1523.10 Lien for payment of bonds.

The funds derived from the sale, use, or lease of the water impounded and conserved or the power generated by the improvements constructed pursuant to sections 1523.01 to 1523.13, inclusive, of the Revised Code, or from the lease of the lands and improvements adjacent thereto are hereby expressly pledged for the purpose of maintaining and keeping said improvements in repair and for the payment of the interest on and principal of the bonds issued under section 1523.02 of the Revised Code, as the same fall due and mature. The owners of such bonds are hereby given a lien for the payment of the principal and interest of such bonds upon any dam, reservoir, storage basin, or other improvements, or any part thereof, with the appurtenances belonging thereto, constructed by the chief of the division of water with the funds derived from the sale of such bonds.

If default is made in the payment of the interest on any of said bonds for three or more successive years, or if bonds, aggregating in par value not less than ten per cent of the total amount of such bonds then outstanding are not paid at maturity, then all of said bonds, both principal and interest, shall become due and payable, and the owners of any of said bonds, aggregating in par value not less than ten per cent of the total amount of such bonds then outstanding, may institute proceedings to foreclose such lien against the state in the court of common pleas of the county in which is located any of said improvements, constructed, altered, or enlarged out of the proceeds of the sale of such bonds.

Said court shall have jurisdiction of such action with full power to foreclose such lien and to make an order to the sheriff of said county, acting as a master commissioner, directing him to make a sale of such improvements or part thereof at not less than two thirds of the appraised value thereof, and upon such terms and in manner and form as provided for in said order, and to pay the proceeds of such sale to the clerk of the court of common pleas. Upon motion of the purchaser of such improvements at such sale, the court, if such sale is found to be regular in all respects and according to law, shall confirm the sale and order the sheriff to execute a deed to such purchaser and his assigns, conveying to him all the right, title, and interest of the holders of said bonds in and to said improvements, and all the right, title, and interest of the state, for a period of not more than fifty years from the date of such conveyance, in the same, with full right and franchise, for said period of not to exceed fifty years, to operate said improvements and dispose of the water conserved or the power generated thereby, with the further right, for said period of fifty years, to flow, transport, and convey said water from said improvements, or to conduct and transmit power generated thereby through, over, and upon any of the lands of the state or channels or beds of any of its reservoirs, lakes, canals, races, aqueducts, or watercourses. In the exercise of such rights, such purchaser or his assigns shall at all times during the term of said grant maintain the improvements so conveyed to them in a good state of repair and shall not interfere with the navigation of the canals of the state or with the control and maintenance thereof or with the sale of water by the state from its dams, reservoirs, and improvements other than those so constructed. The state does not incur any liability by reason of such sale and the rights granted thereunder to continue to maintain such canals, races, channels, or watercourses, or to continue the use thereof. Such conveyance or grant by the sheriff as such master commissioner shall contain a clause giving the chief such control of waste gates and wickets as to regulate the flow of water in the state reservoirs or canals, in such manner as to maintain the proper level therein and to prevent the flowing into such reservoirs and canals of such quantities of water as might impair any of the property of the state or its lessees.

Upon the foreclosure of said lien and the sale of said improvements, all contracts or leases for the sale, use, or lease of water, the lands and improvements adjacent thereto, or power rights then outstanding shall become void, and the rights of the state and the several lessees thereunder, shall cease.

Upon the making of an order by the court for the sale of such improvements, and before they are offered for sale by the sheriff, the court shall appoint three disinterested appraisers, one of whom shall be a water-works or hydraulic engineer with at least five years’ experience in the practice of his profession, and two of whom shall be freeholders residing in the county in which any of such improvements are located. Said appraisers shall appraise said improvements and shall, within the time fixed by the court, file such appraisal in writing with the clerk. If the lien given by this section as security for the payment of said bonds covers a part only of said improvements, said appraisers shall appraise said improvements as an entirety, and shall also appraise separately the part constructed from the proceeds of the sale of said bonds, the lien of which is being foreclosed in such proceeding.

In making such appraisal and fixing the value of said improvements or of such part thereof, said appraisers shall have access to all papers and documents on file in the office of the chief relating to such improvements, including the plans and specifications therefor, and the bids made and contracts entered into for the construction thereof, and all leases and contracts for the sale of water impounded therein and power generated thereby. The order of the court shall direct the sale only of such part of said improvements as have been constructed from the proceeds of the sale of said bonds. The purchaser at such sale, in the operation of such improvements during the term of the franchise granted to him by this section, shall draw from the dam or reservoir impounding such water only such portion thereof as the appraised value of that part of such improvements, constructed from the proceeds of the sale of such bonds and sold to him under the order of the court, bears to the entire appraised value of such improvements.

If at any time during the term of the franchise granted to the purchaser of such improvements at such foreclosure sale any controversy arises between him or his assigns and the chief as to the operation of such improvements, or as to the amount of water which said purchaser is drawing or is entitled to draw therefrom, either said purchaser or said chief may file a petition in said court, setting forth the facts connected with such controversy.

Notice in writing of the filing of such petition shall be given to the opposite party to said controversy within thirty days from the date of the filing thereof, either by service of such notice personally upon such opposite party by the sheriff of such county or by service by mail by the clerk. Such notice shall be mailed to the name and address which the purchaser filed with said clerk at the time of the delivery to the purchaser by the sheriff of the deed. Within thirty days from the serving or mailing of such notice, the opposite party to said controversy shall file his answer in said court, and thereupon the court shall hear and determine said controversy and make such order in regard to it as is just and proper, which order shall be binding upon all the parties to said controversy.

At the termination of said period of not to exceed fifty years, all of the rights and privileges conveyed to said purchaser by the deed and grant of such sheriff as master commissioner shall cease and said improvements, with all the appurtenances belonging thereto, shall revert to and become the property of the state, free and clear of any claims whatever against them.

The clerk shall distribute and pay the money received by him from the sheriff as such master commissioner from the sale of such improvements to the holders of said bonds pro rata, and upon such payment to any of said bondholders, they shall surrender to the said clerk their bonds, with all unpaid interest coupons thereon. The clerk shall thereupon cancel the same and deliver them, so canceled, to the treasurer of the water conservation improvement fund.

Effective Date: 10-01-1953