Amended in Assembly May 16, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1058

Introduced by Assembly Member Chávez

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(Coauthors: Assembly Members Atkins, Jones, and Waldron)

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February 22, 2013

An act to amend Sections 170004, 170006, 170010, 170011, 170012, 170013, 170014, 170018, 170024, 170048, 170056, 170060, 170062, and 170064 of the Public Utilities Code, relating to airports.

LEGISLATIVE COUNSEL’S DIGEST

AB 1058, as amended, Chávez. San Diego County Regional Airport Authority.

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Existing

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begin insert (1) end insert begin insert   end insert begin insert Existing end insert law provides for the formation and functioning of city selection committees in any county in which 2 or more cities are incorporated, for the purpose of appointing city representatives to boards, commissions, and agencies as required by law.

The San Diego County Regional Airport Authority Act establishes the San Diego County Regional Airport Authority as a local entity of regional government with jurisdiction throughout the County of San Diego and requires that the authority prepare, adopt, and amend an airport land use compatibility plan for each airport in San Diego County utilizing a public collaborative planning process. Existing law requires the authority to adopt a comprehensive plan on the future development of San Diego’s regional international airport. The authority is governed by a 9-member board of directors, 4 of whom are appointed by city selection committees of specified cities within the County of San Diego.

This bill would delete references to the city selection committees appointing the 4 directors, and instead would require the mayors of those cities to jointly appoint the directors in a public meeting that is publicly noticed by the authority and each of the cities, as specified. By requiring the cities to provide notice of these meetings, thereby increasing the duties of local officials, this bill would impose a state-mandated local program. The bill would provide that there are 9 voting members of the board of directors and would delete outdated provisions relative to the initial terms of office of the various directors and the first meeting of the board. begin insert The bill would authorize the authority to issue guidance to cities concerning end insert begin insert the appointment process. end insert The bill would provide that a director’s term of office commences on February 1 of the year in which the appointment commences, rather than on the first Monday in February. The bill would specify procedures for the composition of a 3-person executive committee. The bill would delete outdated provisions relative to the authority’s audit committee. The bill would authorize begin insert , instead of require, end insert the authority to adopt a comprehensive plan on the future development of San Diego’s regional international airport.

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The

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begin insert (2) end insert begin insert   end insert begin insert The end insert San Diego Unified Port District Act established the San Diego Unified Port District. The San Diego County Regional Airport Authority Act requires the port to transfer all title and ownership of the San Diego International Airport, as defined, but to retain trusteeship of lands underlying the airport consistent with the State Land’s Commission’s requirement, subject to a 66-year lease to the authority for control of the airport property.

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The

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begin insert This end insert bill would delete outdated provisions relative to the transition of title and ownership of the San Diego International Airport from the port to the authority.

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The

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begin insert (3) end insert begin insert   end insert begin insert The end insert California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 170004 of the Public Utilities Code is
amended to read:

170004.  

The Legislature finds and declares all of the following:

(a) Airports help to link local, regional, statewide, national, and
global economic activities. Airports are also essential features of
comprehensive transportation systems, that include streets and
highways, rail transit, transit over water, and mass transit.

(b) It is essential to the public health, safety, and welfare that
airports be developed and operated in the San Diego County region
so that those airports promote economic development, protect
environmental quality, and enhance social equity.

(c) The significant regional consequences of airport planning,
development, and operations require the creation of a regional
airport authority.

SEC. 2.  

Section 170006 of the Public Utilities Code is amended
to read:

170006.  

For the purposes of this division, the following terms
have the following meanings, unless the context requires otherwise.

(a) The “authority” means the San Diego County Regional
Airport Authority established under this division.

(b) The “board” and “board of directors” means the governing
board of the authority established as specified in Chapter 2
(commencing with Section 170010).

(c) The “consolidated agency” means the authority resulting
from the consolidation of the San Diego Association of
Governments and the transit boards pursuant to Chapter 3
(commencing with Section 132350) of Division 12.7.

(d) The “east county cities” means the Cities of El Cajon, La
Mesa, Lemon Grove, and Santee.

(e) The “north county coastal cities” means the Cities of
Carlsbad, Del Mar, Encinitas, Oceanside, and Solana Beach.

(f) The “north county inland cities” means the Cities of
Escondido, Poway, San Marcos, and Vista.

(g) The “port” means the San Diego Unified Port District
established under the San Diego Unified Port District Act (Chapter
67 of the Statutes of 1962, First Extraordinary Session).

(h) The “San Diego International Airport” means the airport
located at Lindbergh Field in the County of San Diego.

(i) The “south county cities” means the Cities of Chula Vista,
Coronado, Imperial Beach, and National City.

SEC. 3.  

Section 170010 of the Public Utilities Code is amended
to read:

170010.  

(a)  begin insert (1) end insert begin insert   end insert The board of directors shall consist of nine
voting members, appointed as follows:

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(1)

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begin insert (A) end insert  The Mayor of the City of San Diego shall appoint three
persons, two of whom shall be subject to confirmation by the City
Council of the City of San Diego. The persons appointed pursuant
to this paragraph shall be residents of the City of San Diego and
not less than one shall be an elected official of the City of San
Diego. For purposes of this subdivision, an “elected official of the
City of San Diego” means the Mayor or a member of the City
Council of the City of San Diego.

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(2)

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begin insert (B) end insert  The Chair of the Board of Supervisors of the County of San
Diego shall appoint two persons, subject to confirmation by the
Board of Supervisors of the County of San Diego. The persons
appointed pursuant to this paragraph shall be residents of the
County of San Diego and not less than one shall be a member of
the Board of Supervisors of the County of San Diego.

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(3)

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begin insert (C) end insert  At a public meeting, the mayors of the east county cities
shall appoint one person pursuant to a majority vote of the mayors
of the east county cities. The person appointed pursuant to this
paragraph shall be a member of a city council of one of the east
county cities or another resident of one of the east county cities.

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(4)

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begin insert (D) end insert  At a public meeting, the mayors of the north county coastal
cities shall appoint one person pursuant to a majority vote of the
mayors of the north county coastal cities. The person appointed
pursuant to this paragraph shall be a member of a city council of
one of the north county coastal cities or another resident of one of
the north county coastal cities.

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(5)

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begin insert (E) end insert  At a public meeting, the mayors of the north county inland
cities shall appoint one person pursuant to a majority vote of the
mayors of the north county inland cities. The person appointed
pursuant to this paragraph shall be a member of a city council of
one of the north county inland cities or another resident of one of
the north county inland cities.

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(6)

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begin insert (F) end insert  At a public meeting, the mayors of the south county cities
shall appoint one person pursuant to a majority vote of the mayors
of the south county cities. The person appointed pursuant to this
paragraph shall be a member of a city council of one of the south
county cities or another resident of one of the south county cities.

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(7)

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begin insert (2) end insert  Public meetings convened begin delete to appoint a board member end delete
pursuant to begin delete paragraphs (3) through (6) end delete begin insert subparagraphs (C) to (F),
inclusive, of paragraph (1) end insert shall be publicly noticed by the
authority and by each of the cities whose mayor is eligible to
participate in the meeting. These meetings are subject to the Ralph
M. Brown Act (Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code) and shall
be conducted by the authority clerk who shall record the minutes
of the meeting.

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(3) The authority may issue guidance to cities concerning the
appointment process.

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(b) The following persons shall be nonvoting, noncompensated,
ex officio members of the board of directors, appointed by the
Governor:

(1) The District Director of the Department of Transportation
for the San Diego region.

(2) The Department of Finance representative on the State Lands
Commission.

(c) The board of directors may provide for additional nonvoting,
noncompensated members of the board of directors, including
representatives of the United States Navy and the United States
Marine Corps, each of whom may appoint an alternate to serve in
his or her place.

(d) The Mayor of the City of San Diego shall appoint the chair
of the authority board of directors from among the nine voting
members of the board of directors.

SEC. 4.  

Section 170011 of the Public Utilities Code is amended
to read:

170011.  

(a)  Except as provided in subdivision (b) begin insert of Section
170010 end insert , the term of office of a member of the board of directors
appointed pursuant to subdivision (a) of Section 170010 is three
years. A member of the board of directors may continue to serve
beyond the expiration of the term until his or her successor qualifies
for appointment and takes office. Following appointment, a
member of the board of directors shall take office at begin delete noon end delete begin insert 12:01
a.m. end insert on February 1 of the year in which the appointment
commences. If a board appointment is made after February 1 of
the year in which the member’s term is scheduled to commence,
the member shall take office immediately upon appointment and,
if applicable, begin insert after end insert receiving confirmation, to serve the remainder
of the term.

(b) If a member of the board of directors is appointed to be a
member as a result of holding another public office and that person
no longer holds that other public office, then that person shall no
longer serve on the board of directors and a vacancy shall exist.

(c) Any vacancy in the office of a member of the board of
directors shall be filled promptly pursuant to Section 1779 of the
Government Code.

(d) Any person appointed to fill a vacant office shall serve the
balance of the unexpired term. If a member of the board of directors
leaves office prior to the expiration of his or her term, the vacancy
shall be filled for the balance of the unexpired term pursuant to
subdivision (a) of Section 170010.

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SEC. 5.  

Section 170012 of the Public Utilities Code is amended
to read:

170012.  

(a) At the first meeting of the board of directors on
or after February 1 of each even-numbered year, the board of
directors shall meet and elect its officers, except for the chair of
the board of directors, who shall be appointed by the Mayor of the
City of San Diego.

(b) The officers of the board of directors are a chair, vice chair,
and those additional officers created by the board of directors
pursuant to subdivision (c). The chair shall preside over meetings
of the board of directors and the vice chair shall serve during the
chair’s absence or inability to serve.

(c) The board of directors may create additional offices and
elect members to those offices, provided that no member of the
board of directors shall hold more than one office.

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begin insert SEC. 5. end insert   

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begin insert Section 170012 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

170012.  

(a) At the first meeting of the board of directors on
or after February begin delete 4, 2008, and at the first meeting of the board on
or after the first Monday in February of each even-numbered year
thereafter end delete begin insert 1 of each even-numbered year end insert , the board of directors
shall meet and elect its officers, except for the chair of the board
of directors, who shall be appointed by the Mayor of the City of
San Diego.

(b) The officers of the board of directors are a chair, vice chair,
and those additional officers created by the board of directors
pursuant to subdivision (c). The chair shall preside over meetings
of the board of directors and the vice chair shall serve during the
chair’s absence or inability to serve.

(c) The board of directors may create additional offices and
elect members to those offices, provided that no member of the
board of directors shall hold more than one office.

SEC. 6.  

Section 170013 of the Public Utilities Code is amended
to read:

170013.  

(a) The board of directors shall govern the authority.

(b) The board of directors shall establish policies for the
operation of the authority. The board of directors shall provide for
the implementation of those policies which are the responsibility
of the authority’s chief executive officer.

(c) All members of the board of directors shall exercise their
independent judgment on behalf of the interests of the residents,
property owners, and the public within San Diego County as a
whole in furthering the purposes and intent of this division. The
members of the board of directors shall represent the interests of
the public as a whole and not solely the interests of the local
officials who appointed them to the board of directors.

(d) The board of directors shall have a three-member executive
committee. One member of the executive committee shall be a
board member selected from among those members appointed by
the Mayor of the City of San Diego pursuant to begin insert subparagraph (A)
of end insert paragraph (1) of subdivision (a) of Section 170010 (category
1). One member of the executive committee shall be a board
member appointed by the Chair of the Board of Supervisors of the
County of San Diego pursuant to begin delete paragraph (2) end delete begin insert subparagraph (B)
of paragraph (1) end insert of subdivision (a) of Section 170010 (category
2). One member of the executive committee shall be a board
member selected from among those members appointed pursuant
to begin delete paragraphs (3) to (6), inclusive, end delete begin insert subparagraphs (C) to (F),
inclusive, of paragraph (1) end insert of subdivision (a) of Section 170010
(category 3). Additionally, members of the executive committee
shall be the following:

(1) The chair of the authority’s board of directors pursuant to
subdivision (d) of Section 170010.

(2) The vice chair of the authority’s board of directors, appointed
from a category different than the chair.

(3) A third member of the board of directors appointed from a
category that is not represented on the executive committee as a
result of paragraphs (1) and (2).

(4) The members of the executive committee serving pursuant
to paragraphs (2) and (3) shall each be selected to serve by a vote
of the members of the board of directors.

(e) The board of directors shall appoint a seven-member audit
committee consisting of four members of the board of directors
and the three public members appointed pursuant to Section
170018.

SEC. 7.  

Section 170014 of the Public Utilities Code is amended
to read:

170014.  

(a) Meetings of the board of directors are subject to
the provisions of the Ralph M. Brown Act (Chapter 9 (commencing
with Section 54950) of Part 1 of Division 2 of Title 5 of the
Government Code).

(b) A majority of the total voting membership of the board of
directors shall constitute a quorum for the transaction of business.

(c) The board of directors shall act only by ordinance, resolution,
or motion.

(d) (1) Except as provided in subdivision (e), to adopt an
ordinance, resolution, or motion requires both a numerical and a
weighted majority vote of the total voting membership of the board
of directors pursuant to paragraphs (2) and (3).

(2) A numerical majority requires an affirmative vote of at least
five of the voting membership of the board of directors.

(3) (A) A weighted majority requires an affirmative vote of at
least 51 vote points that are allocated to the voting membership of
the board of directors, unless the total number of vote points is
expanded beyond 100 as a result of the operation of subparagraph
(E). If the total number of vote points is greater than 100 as a result
of the operation of subparagraph (E), a weighted majority requires
an affirmative vote of at least 50 percent plus one of the total vote
points. Vote points shall be allocated pursuant to subparagraph
(B).

(B) There shall be a total of 100 allocated vote points for the
weighted vote, except that additional vote points shall be allocated
pursuant to subparagraph (E). For purposes of this paragraph, the
City of San Diego, the County of San Diego, the east county cities,
the north county coastal cities, the north county inland cities, and
the south county cities are each a jurisdiction. The points allocated
to the City of San Diego shall be divided among the three board
members appointed pursuant to paragraph (1) of subdivision (a)
of Section 170010. The points shall be allocated among the three
board members by the Mayor of the City of San Diego, keeping
the votes for each seat as close to equal as possible but in a manner
that avoids fractional vote points. The vote points allocated to the
County of San Diego shall be divided between the two board
members appointed pursuant to paragraph (2) of subdivision (a)
of Section 170010. The vote points shall be allocated among the
two board members by the chair of the board of supervisors,
keeping the votes for each seat as close to equal as possible but in
a manner that avoids fractional vote points. Each jurisdiction shall
have that number of vote points determined by the following
allocation formula, except that each jurisdiction shall have at least
one vote point, no jurisdiction shall have more than 40 vote points,
and there shall be no fractional vote points:

(i) If any jurisdiction has 40 percent or more of the total
population of the San Diego County region, 40 vote points shall
be allocated to that jurisdiction and the remaining vote points shall
be allocated to the remaining jurisdictions pursuant to clause (ii).
If no jurisdiction has 40 percent or more of the total population of
the San Diego County region, vote points shall be allocated
pursuant to clause (iii).

(ii) The total population of the remaining jurisdictions shall be
computed and the remaining 60 vote points allocated based upon
the percentage of the total that each jurisdiction has, in the
following manner:

(I) The percentage each jurisdiction bears to the total remaining
population shall be multiplied by 60 to determine fractional shares.

(II) Each fraction less than one shall be rounded up to one, so
that no jurisdiction has less than one vote point.

(III) Disregarding any fractional vote points and adding just the
whole vote points, if the total vote points is 60, fractional vote
points are dropped and the whole numbers are the vote points for
each jurisdiction.

(IV) If, after disregarding the fractional vote points and adding
just the whole vote points, the total vote points for the remaining
jurisdictions is less than 60, the difference in vote points shall be
allocated to jurisdictions in order of the highest fractions until a
total of 60 vote points are allocated, excepting those jurisdictions
whose vote was increased to one pursuant to subclause (II).

(V) If, after disregarding the fractional vote points and adding
just the whole vote points, the total vote points for the remaining
jurisdictions is more than 60, the vote points in excess of 60 shall
be eliminated by subtracting vote points from jurisdictions with
the lowest percentage to the total remaining population except that
no jurisdiction’s vote points shall be reduced to less than one.

(iii) If no jurisdiction has 40 percent or more of the total
population of the San Diego County region, the total population
of the region shall be computed and all 100 vote points shall be
allocated based upon the percentage each jurisdiction bears to the
total population of the region, in the following manner:

(I) The percentage of any jurisdiction that is less than one shall
be rounded up to one, so that no jurisdiction has less than one vote
point.

(II) Disregarding any fractional vote points and adding just the
whole vote points, if the total vote points is 100, fractional vote
points shall be dropped and the whole numbers shall be the vote
points for each jurisdiction.

(III) If, after disregarding the fractional vote points and adding
just the whole vote points, the total vote points for all jurisdictions
is less than 100, the difference in vote points shall be allocated to
jurisdictions in order of the highest fractions until a total of 100
vote points are allocated, excepting those jurisdictions whose vote
was increased to one pursuant to subclause (I).

(IV) If, after disregarding the fractional vote points and adding
just the whole vote points, the total vote points for all jurisdictions
is more than 100, the vote points in excess of 100 shall be
eliminated by subtracting vote points from jurisdictions with the
lowest percentage to the total population or the region except that
no jurisdiction’s vote points shall be reduced to less than one.

(C) When a weighted vote is taken on any item that requires
more than a majority vote of the board, it shall also require the
same supermajority percentage of the weighted vote.

(D) The allocation of vote points pursuant to this subdivision
shall be made annually by the board of directors based upon the
population calculations made by the San Diego Association of
Governments (SANDAG).

(E) Any other newly incorporated city shall be added to the
jurisdiction designated by SANDAG. The board member
representing that jurisdiction shall receive one additional vote
under the weighted vote procedure specified above until the next
allocation of vote points pursuant to subparagraph (D), at which
time the new jurisdiction shall receive votes in accordance with
the formula specified in this paragraph. Until this next vote points
allocation, the total number of weighted vote points may exceed
100.

(e) Any act to submit a ballot measure to the voters at a regular
or special election shall require a two-thirds majority vote, both
numerically and by weighted vote, of the total voting membership
of the board of directors.

(f) The board of directors shall keep a record of all of its actions,
including financial transactions.

(g) The board of directors shall adopt rules or bylaws for its
proceedings.

(h) The board of directors shall adopt policies for the operation
of the authority, including, but not limited to, ethical standards
and practices, administrative policies, fiscal policies, personnel
policies, and purchasing policies.

SEC. 8.  

Section 170018 of the Public Utilities Code is amended
to read:

170018.  

(a) The audit committee formed pursuant to
subdivision (e) of Section 170013 shall be a standing committee
of the board of directors. Each member of the committee shall be
a voting member. The public members shall be appointed by the
board of directors for staggered three-year terms.

(b) The board of directors shall select the three public members
from among the following categories of persons, with no more
than one appointee from each category at any one time:

(1) A professional with experience in the field of public finance
and budgeting.

(2) An architect or civil engineer licensed to practice in this
state.

(3) A professional with experience in the field of real estate or
land economics.

(4) A person with experience in managing construction of
large-scale public works projects.

(5) A person with public or private sector executive level
decisionmaking experience.

(6) A person who resides within the airport influence area of
the San Diego International Airport (Lindbergh Field).

(7) A person with experience in environmental justice as it
pertains to land use.

(c) The board of directors may appoint other persons to serve
as nonvoting, noncompensated, ex officio members on the Audit
Committee.

(d) In appointing the public members of the Audit Committee,
the board of directors shall provide for selection policies,
appointment procedures, conflict-of-interest policies,
length-of-term policies, and policies for providing compensation,
if any.

(e) The Audit Committee shall serve as a guardian of the public
trust, acting independently and charged with oversight
responsibilities for reviewing the authority’s internal controls,
financial reporting obligations, operating efficiencies, ethical
behavior, and regular attention to cashflows, capital expenditures,
regulatory compliance, and operations.

(f) The Audit Committee shall meet a minimum of four times
per year and shall, at a minimum, do all the following:

(1) Regularly review the authority’s accounting, audit, and
performance monitoring processes.

(2) At the time of contract renewal, recommend to the
appropriate committee and the board of directors its nomination
for an external auditor and the compensation of that auditor, and
consider at least every three years, whether there should be a
rotation of the audit firm or the lead audit partner to ensure
continuing auditor independence.

(3) Advise the appropriate committee and the board of directors
regarding the selection of the auditor.

(4) Be responsible for oversight and monitoring of internal and
external audit functions, and monitoring performance of, and
internal compliance with, authority policies and procedures.

(5) Be responsible for overseeing the annual audit by the external
auditors and any internal audits.

(6) Make recommendations to the full board regarding
paragraphs (1) to (5), inclusive.

(g) An affirmative vote by at least five members of the Audit
Committee shall be required for approval of the annual internal
and external audits, including performance monitoring, the
auditor’s annual audit plan for each fiscal year submitted to the
board for approval, and actions recommending or approving debt
financing for the authority.

SEC. 9.  

Section 170024 of the Public Utilities Code is amended
to read:

170024.  

(a) Upon request of the board of directors of the
authority, and with the consent of any labor organization acting
as the exclusive representative of employees of the authority whose
rights are governed by a collective bargaining agreement, the board
may enter into a contract to enroll those employees as members
of the California Public Employees’ Retirement System (CalPERS)
or another retirement system.

(b) A contract to enroll employees in CalPERS shall be subject
to the provisions of Part 3 (commencing with Section 20000) of
Division 5 of Title 2 of the Government Code and, where permitted
by the law governing that system, shall receive full reciprocity
with public employees’ retirement systems in which they
previously participated.

(c) Employees transferred from any existing retirement system
or pension plan to CalPERS or any other retirement system by
operation of this section shall receive benefits immediately after
enrollment in, or transfer to, the system that are equal to the
benefits the employees would have been entitled to immediately
before enrollment in, or transfer to, the system.

SEC. 10.  

Section 170048 of the Public Utilities Code is
amended to read:

170048.  

(a) The authority has exclusive responsibility to study,
plan, and implement any improvements, expansion, or
enhancements at San Diego International Airport.

(b) The authority may commission planning, engineering,
economic, and other studies to provide information to the board
for making decisions about the location, design, management, and
other features of future airports.

(c) The San Diego Association of Governments, or its successor,
shall cooperate with the authority to include all airport system
plans and facilities selected by the authority in the regional
transportation plan consistent with state and federal law.

(d) The authority, the San Diego Association of Governments,
local agencies, and the Department of Transportation shall
cooperate to develop effective surface transportation access to new
and existing airports.

(e) The authority may adopt a comprehensive plan on the future
development of San Diego’s regional international airport.

SEC. 11.  

Section 170056 of the Public Utilities Code is
amended to read:

170056.  

The port shall transfer all title and ownership of the
San Diego International Airport to the authority consistent with
the terms of the transfer under Section 170060 and shall include,
but need not be limited to, all of the following:

(a) All interest in real property and improvements, including,
but not limited to, all terminals, runways, taxiways, aprons,
hangars, Runway Protection Zones (RPZ), Airport Influence Areas
(AIA), emergency vehicles or facilities, parking facilities for
passengers and employees, above and below ground utility lines
and connections, easements, rights-of-way, other rights for the use
of property necessary or convenient to the use of airport properties,
and buildings and facilities used to operate, maintain, and manage
the airport which is consistent with the Airport Layout Plan (ALP)
dated September 13, 2000, and identified as Drawing No. 724 on
file with the clerk of the port, subject to paragraphs (1), (2), and
(3).

(1) The following real properties shall not be transferred and
shall remain under the ownership and control of the port:

(A) All property originally leased to General Dynamics
Corporation and identified in Document No. 12301 on file with
the clerk of the port.

(B) Property subleased by the port from TDY Industries, Inc.,
c/o Allegheny Teledyne (formerly Teledyne Ryan Aeronautical)
and identified as Document No. 17600 on file with the clerk of
the port.

(C) Property leased to Solar Turbines, Incorporated for parking
along Pacific Highway and identified as Document No. 39904 on
file with the clerk of the port (Parcel No. 016-026).

(D) Property leased to Solar Turbines, Incorporated, for parking
along Laurel Street and identified as Document No. 29239 on file
with the clerk of the port (Parcel No. 016-016 - Parcel 2).

(E) Property leased to Sky Chefs, Incorporated, located at 2450
Winship Lane and identified as Document No. 37740 on file with
the clerk of the port (Parcel No. 012-025).

(F) (i) Property located at Parcel No. 034-002 and identified
as Pond 20. The port shall retain ownership of Pond 20 and shall
reimburse the airport fund for the fair market value of that property.
The fair market value shall be determined by appraisal and
negotiation. If there is no agreement following that negotiation,
then the amount of payment shall be determined by arbitration.

(ii) On January 1, 2003, the port shall commence repayment to
the airport of the negotiated or arbitrated fair market value for the
property. The repayment schedule shall be a 10-year amortized
payment plan with interest based upon the rate of 1 percent above
the prevailing prime rate.

(2) The following additional real properties shall be transferred
from the port to the authority.

(A) Property adjacent to Pond 20 located at Parcel Nos. 042-002
and 042-003 (this parcel encompasses approximately two or three
acres).

(B) Property acquired as Parcel No. 034-001 from Western Salt
Processing Plant and identified as Document No. 39222 from
GGTW, LLC.

(3) The following nonairport, real properties that presently
provide airport-related services shall also be excluded from any
land transfer to the authority:

(A) Airport employee parking lot located at Harbor Island Drive
and Harbor Island Drive East identified as District Parcel No.
007-020.

(B) Airport taxi and shuttle overflow lot located at the southeast
corner of North Harbor Drive and Harbor Island Drive identified
as District Parcel No. 007-025.

(C) Property leased to National Car Rental System, Incorporated,
located east of the southeast corner of North Harbor Drive and
Harbor Island Drive identified at District Parcel No. 007-034.

(D) Property leased to The Hertz Corporation located east of
the southeast corner of North Harbor Drive and Harbor Island
Drive identified as District Parcel No. 007-035.

(E) Property leased to Avis Rent-A-Car Corporation located at
the southwest corner of North Harbor Drive and Rental Car
Roadway identified as District Parcel No. 007-036.

(F) Property leased to National Car Rental System, Incorporated,
located at the southeast corner of North Harbor Drive and Rental
Car Roadway identified as District Parcel No. 007-038.

(G) Property leased in common to National Car Rental System,
Incorporated; The Hertz Corporation; and Avis Rent-A-Car
Corporation, known as Joint-Use Roadway identified as District
Parcel No. 007-037.

(H) Property leased to Jimsair, Incorporated, located on the
property previously known as the General Dynamics Parcel, south
of Sassafras Street and west of Pacific Highway adjacent to the
Airport Operation Area identified as District Parcel No. 016-042.

(I) Property leased to Budget Rent A Car of San Diego located
at both the northeast and southwest corners of Palm Street and
Pacific Highway identified as District Parcel No. 016-001 (Parcel
1 and 2).

(J) Property leased to Budget Rent A Car of San Diego located
east of the northeast corner of Palm Street and Pacific Highway
identified as District Parcel No. 016-001 (Parcel 3).

(K) Property leased to Lichtenberger Equipment Incorporated,
located north of the northeast corner of Palm Street and Pacific
Highway identified as District Parcel No. 016-034.

(L) Property leased to Park and Ride, Incorporated, located at
the northeast corner of Sassafras and Pacific Highway identified
as District Parcel No. 016-038.

(M) Property leased to Ace Parking Management, Incorporated,
located north of the intersection of Sassafras Street and Pacific
Highway identified as District Parcel No. 016-040.

(N) Property leased to Federal Express Corporation located at
the west end of the extension of Washington Street identified as
District Parcel No. 015-008.

(b) All contracts with airport tenants, concessionaires,
leaseholders, and others, including, but not limited to, fees from
vehicle rental companies.

(c) All airport-related financial obligations secured by revenues
and fees generated from the operations of the airport, including,
but not limited to, bonded indebtedness associated with the airport.
The authority shall assume obligations issued or incurred by the
port for San Diego International Airport, including, but not limited
to, any long-term debt, grants, and grant assurances.

(d) All airport-related financial reserves, including, but not
limited to, sinking funds and other credits.

(e) All personal property, including, but not limited to,
emergency vehicles, office equipment, computers, records and
files, software required for financial management, personnel
management, and accounting and inventory systems, and any other
personal property owned by the port used to operate or maintain
the airport.

(f) Notwithstanding any provision of this section, the port shall
agree to lease for a period of 66 years, commencing on January 1,
2003, to the authority parcels 1, 2, and 3 of the property originally
leased to General Dynamics (identified in Document No. 12301
on file with the clerk of the port) consisting of approximately 89.75
acres west of the Pacific Highway and including property leased
to JimsAir (identified as Parcel #016-042), property leased to
Federal Express Corporation (identified as Parcel #015-008) and
the Park, Shuttle and Fly lot operated by Five Star Parking under
a management agreement with the port (identified as Clerk
Document No. 38334, dated March 29, 1999), subject to the
following terms:

(1) The rent shall be paid monthly in arrears and the annual rent
shall be level based on the fair market value of the property as of
January 1, 2006, and a market rate of return on that date.

(2) The authority shall lease to the port at the same fair market
value per square foot a total of not to exceed 250 parking spaces
in reasonable proximity to the port’s administrative building located
at 3165 Pacific Highway with the authority having a right to
relocate or substitute substantially equivalent or better parking
from time to time. The parties shall first meet and confer to
determine by appraisal and negotiation, the fair market value rent.
If the authority and port do not reach agreement within 60 days
after commencement of meetings for that purpose, either party
may submit the matter to binding arbitration in San Diego in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association. In the event airport operations cease to
exist on the property leased to the authority pursuant to this section,
control of the property will revert to the port as provided in Section
170060.

(3) All other terms of the ground lease shall be in accordance
with reasonable commercial practice in the San Diego area for
long-term real property ground leases.

SEC. 12.  

Section 170060 of the Public Utilities Code is
amended to read:

170060.  

(a)  The port shall retain trusteeship of lands
underlying the airport consistent with the State Lands
Commission’s requirement and shall execute a 66-year lease with
the authority for control of the airport property. The authority shall
pay one dollar ($1) per year during the term of the lease, or until
that time as airport operations controlled by the authority cease to
exist on the property. At that time, the lease shall terminate and
control of the property shall revert to the port.

(b)  (1)   The port may continue or enter into contracts,
memorandums of understanding, or other agreements necessary
to fulfill its responsibilities as trustee of the lands underlying the
airport or adjacent lands under its control, or acquire additional
lands within its jurisdiction consistent with its duties and pursuant
to Division 6 (commencing with Section 6001) of the Public
Resources Code.

(2) (A) The port shall act as lead agency to certify any studies,
reports, or other documents necessary to fulfill its obligations as
trustee of the lands described in paragraph (1).

(B) Notwithstanding subparagraph (A) or any other provision
of law, until the date that the port transfers the airport to the
authority, the port and the authority, without the necessity of the
giving of any notice, filing of any documents, or the taking of any
other action, shall serve jointly as the lead agencies for the purposes
of the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code)
and regulations adopted thereto, including, but not limited to, the
filing of notices of exemption, initial studies, negative declarations,
and environmental impact reports. On and after the transfer date,
the authority, without the necessity of the giving of any notice,
filing of any documents, or the taking of any other action, is the
sole lead agency for any documents for which an initial study has
been commenced pursuant to Section 15063 of Title 14 of the
California Code of Regulations or for which a notice of preparation
has been issued pursuant to Section 15082 of Title 14 of the
California Code of Regulations, regardless of whether or not a
notice of determination has been issued or a notice of completion
has been issued.

(C) The lead agency status described in this paragraph is
declaratory of existing law, and shall not in any respect be grounds
for any claim or finding of noncompliance by the port or the
authority, or both, with the California Environmental Quality Act
(Division 13 (commencing with Section 21000) of the Public
Resources Code) or regulations adopted under that act.

(3) Lands acquired by or added to lands under its trusteeship
by the port adjacent to the existing airport property and necessary
to operate the airport, including, but not limited to, lands from the
United States Marine Corp Recruit Depot for additional taxiways
and other airport related facilities, shall be included in the lease to
the authority as it is acquired by the port.

(c) The authority shall be responsible for making any necessary
application to the California Coastal Commission pursuant to the
California Coastal Act of 1976 (Division 20 (commencing with
Section 30000) of the Public Resources Code) and to other agencies
in accordance with other applicable laws in effect on the effective
date of the act that added this section for improvements upon
coastal lands under the control of the authority through a lease.
The port shall assist in the application for those projects as the
trustee of the lands and shall not impede any improvements sought
in the fulfillment of the authority’s duties. The authority shall be
responsible for all applications, requests, or submittals to other
governmental agencies for approvals, permits, authorizations or
agreements of any kind affecting or relating to the property
governed by the lease, and the port shall cooperate in completion
of all documents in the form submitted or approved by the authority
without modification, providing the documents are requested by
the authority, or required by any other governmental agencies, or
both.

SEC. 13.  

Section 170062 of the Public Utilities Code is
amended to read:

170062.  

(a) The authority may, in its sole discretion, from
time to time, enter into agreements with the port for services
including, but not limited to, operations, maintenance, and
purchasing, as the authority may find necessary or beneficial to
facilitate the operation of San Diego International Airport.

(b) The authority shall have no obligation to purchase or procure
any services, facilities, or equipment from or through the port. At
no time shall the authority be obligated to purchase auditing, public
affairs, and governmental relations, strategic planning, legal, or
board support services from the port. However, the authority may
elect to obtain these services and support in agreement with the
port.

(c) Performance of all these services shall be subject to the
direction and control of the authority, and shall be provided in
accordance with specifications, policies, and procedures as
communicated by the authority to the port from time to time. In
all cases, the port shall provide services of sufficient quality,
quantity, reliability, and timeliness to ensure that the authority can
continue the operation, maintenance, planning and improvement
of and for San Diego International Airport consistent with the
standards and practices under which the airport is operated on the
effective date of the act that added this subparagraph or higher
standards as the authority may adopt, or as may be required in the
authority’s judgment to meet the requirements of federal or state
law, or the needs of the users of the airport for the safe, secure,
and efficient operation of the airport. The authority also, from time
to time, may establish performance standards for and may conduct
financial or performance audits, or both, of all services provided
by the port and all charges or claims for payment for the services
provided.

(d) Services provided by the Harbor Police shall in no event be
of less quality than the standard established for airport police
services by the three other largest airports, based on annual
passengers, in this state. The port shall cooperate fully, at its own
cost, in any financial or performance audit, or both, conducted by,
or on behalf of, the authority or by any government agency having
jurisdiction.

(e) The authority shall reimburse the port for the actual and
reasonable direct costs, including, but not limited to, an appropriate
allocation of general and administrative expenses associated with
the provision of that service, incurred by the port to deliver services
actually provided to the authority in accordance with the standards
and requirements described in this section. The port shall request
payment for services on a monthly basis. Those requests shall
provide details regarding each service or element thereof for which
payment is requested as the authority reasonably may request. The
authority shall have the right to review and approve any request
for payment for those services. Payment shall be due and payable
30 days after the request provided all necessary supporting
documentation is received by the authority.

(f) The San Diego Harbor Police Department shall remain under
the jurisdiction of the San Diego Unified Port District, and
employees shall incur no loss of employment or reduction in wages,
health and welfare benefits, seniority, retirement benefits or
contributions made to retirement plans, or other terms and
conditions of employment as a result of enactment of this division.
The San Diego Harbor Police Department shall have the exclusive
contract for law enforcement services at San Diego International
Airport during that time as the airport continues to operate at begin delete the end delete
Lindbergh Field, and peace officers of the Harbor Police shall
remain employees of the port.

SEC. 14.  

Section 170064 of the Public Utilities Code is
amended to read:

170064.  

(a) From revenues in accounts attributable to airport
operations, the port shall fund the authority for not less than one
million dollars ($1,000,000) each year until that time as the transfer
of the airport and all associated revenue sources have been
completed between the port and the authority. The authority’s
board may submit a budget request for more than this amount if
necessary to carry out its duties. The port shall approve those
budget requests in a timely manner without modification or
reduction. The authority shall report its total budget expenditure
amount to the port on an annual basis and balance or carryover
reserves from previous budgets. The funding provided by this
subdivision replaces any loans made to the authority by the port
under the former provisions set forth in this subdivision requiring
the port to loan the authority the sum of one million dollars
($1,000,000).

(b) Upon the completion of the transfer of San Diego
International Airport to the authority, the authority shall assume
all revenue stream revenues to fund its activities, operations, and
investments consistent with its purposes. The sources of revenue
available to the authority may include, but are not limited to,
imposing fees, rents, or other charges for facilities, services, the
repayment of bonded indebtedness, and other expenditures
consistent with the purposes of the authority.

(c) To the extent practicable, the authority shall endeavor to
maximize the revenues generated from enterprises located on the
property of the authority.

(d) The authority may receive state and federal grants for
purposes of planning, constructing, and operating an airport and
for providing ground access to airports under its control.

SEC. 15.  

If the Commission on State Mandates determines
that this act contains costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.