OAR 734-035-0005: Property Grants to Cities and Counties for Streets and Roads

(1) General Policy: The grant of property or property rights acquired by highway funds is subject to statutory and constitutional restrictions. This administrative rule is enacted in order to assure that those restrictions are satisfied when property or property rights are granted to cities or counties for street or road purposes by ensuring that such transfer is in the public interest and that the highway funds are being adequately conserved. (2) The Department of Transportation receives requests from cities and counties for grants of property owned by the department for construction of streets and roads which are not part of the state highway system. Subject to the following conditions, the department may sell or transfer property not on operating right of way if the property is declared surplus to the needs of the department and may grant easements on operating right of way for such street and road purposes: (a) Sale or transfer of property not on operating right of way declared surplus: (A) If the proposed street or road is determined not to benefit the state highway system the property shall be appraised and that value must be paid before property rights are transferred; and (B) If the proposed street or road is determined to be a distinct and direct benefit to the state highway system the property shall be appraised, the value of the proposed street or road to the state highway system shall be determined and if the values are approximately equal the grant shall be given at no cost to the city or county, otherwise the difference between the appraised value and value to the state highway system must be paid before the property rights are transferred. (b) Grant of easement on operating right of way: (A) The property will be reviewed for the possibility of revenue production, and if there is such a possibility, the property will be appraised by the right of way section and an appraised value given: (i) If the proposed street or road is determined to directly and distinctly benefit the state highway system the easement may be granted at no cost to the city or county; (ii) If there is determined to be no possibility of revenue production the easement may be granted at no cost to the city or county; and (iii) If there is determined to be a possibility of revenue production and the proposed street or road is determined not to be a benefit to the state highway system the appraised value must be paid by the city or county prior to a grant of easement. (B) A grant of easement on operating right of way are also subject: (i) Review and approval by Federal Highway Administration; (ii) Review and approval by the department of the street or road design and its effect on the safety and operation of the highway; and (iii) Compliance with section (3) of this rule, including payment of administrative costs. (3) A grant of easement, and sale or transfer of department property is also subject to the following: (a) Payment by the city or county of administrative costs, incurred by the department in processing and reviewing the request, including the proposed design, and in appraising value and determining revenue production possibilities. The administrative costs will be based on actual documented costs incurred plus a ten percent charge for general administration; (b) Prior to the transfer of any property rights a fully approved and executed written agreement must be entered into between the department and the city or county outlining details of design, construction and cost responsibility; and (c) All grants or transfers constitute only a transfer of a property right, and do not excuse the city or county from complying with any other requirements or obtaining approvals necessary under existing law for street or road construction.