N.Y. Rapid Transit Law § 45: Extensions and additional lines

§ 45. Extensions and additional lines. a. Whenever the board of

transportation shall determine that the public interests so require, it

may with the approval of the board of estimate and the mayor, without

advertising for proposals, but only after a public hearing under section

thirty-four of this chapter, enter into a contract with the person

owning, operating or agreeing to operate, any existing railroad for the

construction, equipment, maintenance and operation, or for the

equipment, maintenance and operation of any additional or proposed

railroad to be owned by the city for which necessary consents as

provided in section twenty-one of this chapter shall have been obtained,

provided that such proposed railroad shall be operated in conjunction

with such existing railroad for a single fare. Such contract for the

equipment, maintenance and operation of such road or any portion thereof

may be made and entered into before consents shall have been obtained

therefor as provided in section twenty-one of this chapter. In such case

such contract for equipment, maintenance and operation of such road or

any portion thereof shall be upon condition that such contract shall not

become operative or go into effect as to such road or such portion

thereof unless and until the city shall acquire the right to construct

such road or portion thereof by obtaining such consents.

b. Such contract for construction, equipment, maintenance and

operation or for equipment, maintenance and operation may be made in

either of the two following ways:

1. If such existing railroad be wholly or in part within the limits of

the city, such contract may be made under and pursuant to the provisions

of sections thirty-one, forty, and forty-two, so far as such sections

shall be applicable, with the railroad corporation owning or actually

operating or agreeing to operate such existing railroad, but the term

for equipment, maintenance and operation of such proposed road, as

specified in such contract, pursuant to such sections, shall not be for

a period longer than the unexpired term of the franchise or contract for

the maintenance and operation of such existing railroad and any renewals

provided for in such franchise or contract.

2. If such existing railroad be a rapid transit railroad constructed

wholly or in part at the public expense under the provisions of the

rapid transit act or this chapter and wholly or in part in operation

such contract may be made with the person having the contract for the

construction and operation of such existing rapid transit railroad by

the terms of which such proposed rapid transit railroad if not

constructed or to be constructed by the board of transportation under

separate construction contracts shall be constructed as extra work under

the terms of such existing contract either without expense to the city

or for such sum of money or such proportion of the actual cost thereof

as may be agreed upon to be paid by such city for or toward the

construction thereof, the railroad when so completed as extra work to be

subject to the terms and conditions of such original contract except so

far as shall be otherwise specified and agreed.

c. Every such contract for such construction, equipment, maintenance

and operation or for such equipment, maintenance and operation of such

proposed railroad made in either of the foregoing specified ways, shall

also make provision that the city, upon giving a specified notice, may

terminate the contract for equipment, maintenance and operation of any

such proposed railroad as to all and if deemed advisable as to any

specified portion thereof at any time after the expiration of ten years

from the date when operation of any part of such proposed railroad or of

such specified portion thereof shall actually begin, but such right of

termination of any such contract shall be upon condition as follows:

1. If the title to the equipment of such proposed railroad shall not

be vested in the city then that the equipment of the proposed railroad

or portion thereof suitable to and used for the purposes of such

railroad as apportioned pursuant to the contract, shall be purchased and

taken by the city at an amount which shall be ascertained as provided in

the contract, but which shall not be greater than the actual cost

thereof, plus fifteen per centum thereof, and such equipment, upon such

termination of such contract, shall become and be the property of the

city on paying to the contractor such amount. In case the title to the

equipment of such proposed railroad shall be vested in the city then

that the city shall pay to the contractor an amount for his investment

in the equipment of such proposed railroad, or portion thereof, which

shall not exceed the actual cost to the contractor of equipment of such

railroad or portion, plus fifteen per centum thereof, and shall decrease

under provisions of the contract as the term thereof continues so that

at the end of the full term of the contract no such amount shall be paid

except that if additional equipment shall be required and supplied after

the railroad, or portion thereof, shall have been put in operation, and

if the contract shall provide that title to such additional equipment

shall vest in the city when supplied, then the city shall pay an amount

for the investment of the contractor in such additional equipment which

amount shall not exceed the actual cost to the contractor of such

additional equipment plus fifteen percentum thereof and shall diminish

so that at the end of the full term of the contract the city shall be

required to pay for such investment in additional equipment only such

amount as shall be provided in such contract.

2. Upon the further condition if such proposed railroad shall be

constructed wholly or in part at the cost of the contractor that the

city shall also pay to the contractor an amount for his investment in

the construction of such proposed road or portion thereof, which shall

not exceed the actual cost to the contractor of constructing such road

or portion, plus fifteen per centum thereof, and shall decrease under

provisions of the contract as the term thereof continues so that at the

end of the full term of the contract no such amount shall be paid,

except that if betterments, additions or improvements shall be required

by the board of transportation or approved by such board prior to the

construction thereof and be constructed wholly or in part at the cost of

the contractor, then that the city shall pay an amount for the

investment of the contractor in such betterments, additions or

improvements which shall not exceed the actual cost to the contractor of

constructing such betterments, additions or improvements plus fifteen

per centum thereof and which amount shall diminish so that at the end of

the full term of the contract the city shall be required to pay for such

investment in betterments, additions or improvements only such amount as

shall be provided in the contract.

d. The contract shall provide a method of ascertaining the amount to

be paid for such equipment and for the investment of the contractor in

the construction of such proposed road upon a termination by the city of

such contract and for the equipment of such proposed railroad at the end

of the full term of the contract. The contract may provide for

determining from time to time, in default of agreement, by arbitration

or by the court, a valuation of such investment of the contractor in the

construction of such proposed road and of the equipment or any part or

portion of either thereof for any purpose under such contract. The

contract may provide that the title to the equipment as well as to such

road shall vest in the city from the beginning and that the amount to be

paid by the city for the investment of the contractor in such equipment

shall decrease as the terms of the contract continues so that at the end

of the full term of the contract no amount shall be payable therefor

except for additional equipment as aforesaid. The contract shall provide

that upon the expiration of the term fixed in the contract, the contract

shall end without compensation to the contractor except as provided in

the contract, for betterments, additions or improvements to any such

railroad required to be made or approved by the board of transportation

prior to the construction thereof during the term of any such contract,

and, if the title to the equipment be not vested in the city, for

equipment suitable to and used for the purposes of such contract to the

amount, if any, ascertained as provided in the contract, and that in

such event such equipment shall become the property of the city upon

payment to the contractor of such amount, or, if the title to the

equipment be vested in the city, then an amount for the investment of

the contractor in additional equipment for any such railroad to be

ascertained as provided in the contract.

e. The contract also may include a provision for modification of the

lease or contract for equipment, maintenance and operation of such

existing railroad so that such latter lease or contract may be

terminated by the city upon giving a specified notice at the same time

and in connection with the termination of the contract as to such

proposed railroad, but such right of termination of any such contract as

to such existing railroad shall be upon condition:

1. That the equipment of such railroad suitable to and used for the

purposes of such contract shall be purchased and taken by the city at an

amount which shall be ascertained as provided in the contract, but shall

not be greater than the actual cost thereof plus fifteen per centum

thereof, and such equipment, upon such termination of such contract,

shall become and be the property of the city on paying to the contractor

such amount, or

2. Upon the further condition, if such existing railroad shall have

been constructed wholly or in part at the cost of the contractor, that

the city also shall pay to the contractor or to his assignee in

possession an amount for the investment in the construction of such

existing road which shall not exceed the actual cost to the contractor

of constructing such road plus fifteen per centum thereof, and shall

decrease under the provisions of the contract as the term thereof

continues, so that at the end of the full term of the contract, and of

any renewal thereof contained therein, no such amount shall be paid.

The contract as so modified shall provide a method of ascertaining the

amount to be paid for such equipment and for the investment of the

contractor in the construction of such road upon a termination by the

city of such contract, and for the equipment of such existing railroad

at the end of the full term of the contract. Such contract as so

modified may provide for determining from time to time, in default of

agreement, by arbitration or by the court, a valuation of such

investment of the contractor in the construction of such road and of the

equipment, or any part or portion of either thereof, for any purpose

under such contract. The contract also may provide for assuring that in

case a new contract for equipment, and for maintenance and operation of

such existing railroad, or proposed railroad, is made after such

termination, pursuant to notice, or after the expiration of the full

term of such contract, that the title to and possession of the equipment

so taken and the right to the possession of the railroad so constructed

may be transferred directly to the new contractor upon his paying the

amount so required.