N.J. Admin. Code § 16:89-4.1 - Agreement governing capital improvements

(a) An operator shall enter into an appropriate written agreement ensuring NJ TRANSIT's satisfactory continuing control for every item of capital improvement funded by NJ TRANSIT through the FCIP. This agreement will also ensure that the operator's use and disposition of the capital improvements are in accordance with the FCIP and shall contain such provisions that include, but are limited to, requirements for capital improvement maintenance, indemnification, and insurance, and requirements for default, audits, and recordkeeping as NJ TRANSIT shall deem reasonably necessary to ensure that the capital improvement shall remain in ferry passenger service for the length of its useful life.

(b) Satisfactory continuing control shall take the form of a lien agreement as follows:

1. NJ TRANSIT will be named as the senior (first) lienholder on capital improvements funded through FCIP. If a senior lien is not available, NJ TRANSIT shall maintain its financial interest over each capital improvement through its useful life by means of a lien agreement identifying the cost, date of purchase, and useful life of each capital improvement and stipulating that any early disposition of the capital improvement will require the operator to reimburse NJ TRANSIT the original cost of the capital improvement less depreciation (assuming straight line depreciation).

2. If the operator does not have the resources to reimburse NJ TRANSIT in accordance with (b)1 above, NJ TRANSIT shall reduce the operator's next year's FCIP funds by an amount equivalent to the original cost less depreciation of the capital improvement.

(c) Where an operator may be in breach of its obligations under any agreement with NJ TRANSIT under (a) or (b) above, any recourse or remedy for such breach shall be resolved and determined under the agreement terms and conditions. The remedy for breach may include, but not be limited to, repossessing the capital improvement(s).

Notes

N.J. Admin. Code § 16:89-4.1

Adopted by 47 N.J.R. 2637(a), effective 10/19/2015