Tenn. Comp. R. & Regs. 1680-06-02-.11 - MOVING PAYMENTS - NON-RESIDENTIAL

(1) Payment for Actual and Reasonable Moving Expenses.

Any business or farm operation that qualifies as a displaced person is entitled to reimbursement for actual moving and related expenses, as the displacing agency determines to be reasonable and necessary. Expenses eligible for reimbursement include the following:

(a) The costs of transporting personal property within a 50-mile radius of the displaced dwelling or farm operation. Transportation costs for any distance beyond 50 miles are not eligible for reimbursement, unless, in exceptional cases, the displacing agency has made a prior determination that relocation beyond 50 miles is justified.

(b) The costs of packing, crating, unpacking and uncrating personal property.

(c) The costs of disconnecting, dismantling, removing, reassembling, and reinstalling relocated machinery, equipment and other personal property, including substitute personal property as described in Subparagraph (j) below. This includes fees or charges for reinstalling telephone or utility services. It also includes modifications necessary to adapt personal property to the replacement structure, the replacement site or the utilities at the replacement site, and modifications necessary to adapt the utilities at the replacement site to the personal property.

(d) The costs of storage for personal property, if previously approved by the displacing agency, but not for any period greater than 12 months unless the displacing agency expressly determines that a longer period is necessary.

(e) The cost of insurance for the replacement value of personal property moved or stored in connection with the relocation, or the reasonable replacement value of property lost, stolen or damaged in the process of moving (not through the fault or negligence of the displaced person or his or her agent or employee), where insurance covering such loss, theft or damage is not reasonably available.

(f) The cost of obtaining any license, permit or certification required of the displaced person at the replacement location; provided, however, that the reimbursement shall be limited to the remaining useful life of the existing license, permit or certification. Any costs associated with transferring existing licenses, permits or certifications are also eligible for reimbursement.

(g) The cost of professional services necessary for:

1. Planning the move of the personal property;

2. Moving the personal property; and

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

These services may include fees paid to architects, engineers and other consultants for such services as supervising the move, designing the plant layout for an existing replacement building and scheduling the move.

(h) The costs of relettering signs and replacing stationery on hand at the time of displacement to the extent that they are made obsolete as a result of the move. The displaced person must turn over to the displacing agency all such materials for which the displaced person is seeking reimbursement, and the amount of reimbursement shall be limited to the costs of replacing these materials.

(i) Actual direct loss of tangible personal property incurred as a result of moving or discontinuing the business or farm operation. Except for advertising signs as provided in Part 3 below, the amount of the payment shall include the reasonable cost incurred in attempting to sell the item(s) that are not to be relocated plus the lesser of:

1. The fair market value of the item(s) for continued use at the displacement site, less the proceeds from its sale; provided that:

(i) To be eligible for payment, the displaced person must make a good faith effort to sell the personal property, unless the displacing agency determines that such effort is not necessary, and

(ii) When payment for property loss is claimed held for goods held for sale, the fair market value shall be based on the cost of the goods to the business, not the potential selling price; or

2. The estimated cost of moving the item(s), but with no allowance for storage; provided that, if the business or farm operation is discontinued, the estimated cost shall be based on a moving distance of 50 miles.

3. The amount of a payment for direct loss of an advertising sign, as personal property, shall be the lesser of:

(i) The depreciated reproduction cost of the sign, as determined by the displacing agency, less the proceeds from its sale; or

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

(j) The costs of purchasing substitute personal property to replace an item at the displacement site that is not moved, provided that the substitute item performs a comparable function at the replacement site. The payment shall be for the lesser of:

1. The cost of the substitute item, including installation costs at the replacement site, minus any proceeds from the sale or trade-in of the replaced item; or

2. The estimated cost of moving and reinstalling the replaced item, but with no allowance for storage. At the displacing agency's discretion, the estimated cost for a low cost or uncomplicated move may be based on a single bid or estimate.

(k) The actual costs incurred in searching for a replacement location as the displacing agency determines to be reasonable, but not to exceed $2,500, including the costs for:

1. Transportation, based on the standard mileage reimbursement rate provided in the displacing agency's own travel regulations, if any, or on the current Standard Mileage Rate established by the Tennessee Department of Finance and Administration in the Comprehensive Travel Regulations, General Reimbursement Rate Schedule;

2. Meals and lodging away from home, based on the reimbursement rates provided in the displacing agency's own travel regulations, if any, or on the currently applicable rates for lodging and meals established by the Tennessee Department of Finance and Administration in the Comprehensive Travel Regulations, General Reimbursement Rate Schedule;

3. Time spent searching, obtaining permits, attending zoning hearings, and negotiating the purchase of a replacement site, based on reasonable salary or earnings; and

4. Fees paid to a real estate agent or broker to locate a replacement site, exclusive of any fees or commissions related to the purchase of such site.

(l) If the agency determines that the personal property to be moved is of low value and high bulk (e.g. stockpiled sand, gravel, mulch, etc.), and the cost of moving the property would be disproportionate to its value, the allowable moving cost payment shall not exceed the lesser of: The amount which would be received if the property were sold at the site or the replacement cost of a comparable quantity delivered to the new business location.

(m) Connection to available nearby utilities from the right-of-way to improvements at the replacement site.

(n) Professional services performed prior to the purchase or lease of a replacement site to determine its suitability for the displaced person's business operation including but not limited to, soil testing, feasibility and marketing studies (excluding any fees for the purchase or lease of such site).

(o) Other moving-related costs, excluding ineligible moving expenses identified in Rule 1680-06-02-.12 below, as the displacing agency may determine to be reasonable and necessary.

(2) Self Moves.

(a) If the displaced person chooses to take full responsibility for all or part of the move of the business or farm operation, the displacing agency shall pay the displaced person's moving expenses in an amount not to exceed the lower of two acceptable bids or estimates obtained by the displacing agency. At the displacing agency's discretion, payment for a low cost or uncomplicated move may be based on a single bid or estimate. No further documentation of expenses shall be required prior to payment except as provided in Paragraph (3) below.

(b) The displaced person shall provide the displacing agency with an inventory of all personal property actually moved. If the personal property actually moved is less than the amount included in the bid or estimate, the displacing agency may reduce the amount paid to the displaced person in proportion to the lesser amount of property moved.

(3) Notification and Inspection.

(a) To be reimbursed for actual moving expenses or for a self move, as provided in Paragraphs (1) or (2) above, the dislocated business or farm operation must:

1. Unless waived by the displacing agency, provide the displacing agency with reasonable advance written notice of:

(i) The approximate date of the start of the move or disposition of the personal property, and

(ii) A certified list of the items to be moved (inventory); and

2. Permit the displacing agency to make reasonable and timely inspections of the personal property at both the displacement and replacement sites and to monitor the move.

(b) The displacing agency shall notify the displaced person in writing regarding the obligations in Subparagraph (a) above as soon as possible after the initiation of negotiations. This notice may be included with the Notice of Eligibility for Relocation Assistance as set forth in Rule 1680-06-02-.06.

(4) Reestablishment Expenses - Non-Residential.

(a) In addition to the payments available under Paragraphs (1) or (2) of this Rule, a small business, as defined in Rule 1680-06-02-.03 above, farm operation, or nonprofit organization is entitled to receive a payment for eligible expenses actually incurred in reestablishing such small business, farm operation or non-profit organization. The total amount of any payment for reestablishment expenses shall not exceed $25,000.

(b) Eligible Reestablishment Expenses. To be eligible for reimbursement, reestablishment expenses must be reasonable and necessary, as determined by the displacing agency, and such payments shall not duplicate any payment made to the displaced person as a moving expense under Paragraphs (1) or (2) of this Rule. Eligible expenses include, but are not limited to, the following:

1. Repairs or improvements to the replacement real property as required by federal, state or local law, code or ordinance;

2. Modifications to the replacement property to accommodate the business or farm operation or to make replacement structures suitable for conducting the operation;

3. Construction and installation costs for exterior signing to advertise the business;

4. Redecoration or replacement of soiled or worn surfaces at the replacement site, such as paint, paneling or carpeting;

5. Licenses, fees and permits, when not paid as part of moving expenses;

6. Feasibility surveys, soil testing and marketing studies, when not paid as part of moving expenses;

7. Advertisement of replacement location;

8. Professional services in connection with the purchase or lease of a replacement site, when not paid as part of moving expenses;

9. Estimated increased costs of operation at the replacement site during the first two years for such items as:

(i) Lease or rental charges,

(ii) Personal or real property taxes,

(iii) Insurance premiums, and

(iv) Utility charges, excluding impact fees;

10. Impact fees or one-time assessments for anticipated heavy utility usage; and

11. Other items that may be essential to the reestablishment of the business or farm operation, as determined by the displacing agency.

(c) Ineligible Reestablishment Expenses. The following is a non-exclusive listing of reestablishment expenses that shall not be considered reasonable, necessary or otherwise eligible for reimbursement:

1. The purchase of capital assets, such as office furniture, filing cabinets, machinery or trade fixtures;

2. The purchase of manufacturing materials, production supplies, product inventory, or other items used in the normal course of the business operation;

3. Interest on money borrowed to make the move or purchase the replacement property; and/or

4. Payment to a part-time business in the home that does not contribute materially to the household income.

(5) Fixed Payment for Moving Expenses.

(a) Business. A displaced business, other than a nonprofit organization, may be eligible to choose a fixed payment, in lieu of payments for actual moving and related expenses and for reasonable reestablishment expenses as provided in Paragraphs (1) through (4) of this Rule.

1. The displaced business is eligible for a fixed payment if the displacing agency determines that:

(i) The business owns or rents personal property that must be moved in connection with such displacement and for which an expense would be incurred in such move, and the business vacates or relocates from its displacement site;

(ii) The business cannot be relocated without a substantial loss of its existing patronage (meaning either its clientele or net earnings); provided that the business shall be presumed to meet this test unless the displacing agency determines that the business will not suffer a substantial loss of its existing patronage;

(iii) The business is not part of a commercial enterprise having more than three other entities that are under the same ownership and engaged in the same or similar business activities and which are not being acquired by the displacing agency;

(iv) The business is not operated at a displacement dwelling solely for the purpose of renting such dwelling to others;

(v) The business is not operated at the displacement site solely for the purpose of renting the site to others; and

(vi) The business contributed materially to the income of the displaced person during the two taxable years prior to displacement.

2. The amount of such fixed payment shall equal the average annual net earnings of the business, as computed in accordance with Subparagraph (e) below, but in any case the amount of such fixed payment shall not be less than $1,000 nor more than $40,000.

(b) Determining the Number of Businesses. In determining whether two or more displaced legal entities constitute a single business that is entitled to only one fixed payment, all pertinent factors shall be considered by the displacing agency, including the extent to which:

1. The same premises and equipment are shared;

2. Substantially identical or inter-related business functions are carried out and business and financial affairs are commingled;

3. The entities are held out to the public, and to those customarily dealing with them, as one business; and

4. The same person or closely related persons own, control or manage the affairs of the entities.

(c) Farm Operation. A displaced farm operation may choose a fixed payment in lieu of payments for actual moving and related expenses and for reasonable reestablishment expenses as provided in Paragraphs (1) through (4) of this Rule.

1. In the case of a partial acquisition of land that contained a farm operation before the acquisition, the fixed payment shall be made only if the displacing agency determines that:

(i) The acquisition of part of the land caused the operator to be displaced from the farm operation on the remaining land; or

(ii) The partial acquisition caused a substantial change in the nature of the farm operation.

2. The amount of such fixed payment shall equal the average annual net earnings of the farm operation, as computed in accordance with Subparagraph (e) below, but in any case the amount of such fixed payment shall not be less than $1,000 nor more than $40,000.

(d) Nonprofit Organization. A displaced nonprofit organization may be eligible to choose a fixed payment in lieu of payments for actual moving and related expenses and for reasonable reestablishment expenses as provided in Paragraphs (1) through (4) of this Rule.

1. A nonprofit organization is eligible for a fixed payment if the displacing agency determines that the nonprofit organization cannot be relocated without a substantial loss of existing patronage (meaning membership or clientele). A nonprofit organization is presumed to meet this test unless the displacing agency demonstrates otherwise.

2. The amount of such fixed payment shall be the average of two years' annual gross revenues less administrative expenses, but not less than $1,000 nor more than $40,000. Any payment in excess of $1,000 must be supported with financial statements, including either certified financial statements or financial documents required by public agencies, for the two 12-month periods prior to the acquisition.

(i) Gross revenues may include membership fees, class fees, cash donations, tithes, receipts from sales or other forms of fund collection that enables the nonprofit organization to operate.

(ii) Administrative expenses are those for administrative support such as rent, utilities, salaries, advertising and other like items as well as fundraising expenses. Operating expenses for carrying out the purposes of the nonprofit organization are not included in administrative expenses.

(e) Determining Average Annual Net Earnings. The displacing agency shall determine the average annual net earnings of a displaced business or farm operation in accordance with the following criteria:

1. The average annual net earnings shall be equal to one-half of the net earnings of the business or farm operation before the payment of any applicable income taxes during the two taxable years immediately prior to the taxable year in which the business or farm operation was displaced; or

2. If the business or farm operation was not in operation for the full two taxable years prior to displacement, net earnings shall be based on the actual period of operation at the displacement site during the two taxable years prior to displacement, projected to an annual rate; or

3. If the displacing agency determines, for well documented reasons, that a different period of operation should be used because the two taxable years prior to displacement are not fairly representative of the business or farm operation, the displacing agency may choose two other consecutive taxable years of operation.

4. Net earnings shall include any compensation obtained from the business or farm operation by its owner, the owner's spouse, and dependants.

5. To support any payment in excess of $1,000, the displaced person shall furnish the displacing agency with proof of net earnings through income tax returns or certified financial statements.

Notes

Tenn. Comp. R. & Regs. 1680-06-02-.11

Original rule filed August 12, 1974; effective September 11, 1974. Repeal and new rule filed October 31, 2002; effective January 14, 2003. Rule has been assigned a new control number from 1680-02-04-.11 filed and effective February 1, 2003. Amendments filed January 12, 2017; effective 4/12/2017.

Authority: T.C.A. §§ 13-11-105 and 13-11-113.