(a) A utility shall make a relocation of a utility facility at the expense of this state if relocation of the utility facility is required by improvement of:
(1) a highway in this state established by appropriate authority as part of the National System of Interstate and Defense Highways and the relocation is eligible for federal participation;
(2) any segment of the state highway system and the utility has a compensable property interest in the land occupied by the facility to be relocated; or
(3) a segment of the state highway system that was designated by the commission as a turnpike project or toll project before September 1, 2005.
(a-1) Notwithstanding Subsection (a)(3), the department and the utility shall share equally the cost of the relocation of a utility facility that is required by the improvement of a nontolled highway to add one or more tolled lanes.

(a-2) Notwithstanding Subsection (a)(3), the department and the utility shall share equally the cost of the relocation of a utility facility that is required by the improvement of a nontolled highway that has been converted to a turnpike project or toll project.
(a-3) Notwithstanding Subsection (a)(3), the department and the utility shall share equally the cost of the relocation of a utility facility that is required by the construction on a new location of a turnpike project or toll project or the expansion of such a turnpike project or toll project.
(a-4) Notwithstanding another provision of this section, a utility shall make a relocation of a utility facility required by improvement of the state highway system at the expense of this state if the commission determines that:
(1) the utility is a political subdivision, is owned or operated by a political subdivision, or is a water supply or sewer service corporation organized and operating under Chapter 67, Water Code;
(2) a financial condition would prevent the utility from being able to pay the cost of relocation in full or in part at the time of relocation or, if paid at that time, the payment would adversely affect the utility’s ability to operate or provide essential services to its customers; and
(3) the utility:
(A) would not be able to receive a state infrastructure bank loan under Subchapter D, Chapter 222, to finance the cost of the relocation and is otherwise unable to finance that cost; or
(B) if the utility is a political subdivision or is owned or operated by a political subdivision, the political subdivision:
(i) has a population of less than 5,000; and
(ii) is located in a county that has been included in at least five disaster declarations made by the president of the United States in the six-year period preceding the proposed date of the relocation.
(b) By agreement with the utility the department may relocate the utility facility in accordance with this section.
(c) Subsection (a) includes a relocation for an extension of a highway in an urban area.
(d) The cost of relocation includes the entire amount paid by the utility properly attributable to the relocation less:
(1) any increase in the value of the new facility;
(2) the salvage value derived from the old facility; and
(3) any other deduction established by regulations for federal cost participation.
(e) The total amount paid by the department for the relocation of utility facilities under Subsection (a-4) may not exceed $10 million in any fiscal year.