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This entry was published on 2014-09-22
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SECTION 46
Franchise for private construction, maintenance and operation
Rapid Transit (RAT) CHAPTER 48-A, ARTICLE 5
§ 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.