N.Y. Rapid Transit Law § 46: Franchise for private construction, maintenance and operation

§ 46. Franchise for private construction, maintenance and operation.

a. If or when the necessary consents have been obtained and the detailed

plans and specifications have been prepared by the board of

transportation for a railroad, such board, with the approval of the

board of estimate and the mayor, may grant a franchise to construct,

maintain and operate such a railroad. The board of transportation shall

have power to prescribe all such terms and conditions of such grant and

to require such security to be given and filed for the keeping and

performance of such terms and conditions as it may deem to be for the

interest of the public and of the city and may provide that in

connection with the construction of such railroad by the grantee at its

own expense any galleries, ways, subways or tunnels for sub-surface

structures which may be included in any such plans shall be also

constructed by the grantee at the public expense, and in such case the

sum to be paid therefor shall be separately stated and the amount

appropriated and paid out of the funds hereafter authorized to be

provided in case of such construction, and such board may provide

separately for the maintenance, supervision, care and operation thereof

as authorized by the provisions of section forty of this chapter.

b. The grant shall provide that such railroad shall be constructed by

and at the expense of the grantee under the direction and supervision of

the board of transportation and in accordance with such detailed plans

and specifications; that the construction shall be begun within a time

to be specified and shall be finished within a specified time

thereafter; and that operation of such railroad shall be begun within a

specified time, and may fix the time within which portions of such

railroad shall be begun and finished and put in operation, and may

provide that such board may extend the time of beginning, of completion

and of operation of such railroad or portion thereof, and that if the

grantee shall fail to begin or to finish the construction or begin the

operation of such road or portion thereof at or within any time so

fixed, or shall fail to comply with any of the terms or conditions of

such grant, a penalty specified, or the grant and any construction

pursuant thereto, may be forfeited to the city.

c. Such grant shall contain a reservation to the city of the privilege

upon giving a specified notice to terminate such franchise and to

purchase and take the plant and property of the grantee suitable to and

used for the purpose of such railroad at any time after the expiration

of ten years from the date when operation of any part of such railroad

shall begin upon paying an amount for such plant and property as

property, excluding any value for the franchise, which amount shall not

exceed actual cost of such plant and property, plus fifteen per centum

thereof, and shall decrease under provisions of the grant as the

franchise continues so that at the end of the full term of the grant no

amount shall be paid except for equipment as hereinafter provided. The

grant shall provide a method of ascertaining the amount to be paid for

such plant and property upon termination by the city of such franchise

and for the equipment of such railroad at the end of the full term of

the grant. The grant may provide for determining from time to time, in

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

such plant and property, or any part or portion thereof, for any purpose

under such grant. The grant shall make adequate provision for lien upon

plant and property and by way of penalty or forfeiture of the grant and

any construction pursuant thereto or otherwise to secure compliance with

the terms of such grant, efficiency of service at reasonable rates and

the maintenance of the property in good condition throughout the full

term of the grant.

d. The grant shall provide that any and all income and increase

derived by the grantee or his assignee or any successive holder of the

grant or on his or their behalf in any manner from or in connection with

the enterprise of constructing, equipping and operating such railroad,

after deducting operating expenses, taxes, payments to reserve and

amortization funds as provided for in such grant, and not exceeding six

per centum interest per annum payable quarterly upon the actual cost of

construction and equipment of such road, shall be divided share and

share alike between the grantee and the city, and that upon the

expiration of the period specified in the grant the franchise shall end

and the plant and property suitable to and used for the purposes of such

railroad, except equipment as defined in the grant, shall become the

property of the city without compensation to the grantee, and that such

equipment shall also become the property of the city upon payment to the

grantee of an amount to be ascertained as provided in the grant. The

grant may also provide for assuring that in case a new grant of a

franchise to maintain and operate such railroad is made after any such

determination of such franchise and purchase and taking of such plant

and property pursuant to such notice or after the expiration of the full

term of the grant, that the title to and possession of the plant and

property so taken and of the equipment at the end of such full term may

be transferred directly to the new grantee upon his paying the amount

required as aforesaid. At any time within one year prior to the date

when the franchise shall be terminated or forfeited by the city or shall

come to an end by the expiration of its full term or at any time

thereafter, the board of transportation with the approval of the board

of estimate and the mayor, may grant a new franchise under the

provisions of this section for the construction wholly or in part of

such railroad and for the maintenance and operation thereof from and

after the date of such termination, forfeiture or end of such grant, or

the board of transportation, with like approval, may enter into

contracts for the equipment, maintenance or operation of such railroad,

or may itself operate such road, after such termination, forfeiture or

end of such grant as provided in sections thirty-two, forty, forty-one,

forty-two and forty-three of this chapter in respect of railroads

constructed at the public expense.

e. A certificate shall be prepared by the board of transportation

attested by its seal and the signature of its presiding officer, setting

forth in detail the action taken and grant made by such board with

respect to such railroad, and the terms and conditions aforesaid which

shall be delivered to such grantee upon the receipt by such board of a

written acceptance of the terms, conditions and requirements of the

grant duly executed by such grantee so as to entitle it to be recorded.

Such certificate shall be filed in the office of the secretary of state

and a duly certified copy thereof shall be filed in the office of the

clerk of the county in which such railroad or some part thereof is

situated. Upon the fulfillment by such grantee of such terms, conditions

and requirements enumerated in such certificate as such board may

require to be fulfilled as a condition precedent to commencing such

work, the grantee shall in such cases possess in addition to its

existing powers, all the powers conferred by this chapter upon

corporations receiving a grant of a franchise thereunder with respect to

the railroad so authorized to be constructed and when such certificate

shall have been duly filed, such grantee may construct such railroad

with all the rights provided in such certificate but in every case

subject to all the provisions and conditions of such certificate. Such

certificate, when delivered to and accepted by such grantee, shall be

deemed to constitute a contract between the city and such grantee

according to the terms of such certificate. Such contract shall be

enforceable by the board of transportation acting in the name of and in

behalf of the city, or by the grantee according to the terms thereof,

but subject to the provisions of this chapter. The terms of such

contract, from time to time with like approval and with the consent of

the grantee, may be modified by such board.

f. Any existing railroad corporation owning or actually operating a

railroad wholly or in part within the limits of the city and approved by

such board shall be competent and is hereby authorized to bid for and

receive any grant pursuant to the provisions of this section. If the

successful bidder or bidders be not a corporation, then a corporation

may be organized under the railroad law by him or them for the purpose

of receiving such grant and of constructing, equipping, maintaining and

operating a railroad pursuant to the terms of any such certificate and a

corporation so organized shall not be required to procure the

certificate or approval of the public service commission as provided for

in section nine of the railroad law or section fifty-three of the public

service law.

g. After the proposed certificate shall have been prepared and

approved as to the form thereof by the board of estimate, the board of

transportation, prior to the granting of any such franchise, shall

advertise for proposals or bids for such franchise under such

certificate by a notice to be printed once a week for two successive

weeks in not less than two daily newspapers published in such city, and

in such newspapers published elsewhere than in such city as such board

shall determine, and may require security from bidders for the execution

of their bids if accepted. Such notice shall set forth the points within

such city between which such railroad is proposed to be operated, the

route in general terms to be followed, and such other details and

specifications as the board shall deem proper, and shall refer to such

proposed certificate and such route, detailed plans and specifications

on file in its office for further details. Such notice shall state the

time and place at which proposals will be received and opened. All such

proposals shall refer to such proposed certificate and shall offer the

terms upon which any such proposer or bidder shall undertake to

construct, maintain, equip and operate such railroad in so far as to set

forth all or any of the following matters as may be required by the

board of transportation:

1. The annual interest desired upon the cost of construction and

equipment prior to payment of any part of income or increase to the

city;

2. The period at the end of which the plant and equipment except

equipment as aforesaid shall become the property of the city without

compensation;

3. The amount of money for which galleries for subsurface structures

to be paid for with public money in connection with the construction of

such railroad will be constructed;

4. Such transfer conveniences with other roads, specifications as to

the cost of construction and other provisions as such board may think

proper to require.

The board of transportation shall attend at the time and place

specified and shall publicly open all proposals that shall have been

received, but such board shall not be bound to accept any proposals so

received, but may reject all such proposals and readvertise for

proposals in the manner hereinbefore provided, or may accept any of such

proposals as will, in the judgment of such board, best promote the

public interest, and grant a franchise and execute such certificate

accordingly, subject to the approval of the board of estimate and of the

mayor.

h. Every such corporation shall have power:

1. To take and hold such voluntary grants of property as shall be made

to it, to aid in the construction, maintenance and accommodation of its

railroad, but the real estate received by voluntary grant shall be held

and used for the purposes of such grant only.

2. To purchase, lease, hold and use all such property as may be

necessary for the construction and maintenance of its railroad and

necessary devices and appurtenances.

3. To cross, intersect, join and unite its railroad with any other

railroad at any point on its route and upon the grounds of such other

railroad company, with the necessary devices and appurtenances.

4. To take and convey persons and property on its railroad by the

power or force of electricity or compressed air so used as to involve no

combustion or impurity of air in tunnels or cars or any other power of

like description approved by the board of transportation, and to receive

compensation therefor.

5. To enter upon and underneath the several streets designated by the

board of transportation and enter into and upon the soil thereof; to

construct, maintain, operate and use, in accordance with the plan

adopted by such board, a railroad upon the route and to the points

decided upon, and to secure the necessary foundations and erect the

structures which may be required to secure safety and stability in the

construction and maintenance of the railroads constructed upon the plan

adopted by such board, and which may be necessary for the operation

thereof, except that nothing in this chapter shall authorize the

construction of a railroad crossing the track of any steam railroad in

actual operation at the grade thereof. It shall be lawful to make such

excavations and openings along the route through which such railroad

shall be constructed as shall be necessary from time to time. In all

cases the surface of such streets around such foundations, and

structures shall be restored to the condition in which they were before

such excavations were made, as near as may be, and under the direction

of the proper local authorities. In all cases the use of the streets

designated by such board, and the right of way through them, for the

purpose of a railroad, as herein authorized and provided, shall be

considered, and is hereby declared, to be a public use, consistent with

the uses for which the streets are publicly held. Such corporation shall

not have the right to acquire the use or occupancy of public parks or

squares, or the use or occupancy of any of the streets, except such as

may have been designated for the route of such railroad, and except such

temporary privileges as the proper authorities may grant to such

corporations to facilitate such construction.

i. Every corporation which shall have taken or shall take or hold any

franchise or contract to construct, maintain and operate a railroad

under the provisions of this chapter shall have the right to acquire and

hold such property or property rights appurtenant thereto, as may be

necessary to enable it to construct, maintain and operate such railroad

and such as may be necessary for devices and appurtenances. In case any

such corporation cannot agree with the owner or owners of such property

it shall have the right to acquire title to the same in pursuance of the

terms and in the manner prescribed in the condemnation law. The

existence of an easement acquired or reserved by any such corporation

for any of the purposes specified in this section, shall not be deemed

an incumbrance under any law relating to investments in mortgages upon

real property by corporations, trustees, executors, administrators,

guardians or other persons holding trust funds, but the effect of such

an easement upon the real property which it affects, shall be taken into

consideration in determining the value thereof. When any corporation

authorized under any provision of this chapter to construct, maintain or

operate an additional track added to any elevated railroad in existence

on the sixteenth day of June, nineteen hundred ten, or to construct,

maintain or operate an extension of such railroad or to acquire terminal

or other facilities for any such railroad or extension shall have duly

instituted condemnation proceedings, under the provisions of the

condemnation law, by serving a petition and notice in such proceedings,

to acquire such property or property rights appurtenant thereto, as may

be necessary to construct, maintain or operate such additional track,

extension or terminal or other facilities, the court, upon due hearing

had at a special term of the supreme court held in the judicial district

where the property or some portion of it is situated, and upon notice in

such proceedings served upon all the owners of the property at least

eight days prior to such hearing, in the manner prescribed in the

condemnation law for the service of the petition and notice, may, where

it appears to its satisfaction that the public interests will be

prejudiced by delay, direct that the plaintiff be permitted to enter

immediately upon the property to be taken and devote it temporarily to

the public use specified in the petition, upon depositing with the court

such sum or giving an undertaking in such amount and subject to such

conditions as the court may deem sufficient to secure the payment of the

award that may be made, and the costs and the expenses of the

proceedings and for the payment of any damages which the defendant in

such proceedings may have sustained by such entry upon and use of his

property. The sum so deposited or undertaking so given shall be at least

equal to twice the assessed valuation, if any, of any real estate to be

so taken. The court, at any time, upon like hearing and notice given by

either party to such proceedings, may give such further directions in

respect to any such deposit, undertaking or condition as it may deem

just and proper, and in every case the owner may conduct the proceedings

to a conclusion if the plaintiff delays or neglects to prosecute the

same and if the sum so deposited or security so given shall be

insufficient to pay such award and costs, expenses and damages, and if

the plaintiff shall fail to pay the amount of such deficiency, judgment

shall be entered against the plaintiff for the deficiency and the

possession of the property shall be restored to the defendant.