Ariz. Admin. Code § 17-3-602

Current through Register Vol. 30, No. 50, December 13, 2024

Section R17-3-602 - Telecommunication Use and Occupancy Agreement; Time-frames; Compensation for Longitudinal Access to the Right-of-Way

A. A provider must enter into a telecommunication use and occupancy agreement with the Department and obtain an encroachment permit, as prescribed under Article 5 of this Chapter, before being granted longitudinal access for new installation of a telecommunication facility. This Section does not apply to a telecommunication facility with an encroachment permit approved before January 1, 2023.

B. A provider seeking to enter into a telecommunication use and occupancy agreement shall complete and provide the following information on a telecommunication use and occupancy agreement application provided by the Department at www.azdot.gov:

1. Name of provider;

2. The point of contact's information, which includes name, telephone number, and email address;

3. A description of the proposed work or activity in the right-of-way or facilities; and

4. A map, drawing, or geographical description of the proposed telecommunication facility installation, including the starting and ending milepost to the nearest tenth of a mile, state highway number, the cardinal direction of the highway, the number and size of conduits, and accompanying telecommunication facility locations.

C. The Department shall, within five calendar days of receiving an application under subsection (B), provide written notice to the provider acknowledging receipt of the application:

1. If the application is complete, the notice shall acknowledge receipt of a complete application and indicate the date the Department received the complete application; or

2. If the application is incomplete, the notice shall indicate the current date and include an itemized list of all additional information the provider must provide to the Department before the application can be considered complete and subsequently processed.

D. A provider with an incomplete application shall respond to the notice provided by the Department under subsection (C)(2) within 15 calendar days after the date indicated on the notice or the Department may deny the application.

E. The Department shall render a decision on the application within 15 calendar days after the date on the notice the Department gave to the provider under subsection (C)(1) acknowledging receipt of a complete application.

F. For the purpose of A.R.S. § 41-1073, the Department establishes the following time-frames:

1. Administrative completeness review time-frame: five calendar days.

2. Substantive review time-frame: 10 calendar days.

3. Overall time-frame: 15 calendar days.

G. A provider shall pay an annual right-of-way occupancy rate as compensation to the Department for longitudinal access to a highway right-of-way for new installations of telecommunication facilities, including overhead, surface, or underground, in accordance with A.R.S. § 28-7385.

1. The annual right-of-way occupancy rate schedule is as follows:

a. Interstate System: $1.00 per linear foot of longitudinal access.

b. Controlled Access Highways (non-interstate): $0.50 per linear foot of longitudinal access.

c. Uncontrolled Access Highways: $0.25 per linear foot of longitudinal access.

2. At the beginning of each calendar year, starting January 1, 2024, the cost per linear foot as prescribed in subsection (G)(1), increases at a rate of 2% per calendar year. The new annual right-of-way occupancy rate applies to any new or renewed telecommunication use and occupancy agreements established within that given year.

3. The annual right-of-way occupancy rate, established at the time of signing the telecommunication use and occupancy agreement, shall be the rate for each year of a 20-year or 30-year agreement.

4. The distance is measured using the State Milepost System, rounded to the nearest tenth of a mile and converted to a linear foot value.

5. The total amount of the annual right-of-way occupancy rate is determined by using the following calculation: cost per linear feet x distance = total annual right-of-way occupancy rate.

6. The Department shall receive monetary compensation in the form of an annual or lump sum payment, unless an in-kind compensation or combination of in-kind and monetary compensation is agreed upon by the Department and the provider.

a. Annual monetary compensation. The provider shall pay the total annual right-of-way occupancy rate established at the time of signing the telecommunication and occupancy use agreement and at the time of signing any renewals.

b. Lump-sum monetary compensation. The provider shall pay in accordance with the following:

i. The total annual right-of-way occupancy rate is multiplied by the number of years of the agreement.

ii. A discounted rate of 10% is applied utilizing net present value calculation.

c. In-kind compensation.

i. Telecommunication facilities shall be valued on a present value basis at the estimated, reasonable cost to the provider for procuring and installing such telecommunication facilities. The in-kind value shall be agreed upon, between the Department and provider, in the telecommunication use and occupancy agreement.

ii. The Department shall provide the provider with a list of the specific telecommunication facilities and services for consideration as in-kind compensation. The value of such in-kind compensation shall be subtracted from the total amount of monetary compensation due for occupancy of the right-of-way and the remaining balance, if any, shall be remitted as monetary compensation.

iii. Any telecommunication facilities acquired as in-kind compensation shall be used exclusively for the further development of telecommunications that serve state purposes and may not be sold or leased in competition with providers.

iv. The provider maintains ownership and is responsible for maintenance of the in-kind compensation provided, however, the associated costs will be agreed upon in the telecommunication use and occupancy agreement.

d. Combination of monetary and in-kind compensation. The provider will pay the total annual right-of-way occupancy rate in accordance with subsections (G)(6)(a) through (c), as applicable, and as agreed upon by the Department and the provider.

7. The payment of the annual right-of-way occupancy rate will be made as follows:

a. For monetary compensation, the provider shall pay the total annual right-of-way occupancy rate to the Department within 30 calendar days of signing the telecommunication use and occupancy agreement and any renewals.

b. For in-kind compensation, the agreement shall set forth the timeline for the Department to receive agreed upon telecommunication facilities.

H. By signing a telecommunication use and occupancy agreement, a provider agrees to accept the following general obligations and responsibilities:

1. Complying with the encroachment permit rules in Article 5 of this Chapter;

2. Complying with the terms and conditions contained in the telecommunication use and occupancy agreement and encroachment permit documents for installation, operation, maintenance, and relocation of telecommunication facilities;

3. Not having exclusive access or rights to the right-of-way;

4. Having the term length of the telecommunication use and occupancy agreement to be for one year, 20 years, or 30 years with an option to renew the agreement at the current applicable starting rate for the first year of a new agreement or renewal; the rate will be increased annually if the renewal is for a one-year period, otherwise pursuant to the terms of a new 20-year or 30-year agreement; and

5. Terminating the telecommunication use and occupancy agreement due to removal of facilities from the right of way.

a. For any monetary compensation, the provider shall receive a prorated refund based on the number of months remaining in the term agreement.

b. For any in-kind compensation, the access to facilities or services provided will terminate at the time of the removal of the facilities.

Ariz. Admin. Code § R17-3-602

New Section made by exempt rulemaking at 28 A.A.R. 3372, effective 1/1/2023.