§ 777.23 Moving expenses. ( a ) *Eligibility.* ( 1 ) Residential displaced persons are entitled to benefits under paragraphs (b) and (c) of this section.
( 2 ) Business and farm displaced persons are entitled to benefits under paragraphs (d) through (k) of this section.
( 3 ) Those business or farm displaced persons who reside on the property where the business or farm operation is conducted are eligible for applicable benefits both as residents and as business or farm displaced persons, but no duplicate payments are allowed.
( 4 ) Persons who are required to move or to move personal property from real property, an interest in which is not acquired by the Postal Service, when it is determined by the Postal Service that such move is necessary or reasonable because of the Postal Service's having acquired an interest in other real property owned or leased by such persons and on which such persons conduct a business or farm operation, under circumstances where such persons are displaced persons with regard to such other real property or would have been displaced persons with regard to such other real property had they been required to move or to move personal property from such other real property, are entitled to benefits as residential, business or farm displaced persons under paragraphs (a)(1) or (a)(2) of this section.
( 5 ) Eligibility for moving expenses does not depend upon the owner's or tenant's actual occupancy of the displacement real property.
( b ) *Allowable Expenses, Residential Moves.* Allowable moving expenses include: ( 1 ) Transportation of the displaced person and his or her personal property. Transportation costs are limited to the costs of a move up to a distance of 50 miles unless the Postal Service determines that relocation beyond 50 miles is justified.
( 2 ) Packing, crating, unpacking, and uncrating of the personal property.
( 3 ) Disconnecting, dismantling, removing, reassembling, and reinstalling relocated household appliances and other personal property.
( 4 ) Storage of the personal property not to exceed 12 months unless the Postal Service determines that a longer period is necessary.
( 5 ) Reasonable costs for insurance for the replacement value of the personal property being moved or stored.
( 6 ) When determined to be fair and reasonable by the Postal Service the replacement value of property lost, stolen, or damaged in the process of moving (not through the fault or negligence of the displaced person, his or her agent, or employee), but only where insurance covering such loss, theft, or damage is not reasonably available.
( 7 ) Other moving related expenses that are not listed as non-allowable under paragraph (l)(3) of this section and which the Postal Service determines to be reasonable and necessary.
( c ) *Fixed payment for moving expenses. residential moves.* Any person displaced from a dwelling or a seasonal residence is entitled to receive an expense and dislocation allowance as an alternative to a payment for actual moving and related expenses. This allowance shall be determined according to the applicable schedule approved by the Federal Highway Administration. This includes a provision that the expense and dislocation allowance to a person with minimal personal possessions who is in occupancy of a dormitory style room shared by two or more other unrelated persons or a person whose residential move is performed by an agency at no cost to the person shall be limited to $50.
( d ) *Allowable Expenses, Business and Farm Operations.* Allowable expenses include: ( 1 ) The expenses allowed under paragraphs (b) (2), (4), (5) and (6) of this section;
( 2 ) Transportation of personal property. Transportation costs are limited to a distance up to 50 miles unless the Postal Service makes a finding that relocation beyond 50 miles is justified.
( 3 ) Disconnecting, dismantling, removing, reassembling, and reinstalling relocated machinery, equipment, and other personal property, and substitute personal property as described in paragraph (d)(8) of this section. This includes connection to utilities available at the replacement site or building and minor modifications to personal property to adapt it to the replacement site or building. Excluded are expenses for providing utilities to or installing utilities at the replacement site or building and expenses for repair, alteration, improvement or modification of the replacement site or building. This exclusion includes, but is not limited to, any repairs, alterations, improvements, or modifications required by local code to bring the building up to standard.
( 4 ) Any license, permit, or certification fee required of the displaced person by a governmental authority at the replacement location. However, this payment is limited to the pro rata value for the remaining useful life of any existing license, permit, or certification.
( 5 ) Reasonable professional services necessary for planning the move of the personal property. Such professional services must be approved in advance by the Postal Service and shall not exceed the lowest of three acceptable bids.
( 6 ) Relettering signs and replacing stationary on hand at the time of displacement that are made obsolete as a result of the move.
( 7 ) Actual direct loss of tangible personal property incurred as a result of moving or discontinuing the business or farm operation. The payment will consist of the reasonable costs incurred in attempting to sell the item plus the lesser of: ( i ) The fair market value of the item for continued use at the displacement site, less the proceeds from its sale. (To be eligible for this payment the claimant must make a good faith effort to sell the personal property, unless the Postal Service determines that such effort is not necessary. When payment for property loss is claimed for goods held for sale, the fair market value must be based on the cost of the goods to the business, not the potential selling price.); or
( ii ) The estimated cost of moving the item no more than 50 miles, but with no allowance for storage.
( 8 ) If an item of personal property which is used as part of a business or farm operation is not moved, is promptly replaced with a substitute item that performs a comparable function at the replacement site, the displaced person is entitled to payment of the lesser of: ( i ) The cost of the substitute item, including installation costs at the replacement site, less any proceeds from the sale. (To be eligible for payments under paragraph (d)(8) of this section, the claimant must make a good faith effort to sell the personal property, unless the Postal Service determines that such effort is not necessary.)
( ii ) The estimated cost of moving and reinstalling the replaced item, based on the lowest acceptable bid or estimate obtained by the Postal Service for eligible moving and related expenses, but with no allowance for storage.
( 9 ) A displaced business or farm operation is entitled to reimbursement for actual expenses, not to exceed $1,000, which the Postal Service determines to be reasonable and which are incurred in searching for a replacement location. These expenses include transportation, meals and lodging away from home, time spent searching (based on reasonable salary or earnings) and 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.
( 10 ) Other moving-related expenses, not listed as non-allowable under paragraph (l)(3) of this section, which the Postal Service determines to be reasonable and necessary.
( e ) *Fixed Payment in Lieu of Moving Expenses, Business Moves.* Any displaced business, other than an outdoor advertising display business, or a non-profit organization, is eligible for a fixed payment in lieu of actual moving and related expenses. This payment must be in an amount equal to the average annual net earnings of the business at that location, as computed under paragraph (i) of this section, but not less than $1,000 nor more than $20,000. For a displaced person to qualify for this payment, the Postal Service must determine that: ( 1 ) The business owns or rents personal property which 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; and
( 2 ) The business cannot be relocated without a substantial loss of its existing patronage (clientele or net earnings). A business is assumed to meet this test unless the Postal Service determines that it will not suffer a substantial loss of its existing patronage; and
( 3 ) The business is not part of a commercial enterprise having more than three other entities which are not being acquired by the Postal Service, and which are under the same ownership and engaged in the same or similar business activities.
( 4 ) The business contributed materially to the income of the displaced person during the 2 taxable years prior to displacement (see paragraph (h) of this section). However, the Postal Service may waive this test for good cause.
( 5 ) The business is not operated at a displacement dwelling solely for the purpose of renting such dwelling to others.
( f ) *Determining the Number of Businesses.* In determining whether two or more displaced legal entities constitute a single business which is entitled to only one fixed payment, all pertinent factors shall be considered, including the extent to which: ( 1 ) The same premises and equipment are shared;
( 2 ) Substantially identical or interrelated 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.
( g ) *Fixed Payment in Lieu of Moving Expenses, Farm Operation.* Any displaced farm operation may choose a fixed payment in lieu of a payment for actual moving and related expenses in an amount equal to its average annual net earnings as computed in accordance with paragraph (i) of this section, but not less than $1,000 nor more than $20,000. For a displaced person to qualify for this payment, the Postal Service must determine that the farm operation contributed materially to the income of the displaced person during the two taxable years prior to the displacement (see paragraph (h) of this section). In the case of acquisition of land which was part of a farm operation before the acquisition, the fixed payment shall be made only if the Postal Service determines that: ( 1 ) The acquisition of part of the land caused the operator to be displaced from the operation on the remaining land; or
( 2 ) The partial acquisition caused a substantial change in the nature of the farm operation.
( h ) *Contributes materially.* The term “contributes materially,” as used in paragraphs (e) and (g) of this section means that, during the 2 taxable years prior to the taxable year in which displacement occurs, or during such other period as the Postal Service determines to be more equitable, a business or farm operation: ( 1 ) Had average annual gross receipts of at least $5,000; or
( 2 ) Had average annual net earnings of at least $1,000; or
( 3 ) Contributed at least 331 ⁄ 3 percent of the owner's or operator's average annual gross income from all sources.
( 4 ) If the application of the above criteria creates an inequity or hardship in any given case, the Postal Service may approve the use of other criteria as determined appropriate.
( i ) *Average Annual Net Earnings of a Business or Farm Operation.* The average annual net earnings of a business or farm operation are one-half of its net earnings before Federal, State, and local income taxes during the 2 taxable years immediately prior to the taxable year in which it was displaced. If the business or farm was not in operation for the full 2 taxable years prior to displacement, net earnings shall be based on the actual period of operation at the displacement site during the 2 taxable years prior to displacement, projected to an annual rate. Average annual net earnings may be based upon a different period of time when the Postal Service determines it to be more equitable. Net earnings include any compensation obtained from the business or farm operation by its owner, the owner's spouse, and dependents. The displaced person shall furnish the Postal Service proof of net earnings through income tax returns, certified financial statements, or other reasonable evidence which the Postal Service determines is satisfactory.
( j ) *Nonprofit Organizations.* Any displaced nonprofit organization may choose a fixed payment in lieu of a payment for actual moving and related expenses in an amount of $2,500, if the Postal Service determines that it: ( 1 ) Cannot be relocated without a substantial loss of existing patronage (membership or clientele). A nonprofit organization is assumed to meet this test, unless the Postal Service demonstrates otherwise; and
( 2 ) Is not part of an enterprise having at least one other establishment engaged in the same or similar activity which is not being acquired by the Postal Service.
( k ) *Relocation of Outdoor Advertising Signs.* The amount of a payment for direct loss of an advertising sign which is personal property is the lesser of: ( 1 ) The depreciated replacement cost of the sign, as determined by the Postal Service, less the proceeds from its sale; (To be eligible for payments under this paragraph (k)(1), the claimant must make a good faith effort to sell the sign, unless the Postal Service determines that such effort is not necessary.) or
( 2 ) The estimated cost of moving the sign, no more than 50 miles, but with no allowance for storage.
( l ) *Payment for actual reasonable reestablishment expenses, nonresidential moves.* In addition to the payments available as allowable expenses for nonresidential moves, a small business, farm or non-profit organization may be eligible to receive a payment, not to exceed $10,000 for expenses actually incurred in relocating and reestablishing such small business, farm or non-profit organization at a replacement site. ( 1 ) *Allowable expenses.* Reestablishment expenses must be reasonable and necessary, as determined by the Postal Service. They may include the following: ( i ) Repairs or improvements to the replacement real property as required by federal, state, local law, code or ordinance.
( ii ) Modifications to the replacement property to accommodate the business operation or make replacement structures suitable for occupancy.
( iii ) Construction and installation costs not to exceed $1,500 for exterior signing to advertise the business.
( iv ) Installation of security or fire protection devices.
( v ) Provision of utilities from right-of-way to improvements on the replacement site.
( vi ) Redecoration or replacement of soiled or worn surfaces at the replacement site, such as paint, panelling or carpeting.
( vii ) Licenses, fees and permits when not paid as part of the moving expenses.
( viii ) Feasibility surveys, soil testing and marketing studies.
( ix ) Advertisement of replacement location, not to exceed $1,500
( x ) Professional services in connection with the purchase or lease of a replacement site.
( xi ) Increased costs of operation during the first two years at the replacement site, not to exceed $5,000, for such items as lease or rental charges, personal or real property taxes, insurance premiums, utility charges including impact fees or one time assessments for anticipated heavy utility usage.
( xii ) Other items that the Postal Service considers essential to the reestablishment of the business.
( 2 ) *Non-allowable expenses.* Following is a non-exclusive listing of restablishment expenditures not considered to be reasonable, necessary or otherwise allowable. ( i ) Purchase of capital assets such as office furniture, filing cabinets, machinery, or trade fixtures.
( ii ) Purchase of manufacturing materials, production supplies, product inventory, or other items used in the normal course of the business operation.
( iii ) Interior or exterior refurbishment at the replacement site which are for cosmetic purposes only.
( iv ) Interest on money borrowed to make the move or purchase the replacement property.
( v ) Payment to a part-time business in the home which does not contribute materially to the household income.
( vi ) Payment to a person whose sole business at a replacement dwelling is the rental of such dwelling to others.
( m ) *General Provisions* — ( 1 ) *Self moves.* If the displaced person elects to take full responsibility for all or a part of the move, the Postal Service may approve a payment for the person's moving expenses in an amount not to exceed the lowest of three bids acceptable to the Postal Service. Bids may be obtained by either the displaced person or the Postal Service.
( 2 ) *Transfer of Ownership.* Upon request by the Postal Service and in accordance with applicable law, the displaced person may transfer to the Postal Service ownership of any personal property that is not to be moved, sold, or traded-in by executing a disclaimer of all rights or interest in the property.
( 3 ) *Non-Allowable Expenses.* Except as specifically otherwise provided herein, a displaced person is not entitled to payment for: ( i ) The cost of moving any structure or other real property improvement.
( ii ) Loss of goodwill.
( iii ) Loss of profits.
( iv ) Loss of trained employees.
( v ) Any additional operating expenses of a business or farm operation caused by operating in a new location.
( vi ) Personal injury.
( vii ) Any legal fee or other cost for preparing a claim for a relocation payment or for representing the displaced person before the Postal Service.
( viii ) Expenses for searching for a replacement dwelling.
( ix ) Costs for storage of personal property on real property owned or leased by the displaced person.
[51 FR 6983, Feb. 27, 1986, as amended at 52 FR 48029, Dec. 17, 1987; 54 FR 10667, Mar. 15, 1989]