FORMAL OPINION
DATE: 21 June 1994
Subject: Highways; Counties; Water and Sewer Associations; G.S. 136-27.1
Requested by: William S. Richardson, Currituck County Manager
Questions:
. Under G.S. 136-27.1, at what point in time must a water or sewer system organized pursuant to Chapter 162A be in existence to qualify for an exemption from the requirement that water and sewer lines on state highway right of way be relocated at local expense?
. Is the conclusion in question 1 affected by the existence of an encroachment agreement under which the county agreed to pay all relocation costs?
Conclusions:
. On the date the Department of Transportation lets a contract for the highway improvement project.
. No
The North Carolina Department of Transportation intends to let contracts in 1995 to widen US 168 in Currituck County. In connection with this widening project, approximately 18.5 miles of county-owned water transmission lines will require relocation. Under the terms of a 1987 right of way encroachment agreement between the Department and Currituck County, the County is responsible for the costs of relocating water transmission lines on highway right of way as required in connection with improvement projects.
G.S. 136-27.1 states:
The Department of Transportation shall pay the nonbetterment cost for the relocation of water and sewer lines, located within the existing State highway right-of-way, that are necessary to be relocated for a State highway improvement project and that are owned by: (i) a municipality with a population of 5,500 or less according to the latest decennial census; (ii) a nonprofit water or sewer association or corporation; or (iii) any water or sewer system organized pursuant to Chapter 162A of the General Statutes.
The water transmission lines along US 168 do not currently qualify for the exemption in G.S. 136-27.1, inasmuch as Currituck County is not a municipality with a population of 5,500 or less. Nor is it a water or sewer association, corporation or system organized pursuant to Chapter 162A responsible for ownership and operation of the county water system.
You indicate the County is contemplating the establishment of a water and sewer district or authority for purposes of ownership and operation of the county water and sewer systems. Your first question is at what point in time must the new water and sewer district or authority be in existence in order to qualify for the exemption in G.S. 136-27.1.
The statutory exemption was enacted pursuant to Chapter 1090 of the 1983 Session Laws (Reg. Sess., 1984). Section 2 of Chapter 1090 states:
This act shall apply to State highway improvement projects let to contract after the
effective date of this act.
This provision was subsequently amended by Chapter 479 of the 1985 Session Laws. Section 186(b) of Chapter 479 states:
This section applies only to State highway improvement projects let to contract after July
1, 1985.
Chapter 1018, Section 11, of the 1985 Session Laws (Reg. Sess., 1986), further amended the statutory provision and stated, in Section 11(b):
This section shall become effective June 1, 1986, and applies only to State highway
improvement projects let to contract on or after that date.
The General Assembly therefore used the phrase "let to contract" in each version of the legislation when specifying the effective date of the exemption.
In view of the legislative reliance on the phrase "let to contract" and the absence of other specific guidance as to the application of the exemption, it is our opinion that this phrase should be relied upon in this case in determining the point in time when a water or sewer association, corporation or system must be in existence to qualify for the exemption. As such, if the water transmission lines along US 168 are owned by an association, corporation or system specified under G.S. 136
27.1 on the date the Department lets a contract for the highway improvement project, it will be the responsibility of the Department to pay for the nonbetterment cost of relocating the water transmission lines.
Your second question is whether the existence of the right of way encroachment agreement executed by the Department and Currituck County affects the application of the G.S. 136-27.1 exemption. It is our opinion that the specific exemption contained in the statute supersedes any conflicting provision of the agreement and would not be enforceable.
The utility relocation costs involved in this project are estimated to be between 1.2 and 2 million dollars. The General Assembly did not provide an exemption under G.S. 136-27.1 for counties as it did for municipalities under 5500 population, except for those counties that operate their water or sewer facilities through authorities or districts set up pursuant to G.S. 162A. This opinion assumes a bona fide authority or district will be established pursuant to G.S. 162A for purposes unrelated to the costs of relocating the water transmission lines in question. The opinion does not address the propriety of establishing an authority or district solely for the purpose of transferring the burden of relocation costs to the Department of Transportation.
Michael F. Easley Attorney General Grayson G. Kelley Special Deputy Attorney General