§ 4-262 — Remedies re material default by contractor. Department authority.

(a) In addition to any other remedy available to the state, in the event of a material default by the contractor, the state may elect to assume the responsibilities and duties of the contractor of the project, and in such case, the state shall succeed to all of the rights, title and interest in such project, subject to any liens on revenue previously granted by the contractor to any person providing financing thereof. (b) The department may exercise the power of condemnation to acquire the project in the event of a material default by the contractor. Any person who has provided financing for the project, and the contractor, to the extent of its capital investment, may participate in the condemnation proceedings with the standing of a property owner. (c) The department may terminate, with cause, the partnership agreement and exercise any other rights and remedies that may be available to it at law or in equity. (d) The state may make or cause to be made any appropriate claims under the maintenance, performance or payment bonds, or lines of credit, as set forth in the partnership agreement. (e) In the event the state elects to assume the responsibility and duties of a project pursuant to subsection (a) of this section, the department may develop or operate the project, impose user fees, impose and collect lease payments for the use thereof and comply with any service contracts as if it were the contractor. Any revenue that is subject to a lien shall be collected for the benefit of and paid to secured parties, as their interests may appear, to the extent necessary to satisfy the contractor's obligations to secured parties, including the maintenance of reserves. Such liens shall be correspondingly reduced and, when paid off, released. Before any payments to, or for the benefit of, secured parties, the department may use revenue to pay current operation and maintenance costs of the qualifying project, including compensation to the department for its services in operating and maintaining the project. The right to receive such payment, if any, shall be considered just compensation for the project. The full faith and credit of the department shall not be pledged to secure any financing of the contractor by the election to take over such project. The assumption of the operation of the project shall not obligate the department to pay any obligation of the contractor from sources other than revenue.

Legislative History

(Oct. Sp. Sess. P.A. 11-1, S. 87; P.A. 21-99, S. 9.) History: Oct. Sp. Sess. P.A. 11-1 effective October 27, 2011; P.A. 21-99 amended Subsecs. (a), (b) and (e) to replace “public-private partnership” and “partnership project” with “project”, further amended Subsec. (b) to replace reference to state agency with power of condemnation with “The department” and make a technical change, and amended Subsecs. (c) and (e) to replace “agency” with “department”, effective June 28, 2021.