Section 17 AAC 45.242 - Damage to lessee-owned permanent improvements(a) If, within five years before the expiration of the lease, the lessee-owned permanent improvements on the premises are damaged to the extent that at least 50 percent of the improvements are rendered unusable, the lessee may terminate the lease by 30 days' written notice to the department after removing the damaged improvements and restoring the premises to a clean and neat physical condition acceptable to the department.(b) Except as provided in (a) of this section, if lessee-owned permanent improvements on the premises are damaged or destroyed, the lessee shall repair, rebuild or replace the improvements to function normally within two years after the date on which the improvements were damaged or destroyed. If the lessee materially fails to complete the repair, reconstruction, or replacement of the damaged or destroyed improvements within the allowed time, the department will (1) unilaterally reduce the term of the lease so that the total term from the beginning of the lease is consistent with the cost or value of the undamaged improvements remaining on the premises, using the table in 17 AAC 45.225(j); or(2) grant an extension of time for the lessee to complete the repair, reconstruction, or replacement of damaged or destroyed improvements on the premises for good cause shown by the lessee and upon a finding that the action would be consistent with the best interest of the state.(c) Repair, rebuilding, or replacement of damaged or destroyed lessee-owned permanent improvements under this section constitutes new investment for purposes of term extension.Eff. 3/22/2008, Register 185Authority:AS 02.15.020
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