(a) General.

1. (1) In some cases, the utility owner may upgrade its facility during relocation.
2. (2) Betterments increase the facility capacity or improve transmission, including function and quality.

3. (3)

   1. (A) The Arkansas Department of Transportation only pays for a functional equivalent replacement of the impacted utility facility.
   2. (B) The department shall receive credit for the difference between the cost of the functional replacement of the original facility and the cost of the facility as constructed.
   3. (C) The utility owner shall submit an estimate including any betterment for approval by the department.

(b) Exceptions.

1. (1) Some exceptions as outlined in 23 C.F.R. § 645.117(h), exist to the general rule.

2. (2) The department may reimburse for the following types of betterment:

   1. (A) Those required by the transportation project or by state or federal law or regulation;
   2. (B) Replacement devices or materials that are equivalent but not identical standards;
   3. (C) Replacement of devices or materials no longer regularly manufactured with next higher grade or size; and
   4. (D) Those required by current highway or industry design practices and offering direct benefit to the transportation project.

(c) Amount of betterment.

1. (1) The overall scope of the betterment will be determined when the relocation agreement is prepared and the utility owner's calculation of the betterment credit will be verified.

2. (2) Betterment credit includes the cost of materials and the increased costs of engineering and installing the betterment facilities, such as:

   1. (A) Additional engineering;
   2. (B) Special construction methods; and
   3. (C) Increased overhead.