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SB 302: "An Act establishing the Anchorage International Airport Commission and relating to state airports and the international airports revenue bond program; and providing for an effective date."

00SENATE BILL NO. 302 01 "An Act establishing the Anchorage International Airport Commission and relating 02 to state airports and the international airports revenue bond program; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new 06 section to read: 07 FINDINGS AND PURPOSE. (a) The Alaska State Legislature finds that the state- 08 owned and state-operated international airport at Anchorage is a critical air transportation link 09 between the Orient, Europe, and North America, is a major point of access to Alaska for 10 international and interstate air travelers, and is a major hub for the shipment of cargo 11 throughout the Pacific Rim and the Northern Hemisphere. In order to protect and maintain 12 the viability and competitive position of the Anchorage International Airport, it is in the best 13 interest of the state to vest management of the airport in an independent instrumentality of the 14 state that can provide effective marketing of the airport; efficient, responsive, and integrated

01 management of the airport; and competitive services and facilities to users of the airport. 02 (b) The purpose of this Act is to 03 (1) establish a commission for the operation, management, planning, and 04 construction of facilities for the state-owned and state-operated international airport at 05 Anchorage; 06 (2) protect the rights, investment, and security of the holders of international 07 airports revenue bonds issued before and after the restructuring of the international airports 08 revenue bond program beginning on January 1, 2001; 09 (3) restructure the international airports revenue bond program under 10 AS 37.15.410 - 37.15.550 to provide that, after January 1, 2001, 11  (A) international airports revenue bonds may be issued only for the 12 benefit of the state-owned and state-operated international airport at either Anchorage 13 or Fairbanks and that the repayment of those bonds shall be made from the revenue 14 generated by the airport for which the bonds are issued; and 15  (B) repayment of existing international airports revenue bonds shall be 16 repaid from revenue generated by the Anchorage International Airport. 17 * Sec. 2. AS 02 is amended by adding a new chapter to read: 18 Chapter 45. Anchorage International Airport Commission. 19 Article 1. Creation and Organization. 20  Sec. 02.45.010. Commission established. (a) The Anchorage International 21 Airport Commission is established as a public corporation of the state. The 22 commission is an instrumentality of the state in the Department of Community and 23 Economic Development but has a legal existence independent of and separate from the 24 state and has continuing succession until its existence is terminated by law. 25  (b) The commission is the exclusive state agency responsible for the operation, 26 management, planning, marketing, construction, and maintenance of facilities at the 27 state-owned and state-operated international airport located at Anchorage. 28  (c) The powers of the commission are vested in the board of directors of the 29 commission. 30  Sec. 02.45.020. Board of directors. (a) The board of directors of the 31 commission consists of seven voting members appointed by the governor in accordance

01 with this section: 02  (1) two members who are residents of the Municipality of Anchorage 03 and are nominated by the mayor of the Municipality of Anchorage; 04  (2) one member who is a representative of a labor organization that 05 represents employees of the commission; and 06  (3) four members who are residents of the state. 07  (b) The members of the board appointed under (a) of this section shall have 08 appropriate and relevant experience in the management or operation of airports or of 09 aviation or related business enterprises. 10  (c) The commissioner of community and economic development is a 11 nonvoting, ex officio member of the board. The commissioner may designate a person 12 to serve on the board in the commissioner's absence. 13  (d) The appointed members of the board serve for staggered terms of four 14 years. The terms of the appointed members begin on January 1. 15  (e) The appointed members of the board shall comply with the requirements 16 of AS 39.50 (public official financial disclosure) and AS 39.52 (Alaska Executive 17 Branch Ethics Act). 18  (f) The appointed members of the board may neither be employed by the state, 19 including the University of Alaska, nor hold an elected state or municipal office. 20  Sec. 02.45.030. Removal of members. The governor may remove an 21 appointed member of the board for cause, including incompetence, neglect of duty, or 22 misconduct in office. Before a member is removed for cause, the member shall be 23 given a copy of the charges and afforded an opportunity to publicly present a defense 24 in person or by counsel upon not less than 10 days' notice. If a member is removed 25 for cause, the governor shall file with the lieutenant governor a complete statement of 26 all charges made against the member and the governor's findings based on the charges, 27 together with a complete record of the proceedings. The governor may suspend a 28 member of the board pending a final action under this section. 29  Sec. 02.45.040. Compensation and expenses. (a) A member of the board, 30 other than the commissioner and the commissioner's designee, is entitled to 31 compensation not to exceed $400 for each day the member is engaged in the actual

01 performance of duties as a member of the board for a maximum of 60 days in a 02 calendar year. The board may provide by rule for compensation for partial days 03 during which an appointed member is engaged in actual performance of duties as a 04 member of the board. 05  (b) In addition to compensation under (a) of this section, a member of the 06 board, other than the commissioner and the commissioner's designee, is entitled to per 07 diem and travel expenses authorized by law for state boards and commissions under 08 AS 39.20.180. 09  Sec. 02.45.050. Meetings. (a) The board shall hold at least four regular 10 meetings each year. The board may hold special meetings at the call of the chair or 11 at the request of three members of the board. 12  (b) Meetings of the board are open to the public in accordance with 13 AS 44.62.310 - 44.62.312. 14  Sec. 02.45.060. Officers and quorum. (a) The board shall elect a chair and 15 a vice-chair from among its members. A member of the board may not serve as chair 16 for two consecutive terms. The chair and vice-chair serve for terms of two years. 17  (b) The board shall elect a secretary, who need not be a member. The 18 secretary serves at the pleasure of the board. 19  (c) Four voting members of the board constitute a quorum. Action may be 20 taken and motions and resolutions adopted by the board at a meeting by the affirmative 21 vote of at least four members. Members may not vote by proxy. A vacancy in the 22 membership of the board does not impair the right of a quorum to exercise all the 23 powers and perform all the duties of the board. 24  (d) Members may participate in meetings of the board by electronic means. 25  Sec. 02.45.070. Staff. (a) The board shall employ a manager for the 26 Anchorage International Airport. The airport manager shall be selected on the basis 27 of education, experience, training, and expertise in management of airports. The 28 airport manager serves at the pleasure of the board. Between meetings of the board, 29 the airport manager shall report to the chair of the board. 30  (b) The board may appoint other officers and engage professional and technical 31 advisors as independent contractors.

01  (c) The board shall prescribe the duties and compensation of commission 02 employees, including the airport manager. 03  (d) The airport manager may hire employees of the commission and, subject 04 to the approval of the board, engage professional and technical advisors under contract 05 with the commission. 06  Sec. 02.45.080. Rules and emergency rules. (a) The board shall adopt rules 07 to carry out its functions and the purposes of this chapter, including rules to safeguard 08 property owned by the commission and to protect employees and persons using the 09 commission's property or services. At least 15 days before the adoption of a rule, the 10 board shall give public notice of the proposed action by publishing a notice in at least 11 two newspapers of general circulation in the state and by mailing a copy of the notice 12 to each person who has requested notice of proposed changes to its rules. The notice 13 must state the time, place, and nature of the proceedings and must contain a summary 14 of the subject of the proposed rule. 15  (b) On the date and at the time and place designated in the notice required 16 under (a) of this section, the board shall provide each interested person an opportunity 17 to present statements in writing concerning the proposed rule and shall give members 18 of the public an opportunity to present oral statements for a minimum period of at least 19 one hour. 20  (c) The board shall consider all relevant matters presented to it before adopting 21 a rule. The board may take action on a rule that varies in content from the summary 22 provided with the notice of the proposed rule if the summary reflected the subject of 23 the rule in a way that provided reasonable notice to the public about whether the 24 commission's action on that subject could affect the public's interest. 25  (d) The board may adopt a rule on an emergency basis only when necessary 26 for the orderly operation of the commission's facilities or programs. The requirements 27 of (a) - (c) of this section do not apply to the adoption of an emergency rule under this 28 subsection. However, within 10 days after the adoption of an emergency rule, the 29 commission shall give notice of its action that substantially complies with the notice 30 requirements of this section. A rule adopted under this subsection remains in effect 31 for not more than 120 days. To prevent an emergency rule from lapsing, the board

01 may adopt the same rule under (a) - (c) of this section before the end of the 120-day 02 period. 03  (e) Failure to mail a notice to a person under (a) or (d) of this section does not 04 invalidate an action taken by the board. 05  (f) An interested person may challenge a rule adopted by the board by bringing 06 an action in the superior court. In addition to other grounds, a court may declare a 07 rule invalid 08  (1) for substantial failure by the board to comply with this section; or 09  (2) if the rule was adopted under (d) of this section, upon the ground 10 that the emergency rule was not necessary for the orderly operation of the 11 commission's facilities or programs. 12 Article 2. Powers and Duties. 13  Sec. 02.45.100. Powers and duties of commission. (a) In addition to other 14 powers granted in this chapter, the commission may 15  (1) sue and be sued; 16  (2) adopt and alter an official seal; 17  (3) maintain an office in the state; 18  (4) acquire, hold, use, and dispose of its money; 19  (5) acquire, hold, use, lease, rent, construct, and dispose of property for 20 its purposes; and 21  (6) do all acts necessary to carry out this chapter that are not expressly 22 prohibited by law. 23  (b) The commission shall 24  (1) operate, manage, plan, improve, market, construct, and maintain the 25 facilities of the state-owned and state-operated international airport located at 26 Anchorage; 27  (2) fix and pay from funds available to the commission compensation 28 for officers, employees, and consultants employed by the commission; and 29  (3) adopt and enforce 30  (A) bylaws of the commission establishing procedures consistent 31 with AS 02.45.080 for the adoption of rules and emergency rules;

01  (B) rules for the conduct of its business and for the use of its 02 services and facilities; 03  (C) personnel rules necessary to establish a system of personnel 04 administration substantially equivalent to the state personnel rules adopted 05 under AS 39. 06  Sec. 02.45.110. Public nature of commission activities. The planning, 07 construction, improvement, maintenance, and operation of the airport, whether by the 08 commission separately or jointly with another state agency, municipality, or person, 09 and the exercise of other powers granted to the commission are public and 10 governmental functions exercised for a public purpose and matters of public necessity. 11 Land and other property and privileges acquired and used by or on behalf of the 12 commission for the purposes enumerated in this chapter are acquired and used for 13 public and governmental purposes and as a matter of public necessity. 14  Sec. 02.45.120. Acquisition of land and easements. The commission, as part 15 of the cost of constructing, maintaining, or improving airport facilities, may acquire 16 by purchase, gift, grant, or exchange land in fee simple or an interest in land that the 17 commission considers necessary for present or future public use, either temporary or 18 permanent, including easements in airport hazards or land outside the boundaries of 19 the airport necessary to permit the removal, elimination, and obstruction marking or 20 obstruction lighting of airport hazards or to prevent the establishment of airport 21 hazards. By the same means, the commission may obtain material, including clay, 22 gravel, sand, or rock, or the land necessary to obtain the material. 23  Sec. 02.45.130. Authority to acquire property for the purpose of exchange. 24 When the commission declares that it is in the best public interest of the state to do 25 so, the commission may acquire by purchase, gift, grant, or exchange privately or 26 publicly owned land or an interest in land for the purpose of exchanging the land or 27 interest in land for privately or publicly owned land or an interest in land that the 28 commission is authorized by law to acquire. 29  Sec. 02.45.140. Indemnification. (a) If the person acted in good faith on 30 behalf of the commission and within the scope of the person's official duties or 31 powers, the commission may defend and indemnify a current or former member of the

01 board, an employee, or an agent of the commission against all costs, expenses, 02 judgments, and liabilities, including attorney fees, incurred by or imposed upon that 03 person in connection with a civil or criminal action in which the person is involved 04 by affiliation with the commission. 05  (b) The commission may purchase insurance to protect and hold personally 06 harmless its employees, agents, and board members from an action, claim, or 07 proceeding arising out of the performance, purported performance, or failure of 08 performance, in good faith, of duties for, or employment with, the commission and to 09 hold them harmless from expenses, including attorney fees, connected with the 10 defense, settlement, or monetary judgments from that action, claim, or proceeding. 11 The purchase of insurance is discretionary with the board, and insurance is not 12 considered to be compensation to the insured person. 13  Sec. 02.45.150. Insurance. Except as provided in AS 02.45.140(b), the 14 commission shall protect its assets, services, and employees by purchasing insurance 15 or providing for certain self-insurance retentions. The commission shall also maintain 16 casualty, property, and other insurance in amounts reasonably calculated to cover 17 potential claims against the commission or the state for bodily injury, death, or 18 disability and property damage that may arise from or be related to commission 19 operations and activities. 20  Sec. 02.45.160. Fidelity bond. The commission shall obtain a fidelity bond 21 in an amount determined by the board for board members and each executive officer 22 responsible for accounts and finances. A bond must be in effect during the entire 23 tenure in office of the bonded person. 24 Article 3. International Airport Facilities. 25  Sec. 02.45.200. Operation and use privileges. (a) The commission may 26 enter into contracts, leases, and other arrangements covering periods not exceeding 55 27 years with a person, a municipality, a state agency, or the United States, granting the 28 privilege of using or improving the airport or air navigation facility, a portion of the 29 airport or air navigation facility, or space in the airport or air navigation facility for 30 commercial, governmental, or other public purposes, including private plane tie down, 31 or conferring the privilege of supplying goods, commodities, services, or facilities at

01 the airport or air navigation facility. The commission may establish the terms and 02 conditions and fix the charges, rentals, and fees for the privileges or services that are 03 reasonable and uniform for the same class of privilege or service. Charges, rentals, 04 or fees authorized by this subsection may be fixed by order of the board or by 05 negotiated or competitively offered contract. The fixing of charges, rentals, or fees as 06 permitted under this subsection is not subject to AS 37.10.050(a). The terms, 07 conditions, charges, rentals, and fees shall be established with due regard to the 08 property and improvements used and the expense of operation to the state. However, 09 use of airport land and buildings by the Alaska Wing, Civil Air Patrol and its 10 squadrons shall be permitted without rental charges. The commission shall provide for 11 public notice and an opportunity to comment before a charge, rental, or fee is fixed 12 by order of the board as permitted under this subsection. The public may not be 13 deprived of its rightful, equal, and uniform use of the airport, air navigation facility, 14 or a portion of the airport or air navigation facility. 15  (b) If the commission permits space in the airport to be used as lounges for 16 members of the United States armed forces, the Alaska National Guard, the Alaska 17 Naval Militia, or the Alaska State Defense Force and if the lounges are operated by 18 persons exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code), the 19 commission may not charge rent for the use of the space. 20  (c) The commission may, by contract or other arrangement, upon a 21 consideration fixed by the board, grant to a qualified municipality or person for a 22 reasonable period of time the privilege of operating the airport or a portion of the 23 airport as an agent of the commission. A municipality or person granted that privilege 24 may not operate the airport or portion of the airport other than as a public airport or 25 enter into a contract, lease, or other arrangement in connection with the operation that 26 the commission may not have undertaken under this section. 27  (d) 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 commission 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  (e) 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  (f) At the expiration, termination, or cancellation of a land lease entered into 11 under this section, or under provisions of AS 02.15.090 as those provisions read before 12 the effective date of this section, 13  (1) a lessee who owns the improvements described under (e) of this 14 section shall continue to own the permanent improvements that the lessee constructed 15 or purchased on a leasehold if the lessee is granted, under (d) of this section, a new 16 lease or an extension of the term of a lease for the same land; 17  (2) a lessee may sell the permanent improvements owned by the lessee 18 to a succeeding lessee of the same land; 19  (3) at the option of the lessee, the permanent improvements owned by 20 the lessee may be sold by the commission at public auction with the proceeds from the 21 sale of the improvements going to the lessee, less administrative costs of the auction 22 and obligations owed under the lease to the commission; the successful bidder has the 23 same right to enter into a new lease under (d) of this section without the commission's 24 offering the land to other persons for leasing; 25  (4) after notice by the commission, the permanent improvements owned 26 by the lessee shall be removed at the lessee's sole expense if 27  (A) the permanent improvements do not comply with written 28 airport operational policies or are not in the state's best interest; 29  (B) the permanent improvements are not sold under (2) or (3) 30 of this subsection; or 31  (C) the commission makes written findings that the permanent

01 improvements are a hazard to the public health and safety; 02  (5) title to the permanent improvements vests in the commission if the 03 commission purchases or otherwise contracts for the ownership of the permanent 04 improvements or if the lessee abandons the permanent improvements. 05  Sec. 02.45.210. Sale and delivery of in-bond merchandise. (a) The 06 commission shall allow the sale and delivery of in-bond merchandise at the airport 07 only by an exclusive contract. 08  (b) If an exclusive contract for the sale and delivery of in-bond merchandise 09 at the airport exists on the effective date of this section, the commission may not 10 permit or confer a right on another person to offer to sell, sell, or deliver in-bond 11 merchandise at the airport except as provided in (c) of this section. 12  (c) After an exclusive contract described in (b) of this section expires, the 13 commission shall enter into one exclusive contract and, on its expiration, additional 14 successive exclusive contracts for the sale and delivery of in-bond merchandise at the 15 airport. Except under the existing and future exclusive contracts described in this 16 section, the commission may not permit or confer a right upon a person to offer to sell, 17 sell, or deliver in-bond merchandise at the airport. 18  (d) The commission shall offer the exclusive contract required by this section 19 by competitive bid and shall award the contract after considering the generation of 20 maximum revenue for the international airports revenue fund under AS 37.15.430. 21  (e) The commission shall actively supervise the operations under each 22 exclusive contract for the sale and delivery of in-bond merchandise in order to ensure 23 the effectiveness of the operations. To supervise contract operations under this section, 24 the commission shall adopt rules that provide for review of the reasonableness of price 25 schedules, quality, and assortment of merchandise, and customer service. 26  (f) This section does not apply to deliveries of in-bond merchandise as cargo 27 to airlines. In this subsection, "cargo" means goods carried by an airline under an 28 agreement between the shipper and the airline, other than a passenger ticket, that are 29 accepted, carried, and handled separately from passenger baggage and that are 30 delivered to a location other than a baggage claim area; "cargo" does not include goods 31 carried by an airline as baggage, whether belly-loaded or hand-carried and whether

01 accompanied or unaccompanied by a passenger. 02  Sec. 02.45.220. Police powers vested. The officers and employees of the 03 commission whom the board may designate have general police powers in aid of the 04 enforcement of this chapter and of the powers exercised by the commission under 05 AS 02.15 and AS 02.25. The persons designated under this section shall meet the 06 minimum standards for police officers adopted under AS 18.65.130 - 18.65.290. 07  Sec. 02.45.230. Regulation of ground transportation at airports. 08 Notwithstanding the provisions of AS 02.45.200, the commission may not exclude 09 taxis, buses, limousines that carry passengers for hire, or courtesy cars from the 10 highways, parking facilities, or other portions of the airport designated for operation 11 or parking of ground transportation vehicles. The commission may regulate by rule 12 the operations of taxis, buses, limousines, and courtesy cars as necessary to promote 13 efficient operation of the airport. In this section, "courtesy car" means a motor vehicle 14 owned or operated by a hotel, motel, or other place of public accommodation for the 15 transportation of its guests to and from the airport at the request of the guest and for 16 which a service charge is not made to the guest. 17  Sec. 02.45.240. Liens. The commission may enforce the payment of charges 18 for repairs, improvements, storage, or care of personal property made or furnished by 19 the commission or its agents in connection with the operation of the airport or an air 20 navigation facility owned or operated by the commission. The commission has those 21 lien rights generally allowed by law to secure payment for those services. 22 Article 4. Fiscal Procedures. 23  Sec. 02.45.300. Commission program and financial plan. (a) The 24 commission shall assure the development of a system of results-based operation 25 designed to increase efficiency and effectiveness of programs and services of the 26 commission. 27  (b) The commission shall, with participation of its employees, develop methods 28 for measuring commission results. A group or committee established by the 29 commission to develop methods of measuring results must include a representative of 30 each of the bargaining units that represents employees of the commission. 31  Sec. 02.45.310. Program execution. (a) The commission has power to

01 administer its programs and is responsible for the proper management of the airport. 02  (b) The governor may direct the reduction of expenditures by the commission 03 during the fiscal year only if the governor determines that the planned expenditures can 04 no longer be made due to factors outside the control of the state that make the 05 expenditures factually impossible. 06  Sec. 02.45.320. Acceptance of money from federal and other sources. The 07 commission may accept federal money and money from other public or private sources 08 to accomplish the purposes of this chapter. Federal money accepted under this chapter 09 shall be accepted and expended by the commission under the terms and conditions 10 prescribed by federal law and regulations. 11  Sec. 02.45.330. Annual report. By January 15 of each year, the commission 12 shall submit to the governor a concise report describing the operations, income, and 13 expenditures for the preceding fiscal year. The report must contain information 14 substantially similar to that required by the United States Securities and Exchange 15 Commission Form 10-K. The report must also include financial statements audited by 16 an independent outside auditor. 17  Sec. 02.45.340. Annual audit. The commission shall have a certified audit 18 of its financial records prepared annually by an independent certified public 19 accountant. The audit is a public record. 20 Article 5. General Provisions. 21  Sec. 02.45.900. Commission employees. (a) Employees of the commission 22 are public employees but are not employees of the state. 23  (b) Notwithstanding (a) of this section, employees of the commission who 24 were state employees the day before they were transferred to the commission shall 25 continue to participate in the supplemental employee benefits program under 26 AS 39.30.150 - 39.30.180 and in the public employees' retirement system under 27 AS 39.35. The commission shall pay the employer's contributions required under 28 AS 39.30.150 - 39.30.180 and under AS 39.35. 29  (c) The commission may elect to participate in the supplemental employee 30 benefits program under AS 39.30.150 - 39.30.180 and in the public employees' 31 retirement system under AS 39.35 for employees of the commission not described in

01 (b) of this section. 02  (d) The commission is a public employer, and employees of the commission 03 are public employees, for purposes of AS 23.40.070 - 23.40.260 (Public Employment 04 Relations Act). 05  Sec. 02.45.910. Application of existing laws. Unless specifically provided 06 otherwise in this chapter, the following laws do not apply to the operations of the 07 commission: 08  (1) AS 36.30, except as provided in that chapter; 09  (2) AS 37.07; 10  (3) AS 39, except as provided in this chapter and in AS 39.35.152; 11  (4) AS 44.62.010 - 44.62.300. 12  Sec. 02.45.990. Definitions. In this chapter, unless the context requires 13 otherwise, 14  (1) "airport" means the international airport owned and operated by the 15 state at Anchorage; 16  (2) "board" means the board of directors of the commission; 17  (3) "commission" means the Anchorage International Airport 18 Commission. 19  Sec. 02.45.995. Short title. This chapter may be cited as the Anchorage 20 International Airport Commission Act. 21 * Sec. 3. AS 02.15.010 is amended to read: 22  Sec. 02.15.010. Purpose. The purpose of this chapter is to 23  (1) further the public interest in aeronautical progress by providing for 24 the protection of persons and promotion of safety in aeronautics through appropriate 25 measures consistent with and supplementary to but not duplicating federal aeronautics 26 laws and regulations, with a view to the least possible interference with aviation 27 activity compatible with the general welfare; 28  (2) encourage and develop aeronautics and the establishment and 29 operation of a state system of airports through cooperation among the department, 30 the commission, and [WITH] municipalities, and otherwise, including cooperation 31 with the federal government and acceptance and utilization of federal funds allotted

01 for this purpose. 02 * Sec. 4. AS 02.15.020(b) is amended to read: 03  (b) The department may enter into contracts necessary or advisable to the 04 execution of the powers granted to the department [IT] by this chapter. Where the 05 planning, acquisition, construction, improvement, maintenance, or operation of an 06 airport or air navigation facility subject to the jurisdiction of the department is 07 financed wholly or partially with federal money, the department, as agent of the state, 08 or of a municipality, or person, may let contracts in the manner prescribed by the 09 federal authorities acting under the laws and rules and regulations of the United States. 10 * Sec. 5. AS 02.15.060 is amended to read: 11  Sec. 02.15.060. Establishment, operation, and maintenance. Except as 12 otherwise provided under this title, the [THE] department may plan, establish, 13 construct, enlarge, improve, maintain, equip, operate, regulate, protect, and police 14 airports and air navigation facilities within the state. 15 * Sec. 6. AS 02.15.070(a) is amended to read: 16  (a) For the purposes specified in AS 02.15.060 , the department may, by 17 purchase, gift, devise, lease, condemnation, or otherwise, acquire real or personal 18 property, or any interest in the property , including easements in airport hazards or land 19 outside the boundaries of an airport or airport site, necessary to permit the removal, 20 elimination, obstruction marking [OBSTRUCTION-MARKING], or obstruction 21 lighting [OBSTRUCTION-LIGHTING] of airport hazards, or to prevent the 22 establishment of airport hazards. The department may acquire existing airports and air 23 navigation facilities in the same manner except it may not acquire or take over an 24 airport or air navigation facility owned or controlled by the commission, a 25 municipality , or a person without the consent of the commission, municipality , or 26 person. 27 * Sec. 7. AS 02.15.090(a) is amended to read: 28  (a) In operating an airport or air navigation facility owned or controlled by the 29 state and subject to the jurisdiction of the department , the department may enter 30 into contracts, leases, and other arrangements covering periods not exceeding 55 years 31 with a person, a municipality, or the United States, granting the privilege of using or

01 improving an airport or air navigation facility , [OR] a portion of an airport or air 02 navigation facility, [IT] or space in an airport or air navigation facility [IT] for 03 commercial, governmental, or other public purposes, including private plane tie down , 04 [;] or conferring the privilege of supplying goods, commodities, services, or facilities 05 at an airport or air navigation facility. The department may establish the terms and 06 conditions and fix the charges, rentals, and fees for the privileges or services that are 07 reasonable and uniform for the same class of privilege or service. Charges, rentals, 08 or fees authorized by this subsection may be fixed for the international airport at 09 Fairbanks [AIRPORTS] by order of the commissioner or by negotiated or 10 competitively offered contract. Notwithstanding AS 37.10.050(a), the fixing of 11 charges, rentals, or fees as permitted under this subsection is not subject to the 12 adoption of regulation provisions of AS 44.62 (Administrative Procedure Act). The 13 terms, conditions, charges, rentals, and fees shall be established with due regard to the 14 property and improvements used and the expense of operation to the state. However, 15 use of state land and buildings by the Alaska Wing, Civil Air Patrol and its squadrons 16 shall be permitted without rental charges. If the department permits space in state- 17 owned or state-controlled airports that are subject to the jurisdiction of the department to 18 be used as lounges for members of the United States armed forces, the Alaska National Guard, 19 the Alaska Naval Militia, or the Alaska State Defense Force [MILITIA] and if the lounges 20 are operated by persons exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue 21 Code), rent may not be charged for the use of the space. The department shall provide for 22 public notice and an opportunity to comment before a charge, rental, or fee is fixed by order 23 of the commissioner as permitted under this subsection. The public may not be deprived of 24 its rightful, equal, and uniform use of the airport, air navigation facility, or a portion of them. 25 * Sec. 8. AS 02.15.090(b) is amended to read: 26  (b) The department may by contract or other arrangement, upon a 27 consideration fixed by the department [IT], grant to a qualified municipality or person 28 for a reasonable period of time the privilege of operating, as agent of the state or 29 otherwise, an airport owned or controlled by the state and subject to the jurisdiction 30 of the department . A municipality or person granted that privilege may not operate 31 the airport other than as a public airport or enter into a contract, lease, or other

01 arrangement in connection with the operation that the department may not have 02 undertaken under (a) or (c) - (e) of this section. 03 * Sec. 9. AS 02.15.090(d) is amended to read: 04  (d) A [LAND] lessee of land under this section owns title to the permanent 05 improvements that the lessee constructed or purchased during the term of the lease, 06 unless the lease expressly provides that the state is the owner of the permanent 07 improvements. 08 * Sec. 10. AS 02.15.091(a) is amended to read: 09  (a) Under (b) and (c) of this section, the department shall allow the sale and 10 delivery of in-bond merchandise at an international airport under the jurisdiction of 11 the department only by an exclusive contract. 12 * Sec. 11. AS 02.15.091(b) is amended to read: 13  (b) While the exclusive contracts for the sale and delivery of in-bond 14 merchandise at international airports under the jurisdiction of the department that 15 exist on June 15, 1982 , are in effect, the department may not permit or confer a right 16 on any other person to offer to sell, sell, or deliver in-bond merchandise at an 17 international airport under the jurisdiction of the department . 18 * Sec. 12. AS 02.15.091(c) is amended to read: 19  (c) After the exclusive contracts existing on June 15, 1982 , are no longer in 20 effect, the department shall enter into one exclusive contract and, on its expiration, 21 additional successive exclusive contracts for the sale and delivery of in-bond 22 merchandise at each international airport under the jurisdiction of the department . 23 Except under the existing and future exclusive contracts described in this section, the 24 department may not permit or confer a right upon any person to offer to sell, sell, or 25 deliver in-bond merchandise at an international airport under the jurisdiction of the 26 department . 27 * Sec. 13. AS 02.15.091(d) is amended to read: 28  (d) The department shall offer the exclusive contracts required by this section 29 by competitive bid or by competitive proposals. If the department offers the exclusive 30 contracts by competitive bid, the department shall award the contracts after considering 31 the generation of maximum revenue for the International Airports Revenue Fund

01 established by AS 37.15.430 to repay bonds issued for the benefit of international 02 airports under the jurisdiction of the department . If the department offers the 03 exclusive contracts by competitive proposals, the department shall award the contracts 04 after considering factors that include depth of management, financial ability, 05 demonstrated experience at other locations, quality of services and products, success 06 in marketing programs, character and improvements of proposed facilities, and the 07 generation of optimum revenue for the fund. 08 * Sec. 14. AS 02.15.095 is amended to read: 09  Sec. 02.15.095. Courtesy cars. Notwithstanding the provisions of 10 AS 02.15.090(a), in operating an airport subject to the jurisdiction of the 11 department, the department may not exclude from the streets, roads, highways, parking 12 facilities, or other portions of the [A STATE-OPERATED] airport designated for 13 operation or parking of ground transportation vehicles, nor may the department prohibit 14 from picking up and discharging passengers [,] those motor vehicles commonly known 15 as "courtesy cars ." In this section, "courtesy cars" means motor vehicles ["] owned 16 or operated by hotels, motels, or other similar places of public accommodation for the 17 transportation of their guests to and from the airport at the request of the guest and for 18 which service no charge is made to the guest. 19 * Sec. 15. AS 02.15.100 is amended to read: 20  Sec. 02.15.100. Liens. The department may enforce the payment of any 21 charges for repairs, improvements, storage, or care of personal property made or 22 furnished by the department or its agents [,] in connection with the operation of an 23 airport or air navigation facility owned or operated by the state and subject to the 24 jurisdiction of the department . The state has those lien rights generally allowed by 25 law to secure payment for those services. 26 * Sec. 16. AS 02.15.102 is amended to read: 27  Sec. 02.15.102. Use of airports for utilities. (a) A utility facility may be 28 constructed, placed, or maintained across, along, over, under, or within a state airport , 29 subject to the jurisdiction of the 30  (1) department, only under [IN ACCORDANCE WITH] regulations 31 adopted or procedures prescribed by the department and only if authorized by a written

01 permit issued by the department ; 02  (2) commission under AS 02.45, only under rules adopted by the 03 commission and only if authorized by written permit issued by the commission . 04  (b) The department or the commission may charge a fee for a permit that it 05 issues [ISSUED] under this section. 06 * Sec. 17. AS 02.15.104 is amended to read: 07  Sec. 02.15.104. Relocation of utility facilities incident to airport projects. 08 (a) If, incident to the construction of an airport project, the department or commission 09 determines and orders that a utility facility located across, along, over, under, or within 10 a state airport subject to its jurisdiction must be changed, relocated, or removed, the 11 utility owning or maintaining the facility shall change, relocate, or remove the facility 12 [IT] in accordance with the order, within a reasonable time set by the department or 13 commission in the order. 14  (b) If the utility facility is not changed, relocated, or removed in accordance 15 with the order, a permit authorizing the facility issued by the department or the 16 commission under AS 02.15.102 becomes invalid , and the facility will be considered 17 an unauthorized encroachment subject to the provisions of AS 02.15.114. 18  (c) The cost of change, relocation, or removal, as defined in AS 02.15.260, 19 ordered under (a) of this section is to be paid as follows: 20  (1) by the department or the commission as a cost of airport 21 construction [,] if the utility facility is installed or authorized after June 11, 1986 , 22 under a utility permit or a regulation adopted by the department or the commission 23 and is installed in the location specified in the permit or the regulation ; 24  (2) by the department or the commission as a cost of airport 25 construction [,] if the utility facility was installed before June 11, 1986 , under a utility 26 permit or utility easement and is in the location specified in the permit or easement; 27  (3) by the department or the commission as a cost of airport 28 construction [,] if the utility facility was installed before the location became part of 29 a state airport or before permits were required; 30  (4) by the department or the commission as a cost of airport 31 construction [,] if the utility permit that requires the utility to pay the relocation cost

01 was issued more than five years before the contract for the airport construction project 02 was first advertised; 03  (5) by the utility in all other cases unless , for airports subject to the 04 jurisdiction of the 05  (A) department, the commissioner finds it is in the public 06 interest for the cost to be paid by the department ; 07  (B) commission, the board of the commission finds that it 08 is in the public interest for the cost to be paid by the commission . 09 * Sec. 18. AS 02.15.106 is amended to read: 10  Sec. 02.15.106. Encroachment permits. An encroachment may be 11 constructed, placed, changed, or maintained across or within an airport, but only in 12 accordance with regulations or procedures adopted by the department for airports 13 subject to the jurisdiction of the department or with rules adopted by the 14 commission for airports subject to the jurisdiction of the commission . An 15 encroachment may not be constructed, placed, maintained, or changed until the 16 encroachment [IT] is authorized by a written permit issued by the department or the 17 commission , unless the department or the commission provides otherwise by 18 regulation or rule . The department or the commission may charge a fee for a permit 19 that it issues [ISSUED] under this section. 20 * Sec. 19. AS 02.15.108 is amended to read: 21  Sec. 02.15.108. Relocation or removal of encroachment. If, incidental to the 22 construction or maintenance of a state airport , the department or the commission 23 determines and orders that an encroachment previously authorized by written permit 24 must be changed, relocated, or removed, the owner of the encroachment shall change, 25 relocate, or remove the encroachment [IT] within a reasonable time set by the 26 department or the commission in the order. The cost of the change, relocation, or 27 removal shall be paid as provided in AS 02.15.104(c). If the owner does not change, 28 relocate, or remove an encroachment within the time set by the department or the 29 commission , the encroachment will be considered an unauthorized encroachment 30 subject to the provisions of AS 02.15.114. 31 * Sec. 20. AS 02.15.110 is amended to read:

01  Sec. 02.15.110. Unauthorized encroachments. If an unauthorized 02 encroachment exists in, on, under, or over a state airport , the department or the 03 commission, as appropriate, may require the removal of the encroachment, at the 04 expense of the owner, in the manner provided in AS 02.15.112 - 02.15.114. 05 * Sec. 21. AS 02.15.112 is amended to read: 06  Sec. 02.15.112. Notice of removal of unauthorized encroachment. The 07 department or the commission, as appropriate, shall give notice to [NOTICE 08 SHALL BE GIVEN] the owner, occupant, or person in possession of an unauthorized 09 encroachment, or to another person causing or permitting the encroachment to exist, 10 by serving upon any of them a notice demanding the removal of the encroachment 11 within a time limit set by the department or the commission . The notice must 12 describe the encroachment with reasonable certainty as to its character and location. 13 Service of the notice may be made by certified mail. 14 * Sec. 22. AS 02.15.114 is amended to read: 15  Sec. 02.15.114. Removal at owner's expense after noncompliance; removal 16 expense. After a failure of the owner of an unauthorized encroachment to comply 17 with a notice or order of the department or the commission under AS 02.15.104, 18 02.15.108, or 02.15.112, the department or the commission, as appropriate, may 19 remove the encroachment, or cause the encroachment [IT] to be removed. The owner 20 of the unauthorized encroachment shall pay to the department or the commission 21  (1) the expense of the removal of the encroachment; 22  (2) all costs and expenses paid by the state as a result of a claim or 23 claims filed against the state by third parties for damages due to delays because the 24 encroachment was not changed, removed, or relocated according to the order of the 25 department or the commission ; and 26  (3) the costs and expense of suit. 27 * Sec. 23. AS 02.15.120 is amended to read: 28  Sec. 02.15.120. Assistance to construct, enlarge, or improve air navigation 29 facilities. The department may match available funds with those of the commission, 30 municipalities, federal agencies, or other state agencies, for project costs relating to the 31 construction, enlargement, or improvement of airports. The department may assist

01 persons in the construction, enlargement, and improvement of airports and air 02 navigation facilities. The airports and facilities, until they are abandoned as such, shall 03 be at all times available for the use of and accessible to the general public, and 04 maintained as public airports and facilities. 05 * Sec. 24. AS 02.15.130 is amended to read: 06  Sec. 02.15.130. Assistance to the federal government, municipalities, and 07 other persons. The department may make available its engineering, maintenance, and 08 other services, with or without charge, to the commission, the federal government, 09 [OR TO] a municipality , or a person in connection with the planning, acquisition, 10 construction, improvement, maintenance, or operation of airports or air navigation 11 facilities. 12 * Sec. 25. AS 02.15.205(a) is amended to read: 13  (a) A person , excluding the commission, may not construct, reconstruct, 14 relocate, or extend an airport, airstrip, or private air facility within two miles of a 15 federal-aid highway or proposed federal-aid highway without first obtaining the written 16 approval of the commissioner, as provided by regulation. 17 * Sec. 26. AS 02.15.260(13) is amended to read: 18  (13) "international airport" means an international airport owned and 19 operated by the state that is under the jurisdiction of the department ; 20 * Sec. 27. AS 02.15.260 is amended by adding a new paragraph to read: 21  (18) "commission" means the Anchorage International Airport 22 Commission. 23 * Sec. 28. AS 02.25.110(4) is amended to read: 24  (4) "department" means the Department of Transportation and Public 25 Facilities with regard to airports that are not subject to AS 02.45 and the 26 Anchorage International Airport Commission with regard to airports that are 27 subject to AS 02.45 ; 28 * Sec. 29. AS 02.25.110 is amended by adding a new paragraph to read: 29  (8) "regulation" includes rules adopted by the board of directors of the 30 Anchorage International Airport Commission. 31 * Sec. 30. AS 18.65.290(6) is amended to read:

01  (6) "police officer" means 02  (A) a full-time employee of the state or a municipal police 03 department with the authority to arrest and issue citations; detain a person taken 04 into custody until that person can be arraigned before a judge or magistrate; 05 conduct investigations of violations of and enforce criminal laws, regulations, 06 and traffic laws; search with or without a warrant persons, dwellings, and other 07 forms of property for evidence of a crime; and take other action consistent with 08 exercise of these enumerated powers when necessary to maintain the public 09 peace; 10  (B) an officer or employee of the Department of Transportation 11 and Public Facilities who is stationed at an international airport under the 12 jurisdiction of the department and has been designated to have the general 13 police powers authorized under AS 02.15.230(a); 14  (C) a University of Alaska public safety officer with general 15 police powers authorized under AS 14.40.043; 16  (D) an officer or employee of the Anchorage International 17 Airport Commission who is stationed at the Anchorage International 18 Airport and has been designated to have the general police powers 19 authorized under AS 02.45.220; 20 * Sec. 31. AS 19.10.270 is amended by adding a new subsection to read: 21  (d) In this section, 22  (1) "commissioner" means the commissioner of transportation and 23 public facilities with regard to airports not subject to AS 02.45 and the board of 24 directors of the Anchorage International Airport Commission with regard to airports 25 subject to AS 02.45; 26  (2) "regulation" includes a rule adopted by the board of directors of the 27 Anchorage International Airport Commission. 28 * Sec. 32. AS 23.10.037(b) is amended to read: 29  (b) The provisions of (a) of this section do not apply to the state or a political 30 subdivision of the state when dealing with police officers in its employ or with persons 31 applying to be employed as police officers. In this subsection, "police officers"

01 includes officers and employees of the Department of Transportation and Public 02 Facilities or the Anchorage International Airport Commission who are stationed at 03 an international airport and have been designated to have the general police powers 04 authorized under AS 02.15.230(a) or AS 02.45.220 . 05 * Sec. 33. AS 35.27 is amended by adding a new section to read: 06  Sec. 35.27.025. Application to the Anchorage International Airport 07 Commission. This chapter applies to the Anchorage International Airport 08 Commission. Compliance with this chapter is the sole responsibility of the Anchorage 09 International Airport Commission with regard to the public buildings and facilities of 10 the commission. 11 * Sec. 34. AS 35.27.030(1) is amended to read: 12  (1) "building" or "facility" means a permanent improvement constructed 13 by the department or the Anchorage International Airport Commission ; the term 14  (A) includes [, BUT IS NOT LIMITED TO,] 15  (i) schools, office buildings, and court buildings; 16  (ii) other buildings that [WHICH] the commissioner 17 determines are designed for substantial public use; 18  (iii) boats and vessels of the marine highway system; 19  (iv) transportation facilities that [WHICH] accommodate 20 traveling passengers; 21  (B) excludes other transportation facilities; 22 * Sec. 35. AS 36.10.180(a) is amended to read: 23  (a) The preferences established in AS 36.10.150 - 36.10.175 apply to work 24 performed 25  (1) under a contract for construction, repair, preliminary surveys, 26 engineering studies, consulting, maintenance work, or any other retention of services 27 necessary to complete a given project that is let by the state or an agency of the state, 28 a department, office, state board, commission, public corporation, or other 29 organizational unit of or created under the executive, legislative, or judicial branch of 30 state government, including the University of Alaska , and the Anchorage 31 International Airport Commission, and the Alaska Railroad Corporation, or by a

01 political subdivision of the state , including a regional school board with respect to an 02 educational facility under AS 14.11.020; 03  (2) on a public works project under a grant to a municipality under 04 AS 37.05.315 or AS 37.06.010; 05  (3) on a public works project under a grant to a named recipient under 06 AS 37.05.316; 07  (4) on a public works project under a grant to an unincorporated 08 community under AS 37.05.317 or AS 37.06.020; and 09  (5) on any other public works project or construction project that is 10 funded in whole or in part by state money. 11 * Sec. 36. AS 36.30.015(e) is amended to read: 12  (e) The board of directors of the Alaska Railroad Corporation , the board of 13 directors of the Anchorage International Airport Commission, and the board of 14 directors of the Alaska Aerospace Development Corporation shall adopt procedures to 15 govern the procurement of supplies, services, professional services, and construction. 16 The procedures must be substantially equivalent to the procedures prescribed in this 17 chapter and in regulations adopted under this chapter. Notwithstanding the other 18 provisions of this subsection, the Alaska Railroad Corporation , the Anchorage 19 International Airport Commission, and the Alaska Aerospace Development 20 Corporation shall comply with AS 36.30.170(b), and, when the Department of 21 Transportation and Public Facilities authorizes the Alaska Railroad Corporation to 22 perform construction work instead of the Department of Transportation and Public 23 Facilities, the Alaska Railroad Corporation shall use competitive sealed bidding or 24 competitive sealed proposals under AS 36.30.100 - 36.30.270 to procure the supplies, 25 services, professional services, and construction services necessary for the work and, 26 to ensure the state obtains the lowest cost for the project, may submit a bid or proposal 27 for the work. 28 * Sec. 37. AS 36.30.050(c) is amended to read: 29  (c) The lists may be used by the chief procurement officer or an agency when 30 issuing invitations to bid or requests for proposals under this chapter. The lists may 31 be used by the legislative council, the court system, the Anchorage International

01 Airport Commission, and the Alaska Railroad Corporation. 02 * Sec. 38. AS 36.30.850(b)(8) is amended to read: 03  (8) acquisitions or disposals of property and other contracts relating to 04 airports under AS 02.15.070, 02.15.090, 02.15.091, AS 02.45.120, 02.45.200, 05 02.45.210, and AS 44.88; 06 * Sec. 39. AS 36.30.990(1) is amended to read: 07  (1) "agency" 08  (A) means a department, institution, board, commission, 09 division, authority, public corporation, the Alaska Pioneers' Home, or other 10 administrative unit of the executive branch of state government; 11  (B) does not include 12  (i) the University of Alaska; 13  (ii) the Alaska Railroad Corporation; 14  (iii) the Alaska Housing Finance Corporation; 15  (iv) a regional Native housing authority created under 16 AS 18.55.996 or a regional electrical authority created under 17 AS 18.57.020; 18  (v) the Department of Transportation and Public 19 Facilities, in regard to the repair, maintenance, and reconstruction of 20 vessels, docking facilities, and passenger and vehicle transfer facilities 21 of the Alaska marine highway system; 22  (vi) the Alaska Aerospace Development Corporation; 23  (vii) the Alaska State Pension Investment Board; 24  (viii) the Alaska Seafood Marketing Institute; 25  (ix) the Anchorage International Airport 26 Commission; 27 * Sec. 40. AS 37.15.410 is amended to read: 28  Sec. 37.15.410. Bond authorization. For the purpose of providing part or all 29 of the money to be used, with or without any grants or other money that may become 30 available, the issuance and sale of revenue bonds of the state in a total principal sum 31 not to exceed $305,000,000 is authorized to acquire, equip, construct, and install the

01 additions, improvements, extensions, and facilities authorized in AS 37.15.510. The 02 principal of and interest on these bonds shall be paid out of and secured by the gross 03 revenue derived by the state from the ownership, lease, use, and operation of the state- 04 owned and state-operated international airports at Anchorage and Fairbanks as provided 05 under AS 37.15.500 [AIRPORTS], and of all the facilities of the airports [THEM], and out 06 of any other money that may be appropriated for the purpose. 07 * Sec. 41. AS 37.15.420(c) is amended to read: 08  (c) By January 1 of each year, the board of the Anchorage International 09 Airport Commission and the commissioner of transportation and public facilities 10 shall each submit to the legislature an annual spending plan that contains information 11 regarding the planned expenditure of money from the construction fund during the next 12 fiscal year. The spending plan must include 13  (1) the total amount of money to be spent from the construction fund; 14  (2) a description of the work to be performed on airport facilities that 15 will be financed with money from the construction fund; 16  (3) the amount from the construction fund that will be spent under 17 contracts with the private sector and a description of the goods or services to be 18 provided to the state under each of the contracts; 19  (4) the amounts that the Anchorage International Airport 20 Commission and the Department of Transportation and Public Facilities [STATE] 21 will spend from the construction fund for purposes other than contract payments and 22 a description of each of those purposes, including financing costs, administrative and 23 other overhead costs, and contingencies. 24 * Sec. 42. AS 37.15.430(a) is amended to read: 25  (a) There is established an enterprise fund known as the "International Airports 26 Revenue Fund," into which shall be paid all revenue, fees, charges, and rentals derived 27 by the state from the ownership, lease, use, and operation of the airports and all of the 28 facilities and improvements of the airports [THEM] and facilities and improvements 29 used in connection with them as provided under AS 37.15.500. The Anchorage 30 International Airport account and the Fairbanks International Airport account 31 are established within the fund . The revenue, charges, fees, and rentals may not

01 include the proceeds of any state tax or license. The money in the revenue fund may 02 only be used for the purpose of 03  (1) paying or securing the payment of the principal of and interest on 04 the bonds and of and on any other revenue bonds issued 05  (A) before January 1, 2001, by authorization of the legislature 06 to provide money to acquire, equip, construct, and install additions and 07 improvements to, and extensions of and facilities for, the state-owned and 08 state-operated international airports at Anchorage and Fairbanks , and to be 09 payable out of the revenue fund and out of the Anchorage International 10 Airport account in the revenue fund ; 11  (B) on or after January 1, 2001, by authorization of the 12 legislature to provide money to acquire, equip, construct, and install 13 additions and improvements to, and extensions of and facilities for, the 14 Anchorage International Airport, and to be payable out of the Anchorage 15 International Airport account in the revenue fund; and 16  (C) on or after January 1, 2001, by authorization of the 17 legislature to provide money to acquire, equip, construct, and install 18 additions and improvements to, and extensions of and facilities for, the 19 Fairbanks International Airport, and to be payable out of the Fairbanks 20 International Airport account in the revenue fund; 21  (2) paying the normal and necessary costs of maintaining and operating 22 each of the airports and all of the improvements and facilities of each of the airports 23 from the revenue generated by that airport [THEM]; 24  (3) paying the costs of renewals, replacements, and extraordinary 25 repairs to each of the airports and all of the improvements and facilities of each of the 26 airports from the revenue generated by that airport [THEM]; 27  (4) redeeming before their fixed maturities any and all revenue bonds 28 issued 29  (A) before January 1, 2001, for the purposes of the state- 30 owned and state-operated international airports at Anchorage and Fairbanks; 31  (B) on or after January 1, 2001, for the purposes of the

01 Anchorage International Airport, and to be payable out of the Anchorage 02 International Airport account in the revenue fund; and 03  (C) on or after January 1, 2001, for the purposes of the 04 Fairbanks International Airport, and to be payable out of the Fairbanks 05 International Airport account in the revenue fund ; 06  (5) providing money to acquire, construct , and install necessary 07 additions and improvements to and extensions of and facilities for each of the airports 08 and all of their facilities from the revenue generated by that airport ; and 09  (6) providing money to pay any and all other costs relating to the 10 ownership, use, and operation of each of the airports from the revenue generated by 11 that airport . 12 * Sec. 43. AS 37.15.430(b) is amended to read: 13  (b) The investment of money in the revenue fund , including the accounts in 14 the revenue fund, may be made in the manner that the committee may determine. 15 The interest earned upon or any profits derived from the sale of this investment shall 16 be deposited in and become a part of the revenue fund and the accounts in the 17 revenue fund . 18 * Sec. 44. AS 37.15.480 is amended to read: 19  Sec. 37.15.480. Amounts required for payments. The committee shall, 20 before December 31 of each year, commencing with the year in which the bonds are 21 issued, certify to the commissioners of revenue and transportation and public facilities 22 and to the board of the Anchorage International Airport Commission the amounts 23 required in the next ensuing calendar year by the bond resolution or resolutions to be 24 paid out of the revenue fund into the bond redemption fund and to be paid into and 25 maintained in any reserve fund or account or any other fund or account created by the 26 bond resolution or resolutions, and shall also certify to the commissioners and the 27 board the last date or dates upon which payments may be made. 28 * Sec. 45. AS 37.15.500 is amended to read: 29  Sec. 37.15.500. Airport charges. (a) As provided in AS 02.15.090(a), the 30 commissioner of transportation and public facilities shall fix and collect the fees, 31 charges, and rentals derived by the state from the ownership, lease, use, and

01 operation of the Anchorage International Airport and all of the associated 02 facilities and improvements that will provide revenue sufficient to comply with all 03 of the covenants of the bond resolutions for bonds sold for the benefit of the 04 Anchorage International Airport. The fees, charges, and rentals collected under 05 this subsection shall be deposited in the Anchorage International Airport account 06 of the revenue fund. 07  (b) As provided in AS 02.15.090(a), the commissioner of transportation and 08 public facilities shall fix and collect the fees, charges, and rentals derived by the state 09 from the ownership, lease, use, and operation of the Fairbanks International Airport 10 [AIRPORTS] and all of the associated facilities and improvements that will provide 11 revenue sufficient to comply with all of the covenants of the bond resolutions for 12 bonds sold for the benefit of the Fairbanks International Airport. The fees, 13 charges, and rentals collected under this subsection shall be deposited in the 14 Fairbanks International Airport account of the revenue fund [RESOLUTION]. 15 * Sec. 46. AS 37.15.500(a) is amended to read: 16  (a) As provided in AS 02.45.200(a) [AS 02.15.090(a)], the board of the 17 Anchorage International Airport Commission [COMMISSIONER OF 18 TRANSPORTATION AND PUBLIC FACILITIES] shall fix and collect the fees, 19 charges, and rentals derived by the state from the ownership, lease, use, and operation 20 of the Anchorage International Airport and all of the associated facilities and 21 improvements that will provide revenue sufficient to comply with all of the covenants 22 of the bond resolutions for bonds sold for the benefit of the Anchorage International 23 Airport. The fees, charges, and rentals collected under this subsection shall be 24 deposited in the Anchorage International Airport account of the revenue fund. 25 * Sec. 47. AS 37.15.510 is amended to read: 26  Sec. 37.15.510. State improvements to airports. The state is authorized to 27 acquire, equip, construct, and install additions and improvements to and extensions of 28 the airports, facilities for the landing, parking, loading, storing, repairing, safety, and 29 utility of aircraft at the airports and passenger, freight, and terminal facilities, including 30 safety equipment and devices at the airports, found to be necessary for the Anchorage 31 International Airport by the board of the Anchorage International Airport

01 Commission and for the Fairbanks International Airport by the commissioner of 02 transportation and public facilities. 03 * Sec. 48. AS 38.05.030(b) is amended to read: 04  (b) The provisions of this chapter do not apply to any power, duty , or authority 05 now or in the future granted to the Department of Transportation and Public Facilities 06 or the Anchorage International Airport Commission in the name of the state, to 07 acquire, use, lease, dispose of, or exchange real property, or any interest in real 08 property. Land assigned by the division of lands to the Department of Transportation 09 and Public Facilities or the Anchorage International Airport Commission shall be 10 returned to the management of the division of lands when the land [IT] is no longer 11 needed for the purposes assigned. 12 * Sec. 49. AS 38.05.030 is amended by adding a new subsection to read: 13  (h) Except for land that is required to be returned to the department under (b) 14 of this section, the Anchorage International Airport Commission may dispose of real 15 property (1) acquired by the commission under AS 02.45.120, or (2) acquired by the 16 Department of Transportation and Public Facilities and transferred to the commission 17 under provisions of the Act creating the commission. Land conveyed under this 18 subsection to a municipality for less than fair market value shall be credited against 19 the municipality's entitlement under AS 29.65. 20 * Sec. 50. AS 39.25.120(c)(11) is amended to read: 21  (11) airport managers in the Department of Transportation and Public 22 Facilities employed at the [ANCHORAGE AND] Fairbanks International Airport 23 [AIRPORTS]; 24 * Sec. 51. AS 39.35 is amended by adding a new section to read: 25  Sec. 39.35.152. Anchorage International Airport Commission employees. 26 (a) An employee of the Anchorage International Airport Commission who was an 27 employee of the state on the day before the employee was transferred to the 28 commission under sec. 58 of this Act shall be included in the system. 29  (b) An employee of the Anchorage International Airport Commission who is 30 not covered under (a) of this section shall be included in the system on the effective 31 date of the commission's participation in the system for that employee.

01 * Sec. 52. AS 39.50.200(b) is amended by adding a new paragraph to read: 02  (56) Anchorage International Airport Commission (AS 02.45.010). 03 * Sec. 53. AS 39.52.960(2) is amended to read: 04  (2) "agency" means a department, the office of the governor, or an 05 entity in the executive branch, including [BUT NOT LIMITED TO] the University of 06 Alaska, public or quasi-public corporations, boards or commissions, [AND] the Alaska 07 Railroad Corporation , and the Anchorage International Airport Commission ; 08 * Sec. 54. AS 39.52.960(4) is amended to read: 09  (4) "board or commission" means a board, commission, authority, or 10 board of directors of a public or quasi-public corporation, established by statute in the 11 executive branch, including the Alaska Railroad Corporation and the Anchorage 12 International Airport Commission , but excluding members of a negotiated regulation 13 making committee under AS 44.62.710 - 44.62.800; 14 * Sec. 55. AS 39.52.960(12) is amended to read: 15  (12) "instrumentality of the state" means a state agency or 16 administrative unit, whether in the legislative, judicial, or executive branch, including 17 such entities as the University of Alaska, the Alaska Railroad Corporation, the 18 Anchorage International Airport Commission , and any public or quasi-public 19 corporations, boards, or commissions; the term includes municipalities; 20 * Sec. 56. AS 44.42.020(a)(7) is amended to read: 21  (7) manage, operate, and maintain state transportation facilities and all 22 docks, floats, breakwaters, and buildings, including all state highways, vessels, 23 railroads, pipelines, and airports [,] and aviation facilities other than airports and 24 aviation facilities under the jurisdiction of the Anchorage International Airport 25 Commission under AS 02.45 ; 26 * Sec. 57. AS 44.88.080(25) is amended to read: 27  (25) to make cooperative agreements with the Anchorage 28 International Airport Commission [DEPARTMENT OF TRANSPORTATION AND 29 PUBLIC FACILITIES], acting on behalf of the international airports revenue fund 30 established under AS 37.15.430, to acquire, equip, operate, maintain, construct, or 31 install facilities that will enhance the competitiveness of the international airports

01 under the jurisdiction of the commission , including a cooperative agreement to lend 02 amounts from the international airports [AIRPORT] revenue fund to finance the 03 development or improvement of utilities serving the airports; 04 * Sec. 58. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 TRANSITION. (a) All real property used or controlled by the Department of 07 Transportation and Public Facilities, Anchorage International Airport, and all appropriations, 08 records, equipment, and other personal property of the Department of Transportation and 09 Public Facilities, Anchorage International Airport, on the day before the effective date of this 10 subsection shall be transferred to the Anchorage International Airport Commission to 11 implement the provisions of this Act. 12 (b) All employees of the Department of Transportation and Public Facilities assigned 13 to the management, operation, and maintenance of the Anchorage International Airport on the 14 day before the effective date of this subsection shall be transferred to the Anchorage 15 International Airport Commission as employees of the commission. The commissioner of 16 transportation and public facilities shall determine which employees are transferred to the 17 commission. 18 (c) Classified state employees transferred to the Anchorage International Airport 19 Commission under (b) of this section retain the rights and status of state employees until the 20 expiration dates of the collective bargaining agreements covering those employees that are in 21 effect on the day before the effective date of (b) of this section. 22 (d) The Anchorage International Airport Commission is bound by the collective 23 bargaining agreements covering employees transferred to the commission under (b) of this 24 section for the terms of the agreements. Nothing in this Act terminates or modifies a 25 collective bargaining unit, recognition of an exclusive bargaining representative, or a collective 26 bargaining agreement covering employees that are transferred to the Anchorage International 27 Airport Commission under this Act if the unit, recognition, or agreement is in effect on the 28 day before the effective date of (b) of this section. 29 (e) Notwithstanding AS 02.45.900(a), as added by sec. 2 of this Act, and (c) and (d) 30 of this section, the Anchorage International Airport Commission shall operate under personnel 31 rules adopted under AS 39 until January 1, 2004, or until the commission adopts its own

01 personnel rules under AS 02.45.100(b), as added by sec. 2 of this Act, whichever occurs first. 02 (f) All contracts, leases, rights, liabilities, bonds, notes, or other obligations of the 03 Department of Transportation and Public Facilities created by or under a law amended or 04 repealed by this Act and in effect on the effective date of this section, remain in effect 05 notwithstanding this Act's taking effect, with all contracts, leases, rights, liabilities, bonds, 06 notes, or other obligations of the Department of Transportation and Public Facilities, 07 Anchorage International Airport, becoming contracts, leases, rights, liabilities, bonds, notes, 08 and other obligations of the Anchorage International Airport Commission for the terms 09 provided. 10 * Sec. 59. The uncodified law of the State of Alaska is amended by adding a new section 11 to read: 12 PAYMENT OF DIVIDEND. During fiscal years 2004, 2005, 2006, and 2007, the 13 board of the Anchorage International Airport Commission shall, after determining the amount 14 of the unrestricted revenue of the commission necessary for the payment of the costs related 15 to the international airports revenue bonds and for the essential operations of the commission, 16 authorize the transfer of an amount not to exceed $4,000,000 each fiscal year from the 17 Anchorage International Airport account in the "International Airports Revenue Fund" to the 18 Fairbanks International Airport account in the revenue fund, for the payment of the costs of 19 the state-owned and state-operated international airport at Fairbanks. 20 * Sec. 60. The uncodified law of the State of Alaska is amended by adding a new section 21 to read: 22 INTERIM MANAGEMENT OF THE ANCHORAGE INTERNATIONAL AIRPORT. 23 (a) Notwithstanding other provisions of this Act, until the board of the Anchorage 24 International Airport Commission convenes its first meeting, the commissioner of 25 transportation and public facilities shall manage the state-owned and state-operated 26 international airport at Anchorage under applicable laws that are in effect on the day before 27 the effective date of sec. 1 of this Act. 28 (b) Notwithstanding AS 02.45.060, as added by sec. 2 of this Act, the commissioner 29 of transportation and public facilities is the chair pro tempore of the board of directors of the 30 Anchorage International Airport Commission until the board elects a chair from among its 31 members at its first meeting.

01 (c) The board of the Anchorage International Airport Commission shall convene its 02 first meeting as soon as practicable after appointment of at least five voting members by the 03 governor. 04 * Sec. 61. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 INITIAL APPOINTMENTS. Notwithstanding AS 02.45.020, as added by sec. 2 of 07 this Act, and AS 39.05.055, the governor shall designate 08 (1) two persons initially appointed to the board of directors of the Anchorage 09 International Airport Commission to serve as members of the board until December 31, 2004; 10 (2) two persons initially appointed to the board of directors of the Anchorage 11 International Airport Commission to serve as members of the board until December 31, 2005; 12 (3) two persons initially appointed to the board of directors of the Anchorage 13 International Airport Commission to serve as members of the board until December 31, 2006; 14 (4) one person initially appointed to the board of directors of the Anchorage 15 International Airport Commission to serve as a member of the board until December 31, 2007. 16 * Sec. 62. The uncodified law of the State of Alaska is amended by adding a new section 17 to read: 18 SAVING CLAUSE. Litigation, hearings, investigations, and other proceedings pending 19 under a law amended or repealed by this Act, or in connection with functions transferred by 20 this Act, continue in effect and may be continued and completed notwithstanding a transfer 21 or amendment or repeal provided for by this Act. Regulations adopted under authority of a 22 law amended or repealed by this Act remain in effect for the term adopted or until repealed 23 or otherwise amended under the provisions of this Act. 24 * Sec. 63. Sections 1, 40, 42, 43, and 45 of this Act take effect January 1, 2001. 25 * Sec. 64. AS 02.45.900, as added by sec. 2 of this Act, and secs. 41, 44, 46, 47, 51, and 26 56 - 59 of this Act take effect on the day on which the board of the Anchorage International 27 Airport Commission convenes its first meeting. The commissioner of transportation and 28 public facilities shall inform the revisor of statutes and the lieutenant governor of the date on 29 which the board of directors of the Anchorage International Airport Commission convenes its 30 first meeting. 31 * Sec. 65. Except as provided by secs. 63 and 64 of this Act, this Act takes effect

01 January 1, 2003.