2023 New York Laws › RRD - Railroad › Article 5 - Street Surface Railroads › 173 - Condition Upon Which Consent Shall Be Given; Sale of Franchise at Public Auction.

§  173. Condition upon which consent shall be given; sale of franchise
  at public auction.  The consent of the local  authorities  in  any  city
  having  a  population of three hundred thousand or more must contain the
  condition that the right, franchise and privilege of using  any  street,
  road,  highway,  avenue,  park  or  public place shall be sold at public
  auction to the bidder who will  agree  to  give  the  city  the  largest
  percentage  per  annum of the gross receipts of such corporation, with a
  bond or undertaking in such form and amount and with such conditions and
  sureties as may be required and approved by  the  comptroller  or  other
  chief  fiscal officer of the city, for the fulfillment of such agreement
  and for the commencement and completion of its railroad within the  time
  designated  by law and for the performance of such additional conditions
  as the local authorities in their  discretion  may  prescribe.  Whenever
  such  consent  shall provide for the sale at public auction of the right
  to construct and operate a branch or extension of an existing  railroad,
  such  consent  shall  provide  that  but  one  fare shall be exacted for
  passage over such branch or extension and over the line  of  road  which
  shall  have  applied  therefor; and further, that if such right shall be
  purchased by  any  corporation  other  than  the  applicant,  the  gross
  receipts from joint business shall be divided in the proportion that the
  length  of  such  extension  or  branch so sold shall bear to the entire
  length of the road whether owned or  leased  which  shall  have  applied
  therefor  and  of such branch or extension, and that if such right shall
  be purchased by the applicant,  the  percentage  to  be  paid  shall  be
  calculated  on such portion of its gross receipts as shall bear the same
  proportion to the whole value thereof as the length of such extension or
  branch shall bear to the entire length of its  road,  whether  owned  or
  leased.  The  bidder to which such right, franchise and privilege may be
  sold must be a duly incorporated railroad  corporation  of  this  state,
  organized  to  construct,  maintain and operate a street railroad in the
  city for which such consent may be given; but no such corporation  shall
  be  entitled  to bid at such sale unless at least five days prior to the
  day fixed for such sale, or five days prior to the  day  to  which  such
  sale  shall  have  been duly adjourned, the corporation shall have filed
  with the comptroller or other chief fiscal officer of the city,  a  bond
  in  writing  and under seal, with sufficient sureties, to be approved by
  such comptroller or officer, conditioned that if such  right,  franchise
  and  privilege  shall  be  sold  to such corporation, to pay to the city
  where such railroad is situated the sum of  fifty  thousand  dollars  as
  liquidated damages and not by way of penalty in the event of the failure
  of  such bidder to fulfill the terms of sale, comply with the provisions
  of this article pertinent thereto, and complete and operate its railroad
  according to the plan or plans and upon the route or  routes  fixed  for
  its   construction  within  the  time  hereinafter  designated  for  the
  construction and completion of its railroad, and also conditioned to pay
  to the corporation first applying for the consent, if it  shall  not  be
  the   successful   bidder,  the  necessary  expenses  incurred  by  such
  corporation prior to the sale pursuant to the requirements and direction
  of the local authorities, within twenty days after such  sale  and  upon
  the  certificate of the comptroller or other officer conducting the same
  as to the sum or amount to be paid. Notice of the time, place and  terms
  of  sale, and of the route or routes to be sold, and the conditions upon
  which  the  consent  of  the  local  authorities  to  the  construction,
  operation  and  extension of such street railroad will be given, must be
  published by such local authorities for a least three successive  weeks,
  at  least  three  times a week in two daily newspapers of the city to be
  designated by the mayor. The comptroller or other chief  fiscal  officer
  of  the city shall attend and conduct such sale and may adjourn the same

  from time to time, but not more than four weeks in all,  unless  further
  adjournments  should,  in  his discretion, be necessary by reason of the
  pendency of legal proceedings, and shall cancel any bid if in excess  of
  the  gross  receipts, leaving in force the highest bid not in excess, or
  if the bidder shall not have furnished adequate security entitling  such
  bidder  to  bid,  or  shall  otherwise fail to comply with the terms and
  conditions of sale, and shall resell the consent and license in the same
  manner as hereinbefore provided for the first sale. The bidder  who  may
  build  and  operate such railroad shall at all times keep accurate books
  of account of the business and earnings of such  railroad,  which  books
  shall   at  all  times  be  subject  to  the  inspection  of  the  local
  authorities.  In the event of the failure or refusal of the  corporation
  operating  or  using  such  railroad to pay the rental or percentages of
  gross earnings agreed upon, and after notice of not less than sixty days
  to pay the same, the local authorities interested therein may  apply  to
  any  court having jurisdiction upon at least twenty days' notice to such
  corporation, and after it shall have had an opportunity to be  heard  in
  its defense, for judgment declaring the consent and right to operate and
  use  such  railroad forfeited and authorizing the sale again of the same
  in the manner hereinbefore prescribed, provided, however, that  no  such
  resale  of  any  such  consent  and  right  heretofore  granted shall be
  authorized except upon the condition that the same shall be  subject  to
  all  liens  and incumbrances existing on said railroads at the time such
  forfeiture may have been declared. All consents hereafter given  by  the
  local authorities, unless it be otherwise provided in such consent or in
  some  renewal  thereof,  may be forfeited at the expiration of two years
  thereafter. The board of sinking fund commissioners of  any  city  shall
  have  power to reduce, compromise or release any obligation or liability
  to the mayor, aldermen and commonalty of such city under the  provisions
  of chapter six hundred and forty-two of the laws of eighteen hundred and
  eighty-six,  or of this chapter, whenever, in the opinion of such board,
  such release or compromise shall be just or equitable, or for the public
  interest, the reason for any such release or compromise to be stated  in
  the  recorded  proceedings  of  such  board.  No  lease  by  any company
  organized under section  five  of  this  chapter  and  owning  a  right,
  privilege  or  franchise  of using any street, avenue, highway or public
  place for railroad purposes, which was sold  prior  to  May  nineteenth,
  nineteen  hundred  and eight, under the provisions of this section, made
  after said date to any street surface  railroad  company  which  is  not
  subject  to  the payment of any percentage pursuant to this section, and
  which is not organized for the purpose of operating a railroad in a city
  having a population of three hundred thousand or more,  shall  be  valid
  until  the  lessee  company  shall  have  filed  in  the  office  of the
  department of state and in the office of the clerk of the  county  where
  its certificate of incorporation is filed, its acceptance in writing and
  under  its  corporate  seal  of  the  provisions  of this section as now
  amended; and upon such acceptance  being  filed,  the  total  percentage
  amount  thereafter  to  be  paid  annually  under this section and under
  section one hundred and seventy-five of this chapter, shall  be  at  the
  rate of five per centum of the gross receipts derived from the operation
  of  the  roads  of  the  lessor  and  lessee companies considered as one
  system. The lessee  company,  at  the  time  of  filing  its  acceptance
  aforesaid,  shall  also file in the same offices a bond to the people of
  the state, executed in duplicate by it and a surety  company  authorized
  by  law  to act as surety on bonds and undertakings, in the penal sum of
  fifty  thousand  dollars,  and  conditioned  for  the  faithful  payment
  annually  of  the  total  percentage  aforesaid,  and such bond shall be
  deemed to be a  full  compliance  with  the  condition  for  a  bond  or

  undertaking  required  by  this  section  to  be  provided  for  in  the
  conditions of the consent of the local authorities and  shall  supersede
  any  such  bond  or  undertaking theretofore given. Whenever it shall be
  desired  to  unite  two street surface railroad routes at some point not
  over one-half mile from such respective lines or routes,  and  establish
  by  the  construction  of such connection a new route for public travel,
  and the corporation or corporations owning or using such railroads shall
  consent to operate such connection as a part of a continuous  route  for
  one  fare,  and  it  shall  appear  to  the  local authorities that such
  connection  cannot  be  operated  as  an  independent  railroad  without
  inconvenience to the public, but that it is to the public advantage that
  the same should be operated as a continuous line or route, with existing
  railroads,  or  whenever for the purpose of connecting with any ferry or
  railroad depot, it shall be desired to construct an extension or  branch
  not  more  than  one-half mile in length, of any street surface railroad
  corporation, no sale of such franchise shall be made as provided in this
  section, but any consent of the local authorities for  the  construction
  and operation of such connection, extension or branch shall provide that
  the  corporation or corporations operating such connection, extension or
  branch shall pay into the treasury of said city annually the  percentage
  provided   for  extensions  or  branches  in  section  one  hundred  and
  seventy-five of this chapter, for the purposes, at  the  times,  in  the
  manner and upon the conditions set forth in such section. Nothing herein
  contained  shall be construed as superseding, repealing or modifying any
  provision of the charter of any city, village or town, nor as  modifying
  or affecting the terms of a certain contract bearing date January first,
  eighteen hundred and ninety-two, entered into by and between the city of
  Buffalo  and  the  various  street surface railroad corporations therein
  named in said contract, nor as modifying or affecting  the  terms  of  a
  certain contract bearing date the twenty-fifth day of February, eighteen
  hundred  and  ninety,  entered into by and between the city of Rochester
  and the street  surface  railroad  corporation  therein  named,  nor  as
  modifying  or  affecting  any contract heretofore entered into between a
  street surface railroad corporation and any city having a population  of
  less  than  fifty  thousand,  town  or village regulating the payment of
  percentages or paving of streets, and any such city, town or village, is
  hereby authorized to enter into any  such  form  of  contract  with  any
  street  surface railroad corporation, and any such contract entered into
  before said date is hereby ratified and confirmed. The local authorities
  may, in their discretion, make their consent to depend upon any  further
  conditions respecting other or further security, or deposit, suitable to
  secure the construction, completion and operation of the railroad within
  any  time  not  exceeding  the  period  prescribed  in  this article and
  respecting the character, quality or motive power  of  the  road  to  be
  completed  and  respecting the grouping of streets, avenues and highways
  into one route, or into several routes, for the purpose of a single sale
  of the franchise, right or privilege for all the routes collectively, or
  of the separate sale for each route or street, as said local authorities
  may think expedient, and respecting the payment of the percentage agreed
  to be paid at the sale upon all the lines  operated  by  the  successful
  bidder  within  the  city  and  respecting  any  matter  involved  in or
  affecting the computation of percentage payments and respecting the  use
  of  the  railroads  to  be  constructed  under  the consent by any other
  company and respecting the interchange of traffic and division of  fares
  between  the company operating such railroads and any other company, and
  respecting the application of  any  provision  herein  contained  as  to
  carriage  of  passengers  for  single  fare  and  the  division of gross
  receipts and the payment of percentages to the line leased  or  operated

  under  contract  by  the applicant for an extension, and also respecting
  any other matter concerning which, in their judgment, further conditions
  would be for the public interest. Nothing herein contained  shall  apply
  to,  or  affect  any  grant hereafter made under the provisions of title
  one, chapter three of chapter three hundred  and  seventy-eight  of  the
  laws  of  eighteen  hundred  and ninety-seven and the amendments thereto
  known as the Greater New York charter.