00 CS FOR HOUSE BILL NO. 543(FIN) am S 01 "An Act establishing the procedures and conditions for lessees of land leases at 02 state airport and air navigational facilities, including leases in holdover status 03 to receive a new lease of the same land or an extended term of the existing 04 lease; and relating to the title and ownership, and the sale, removal, and other 05 disposition, of permanent improvements made to a leasehold under an airport 06 or air navigational facility lease; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. FINDINGS AND STATEMENT OF PURPOSE. (a) The legislature finds 09 that 10 (1) it often takes considerable commitment, time, and resources for a lessee 11 to establish a fully developed revenue-producing business or noncommercial enterprise on 12 leased land on an airport owned and operated by the state; 13 (2) a developed business or noncommercial enterprise by an airport lessee 14 produces a stable long-term flow of revenue to the local community and the state in the form 01 of income from jobs created and taxes paid; 02 (3) a developed business by an airport lessee usually has established a positive 03 reputation with its clientele that enhances future tourism and commerce in this state; 04 (4) a developed business by an airport lessee is better positioned to generate 05 more federal passenger entitlement money for the airport and the state; 06 (5) a developed business or noncommercial enterprise on an airport land lease 07 generally maximizes the use of the airport infrastructure, and this maximization makes the 08 airport's operation more economical; and 09 (6) providing a right and option to lessees of airport land to continue to lease 10 the land will encourage and enhance compliance with state law and airport leases, and this 11 compliance will benefit the overall operations of the state airport system. 12 (b) It is the purpose of the legislature to preserve and establish, for qualifying land 13 lessees who are in compliance with state law and airport leases, a right, consistent with sound 14 airport planning, to continue to lease the land in order to continue their businesses and 15 noncommercial enterprises and in order to promote a strong aviation industry in this state with 16 long-term benefits to local communities, the airports, and the state. 17 * Sec. 2. AS 02.15.090(b) is amended to read: 18  (b) The department may by contract or other arrangement, upon a 19 consideration fixed by it, grant to a qualified municipality or person for a 20 reasonable period of time the privilege of operating, as agent of the state or 21 otherwise, an airport owned or controlled by the state. A municipality or person 22 granted that privilege may not operate the airport other than as a public airport 23 or enter into any contract, lease or other arrangement in connection with the 24 operation that the department may not have undertaken under (a) or (c) - (e) 25 of this section. 26 * Sec. 3. AS 02.15.090 is amended by adding new subsections to read: 27  (c) Notwithstanding the right of the public to rightful, equal, and uniform use 28 under (a) of this section, before the expiration of a land lease, including the 29 termination of a lease in holdover status, entered into under this section, the lessee may 30 apply for a new lease, or for an extended term under the existing lease, for the same 31 land. The commissioner shall approve the application for a new land lease or an 01 extended term under this section without offering the land to other persons for leasing 02 if 03  (1) the lessee is in compliance with the terms and conditions of the 04 existing or holdover lease; and 05  (2) the continued use of the leasehold is consistent with written airport 06 operation policies and is in the state's best interest. 07  (d) A land lessee owns title to the permanent improvements that the lessee 08 constructed or purchased during the term of the lease, unless the lease expressly 09 provides that the state is the owner of the permanent improvements. 10  (e) At the expiration, termination, or cancellation of a land lease entered into 11 under this section, 12  (1) a lessee who owns the improvements under (d) of this section shall 13 continue to own the permanent improvements that the lessee constructed or purchased 14 on a leasehold if the lessee is granted under (c) of this section a new lease or an 15 extended term for the same land; 16  (2) a lessee may sell the permanent improvements owned by the lessee 17 to a succeeding lessee of the same land; 18  (3) at the option of the lessee, the permanent improvements owned by 19 the lessee may be sold by the state at public auction with the proceeds from the sale 20 of the improvements going to the lessee, less administrative costs of the auction and 21 obligations owed under the lease to the state; the successful bidder has the same right 22 to enter into a new lease under (c) of this section without the department offering the 23 land to other persons for leasing; 24  (4) after notice by the department, the permanent improvements owned 25 by the lessee shall be removed at the lessee's sole expense if 26  (A) the permanent improvements do not comply with written 27 airport operational policies or are not in the state's best interest; 28  (B) the permanent improvements are not sold under (e)(2) or (3) 29 of this section; or 30  (C) the department makes written findings that the permanent 31 improvements are a hazard to the public health and safety; 01  (5) title to the permanent improvements vests in the department if the 02 state purchases or otherwise contracts for the ownership of the permanent 03 improvements, or if the lessee abandons the permanent improvements. 04 * Sec. 4. REGULATIONS. The Department of Transportation and Public Facilities may 05 proceed to adopt regulations to implement AS 02.15.090(c) - (e), added by sec. 3 of this Act. 06 The regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 07 effective date of sec. 3 of this Act. 08 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c).