.

10. "Prequalification amount" means the dollar limitation of each contract, based on the Department's estimate of contract value, for which a contractor may submit a proposal to the Department for constructing or reconstructing state transportation facilities.

11. "Reviewed financial statement" means a financial statement that includes an inquiry of company personnel, and a review of the analytical procedures applied to the financial data. It does not express an opinion regarding the financial statement taken as a whole.

12. "State Engineer" has the meaning in A.R.S. § 28-6901(3).

B. Contractor Prequalification Board.

1. The State Engineer shall appoint the Board to consider and decide on applications for contractor prequalification.

2. The Board will be comprised of three Department employees, one of whom shall be a professional engineer, registered by the Arizona Board of Technical Registration, and one a certified or licensed public accountant.

3. The Board's authority to determine prequalification does not limit the Department's ability to establish additional criteria for contracts.

Historical Note

Adopted effective March 3, 1987 (Supp. 87-1). Amended by final rulemaking at 8 A.A.R. 79, effective December 10, 2001 (Supp. 01-4).

R17-3-202. Contractor Prequalification

A. Criteria. An applicant for contractor prequalification shall include on the application and the Board shall consider the following information in determining the prequalification amount for a contractor:

1. Key personnel and their work experience,

2. Organizational structure,

3. History of past or current projects and contracts,

4. Company affiliations,

5. Equipment owned or controlled,

6. Any applicable licenses,

7. Type of work requested,

8. Individuals authorized to act on behalf of the contractor,

9. Any prequalification or bidding disputes with a government agency, and

10. Financial condition.

B. Prequalification Expiration and Extension.

1. Prequalification expires 15 months after the end of a contractor's fiscal year, as reflected on the financial statement. Due to the time necessary to prepare an examined financial statement, the Board may grant up to a 60 day extension on the expiration of prequalification, if:

a. The contractor submits a letter from its accountant stating the reasons for delay in preparing the examined financial statement,

b. The letter from the accountant states the anticipated completion date of the examined financial statement, and

c. The contractor submits an interim compiled or reviewed financial statement that was prepared within the previous six months.

2. The Board will notify each contractor in writing of its decision on the contractor's prequalification amount.

C. Joint Ventures.

1. Each contractor in a proposed joint venture shall be prequalified. The joint venture shall submit a joint venture statement of intent at least five calendar days before the applicable bid opening date.

2. If one or more of the parties to the joint venture are corporations, a copy of a resolution from the Board of Directors authorizing the corporation to enter into the joint venture and execute all contract documents shall be submitted with the statement of intent.

3. Contractors operating as a joint venture on a continuing basis may file for prequalification as a joint venture.

4. The Board may allow a contractor operating as a joint venture to prequalify for a pro rata share of the entire contract amount. The percentage share of work shall not exceed each individual contractor's prequalification amount.

D. Classification of Contractors. The Board shall categorize contractors into the following classifications:

1. Inexperienced firms: Firms that have no experience as contractors in transportation facilities construction work;

2. New firms: Recently organized firms that have officers with experience with other contractors in positions of responsibility for transportation facilities construction;

3. Unknown firms: Firms that have experience as contractors but have not completed a transportation facilities construction contract as a contractor for the Department within the past five years or at any time;

4. Known firms: Firms that have successfully completed at least one transportation facilities construction contract within the past five years as a contractor for the Department.

E. Classification of Financial Statements.

1. All financial statements shall be examined, reviewed, or compiled according to generally accepted accounting principles, by either an independent certified public accountant or an independent public accountant, registered and licensed under the laws of any state. A contractor shall not submit a financial statement prepared by either a certified or public accountant who is directly or indirectly interested in or affiliated with the business of the contractor.

2. A contractor that desires a prequalification amount in excess of $1.5 million shall submit an examined financial statement.

3. A contractor that submits a reviewed financial statement will be limited to a maximum prequalification amount of $1.5 million.

4. A contractor that submits a compiled financial statement will be limited to a maximum prequalification amount of $300,000.

F. Prequalification Limits. In determining the prequalification amount for each contractor, the amount set by the Board may be less than the maximum amount set out in this subsection due to the Board's evaluation of the contractor's information under R17-3-202(A).

1. Inexperienced firms. An inexperienced firm will be limited to a maximum prequalification amount of $300,000 until the contractor has satisfactorily completed at least one transportation facilities construction contract for any public agency.

2. New firms. A new firm will be limited to a maximum prequalification amount of five times the firm's net worth.

3. Unknown firms. An unknown firm will be limited to a maximum prequalification amount of five times the firm's net worth or the amount of the largest transportation facilities construction contract it has successfully completed as a contractor for any other public agency, whichever is larger.

4. Known firms. A known firm will be limited to a maximum prequalification amount of ten times the firm's net worth. An unlimited prequalification amount may be granted if the product of ten times the firm's net worth exceeds $100 million.

5. All firms. Evidence of additional assets pledged in behalf of a contractor or letters from a contractor's surety company may be considered in establishing higher prequalification amounts than stated in subsections (F)(2) through (F)(4). A parent company that pledges assets in behalf of a contractor shall submit a financial statement.

G. Reconsideration of Prequalification Determination.

1. If a contractor is dissatisfied with the Board's decision, the contractor may request in writing a hearing, within 15 days of receiving the Board's decision. The hearing shall be conducted under A.R.S. § 41-1062. The letter shall indicate the basis for the request and shall provide supportive data. The Board shall review the request and accompanying information and decide on the request within 30 calendar days of its receipt.

2. If the contractor is still dissatisfied with the decision of the Board, the contractor may appeal to the State Engineer. The Board shall notify the contractor about the appeal procedures.

H. Issuance of Bidding Documents. A contractor shall not request bid documents for a contract for which it is not prequalified.

I. The Department may waive the prequalification requirement on an individual contract when it is in the best interest of the state. The advertisement for bids shall identify if prequalification is waived.

Historical Note

Adopted effective March 3, 1987 (Supp. 87-1). Amended by final rulemaking at 8 A.A.R. 79, effective December 10, 2001 (Supp. 01-4).

R17-3-203. Reduced Prequalification Amounts or Disqualifications

A. The Board may reduce the prequalification amount of a contractor already prequalified or disqualify a contractor from bidding if a contractor:

1. Falsifies any document or misrepresents any material fact in the information furnished to the Department;

2. Fails to enter into a contract with the Department;

3. Defaults on a previous contract with any public agency;

4. Has an unsatisfactory work performance record with the Department on the basis of workmanship, competent superintendence, adequate and proper equipment, timely completion, or failure to submit required documentation for closing out a contract; or

5. Fails to provide notification to the Board, within 30 calendar days of occurrence, of any change in ownership, corporate officers or general partners, bankruptcy, receivership, court supervised reorganization, or the entry of a judgment in a judicial or administrative proceeding adverse to the contractor.

B. The Board shall notify a contractor in writing of its intention to reduce the prequalification amount or to disqualify a contractor. The Board's notice to reduce prequalification or to disqualify a contractor shall become a final determination unless the contractor requests a hearing with the Board within 20 calendar days after receiving such notification. The Board shall notify the contractor about the hearing procedures.

C. The contractor may appeal the Board's decision to the State Engineer. The Board shall notify the contractor about the appeal procedures.

Historical Note

Adopted effective March 3, 1987 (Supp. 87-1). Amended by final rulemaking at 8 A.A.R. 79, effective December 10, 2001 (Supp. 01-4).

R17-3-204. Access to Department Prequalification Files

Prequalification files are considered to be strictly confidential. The files will be available only to:

1. Members of the Board,

2. The Director of the Department or any authorized agents of the Department,

3. Members of the Arizona State Transportation Board,

4. The division administrator of the Federal Highway Administration or any authorized representatives,

5. Agents of surety upon the filing of an application for bond duly signed by an authorizing party of the prequalified contractor,

6. Members of the Arizona State Board of Accountancy or their duly authorized representatives, and

7. The contractor that is the subject of the file.

Historical Note

Adopted effective March 3, 1987 (Supp. 87-1). Amended by final rulemaking at 8 A.A.R. 79, effective December 10, 2001 (Supp. 01-4).

ARTICLE 3. RELOCATION ASSISTANCE

Article 3, consisting of Sections R17-3-301 through R17-3-304, repealed; new Article 3, consisting of Sections R17-3-301 through R17-3-306, made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-301. Relocation Assistance; Adoption of Federal Regulations

A. The Department incorporates by reference 49 CFR 24.2, 24.3, 24.5, 24.8, 24.9, 24.10, 24.202, 24.203, 24.204, 24.205, 24.206, 24.207, 24.208, 24.301, 24.302, 24.303, 24.304, 24.305, 24.306, 24.401, 24.402, 24.403, 24.404, 24.501, 24.502, 24.503, 24.504, 24.505, and Appendix A to Part 24 published October 1, 2001, and no later amendments or editions, as amended by R17-3-301 through R17-3-306. The incorporated material is on file with the Arizona Department of Transportation and the Office of Secretary of State. An unofficial version of the federal regulations is available at http://www.access.gpo.gov/nara/cfr/cfr-table-search.html.

B. The following definitions apply for the purpose of R17-3-301 through R17-3-306 unless indicated otherwise.

"Department" means the Arizona Department of Transportation.

Historical Note

Former Rule, Right of Way Resolution 70-60. Former Section R17-3-12 renumbered without change as Section R17-3-301 (Supp. 88-4). Section repealed; new Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-302. Relocation Assistance; 49 CFR Part 24, Subpart A - General

A. 49 CFR 24.2, "Definitions" is amended as follows:

1. "Agency" means the Arizona Department of Transportation.

2. "Business" is amended to read:

The term business means any lawful activity, including a farm operation, that is conducted:

3. "Comparable replacement dwelling" is amended at paragraph (8)(i) to read:

A replacement dwelling purchased by a homeowner in occupancy at the displacement dwelling for at least 180 days before initiation of negotiations (180-day homeowner) is considered to be within the homeowner's financial means if the homeowner will receive the price differential as described in Sec. 24.401(c), all increased mortgage interest costs as described at Sec. 24.401(d) and all incidental expenses as described at Sec. 24.401(e), plus any additional amount required to be paid under Sec. 24.404, Replacement housing of last resort.

4. "Contribute materially" is amended to read:

The term "contribute materially" means that during the two taxable years before the taxable year in which displacement occurs, a business:

a. Contributed at least 33 1/3 percent of the owner's or operator's average annual gross income from all sources,

b. Registered and has a use permit from the local political subdivision, and

c. Submitted federal income tax returns for the last two years.

5. "Decent, safe, and sanitary dwelling" is amended to read:

The term decent, safe, and sanitary dwelling means a dwelling which meets applicable housing and occupancy codes. However, any of the following standards which are not met by an applicable code shall apply unless waived for good cause by the federal agency or state agency funding the project. The dwelling shall:

a. Be structurally sound, weathertight, and in good repair;

b. Contain a safe electrical wiring system adequate for lighting and other devices; and

c. Contain heating and cooling systems capable of sustaining a healthful temperature for a displaced person, except in those areas where local climatic conditions do not require such systems.

6. "Displaced person" is amended to read:

a. General. The term "displaced person" means, except as provided in the definition of "persons not displaced," any person who is required to move from the real property or moves his or her personal property from the real property as a direct result of the real property being acquired in whole or in part for an approved State project as a result of a written notice of intent to acquire:

i. This includes a person who occupies the real property before its acquisition but does not meet the length of occupancy requirements for relocation assistance other than reimbursement of moving expenses.

ii. Any person who does not meet the statutory occupancy requirements and is unable to obtain comparable replacement housing within the person's financial means is eligible for assistance only under Sections 24.401 and 24.402, as qualified by Section 24.404, in obtaining comparable, decent, safe and sanitary housing.

b. "Persons not displaced" is amended as follows:

i. Amend paragraph (2)(i) to read:

A person who moves before the initiation of negotiations unless this requirement is waived by the Department due to a move necessitated for reasons beyond the person's control.

ii. Delete paragraphs (2)(v), (2)(viii), (2)(ix), and (2)(x).

7. "Initiation of negotiations" is amended to have the same meaning as prescribed in A.R.S. § 28-7141(8).

8. "Notice of intent to acquire or notice of eligibility for relocation assistance" is amended to read:

Written notice furnished to a person to be displaced that establishes eligibility for relocation benefits before the initiation of negotiation.

9. "Owner of dwelling" is amended as follows:

Subsection (3) is deleted.

10. "Program or project" is amended to read:

The phrase "program" or "project" means any displacing activity or series of activities undertaken by the Department, related to construction or reconstruction of a transportation facility or a facility necessary for maintaining a transportation facility.

11. "Salvage value" is deleted.

12. "State" is amended to read:

"State" means a state of the United States or the District of Columbia.

13. "Uneconomic remnant" is deleted.

14. "Uniform Act" is amended to read:

The term "Uniform Act" refers to A.R.S. §§ 28-7141 through 28-7156.

15. "Unlawful occupancy" is amended to read:

A person is considered to be in unlawful occupancy if:

a. A court of competent jurisdiction has found the person guilty of forcible entry and detainer, or forcible detainer (under A.R.S. §§ 12-1171 through 12-1183) before the initiation of negotiations, or

b. The Department determines that the person is occupying the real property without the permission of the owner and has no legal right to occupy the property under state law.

16. "Utility costs" is amended to read:

The term "utility costs" means expenses for electrical, gas, water, and sewer.

17. "Utility facility" is deleted.

18. "Utility relocation" is deleted.

B. 49 CFR 24.5 "Manner of notices" is amended to read:

Each notice the Agency is required to provide to a property owner or occupant under this part shall be personally served or sent by certified or registered first-class mail, return receipt requested, and documented in Agency files. Each notice shall be written in plain, understandable language. Persons who are unable to read and understand the notice must be provided with appropriate translation and counseling. Each notice shall indicate the name and telephone number of a person who may be contacted for answers to questions or other needed help.

C. 49 CFR 24.9 "Recordkeeping and reports" is amended as follows:

1. Paragraph (a) Records. The Agency shall maintain adequate records of its acquisition and displacement activities in sufficient detail to demonstrate compliance with this part. These records shall be retained for at least five years after each owner of a property and each person displaced from the property receives the final payment to which he or she is entitled under this part, or in accordance with the applicable regulations of the federal funding agency, whichever is later.

2. Paragraph (c) is deleted.

D. 49 CFR 24.10 "Appeals" is amended to read:

In addition to the provisions of A.R.S. §§ 41-1061 through 41-1067, the following provisions apply:

1. Actions which may be appealed. A person who believes the Department has failed to determine properly the person's eligibility for or the amount of a relocation payment, may file a written appeal. A person shall include all contested issues in one appeal.

2. Process. To appeal, a person shall submit a letter stating name and address, and the reasons for disagreeing with the Department's decision to the Right-of-Way Group, Arizona Department of Transportation, 205 S. 17th Ave., MD 612E, Phoenix, AZ 85007-3212.

3. Time limit. The person shall file the written appeal within 60 days after receiving notice of the Department's determination on the person's claim. The date the appeal request is received begins the official time limit constraints, as prescribed in subsections (D)(4) and (D)(8). Filing the appeal does not extend any eligibility periods or a required date to vacate a property.

4. Hearing date. Within 45 days of receiving the appeal request, the Department shall set a mutually acceptable date for a hearing before a hearing officer.

5. Review of files. Upon making a written request to the address in subsection (D)(2), the person may review and copy any non-confidential documentation contained in the Department's files regarding the person's appeal.

6. Scope of review. The Department shall consider and review the person's arguments, statements, and documents in support of the appeal, allowing reasonable latitude for the hearing of relevant material.

7. Right to representation. The person has a right to be represented by legal counsel or other representative in connection with the person's appeal, but solely at the person's own expense.

8. Determination. Within 30 days of the hearing, the hearing officer shall make a recommendation to the Chief Right-of-Way Agent. The Department shall promptly issue a written decision and provide a copy to the person by certified mail. The Department shall explain the basis on which its decision was made, and what relief, if any, is to be provided.

9. If the Department does not grant the relief requested, the Department shall advise the person of the right to seek judicial review.

E. Conflict of interest. If a displaced person is an employee of the state, or of a political subdivision involved in a joint project with the displacing agency, the Department shall forward the displaced person's file to the Office of the Attorney General for settlement purposes and decision.

F. The Department shall determine whether a person is required to relocate permanently as a direct result of a project.

Historical Note

Former Rule, Right of Way Resolution 71-42. Former Section R17-3-13 renumbered without change as Section R17-3-302 (Supp. 88-4). Section repealed; new Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-303. Relocation Assistance; 49 CFR Part 24, Subpart C - General Relocation Requirements

A. 49 CFR 24.203(b) "Notices of relocation eligibility" is amended to read:

Notice of relocation eligibility. Eligibility for relocation assistance shall begin on the date of the notice of intent to acquire or notice of eligibility for relocation assistance (defined in Sec. 24.2) for the occupied property. When this occurs, the Agency shall promptly notify all occupants in writing of their eligibility for applicable relocation assistance.

B. 49 CFR 24.205 "Relocation planning, advisory services, and coordination" is amended as follows.

1. Paragraph (a) is amended to read:

Relocation planning. During the early stages of development, federal and federal-aid programs or projects will be planned in a manner that the problems associated with the displacement of individuals, families, businesses, farms, and nonprofit organizations are recognized and solutions are developed to minimize the adverse impacts of displacement. The planning, appropriate to the scope, complexity, and scheduling shall precede any action by an Agency which will cause displacement. The planning should be scoped to the complexity and nature of the anticipated displacing activity including an evaluation of program resources available to carry out timely and orderly relocations. If timing or scheduling is restricted, the planning may be limited. Planning may involve a relocation survey or study which may include the following:

2. Paragraph (b) is deleted.

C. 49 CFR 24.206 is amended to read:

1. Eviction for cause must conform to A.R.S. §§ 12-1171 through 12-1183. The Department may determine that a person who is an unlawful occupant (as defined in 49 CFR 24.2) is still eligible for advisory relocation assistance, using the following factors:

a. The person received an eviction notice before the initiation of negotiations and, as a result of that notice is later evicted;

b. The person is evicted after the initiation of negotiations for serious or repeated violation of material terms of the lease or occupancy agreement;

c. The eviction was not undertaken for the purpose of evading the obligation to make available the payments and other assistance set forth in this part;

d. The person occupying the property and the owner dispute the issue of lawful occupancy;

e. The duration of prior legal occupancy of the person occupying the property;

f. Financial or medical hardship of the person occupying the property; or

g. The cost of the relocation assistance is less than the cost of an appeal.

2. For purposes of determining eligibility for relocation payments, the date of displacement is the date the person moves, or if later, the date a comparable replacement dwelling is made available.

3. The state may initiate eviction proceedings due to:

a. Unlawful activities being conducted on state-owned property,

b. Willful destruction of state-owned property,

c. Refusal to vacate state-owned property after all required notices to vacate have been delivered and appropriate assistance provided, or

d. Failure to pay rent when there is no hardship.

Historical Note

Former Rule, Right of Way Resolution 71-69. Former Section R17-3-14 renumbered without change as Section R17-3-303 (Supp. 88-4). Section repealed; new Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-304. Relocation Assistance; 49 CFR Part 24, Subpart D - Payments for Moving and Related Expenses

A. 49 CFR 24.301 "Payment for actual reasonable moving and related expenses-residential moves" is amended as follows.

1. Paragraph (d) is amended to read:

Storage, if necessary to accommodate the Department's project schedule, for a period not to exceed l2 months.

2. Paragraph (f) is deleted.

B. 49 CFR 24.303 "Payments for actual reasonable moving and related expenses-nonresidential moves" is amended as follows.

1. Paragraphs (a)(7) and (a)(13)(iv) are deleted.

2. Paragraph (a)(8) is amended to read:

Professional services necessary for:

i. Planning the move of the personal property, when the Department approves in advance the quantity and type of planning,

ii. Moving the personal property, and

iii. Installing the relocated personal property at the replacement location.

3. Paragraph (a)(10)(i) is amended to read:

The market value of the item for continued use at the displacement site, less the proceeds from its sale. (To be eligible for payment, the claimant must make a good faith effort to sell the personal property, unless the Agency determines that the effort is not necessary. When payment for property loss is claimed for goods held for sale, the market value shall be based on the cost of the goods to the business, not the potential selling price.); or

4. Paragraph (c) is amended to read:

Self-moves. If the displaced person elects to take full responsibility for the move of the business or farm operation, the Agency may make a payment for the person's moving expenses in an amount not to exceed the lower of two acceptable bids or estimates obtained by the Agency. At the Agency's discretion, a payment for a low cost or uncomplicated move may be based on a single bid or estimate. The Agency has sole authority to determine, in the best interests of the Agency and the displaced business or farm operation, if a self-move will be permitted.

5. Paragraph (e) is amended to read:

Advertising signs. The amount of a payment for direct loss of an on-premise advertising sign which is personal property shall be the lesser of:

a. (1) The depreciated reproduction cost of the sign, as determined by the Agency, less the proceeds from its sale; or

b. (2) The estimated cost of moving the sign, but with no allowance for storage.

C. 49 CFR 24.305(h) for "Ineligible moving and related expenses" is amended to read:

Any legal fee or other cost for preparing a claim for a relocation payment or for representing the claimant before the Agency, except as required under A.R.S. § 28-7153.

Historical Note

Former Rule, Right of Way Resolution 70-51. Former Section R17-3-11 renumbered without change as Section R17-3-304 (Supp. 88-4). Section repealed; new Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-305. Relocation Assistance; 49 CFR Part 24, Subpart E - Replacement Housing Payments

A. 49 CFR 24.401 "Replacement housing payment for 180-day homeowner-occupants" is amended as follows.

1. Paragraph (c)(4)(iii) is amended to read:

The current market value for residential use of the replacement site (see Appendix A of this part, Sec. 24.401(c)(4)(iii)), unless the claimant rented the displacement site and there is a reasonable opportunity for the claimant to rent a suitable replacement site; and

2. Paragraph (d)(3) is amended to read:

The interest rate on the new mortgage used in determining the amount of the payment shall not exceed the prevailing fixed interest rate for conventional mortgages currently charged by mortgage lending institutions in the area in which the replacement dwelling is located. If a displaced person chooses to buy down the interest rate, the Agency shall:

a. Require documents indicating the initial interest rate,

b. Require documents indicating the final interest rate, and

c. Limit reimbursement to the lower of the amount the displaced person actually paid or the amount qualified under the established market interest rate.

3. Paragraph (e)(1) is amended to read:

Closing and related costs, including those for title search, preparing conveyance instruments, notary fees, preparing surveys and plats, and recording fees.

4. Paragraphs (e)(7) and (e)(8) are deleted.

B. 49 CFR 24.402 "Replacement housing payment for 90-day occupants" is amended as follows.

1. Paragraph (b)(2)(i) is amended to read:

The average monthly cost for rent and utilities at the displacement dwelling for a reasonable period prior to displacement, as determined by the Agency. (For an owner-occupant, use the market rent for the displacement dwelling. For a tenant who paid little or no rent for the displacement dwelling, use the market rent, unless its use would result in a hardship because of the person's income or other circumstances); or

2. Paragraph (c)(1) is amended to read:

Amount of payment. An eligible displaced person who purchases a replacement dwelling is entitled to a downpayment assistance payment in the amount the person would receive under paragraph (b) of this section if the person rented a comparable replacement dwelling.

C. 49 CFR 24.403 "Additional rules governing replacement housing payments" is amended as follows.

1. Paragraph (a)(1) is amended to read:

At least one comparable replacement dwelling shall be examined. If more than one dwelling is examined, then the payment shall be computed on the basis of the dwelling most nearly representative of, and equal to, or better than, the displacement dwelling. An adjustment shall be made to the asking price of any dwelling, to the extent justified by local market data (see also Sec. 24.205(a)(2) and Appendix A of this part). An obviously overpriced dwelling will be ignored.

2. Paragraph (a)(3) is amended to read:

If the acquisition of a portion of a typical residential property causes the displacement of the owner from the dwelling and the remainder is a buildable residential lot, the Agency may offer to purchase the entire property. If the owner refuses to sell the remainder to the Agency, the market value of the remainder may be added to the acquisition cost of the displacement dwelling for purposes of computing the replacement housing payment.

3. Paragraph (c)(6) is amended to read:

Currently owns a previously purchased dwelling and site, valuation of which shall be on the basis of current market value.

Historical Note

New Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

R17-3-306. Relocation Assistance; Appendix A to Part 24 - Additional Information

A. Appendix A, Section 24.9 "Recordkeeping and Reports" is deleted.

B. Appendix A, Subpart B - "Real Property Acquisition" is deleted.

C. Appendix A, Section 24.204(a) "General" is amended to read:

This provision requires that no one may be required to move from a dwelling without one comparable replacement dwelling having been made available. In addition, Sec. 24.204(a) requires that, "Where possible, three or more comparable replacement dwellings shall be made available." Only in situations where three comparable replacement dwellings are not available (e.g., when the local housing market does not contain three comparable dwellings) may the Agency make fewer than three referrals.

D. Appendix A, Section 24.307 "Discretionary Utility Relocation Payments" is deleted.

E. Appendix A, Section 24.401(c) "Price differential" is amended to read:

The provision in Sec. 24.401(c)(4)(iii) to use the current market value for residential use does not mean the Agency must have the property appraised. Any reasonable method for arriving at the market value may be used.

F. Appendix A, Section 24.402 "Replacement Housing Payment for 90-Day Occupants" is deleted.

G. Appendix A, Section 24.403 "Additional Rules Governing Replacement Housing Payments" Section 24.403(a)(1) is amended to read:

The procedure for adjusting the asking price of comparable replacement dwellings requires that the agency provide advisory assistance to the displaced person concerning negotiations so that he or she may enter the market as a knowledgeable buyer. If a displaced person elects to buy the selected comparable, but cannot acquire the property for the adjusted price, it is appropriate to increase the replacement housing payment to the actual purchase amount.

Historical Note

New Section made by final rulemaking at 9 A.A.R. 1075, effective May 6, 2003 (Supp. 03-1).

ARTICLE 4. REPEALED

R17-3-401. Repealed

Historical Note

Former Rule, Traffic Engineering Resolution; Repealed effective June 18, 1979 (Supp. 79-3). New Section R17-3-05 adopted effective August 4, 1982 (Supp. 82-4). Former Section R17-3-05 renumbered without change as Section R17-3-401 (Supp. 88-4). Section repealed by final rulemaking at 7 A.A.R. 2750, effective June 7, 2001 (Supp. 01-2).

R17-3-402. Repealed

Historical Note

Former Rule, ASHC Resolution. Repealed effective January 3, 1977 (Supp. 77-1). New Section R17-3-08 adopted effective March 25, 1982 (Supp. 82-2). Former Section R17-3-08 renumbered without change as Section R17-3-402 (Supp. 88-4). Section repealed by final rulemaking at 7 A.A.R. 2748, effective June 7, 2001 (Supp. 01-2).

R17-3-403. Recodified

Historical Note

Former Rule, Right of Way Resolution 71-15. Former Section R17-3-09 renumbered without change as Section R17-3-403 (Supp. 88-4). Section recodified to A.A.C. R17-4-428 at 7 A.A.R. 1260, effective February 20, 2001 (Supp. 01-1).

R17-3-404. Repealed

Historical Note

Adopted as an emergency effective April 13, 1983 pursuant to A.R.S. § 41-1003, valid for only 90 days (Supp. 83-2). Former Section R17-3-20 renumbered without change as Section R17-3-404 (Supp. 88-4). Section repealed by final rulemaking at 7 A.A.R. 2750, effective June 7, 2001 (Supp. 01-2).

R17-3-405. Reserved

R17-3-406. Repealed

Historical Note

Former Rule, Traffic Engineering Report. Former Section R17-3-02 renumbered without change as Section R17-3-406 (Supp. 88-4). Section repealed by final rulemaking at 8 A.A.R. 849, effective February 8, 2002 (Supp. 02-1).

R17-3-407. Repealed

Historical Note

Former Rule, ASHC Resolution; Former Section R17-3-06 repealed, new Section R17-3-06 adopted effective April 25, 1978 (Supp. 78-2). Former Section R17-3-06 renumbered without change as Section R17-3-407 (Supp. 88-4). Section repealed by final rulemaking at 8 A.A.R. 849, effective February 8, 2002 (Supp. 02-1).

R17-3-408. Repealed

Historical Note

Former Rule, General Order 21. Former Section R17-3-08 renumbered without change as Section R17-3-408 (Supp. 88-4). Section repealed by final rulemaking at 8 A.A.R. 849, effective February 8, 2002 (Supp. 02-1).

ARTICLE 5. HIGHWAY ENCROACHMENTS AND PERMITS

R17-3-501. Definitions

In this Article, unless otherwise defined, these terms have the following meanings:

"Abutting property" means real property or interest in real property bordering a state highway right-of-way.

"Adopt-a-highway" means a Department program that allows a group of persons access to a state highway right-of-way to conduct litter pickup on a designated portion of the state highway.

"Airspace" means the space above real property.

"Applicant" means a person or entity seeking to obtain an encroachment permit.

"Department" means the Arizona Department of Transportation.

"District Office" means one of the Department's Engineering and Maintenance district offices.

"Encroachment" means any use of, intrusion upon, or construction of improvement within a state highway right-of-way by any person or entity other than the Department for any purpose, temporary or fixed, other than public travel authorized by state statute.

"Encroachment owner" means the person or entity responsible for creating or maintaining an encroachment on a state highway right-of-way.

"Encroachment permit" means a written approval granted by the Department for construction of a fixed or temporary improvement within a state highway right-of-way, or for any activity requiring the temporary use of or intrusion upon a state highway right-of-way.

"Engineering stationing" means the Department identification system to identify the location of a state highway feature.

"Improvement" means any constructed facility or object, or alteration to any existing physical facility or object, or change in the elevation, slope, or drainage of a state highway right-of-way.

"Permittee" means a person or entity to whom the Department issues an encroachment permit, and who is responsible for meeting the obligations, responsibilities, and specifications stated in the encroachment permit.

"Right-of-way" means the real property or interest in real property on which state transportation facilities and appurtenances to the facilities are constructed or maintained.

"Special event" means any temporary organized or supervised activity that could affect the normal operation of a state highway.

"State highway" has the meaning prescribed in A.R.S. § 28-101(47).

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-502. Applicability

A. A person or entity shall not encroach on a state highway right-of-way without obtaining an encroachment permit.

B. Only the following types of encroachments qualify for a Department encroachment permit:

1. Access improvements to abutting properties, consistent with subsection (C)(6);

2. Utility construction and maintenance, including underground and overhead;

3. Drainage improvements;

4. Airspace encroachments, such as overhanging signs, awnings, and banners;

5. Landscaping;

6. Special events;

7. Removing or improving an existing encroachment;

8. Rest area coffee breaks;

9. Change in the principal activity or function of an abutting property where an access or utility encroachment has been constructed;

10. Adopt-a-highway;

11. Activities, such as surveying, performed to compile information about physical features in the highway right-of-way;

12. Traffic control unrelated to the types of encroachments listed above for specific incidents, such as hazardous material removal, accident clean-up, or check points by government enforcement; and

13. For such uses as the Director specifies.

C. An encroachment not listed under subsection (B) is ineligible to qualify for an encroachment permit and is an unauthorized encroachment. An unauthorized encroachment also includes:

1. Outdoor advertising signs, except as an overhang in subsection (B)(4);

2. Parking areas;

3. Sales of any service or thing;

4. Bicycling, walking, horseback riding, or other activities prohibited under A.R.S. § 28-733;

5. Any commercial or industrial activity; or

6. Access to undeveloped property abutting a state highway, unless the applicant demonstrates a plan for:

a. Immediate development of the property evidenced by construction plans or building permits, or

b. Continuing maintenance of the undeveloped property.

D. A new owner of an existing permitted encroachment shall apply for an encroachment permit in the new owner's name within 30 days from the date of purchase of the abutting real property.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-503. Who Can Apply for an Encroachment Permit

A. Any person or entity, other than the Department, seeking an encroachment upon a state highway right-of-way shall apply to the Department for an encroachment permit.

B. Any person or entity is eligible to apply for an encroachment permit, except for an encroachment involving:

1. Access, only an abutting property owner is eligible to apply.

2. Landscaping and aesthetic enhancements, only an abutting property owner or a political subdivision is eligible to apply.

3. Utility installation, only an ultimate owner who will be responsible for maintenance and liability of the utility after it is put into service is eligible to apply. An ultimate owner includes a utility company, improvement district, political subdivision, or abutting property owner. A contractor or developer may apply if the contractor or developer provides evidence that an ultimate owner has approved plans and agrees to obtain an encroachment permit as a new owner upon completion of the utility installation.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-504. General Application Procedures

A. An applicant shall obtain an encroachment permit application form from the District Office serving the Department's district in which the proposed encroachment will be located.

B. An applicant shall include the following information on a District Office's encroachment permit application:

1. Name, address, city, state, zip code, telephone number, and signature of proposed encroachment owner;

2. Name, address, city, state, zip code, telephone number, and signature of applicant, if different from proposed encroachment owner;

3. Applicant's legal relationship to proposed encroachment owner;

4. City nearest to the proposed encroachment;

5. Location of proposed encroachment from the nearest milepost (in feet), including state highway route number, side of highway, and engineering stationing (if applicable); and

6. Purpose of proposed encroachment, as listed in R17-3-502(B), and a description of the proposed work or activity in the right-of-way.

C. By signing an application, an applicant or proposed encroachment owner, or both, agree to accept the following general obligations and responsibilities:

1. Assume all legal liability and financial responsibility for the encroachment activity for the duration of the permit;

2. Be responsible for any repair or maintenance work to the encroachment for the duration of the permit;

3. Comply with the Department's traffic control standards;

4. Obtain written approval from the abutting property owner if the encroachment encroaches on abutting property;

5. Upon notice from the Department, repair any aspect or condition of the encroachment that causes danger or hazard to the traveling public;

6. Remove the encroachment and restore the right-of-way to its original or better condition if the Department cancels the encroachment permit, and terminates all rights under the permit;

7. Reimburse the Department for costs incurred or deposit with the Department money necessary to cover all costs incurred for activities related to the encroachment, such as inspections, restoring the right-of-way to its original or better condition, or removing the encroachment;

8. Notify a new owner to apply for an encroachment permit, as required by R17-3-502(D);

9. Apply for a new encroachment permit if the use of the permitted encroachment changes;

10. Keep a copy of the encroachment permit at the work site or site of encroachment activity;

11. Construct the encroachment according to plans that the Department approves as part of the final permit;

12. Obtain required permits from other government agencies or political subdivisions;

13. Remove any defective materials, or materials that fail to pass the Department's final inspection, and replace with materials the Department specifies.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-505. Supporting Documentation

An applicant for an encroachment permit shall provide supporting documentation relevant to the type of encroachment activity and necessary to allow the Department to analyze the proposed encroachment's impact on the state highway and right-of-way, using such criteria as:

1. Whether the proposed encroachment is for commercial or residential access;

2. The proposed encroachment's impact on roadway features within the right-of-way;

3. The amount of traffic the proposed encroachment will generate;

4. Duration of the proposed encroachment;

5. The proposed encroachment's potential to disrupt traffic or change traffic patterns;

6. The surrounding terrain and physical features of the right-of-way and the abutting property; and

7. The number, size, and intended use of any buildings that would be accessed via the proposed encroachment.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-506. Encroachment Permit Requirements

A. An encroachment permit consists of the materials submitted by an applicant under R17-3-504 and R17-3-505, and additional requirements from the Department as described in subsection (B). An encroachment permit will list in detail the requirements with which the permittee shall comply in order to perform the requested encroaching activity. Some of the requirements are general and apply to every encroachment permit. Others are specific to a particular encroachment activity.

B. The Department shall set encroachment permit requirements to:

1. Maintain the integrity of the Department's right-of-way and transportation facilities;

2. Mitigate the risk to traffic safety;

3. Improve traffic movement, efficiency, and capacity;

4. Mitigate adverse drainage on state property or abutting property affecting state property;

5. Mitigate environmental impacts;

6. Mitigate maintenance costs to transportation facilities;

7. Mitigate potential liability for the Department or the state; and

8. Mitigate potential harms to national or state security.

C. By accepting an encroachment permit, a permittee agrees to the requirements described in the permit. If the permittee disagrees with the requirements, the permittee shall return the permit immediately to the District Office.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-507. Review Procedures

A. The Department shall conduct an administrative completeness review and substantive review of an application for an encroachment permit under A.R.S. §§ 41-1072 through 41-1077 and A.A.C. R17-1-102.

B. The Department shall decide whether to grant an encroachment permit based solely on the documents and information before the Department.

C. Decision.

1. The Department shall approve an encroachment permit if:

a. The proposed encroachment use is lawful,

b. The applicant provides complete and accurate information,

c. The proposed encroachment use qualifies under R17-3-502(B), and

d. The applicant agrees to comply with the Department's requirements as set out in the permit.

2. The Department shall deny an encroachment permit application if:

a. The proposed encroachment use is unlawful,

b. The applicant provides incomplete or inaccurate information,

c. The proposed encroachment use does not qualify under R17-3-502(B), or

d. The permittee disagrees with the requirements in the permit.

3. An applicant may appeal the Department's denial decision on an encroachment permit application as prescribed in R17-3-509.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-508. Unauthorized Encroachments; Enforcement Actions

A. An encroachment is unauthorized if:

1. A permittee fails to comply with the permit requirements,

2. A permittee provides false or inaccurate information on the encroachment permit application,

3. A person or entity fails to obtain an encroachment permit, or

4. The encroachment is unauthorized under R17-3-502(C).

B. An encroachment owner shall remove any unauthorized encroachment at the owner's own cost.

C. After considering the totality of the circumstances and in consultation with the Office of the Attorney General, the Department may refer a matter to the Office of the Attorney General according to A.R.S. §§ 28-7053 and 28-7054 for:

1. Enforcement against the owner of an unauthorized encroachment, or

2. Recovery of costs from the encroachment owner for the Department removing an unauthorized encroachment if the encroachment owner fails to remove the unauthorized encroachment.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

R17-3-509. Hearings

The Department shall inform an applicant or permittee of the hearing procedures when the Department:

1. Denies an application for an encroachment permit, or

2. Determines that an encroachment is unauthorized.

Historical Note

New Section made by final rulemaking at 10 A.A.R. 5202, effective February 5, 2005 (Supp. 04-4).

ARTICLE 6. RESERVED

ARTICLE 7. HIGHWAY ENCROACHMENTS AND PERMITS

R17-3-701. Outdoor advertising control

A. Purpose. The purpose of this subsection is to present the definitions of specialized terms used in describing outdoor advertising signs and matters relating thereto and to present a portion of the Arizona Revised Statutes dealing specifically with the regulation of certain advertising displays.

1. Definition of terms. Terms used in this rule are defined as follows:

a. "Erect" means to construct, build, raise, assemble, place, affix, attach, create, paint, draw, or in any way bring into being or establish.

b. "Re-erection" means the placing of any sign in a vertical position subsequent to its initial erection. Re-erection shall only occur in the event the sign has been damaged by tortious acts, acts of God such as wind, rain, flooding, or in the course of normal maintenance.

c. "Lease" means an agreement, oral or in writing by which possession or use of land or interests therein is given by the owner to another person for a specified period of time.

d. "Illegal sign" means one which was erected and/or maintained in violation of the state law.

e. "On-premise sign" means any sign that meets the following requirements (such signs are not controlled by state statutes):

i. Premises. The sign must be located on the same premises as the activity or property advertised.

ii. Purpose. The sign must have as its purpose:

(1) The identification of the activity, or its products or services, or

(2) The sale or lease of the property on which the sign is located, rather than the purpose of general advertising.

iii. In the case of an on premise sign advertising an activity, the premises will include all actual land used or occupied for such activity, including its buildings, parking, storage and service areas, streets, driveways and established front, rear, and side yards constituting an integral part of such activity, provided the sign is located on property under the same ownership or lease as the activity. Uses of land which serves no reasonable or integrated purpose related to the activity other than to attempt to qualify the land for signing purposes will not be considered as premises. Generally these will be inexpensive facilities, such as picnic, playgrounds, walking paths, or fences.

f. "Off-premise sign" means an outdoor advertising sign which advertises an activity, service or product and which is located on premises other than the premises at which such activity or service occurs or product is sold or manufactured.

g. "Nonconforming sign" means one which was lawfully erected but which does not comply with the provisions of state law or state laws passed at a later date or which later fails to comply with state law or state regulations due to changed conditions. Illegally erected or maintained signs are not nonconforming signs.

h. "Maintain" means to allow to exist, including such activities necessary to keep the sign in good repair, safe condition, and change of copy.

i. "Scenic area" means any area of particular scenic beauty or historical significance as determined by the federal, state, or local officials having jurisdiction thereof, and includes interests in land which have been acquired for the restoration, preservation, and enhancement of scenic beauty.

j. "Parkland" means any publicly owned land which is designated or used as a public park, recreation area, wildlife or waterfowl refuge or historic site.

k. "Federal or state law" means a federal or state constitutional provision or statute, or an ordinance, rule, or regulation enacted or adopted by a state or federal agency or a political subdivision of a state pursuant to a federal or state constitution or statute.

l. "Scenic overlook or rest area" - an area or site established and maintained within or adjacent to the highway right-of-way by or under public supervision or control for the convenience of the traveling public.

m. "Abandoned sign" means a sign for which neither the sign owner nor the landowner claim any responsibility.

n. "Double-faced sign" means a sign which has two faces facing in the same direction.

o. "Back-to-back sign" means a sign which carries faces attached on each side of the structure, being read from opposite directions.

p. "V-type signs" - signs which are oriented at an angle to each other, the nearest points of which are not more than ten feet apart.

q. "Face" means the surface of an outdoor advertising structure on which the design is posted or painted, usually made of galvanized metal sheets, fiberboard, plywood or plastic.

r. "Landmark sign" means a sign of historic or artistic significance which existed on October 22, 1965 which may be preserved or maintained as determined by the Director and approved by the Secretary of Transportation.

s. "Normal maintenance (nonconforming sign)," is that customary to keep a sign in ordinary repair, upkeep or refurbishing. Such maintenance will not exceed 50% of the appraised value of the sign. Repairs will be allowed for fires, winds, explosions, or other acts of God. Current appraisal schedules will be used in making value determinations. Normal maintenance also includes re-erection at the same location or within a reasonable distance of the original location, not to exceed ten feet.

t. "Intended to be read from the main traveled way" is defined by any of the following criteria:

i. More than 80% of the average daily traffic (as determined by ADOT traffic counts) viewing the outdoor advertising is traveling in either or both directions along the main-traveled way.

ii. Message content is of such a nature that it would be only of interest for the traffic using the main-traveled way.

iii. The sales value of the outdoor advertising is directly attributable to advertising circulation generated by traffic along the main-traveled way.

u. "Within the view of and directed at the main-traveled way" means any sign which is readable from the main-traveled way for more than five seconds traveling at the posted speed limit or for such a time as the whole message can be read whichever is less.

v. "Interchange" means a junction of two or more highways by a system of separate levels that permit traffic to pass from one to another without the crossing of traffic streams.

2. State statute regarding outdoor advertising. The following portion from Title 28 of the Arizona Revised Statutes is the authority for and is relevant to the content and intent of this rule. This portion of the A.R.S. is from Title 28, amended effective August 22, 1975. Exhibits 1 through 8 portray the essence of requirements promulgated by these statutes.

"CHAPTER 16
BEAUTIFICATION OF HIGHWAYS

ARTICLE 1. REGULATION OF CERTAIN ADVERTISING DISPLAYS

"28-2101. Definitions

In this Article, unless the context otherwise requires:

1. "Business area" means an area outside municipal limits embracing all of the land on the same side of the highway on which one or more commercial or industrial activities are conducted, including all land within one thousand feet measured in any direction from the nearest edge of the actual land used or occupied for such activity, including its parking, storage and service areas, its driveways and its established front, rear and side yards, constituting an integral part of such activity and which is zoned, under authority of law, primarily to permit industrial or commercial activity. However, when one or more commercial or industrial activities are located within one thousand feet of a freeway interchange, the business area shall extend three thousand feet measured in each direction parallel to the freeway from the center line of the crossroad, but shall not extend beyond the limits of the established commercial or industrial zone.

2. "Freeway" means a divided arterial highway on the interstate or primary system with full control of access and with grade separations at intersections.

3. "Information center" means a site established and maintained at a safety rest area for the purpose of informing the public of places of interest within the state and providing other information the transportation board considers desirable.

4. "Interstate system" means that portion of the national system of interstate and defense highways located within this state as may now or hereafter be officially designated by the transportation board and approved by the secretary of transportation pursuant to title 23, United States Code.

5. "Main-traveled way" means the portion of a roadway for the movement of vehicles, exclusive of shoulders, on which through traffic is carried. In the case of divided highway, the traveled way of each of the separated roadways for traffic in opposite directions is a main-traveled way. It does not include such facilities as frontage roads or parking areas.

6. "Outdoor advertising" means any outdoor sign, display, light, device, figure, painting, drawing, message, plaque, poster, billboard or other thing which is designed, intended or used to advertise or inform, the message of which is visible from any place on the main-traveled way of the interstate, secondary or primary systems.

7. "Primary system" means that portion of connected main highways located within this state as may now or hereafter be officially designated by the transportation board and approved by the secretary of transportation pursuant to title 23, United States Code.

8. "Safety rest area" means a site established and maintained by or under public supervision or control for the convenience of the traveling public within or adjacent to the right-of-way of the interstate or primary systems.

9. "Secondary system" means that portion of connected highways located within this state as may now or hereafter be officially designated by the transportation board and approved by the secretary of transportation pursuant to title 23, United States Code.

10. "Unzoned commercial or industrial area" means an area not zoned under authority of law in which land use is characteristic of that generally permitted only in areas which are actually zoned commercial or industrial under authority of state law, embracing all of the land on the same side of the highway on which one or more commercial or industrial activities are conducted, including all land within one thousand feet measured in any direction from the nearest edge of the actual land used or occupied by such activity, including its parking, storage and service areas, its driveways and its established front, rear and side yards, constituting an integral part of such activity. As used in this paragraph, "commercial or industrial activities" does not include:

(a) Outdoor advertising structures.

(b) Agricultural, forestry, grazing, farming and related activities.

(c) Transient or temporary activities including but not limited to wayside fresh produce stands.

(c) Activities not visible from the main-traveled way.

(e) Activities conducted in a building principally used as a residence.

(f) Railroad tracks and minor sidings, and above ground or underground utility lines.

"28-2102. Outdoor advertising authorized

A. The following outdoor advertising may be placed or maintained along interstate, secondary and primary systems within six hundred sixty feet of the edge of the right-of-way:

1. Directional or other official signs or notices that are required or authorized by law, including but not limited to, signs pertaining to natural wonders, scenic and historic attractions.

2. Signs, displays and devices advertising activities conducted on the property upon which they are located.

3. Signs, displays and devices advertising the sale or lease of property upon which they are located.

4. Signs, displays and devices lawfully placed after April 1, 1970, in business areas.

5. Signs, displays and devices lawfully placed after the effective date of this Article in zoned or unzoned commercial or industrial areas inside municipal limits, or after April 1, 1972, in unzoned commercial or industrial areas outside of municipal limits.

6. Signs, displays and devices lawfully existing on April 1, 1970, which are located in business areas, and in zoned commercial or industrial areas outside of municipal limits.

7. Signs, displays and devices lawfully existing on the effective date of this Article which are located in zoned or unzoned commercial or industrial areas inside municipal limits, or on April 1, 1972, in unzoned commercial or industrial areas outside of municipal limits.

B. Outdoor advertising authorized under subsection A, paragraphs 1, 4, and 5 of this Section shall conform with standards contained, and shall bear permits required, in regulations promulgated by the director under the provisions of this Article, except that such authorized outdoor advertising along highways in the secondary system which are not state highways need only bear permits required by the responsible county or municipal authority.

C. Outdoor advertising authorized under paragraphs 6 and 7, subsection A of this Section need not conform to standards contained, but shall bear permits required, in regulations promulgated by the director under the provisions of this Article, except that such authorized outdoor advertising along highways in the secondary system which are not state highways need only bear permits required by the responsible county or municipal authority.

D. Signs lawfully in existence on October 22, 1965 which are determined by the director, subject to the approval of the secretary of transportation as provided for by § 131(c) of Title 23 of the United States Code, to be landmark signs, including signs on farm structures or natural surfaces, of historic or artistic significance the preservation of which would be consistent with the purposes of this Article, may be preserved or maintained.

"28-2103. Outdoor advertising prohibited

A. No outdoor advertising shall be placed or maintained adjacent to the interstate, secondary or primary systems at the following locations or positions or under any of the following conditions or if it is of the following nature:

1. If within view of, directed at, and intended to be read from the main-traveled way of the interstate, primary or secondary systems, excepting outdoor advertising authorized under § 28-2102.

2. If visible from the main-traveled way and simulating or imitating any directional, warning, danger or information sign permitted under the provisions of this Article, or if likely to be mistaken for any such permitted sign, or if intended or likely to be construed as giving warning to traffic, such as by the use of the words "STOP" or "SLOW DOWN."

3. If within any stream or drainage channel or below the flood water level of any stream or drainage channel where the outdoor advertising might be deluged by flood waters and swept under any highway structure crossing the stream or drainage channel or against the supports of the highway structure.

4. If visible from the main-traveled way and displaying any red, flashing, blinking, intermittent or moving light or lights likely to be mistaken for a warning or danger signal, excepting that part necessary to give public service information such as time, date, weather, temperature or similar information.

5. If any illumination thereon is of such brilliance and so positioned as to blind or dazzle the vision of travelers on the main-traveled way.

6. If existing under a permit as required by this Article and not maintained in a safe condition.

7. If obviously abandoned.

8. If placed in such a manner as to obstruct, or otherwise physically interfere with, an official traffic sign, signal or device or to obstruct, or physically interfere with, the vision of drivers in approaching, merging or intersecting traffic.

9. If placed upon trees, or painted or drawn upon rocks or other natural features, excepting signs permitted under § 28-2102, subsection A, paragraph 2.

B. At interchanges on freeways or interstate highways outside of municipal limits, no outdoor advertising signs, displays or device shall be erected in the area between the crossroad and a point five hundred feet beyond the beginning or ending of pavement widening at the exit from or entrance to the main-traveled way.

"28-2104. Standards for outdoor advertising; directional and other official signs; business areas and unzoned commercial or industrial areas outside municipal limits; zoned or unzoned commercial or industrial areas within municipal limits

A. Direction and other official signs authorized under § 28-2102, subsection (A), paragraph (1), shall comply with regulations which shall be promulgated by the director relative to their lighting, size, number, spacing and such other requirements as may be appropriate to implement this Article, which regulations shall not be inconsistent with such national standards as may be promulgated from time to time by the secretary of transportation of the United States pursuant to subdivision (c) of § 131 of Title 23 of the United States Code.

B. After April 1, 1970, outdoor advertising placed in business areas and after April 1, 1972, in unzoned commercial or industrial areas outside of municipal limits shall comply with the provisions of this Article and the following standards:

1. Size of outdoor advertising shall not exceed one thousand two hundred square feet in area with a maximum vertical facing dimension of twenty-five feet and a maximum horizontal facing dimension of sixty feet, including border and trim, and excluding base or apron supports and other structural members. Such size limitations shall apply to each facing of outdoor advertising. The area shall be measured by the smallest square, rectangle, triangle, circle or combination thereof, which will encompass the entire advertisement. Two advertising displays not exceeding three hundred fifty square feet each may be placed in a facing. Back to back or V-type signs may be placed, with the maximum area allowed for each facing.

2. Spacing of outdoor advertising shall be such that it is not placed:

(a) Within five hundred feet from other outdoor advertising on the same side of a freeway.

(b) Within five hundred feet of the beginning or ending of pavement widening at the exit from or entrance to the main traveled way at a scenic overlook or safety roadside rest area on any portion of a freeway.

(c) Within three hundred feet from other outdoor advertising on the same side of any portion of the primary system which is not a freeway.

3. Minimum spacing distances from other outdoor advertising shall not apply to outdoor advertising which is separated by a building or other obstruction in such a manner that only one display located within the minimum distances set forth herein is visible from the highway at any one time. Spacing distances shall be measured along the nearest edge of the pavement to a point directly opposite the outdoor advertising.

4. Outdoor Advertising authorized under § 28-2102, subsection (A), paragraphs (2) and (3) shall not be counted and measured from in determining compliance with the spacing requirements of this subsection.

C. After the effective date of this Article, outdoor advertising placed in zoned or unzoned commercial or industrial areas within municipal limits shall comply with the following standards:

1. The size of outdoor advertising shall not exceed that set forth in subsection (B), paragraph (1) of this Section.

2. Spacing of outdoor advertising shall be such that it is not placed:

(a) Within five hundred feet from other outdoor advertising on the same side of a freeway.

(b) Within one hundred feet from other outdoor advertising on the same side of any portion of the primary system which is not a freeway.

3. It shall have the same standard as subsection (B), paragraph (3) of this Section.

4. It shall have the same standard as subsection (B), paragraph (4) of this Section.

"28-2105 . Authority to acquire outdoor advertising and property rights; compensation; removal

A. The director shall acquire by gift, agreement, purchase, exchange, eminent domain or other lawful means, all right, title, leasehold, and interest in any outdoor advertising together with the right of the owner of the real property on which such outdoor advertising is located to erect and maintain such outdoor advertising thereon, when the outdoor advertising is prohibited by this Article. Damages resulting from any taking of property in eminent domain shall be ascertained in the manner provided by law.

B. If compensation is required by federal law, and if federal participation in such compensation is required by federal law, nonconforming outdoor advertising shall not be required to be removed until federal funds for the federal share of compensation therefor as required by such federal law have been made available to the Department.

C. When outdoor advertising is placed after the effective date of this Article, contrary to provisions of this Article or the regulations promulgated by the director, or when a permit is not obtained as prescribed in this Article, the outdoor advertising shall be deemed unlawful. The director shall give notice by certified mail of his intention to remove advertising deemed unlawful to both the owner or the occupant of the land on which such outdoor advertising is located and the owner of the outdoor advertising, if the latter is known, or if unknown, by posting notice in a conspicuous place on such outdoor advertising. Within seven days after such notice is mailed or posted the owner of the land or the outdoor advertising may make a written request to the director for a hearing to show cause why the outdoor advertising should not be removed. The director shall designate a hearing officer, who shall be an administrative employee of the department, to conduct and preside at such hearings. When a hearing is requested under this provision, the hearing shall be held within thirty days thereafter and the party requesting the hearing shall be given at least five days' notice of the time of such hearing. All hearings shall be conducted at department administrative offices. A full and complete record and transcript of the hearing shall be taken. The presiding officer shall within ten days after the hearing make a written determination of his findings of fact, conclusions and decision and shall mail a copy of the same, by certified mail, to the owner or the party who requested the hearing. If the decision is adverse to the party, the party may within ten days after the decision is rendered, petition the superior court of the county wherein the outdoor advertising is located to determine whether the decision of the hearing officer was lawful and reasonable. If the decision of the court upholds that of the director, all costs from the time of the administrative hearing, including court costs, shall be borne by the owner of the land or the outdoor advertising or both. If a hearing before the director is not requested, or if there is no appeal taken from the director's decision of such hearing, or if the director's decision is affirmed on appeal, the director shall immediately remove the offending outdoor advertising. The owner of the outdoor advertising or the owner or occupant of the land or the owner of the outdoor advertising and the owner or occupant of the land shall be liable for the costs of such removal. The director shall incur no liability for such removal.

"28-2106. Agreement with secretary of transportation; outdoor advertising regulations; permits

The director shall:

1. Enter into the agreement with the secretary of transportation provided for by § 131(d) of Title 23 of the United States Code setting forth the standards governing the size, lighting, and spacing of outdoor advertising authorized under § 28-2102, subsection (A), paragraphs (4) and (5), and defining an unzoned commercial or industrial area. If the standards and definitions contained in the agreement do not agree substantially with the provisions of this Article, the agreement shall not become effective until the legislature by statute amends this Article to conform with the terms of the agreement.

2. Prescribe and enforce regulations governing the placing, maintenance, and removal of outdoor advertising. Such regulations shall be consistent with the public policy of this state to protect the safety and welfare of the traveling public, the provisions of this Article, the terms of the agreement with the secretary of transportation, and the national standards, criteria, and rules and regulations promulgated by the secretary of transportation pursuant to § 131 of Title 23, United States Code.

3. Define by rules or regulations, unzoned commercial or industrial areas along with the interstate and primary systems. The definitions shall be consistent with the definitions of these areas set forth in this Article and set forth in the agreement with the secretary of transportation.

4. Issue permits to place or maintain, or both, outdoor advertising authorized under § 28-2102, subsection (A), paragraphs (1), (4), (5), (6) and (7), and establish and collect fees for the issuance of such permits. The fees shall be not more than the actual costs to the department. All fees collected under the provisions of this Article shall be paid to the state treasurer for credit to the state highway fund.

"28-2107. Control of advertising displays along interstate, secondary and primary highways by municipality or county

If an incorporated municipality or county desires to control outdoor advertising along interstate, secondary and primary highways, it may do so upon request to the director and certification by the director to the secretary of transportation that the municipality or county has enacted