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175.470 Leases between authority and department authorized -- Contents.
The authority and the department are authorized and empowered to enter into a
lease or leases with respect to any turnpike project or projects pursuant to any
agreement or agreements made under the provisions of KRS 175.460. Any lease
may contain, in substance, any of the provisions set forth in this section and such
other provisions not inconsistent herewith as the authority and the department may
deem appropriate and desirable:
(1) That the lease is for the remainder of the biennial period in which it is dated
and executed, and is renewable at the option of the department for the
succeeding biennial period, one (1) at a time, until the final maturity date of the
bond issue to which the lease is related;
(2) That as to the cost of maintaining, repairing and operating the project, and not
otherwise, the department is contractually bound not only for the remainder of
the biennial period in which the lease is dated and executed, but for the entire
period of years until the final maturity of such bonds;
(3) That with respect to the biennial period in which the lease is dated and
executed, the department shall otherwise be firmly bound only (a) to contribute
to the authority such portions, if any, of the cost of the project as the agreement
prescribes shall be paid by the department, and (b) to pay to the authority the
rental prescribed for such biennium;
(4) That if the department shall fully perform all such obligations during such initial
term of the lease, it shall have an exclusive option to renew the lease at the
time and in the manner prescribed for the ensuing biennium, effective on the
first day thereof; that the department shall not be or become in any way
obligated to pay the rental stipulated for such biennium unless the lease be so
renewed; and that the department shall, upon any such renewal, be firmly
bound to pay to the authority the rental stipulated for such biennium as a
general obligation of the department to be paid not only from the revenues of
the project but also from any other available funds of the department not
required by law or by previous binding contract to be devoted to some other
purpose;
(5) In like manner and subject to the same conditions and provisions as are set
forth in subsection (4) above, if the department shall in such first ensuing
biennium fully perform all its obligations and pay to the authority the rental
stipulated for such biennium, the department shall have another exclusive
option to renew such lease for another biennium; and so on for successive
biennial terms until the final biennium for which the lease may be renewed;
(6) That each such option of the department to renew the lease for a succeeding
biennial term may be exercised at any time after the adjournment of the
session of the General Assembly at which appropriations shall have been
made for the operation of the state government for such succeeding biennial
term, by so notifying the authority in writing signed by the commissioner of
highways and delivered in the office of the authority to any officer thereof;
provided, however, that such option shall be deemed automatically exercised,
and the lease automatically renewed for the succeeding biennium, effective on
the first day thereof, unless a written notice of the department's election not to
renew shall have been delivered in the office of the authority, to an officer
(7)
(8)
thereof, before the close of business on the last working day in April
immediately preceding the beginning of such succeeding biennium;
That so long as the lease is renewed from time to time and the department fully
performs all its obligations as lessee, including payment of the rental stipulated
in the lease, (a) the revenues of the project shall be collected, segregated,
distributed, deposited, secured, disbursed and accounted for in strict
conformity with the proceedings and trust indenture of the authority, and the
aggregate of such revenues properly accounted for and deposited pursuant to
said proceedings and trust indenture shall, if and to the extent provided in the
lease, be a credit against the department's rental or other obligations for the
then current biennial term under the lease, and (b) any motor fuel taxes and
surtaxes collected by the Commonwealth on gasoline and other motor fuels
consumed on the project and set aside pursuant to an agreement shall be
applied as provided in said proceedings and trust indenture and shall, if and to
the extent provided in the lease, be a credit against the department's rental or
other obligations for the then current biennial term under the lease; and if such
revenues and motor fuel taxes so provided in the lease to be a credit against
the rental or other obligations of the department under the lease shall at any
time appear to be insufficient to discharge such obligations in full when due
and payable, the department shall estimate the rate of deficiency on a
semiannual basis conforming to the interest payment dates of the bonds of the
authority to which the lease is related and shall pay the amount of such
estimated deficiency to the authority in equal monthly payments from any other
available funds of the department not required by law or previous binding
contract to be devoted to other purposes, subject to adjustment from estimated
deficiencies to actual deficiencies at least thirty (30) days before each such
semiannual interest payment date; provided, however, that during the
department's continuance in good standing in this respect the department shall
have the right to establish, increase, decrease, suspend, or abolish the
exaction of tolls, rates and charges for vehicular travel upon the project, but
during any period when the department may elect to suspend or abolish the
exaction of such tolls, rates and charges, it shall nevertheless continue to
maintain in good operating condition, on a stand-by basis, all tollhouses,
tollgates, toll-registering and toll-collecting equipment, signs, lights, fences, and
other installations and facilities incident to, or used or useful in connection with,
the exaction and collection of tolls, rates, and charges, in order that the same
may be resumed at any time, without delay;
That in the event the lease is not renewed in accordance with its terms, or in
the event it is renewed and the department shall fail to perform in full its
obligations thereunder, then (a) the department shall immediately be liable for
the balance of the rental stipulated for the then current biennial term for which
the lease had previously been renewed, without requirement of notice or other
action on the part of the authority, and shall forthwith pay such balance to the
authority upon demand, (b) the department shall forfeit its then current option
to renew the lease for the ensuing biennial term and its options for all future
terms, (c) the right to establish, increase, decrease, suspend, abolish the
exaction of, or resume tolls, rates, and charges for vehicular travel on the
project shall wholly pass from the department to the authority, and (d) all motor
(9)
fuel taxes collected by the Commonwealth on gasoline and other motor fuels
consumed on the project, except the two-sevenths (2/7) of said motor fuel
taxes provided by KRS 138.220 to be set aside for the construction,
reconstruction, and maintenance of rural and secondary roads, shall thereafter
be set aside and paid over to the authority as revenues of the project for
deposit in the sinking fund or funds pledged to the payment of the bonds of the
authority; and
In the event of the department's forfeiture of rights as provided in subsection
(8) of this section, the same may not be reassumed, nor the department
restored to good standing with options to renew the lease from time to time,
except in such manner as shall not be inconsistent with the rights of the
holders of outstanding bonds.
Effective:March 25, 1960
History: Created 1960 Ky. Acts ch. 173, sec. 7, effective March 25, 1960.
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