§261-54  Special facility lease.  (a) In addition to the conditions and terms set forth in this part, any specialfacility lease entered into by the department shall at least contain provisionsobligating the other person to the special facility lease:

(1)  To pay to the department during the initial termof the special facility lease, whether the special facility is capable of beingused or occupied or is being used or occupied by the other person, a rental orrentals at the time or times and in the amount or amounts that will besufficient:  to pay the principal and interest on all special facility revenuebonds issued for the special facility, to establish or maintain any reservesfor these payments, and to pay all fees and expenses of the trustees, payingagents, transfer agents, and other fiscal agents for the special facilityrevenue bonds issued for the special facility;

(2)  To pay to the department:

(A)  A ground rental, equal to the fair marketrental of the land, if the land on which the special facility is located wasnot acquired from the proceeds of the special facility revenue bonds; or

(B)  A properly allocable share of theadministrative costs of the department in carrying out the special facilitylease and administering the special facility revenue bonds issued for thespecial facility, if the land was acquired from the proceeds of the specialfacility revenue bonds;

(3)  To either operate, maintain, and repair thespecial facility and pay the costs thereof or to pay to the department all costsof operation, maintenance, and repair of the special facility;

(4)  To:

(A)  Insure, or cause to be insured, thespecial facility under builder's risk insurance (or similar insurance) in theamount of the cost of construction of the special facility to be financed fromthe proceeds of the special facility revenue bonds;

(B)  Procure and maintain, or cause to beprocured or maintained, to the extent commercially available, a comprehensiveinsurance policy providing protection and insuring the department and itsofficers, agents, servants, and employees (and so long as special facilityrevenue bonds are outstanding, the trustee) against all direct or contingentloss or liability for damages for personal injury or death or damage toproperty, including loss of use thereof, occurring on or in any way related tothe special facility or occasioned by reason of occupancy by and the operationsof the other person upon, in, and around the special facility;

(C)  Provide all risk casualty insurance,including insurance against loss or damage by fire, lightning, flood,earthquake, typhoon, or hurricane, with standard extended coverage and standardvandalism and other malicious mischief endorsements; and

(D)  Provide insurance for workers'compensation, employer's liability, and aircraft liability (including passengerliability) for personal injury or death or damage to property (the other partymay self-insure for workers' compensation if permitted by law);

provided that all policies with respect toloss or damage of property including fire or other casualty and extendedcoverage and builder's risk shall provide for payments of the losses to thedepartment, the other person, or the trustee as their respective interests mayappear; and provided further that the insurance may be procured and maintainedas part of or in conjunction with other policies carried by the other person;and provided further that the insurance shall name the department, and so longas any special facility revenue bonds are outstanding, the trustee, asadditional insured; and

(5)  To indemnify, save, and hold the department, thetrustee and their respective agents, officers, members, and employees harmlessfrom and against all claims and actions and all costs and expenses incidentalto the investigation and defense thereof, by or on behalf of any person, firm,or corporation, based upon or arising out of the special facility or the otherperson's use and occupancy thereof, including, without limitation, from andagainst all claims and actions based upon and arising from any:

(A)  Condition of the special facility;

(B)  Breach or default on the part of the otherperson in the performance of any of the person's obligations under the specialfacility lease;

(C)  Fault or act of negligence of the otherperson or the person's agents, contractors, servants, employees, or licensees;or

(D)  Accident to or injury or death of anyperson or loss of or damage to any property occurring in or about the specialfacility, including any claims or actions based upon or arising by reason ofthe negligence or any act of the other person.

Any moneys received by the department pursuantto paragraphs (2) and (3) shall be paid into the airport revenue fund and shallnot be nor be deemed to be revenues of the special facility.

(b)  The term and all renewals and extensionsof the term of any special facility lease (including any amendments orsupplements thereto) shall not extend beyond the lesser of the reasonable lifeof the special facility which is the subject of the special facility lease, asestimated by the department at the time of the entering into thereof, or thirtyyears.

(c)  Any special facility lease entered into bythe department shall be subject to chapter 171 and shall contain any otherterms and conditions that the department deems advisable to effectuate thepurposes of this part. [L 1971, c 160, pt of §1; am L 1998, c 284, §2]