(a) With the consent of the secretary, a nonprofit organization may hold an annual fair in lieu of the annual fair held by the 25th District Agricultural Association.

(b) Notwithstanding any other provision of law, the department may enter into contracts with the nonprofit organization referred to in subdivision (a) for the receipt of public funds.

(c) Notwithstanding any other provision of law, the Director of General Services, with the consent of, and on terms approved by the secretary, may lease certain premises commonly known as the Napa Valley Expo, containing approximately 37 acres situated in the County and City of Napa, to the nonprofit organization referred to in subdivision (a) for a period not to exceed 99 years, to hold an annual fair pursuant to subdivision (a). While the lease is in effect, the nonprofit organization shall be deemed to be an instrumentality of the state for the limited purpose of carrying out the authority granted the 25th District Agricultural Association by Sections 4161 and 4162. While the lease is in effect, the 25th District Agricultural Association shall be inactive, and shall not have any powers or duties.

(d) The lease executed pursuant to this section may be for less than the market value of the property, and shall include a provision that the lease may be canceled if the lessee or its successors or assignees does any of the following:

(1) Fails to hold an annual fair.

(2) Fails to make a seat on its board of directors available to the Mayor of Napa and the Chairperson of the Napa County Board of Supervisors for the duration of the lease.

(3) Fails, in any calendar year, to hold at least two meetings of its board of directors, open to the public, in the City of Napa.

(e) Prior to the commencement of the term of the lease, the lessee and the Department of Food and Agriculture shall ensure that every employee in the civil service of the 25th District Agricultural Association is provided with the option of continuing his or her employment with the state, or of accepting a position as an employee of the lessee.

(1) With respect to an employee who chooses to continue his or her employment with the state, the employee shall continue to be subject to all of the provisions governing civil service employees, and additionally, all of the following shall apply:

(A) The lessee shall contract with the department for the services of the employee, consistent with his or her civil service classification and status.

(B) The employee has the right to continue to provide services to the lessee pursuant to that contract during the time the employee continues in the civil service classification he or she held at the time of the employee’s election.

(2) With respect to an employee who chooses to leave his or her employment with the state and become an employee of the lessee, those employees are not employees of the state, and are not subject to the requirements of Chapter 10.3 (commencing with Section 3512) and Chapter 10.5 (commencing with Section 3525) of Division 4 of Title 1 of the Government Code.

(3) If a position filled by a civil service employee pursuant to contract with the department becomes vacant, the lessee may fill the position with a non-civil-service employee.

(f) The State of California is not liable for any debts, liabilities, settlements, liens, or any other obligations incurred by or imposed upon the nonprofit organization referred to in subdivision (a). The lease executed pursuant to this section shall expressly provide that the General Fund and the Fair and Exposition Fund shall be held harmless from all debts, liabilities, settlements, judgments, or liens incurred by the nonprofit organization, and that neither the state nor any agency or division thereof shall be liable for any contract, tort, action or inaction, error in judgment, mistakes, or other acts taken by the nonprofit organization, or any of its employees, agents, servants, invitees, guests, or anyone acting in concert with, or on the behalf of, the nonprofit organization.

(Added by Stats. 1998, Ch. 259, Sec. 2. Effective August 4, 1998.)