{"data":{"id":"us-ky/krs-175.470","jurisdiction":"us-ky","citation":"KRS 175.470","heading":"Leases between authority and department authorized -- Contents.","body":"The authority and the department are authorized and empowered to enter into a lease or\nleases with respect to any turnpike project or projects pursuant to any agreement or\nagreements made under the provisions of KRS 175.460. Any lease may contain, in\nsubstance, any of the provisions set forth in this section and such other provisions not\ninconsistent herewith as the authority and the department may deem appropriate and\ndesirable:\n(1) That the lease is for the remainder of the biennial period in which it is dated and\nexecuted, and is renewable at the option of the department for the succeeding\nbiennial period, one (1) at a time, until the final maturity date of the bond issue to\nwhich the lease is related;\n(2) That as to the cost of maintaining, repairing and  operating the project, and not\notherwise, the department is contractually bound not only for the remainder of the\nbiennial period in which the lease is dated and executed, but for the entire period of\nyears until the final maturity of such bonds;\n(3) That with respect to the biennial period in which the lease is dated and executed, the\ndepartment shall otherwise be firmly bound only (a) to contribute to the authority\nsuch portions, if any, of the cost of the project as the agreement prescribes shall be\npaid by the department, and (b) to pay to the authority the rental prescribed for such\nbiennium;\n(4) That if the department shall fully perform all such obligations during such initial\nterm of the lease, it shall have an exclusive option to renew the lease at the time and\nin the manner prescribed for the ensuing biennium, effective on the first day thereof;\nthat the department shall not be or become in any way obligated to pay the rental\nstipulated for such biennium unless the lease be so renewed; and that the\ndepartment shall, upon any such renewal, be firmly bound to pay to the authority the\nrental stipulated for such biennium as a general obligation of the department to be\npaid not only from the revenues of the project but also from any other available\nfunds of the department not required by law or by previous binding contract to be\ndevoted to some other purpose;\n(5) In like manner and subject to the same conditions and provisions as are set forth in\nsubsection (4) above, if the department shall in such first  ensuing biennium fully\nperform all its obligations and pay to the authority the rental stipulated for such\nbiennium, the department shall have another exclusive option to renew such lease\nfor another biennium; and so on for successive biennial terms until  the final\nbiennium for which the lease may be renewed;\n(6) That each such option of the department to renew the lease for a succeeding\nbiennial term may be exercised at any time after the adjournment of the session of\nthe General Assembly at which appropr iations shall have been made for the\noperation of the state government for such succeeding biennial term, by so notifying\nthe authority in writing signed by the commissioner of highways and delivered in\nthe office of the authority to any officer thereof; p rovided, however, that such\noption shall be deemed automatically exercised, and the lease automatically\nrenewed for the succeeding biennium, effective on the first day thereof, unless a\nwritten notice of the department's election not to renew shall have be en delivered in\nthe office of the authority, to an officer thereof, before the close of business on the\nlast working day in April immediately preceding the beginning of such succeeding\nbiennium;\n(7) That so long as the lease is renewed from time to time an d the department fully\nperforms all its obligations as lessee, including payment of the rental stipulated in\nthe lease, (a) the revenues of the project shall be collected, segregated, distributed,\ndeposited, secured, disbursed and accounted for in strict c onformity with the\nproceedings and trust indenture of the authority, and the aggregate of such revenues\nproperly accounted for and deposited pursuant to said proceedings and trust\nindenture shall, if and to the extent provided in the lease, be a credit aga inst the\ndepartment's rental or other obligations for the then current biennial term under the\nlease, and (b) any motor fuel taxes and surtaxes collected by the Commonwealth on\ngasoline and other motor fuels consumed on the project and set aside pursuant t o an\nagreement shall be applied as provided in said proceedings and trust indenture and\nshall, if and to the extent provided in the lease, be a credit against the department's\nrental or other obligations for the then current biennial term under the lease; and if\nsuch revenues and motor fuel taxes so provided in the lease to be a credit against the\nrental or other obligations of the department under the lease shall at any time appear\nto be insufficient to discharge such obligations in full when due and payab le, the\ndepartment shall estimate the rate of deficiency on a semiannual basis conforming\nto the interest payment dates of the bonds of the authority to which the lease is\nrelated and shall pay the amount of such estimated deficiency to the authority in\nequal monthly payments from any other available funds of the department not\nrequired by law or previous binding contract to be devoted to other purposes,\nsubject to adjustment from estimated deficiencies to actual deficiencies at least\nthirty (30) days befor e each such semiannual interest payment date; provided,\nhowever, that during the department's continuance in good standing in this respect\nthe department shall have the right to establish, increase, decrease, suspend, or\nabolish the exaction of tolls, rate s and charges for vehicular travel upon the project,\nbut during any period when the department may elect to suspend or abolish the\nexaction of such tolls, rates and charges, it shall nevertheless continue to maintain\nin good operating condition, on a stand -by basis, all tollhouses, tollgates, toll -\nregistering and toll -collecting equipment, signs, lights, fences, and other\ninstallations and facilities incident to, or used or useful in connection with, the\nexaction and collection of tolls, rates, and charges,  in order that the same may be\nresumed at any time, without delay;\n(8) That in the event the lease is not renewed in accordance with its terms, or in the\nevent it is renewed and the department shall fail to perform in full its obligations\nthereunder, then (a) the department shall immediately be liable for the balance of\nthe rental stipulated for the then current biennial term for which the lease had\npreviously been renewed, without requirement of notice or other action on the part\nof the authority, and shall forthwith pay such balance to the authority upon demand,\n(b) the department shall forfeit its then current option to renew the lease for the\nensuing biennial term and its options for all future terms, (c) the right to establish,\nincrease, decrease, suspe nd, abolish the exaction of, or resume tolls, rates, and\ncharges for vehicular travel on the project shall wholly pass from the department to\nthe authority, and (d) all motor fuel taxes collected by the Commonwealth on\ngasoline and other motor fuels consum ed on the project, except the two -sevenths\n(2/7) of said motor fuel taxes provided by KRS 138.220 to be set aside for the\nconstruction, reconstruction, and maintenance of rural and secondary roads, shall\nthereafter be set aside and paid over to the authori ty as revenues of the project for\ndeposit in the sinking fund or funds pledged to the payment of the bonds of the\nauthority; and\n(9) In the event of the department's forfeiture of rights as provided in subsection (8) of\nthis section, the same may not be re assumed, nor the department restored to good\nstanding with options to renew the lease from time to time, except in such manner\nas shall not be inconsistent with the rights of the holders of outstanding bonds.","path":["KRS Chapter 175"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=5077","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:25Z","sha256":"5d586666f58850382e194ffb8028bcc5ae2513128f1c94293fc6e920341c0467","source_id":"us-ky","stale":false,"prev":"us-ky/krs-175.460","next":"us-ky/krs-175.480"},"notice":"GroundRules: Original legal text. Not legal advice."}