The trust lands granted to the trustee pursuant to Section 3 of this act shall be held by the trustee in trust for the benefit of all the people of the state for purposes consistent with the public trust doctrine, including, but not limited to, maritime or water-dependent commerce, navigation, and fisheries, and the preservation of lands in their natural state for scientific study, open space, wildlife habitat, and water-oriented recreation. The trustee may use the trust lands for the construction, reconstruction, repair, and maintenance of any transportation, utility, or other infrastructure that is incidental, necessary, or convenient to promote or accommodate uses consistent with the public trust doctrine. The trust lands shall be held by the trustee, subject to the following conditions:
(a) (1) The trustee shall not grant, convey, or otherwise alienate the trust lands, or any part thereof, to any individual, firm, or corporation for any purpose, except as provided in this act. However, the trustee may lease the trust lands, or any part thereof, for limited periods, not exceeding 49 years, for purposes consistent with the trust on which those lands are held. Any lease entered into pursuant to this subdivision shall be subject to any terms or conditions that may be imposed by the trustee that are deemed to be appropriate for public trust purposes. The trustee shall collect and retain rents from any lease entered into pursuant to this subdivision and expend trust revenues only for those uses and purposes that are consistent with the public trust purposes. The purpose of this requirement is to provide for the segregation of funds derived from the use of the trust lands in order to ensure that they are expended only to enhance the trust lands in accordance with the trust uses and purposes upon which the trust lands are held.
(2) The Legislature finds and declares that the requirement that trust revenues be used only for those purposes that are consistent with the public trust purposes is intended to provide for the segregation of trust revenues in order to ensure that they are expended only to enhance the trust lands in accordance with the trust uses and purposes upon which the trust lands are held.
(b) (1) In accordance with Section 6306 of the Public Resources Code, on or before December 31 of each year, the trustee shall file with the commission a detailed statement of all trust revenues and expenditures relating to its use of the trust lands and other trust assets, including obligations that have been incurred, but not yet paid, covering the fiscal year preceding submission of the statement. The statement required by this subdivision shall be prepared according to generally accepted accounting principles and may take the form of an annual audit prepared by or for the trustee. Prior to commission approval of a trust lands use plan, the following requirements shall apply:
(A) At least 30 days before making a capital expenditure of trust revenues in excess of one hundred thousand ($100,000), but not more than one million ($1,000,000), in or on the trust lands, the trustee shall give written notice of that proposed expenditure to the commission. The notice shall set forth the trust purposes for which the proposed expenditure will be made.
(B) The trustee shall not make a capital expenditure of trust revenues in excess of one million dollars ($1,000,000), in or on the trust lands, unless the commission approves the expenditure pursuant to Chapter 2 (commencing with Section 6701) of Part 2 of Division 6 of the Public Resources Code.
(2) As to the commitment of trust revenues for capital improvements as described in paragraph (1), the commission may request the opinion of the Attorney General on the matter. The commission shall provide a copy of any opinion of the Attorney General pursuant to this paragraph to the trustee with the notice of its determination.
(3) If the commission determines that a proposed capital expenditure is not authorized, the trustee shall not disburse any trust revenues for, or in connection with, that capital improvement, unless it is determined to be authorized by a final order or judgment in a civil action filed by the trustee. The trustee may file a civil action against the state, which suit shall have priority over all other civil matters, for purposes of determining whether a proposed capital expenditure is an authorized public trust purpose. Service shall be made upon the executive officer of the commission and the Attorney General, and the Attorney General shall defend the state in that suit. If the trustee prevails, the court shall not award costs.
(c) Any property acquired by the trustee with trust revenues shall become an asset of the trust lands and be subject to the terms and conditions of this act.
(d) (1) Commencing June 30, 2019, and at the end of every fiscal year thereafter, 20 percent of all annual gross revenues generated from leases or improvements to the trust lands shall be transmitted to the commission.
(2) Of the amount transmitted pursuant to paragraph (1), the commission shall allocate 80 percent to the Treasurer, for deposit in the General Fund, and 20 percent to the Treasurer, for deposit in the Land Bank Fund for expenditure pursuant to Division 7 (commencing with Section 8600) of the Public Resources Code for management of the commission’s granted lands program.
(e) Reimbursement for any expenditures by the trustee of nontrust revenues for improvements made to the trust lands shall be approved by the commission in accordance with subdivision (b) in advance of that expenditure. If reimbursement is not approved as provided in this subdivision, the expenditure of the trustee’s nontrust revenues shall be deemed a gift to the trust.
(f) (1) Upon request of the commission, the trustee shall submit to the commission a trust lands use plan indicating details of intended development, preservation, or other use of the trust lands. The trustee shall thereafter submit to the commission for approval all changes of, amendments to, or extensions of, the trust lands use plan. Any use of the trust lands shall be consistent with the trust lands use plan as approved by the commission. Any improvements of the trust land undertaken by the trustee pursuant to a prior lease of the trust land, as authorized by the commission prior to the effective date of this act, shall be deemed an approved component of the trust lands use plan.
(2) The commission shall review with reasonable promptness the trust lands use plan submitted by the trustee and any changes or amendments to determine that they are consistent with the public trust purposes and the requirements of this act. Based upon its review, the commission shall either approve or disapprove the trust lands use plan. In the event the commission disapproves the trust lands use plan, the trustee shall submit a revised plan to the commission within 180 days. If the commission determines that the revised trust lands use plan is inconsistent with the public trust doctrine and the requirements of this act, the commission shall report the matter to the Governor and each house of the Legislature.
(3) The trust lands use plan may consist of any plan, program, or other document that includes all of the following:
(A) A general description of the type of uses planned or proposed for the trust lands, including a map or aerial photograph showing the location of these uses.
(B) The projected statewide benefit to be derived from the planned or proposed uses of the trust lands, including, but not limited to, the financial benefit and the furtherance of the public trust purposes.
(C) The proposed method of financing the planned or proposed uses of the trust lands, including estimated capital costs, annual operating costs, and anticipated annual trust revenues.
(D) Estimated timetable for implementation of the trust lands use plan or any phase of that implementation.
(E) A description of how the trustee proposes to protect and preserve natural and manmade resources in connection with the use of the trust lands.
(F) Procedures, rules, and regulations to governing the use of or development of any leases of the trust lands developed by the governing body of the city, which shall be subject to approval of the commission. These rules and regulations shall include, but not necessarily be limited to, lease rates, the bases upon which the rates are established, lease terms and conditions, provision for renegotiation of rates and terms and assignments, and such other information as may be required by the commission.
(G) If a trust lands use plan for the trust lands is approved by the commission pursuant to subdivision (f), all leases or similar agreements with a third party governing the use of those trust lands proposed or entered into by the trustee after the effective date of this act shall be consistent with the provisions of the trust lands use plan submitted by the trustee and approved by the commission.
(H) Upon request of the commission, the trustee shall submit to the commission a copy of all leases and similar agreements entered into, renewed, or renegotiated for the trust lands.
(g) Upon request of the commission, the trustee shall submit a trust lands use report of its utilization of the trust lands for each immediately preceding five-calendar-year period ending with June 30 of the calendar year in which the report is submitted. The updated report shall include all of the following:
(1) A general description of the uses to which the trust lands have been placed during the period covered by the report.
(2) A list of the holders of all leases and permits granted or issued by the trustee for the trust lands, which list shall specify, as to each lease holder:
(A) The use to which the trust lands have been placed by the lessee or permitee.
(B) The consideration provided for in each lease or permit, and the consideration actually received by the trustee for the lease or permit granted or issued.
(C) An enumeration of the restrictions that the trustee has placed on the use of the trust lands and each area thereof for the period covered by the report.
(h) The trustee shall reimburse the commission for staff costs related to the review of the trust lands use plan and subsequent report updates described in subdivisions (f) and (g).
(i) The trustee shall demonstrate good faith in carrying out the provision of a trust lands use plan approved pursuant to subdivision (f).
(j) The commission may, from time to time, institute a formal inquiry to determine that the trustee has complied in good faith with terms and conditions of this act, including any amendments, and with any other applicable law concerning the trust lands.
(k) There is hereby reserved in the people of the State of California the right to fish in the waters on and from the trust lands with the right of convenient access to those waters for fishing purposes.
(l) The state shall have the right to use, without charge, any transportation, landing, or storage improvements, betterments, or structures constructed upon the trust lands by trustee for any vessel or other watercraft or railroad owned or operated by, or under contract to, the state as long as that use is consistent with the approved trust lands use plan. The state’s use of those facilities shall be governed by the trustee’s rules and regulations.
(m) The trust lands granted to the trustee are subject to the express reservation and condition that the state may at any time in the future use those lands, or any portion thereof, for highway purposes without compensation to the trustee, or its successors or assignees, or any person, firm, or public or private corporation claiming any right to those lands, except that in the event improvements have been placed with legal authority upon the property taken by the state for highway purposes, compensation shall be made to the person entitled to compensation for the value of the interest in the improvements taken or the damages to that interest.
(n) The state reserves all rights to any remains or artifacts of archaeological or historical significance and to all minerals and mineral rights in the trust lands, whether now known to exist or hereafter discovered, including, but not limited to, oil and gas and rights thereto, together with the sole, exclusive, and the perpetual right to explore for, remove, and dispose of those minerals by any means or methods suitable to the state or to its successors and assignees. Notwithstanding Section 6401 of the Public Resources Code, any mineral right retained pursuant to this section shall not include the right of the state or its successors or assignees in connection with any mineral reservation, removal, or disposal activity, to do either of the following:
(1) Enter upon, use, or damage the surface of the trust lands or interfere with the use of the surface by the trustee or by the trustee’s tenants.
(2) Conduct any mining activities of any nature whatsoever above a plane located five hundred feet below the surface of the trust lands without permission of the trustee.
(o) In the management, conduct, operation, and control of the trust lands or any improvements, or structures on that land, the trustee or its successor shall not discriminate in rates, tolls, or charges for any use or service in connection with those actions and shall not discriminate against or unlawfully segregate any person or group of persons because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, in accordance with Article 1 (commencing with Section 12940) of Chapter 6 of Part 2.8 of Division 3 of Title 2 of the Government Code and other state antidiscrimination laws, for any use or service in connection with those actions.
(p) The trust lands shall be improved by the trustee without expense to the state, except that nothing contained in this act shall preclude the trustee from accepting and retaining any grant of funds or subvention from the state or other governmental agencies made available for the purpose of aiding in the development of those trust lands for any public purpose consistent with the promotion and accommodation of navigation, commerce, fisheries, water-oriented recreation and public access, or ecological preservation.