(a) The director of transportation shall arrange for the installation of all utility cables and facilities below the ground, within a berm or away from the alignment of a highway, during the design or redesign and construction or reconstruction phases of any new or existing federal-aid highway project, when a determination is made that federal highway funds are available to pay for the federal share of the cost differential between underground and overhead facilities.
(b) The director of transportation may make exceptions to subsection (a) if:

(1) The director determines that exceptions are appropriate due to either:

(A) Any of the following criteria: environmental, safety, research, technology, corridor alignment, or management concern; or
(B) The following criteria collectively: state funding impacts, economic feasibility, and federal funding concerns; or
(2) The projects do not lend themselves to undergrounding, such as: resurfacing, traffic signal installation, drainage installation, bikeway markings, guardrail installation, traffic markings, and enhancement improvements.