56-575.11 - Material default; remedies.
§ 56-575.11. Material default; remedies.
A. In the event of a material default by the private entity, the responsiblepublic entity may elect to assume the responsibilities and duties of theprivate entity of the qualifying project, and in such case, it shall succeedto all of the right, title and interest in such qualifying project, subjectto any liens on revenues previously granted by the private entity to anyperson providing financing thereof.
B. Any responsible public entity having the power of condemnation under statelaw may exercise such power of condemnation to acquire the qualifying projectin the event of a material default by the private entity. Any person who hasprovided financing for the qualifying project, and the private entity, to theextent of its capital investment, may participate in the condemnationproceedings with the standing of a property owner.
C. The responsible public entity may terminate, with cause, the interim orcomprehensive agreement and exercise any other rights and remedies that maybe available to it at law or in equity.
D. The responsible public entity may make or cause to be made any appropriateclaims under the maintenance, performance, or payment bonds; or lines ofcredit required by subsection A 1 of § 56-575.9.
E. In the event the responsible public entity elects to take over aqualifying project pursuant to subsection A, the responsible public entitymay develop or operate the qualifying project, impose user fees, impose andcollect lease payments for the use thereof and comply with any servicecontracts as if it were the private entity. Any revenues that are subject toa lien shall be collected for the benefit of and paid to secured parties, astheir interests may appear, to the extent necessary to satisfy the privateentity's obligations to secured parties, including the maintenance ofreserves. Such liens shall be correspondingly reduced and, when paid off,released. Before any payments to, or for the benefit of, secured parties, theresponsible public entity may use revenues to pay current operation andmaintenance costs of the qualifying project, including compensation to theresponsible public entity for its services in operating and maintaining thequalifying project. The right to receive such payment, if any, shall beconsidered just compensation for the qualifying project. The full faith andcredit of the responsible public entity shall not be pledged to secure anyfinancing of the private entity by the election to take over the qualifyingproject. Assumption of operation of the qualifying project shall not obligatethe responsible public entity to pay any obligation of the private entityfrom sources other than revenues.
(2002, c. 571; 2003, c. 1034; 2005, c. 865.)