House Bill 2007e1

CODING: Words stricken are deletions; words underlined are additions.







                                          HB 2007, First Engrossed



  1                      A bill to be entitled

  2         An act relating to state leases; amending s.

  3         216.043, F.S.; revising language with respect

  4         to budget for fixed capital outlay; providing

  5         an additional requirement; amending s. 255.249,

  6         F.S.; requiring state agencies to present

  7         justification prior to terminating a lease of

  8         privately owned property; providing for the

  9         coordination and assumption of the remaining

10         term of a lease terminated by a state agency

11         prior to the end of its base term; providing

12         for the determination and amortization of the

13         cost of tenant improvements; providing a

14         process for the recovery of unamortized cost of

15         tenant improvements when a lease is terminated

16         prior to the end of its base term; amending s.

17         255.25, F.S.; revising cross references, to

18         conform; designating the procedure for the sale

19         of public property to the tenants doing the

20         majority of business in the public property;

21         authorizing the Division of Facility Management

22         to procure real estate appraisals on the public

23         property; requiring the Board of Trustees of

24         the Internal Improvement Trust Fund to

25         institute a procedure to negotiate the sale and

26         privatization of certain public property and

27         buildings; providing an effective date.

28

29         WHEREAS, the State of Florida currently owns

30  significant public properties and buildings located on those

31  public properties, known as state facilities, and


                                  1

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1         WHEREAS, the Legislature wishes to promote businesses

  2  within Florida while upgrading certain state facilities

  3  through privatization, and

  4         WHEREAS, certain state facilities need substantial

  5  capital improvements to continue to provide the services

  6  necessary for the Florida businesses, and

  7         WHEREAS, it is the Legislature's public policy to

  8  promote private industry in areas such as property

  9  construction, renovation, and management, and

10         WHEREAS, certain state facilities are operating without

11  substantial capital improvements to fully optimize the use of

12  the state facilities, NOW, THEREFORE,

13

14  Be It Enacted by the Legislature of the State of Florida:

15

16         Section 1.  The Board of Trustees of the Internal

17  Improvement Trust Fund shall institute a program of

18  privatization of certain state facilities.

19         (1)  The Board of Trustees of the Internal Improvement

20  Trust Fund shall privatize certain state facilities where the

21  majority private business tenants on the facility are private

22  businesses, the majority private business tenants petition the

23  board of trustees, and the facility meets one or more of the

24  following criteria:

25         (a)  The state facility is more than 25 years old and

26  is in need of substantial capital improvements;

27         (b)  The Office of Program Policy Analysis and

28  Government Accountability has issued a report questioning the

29  long-term viability of the state facility or states that the

30  sale of the state facility is appropriate;

31


                                  2

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1         (c)  The state agency has provided in its budget for

  2  substantial capital improvements to the state facility and the

  3  budget request has gone unfunded for 2 consecutive years; or

  4         (d)  The state facility requires asbestos removal from

  5  the buildings on the facility and such removal has not been

  6  undertaken within 2 years of discovery.

  7         (2)  For purposes of this section, the term:

  8         (a)  "Substantial capital improvement" means that the

  9  capital improvements' cost would exceed 25 percent of the

10  appraised value of the property, including the cost of removal

11  and replacement of outdated buildings on the public property.

12         (b)  "State facility" means public property and

13  buildings consisting of 25 acres or less of state-owned land

14  that is improved with office space and is leased by the state

15  to private tenants that occupy the majority of the square

16  footage of the leased space.

17         (c)  "Majority private business tenants" means the

18  nongovernmental lessees of the state facilities which lease

19  the majority of the square footage of state facilities which

20  is for lease.

21         (3)  The Board of Trustees of the Internal Improvement

22  Trust Fund shall have 6 months from the date of the receipt of

23  the petition to procure three appraisals of the facility for

24  purposes of negotiating with the petitioning tenants to sell

25  the state facility for the average price of the appraisals.

26         (4)  The agreement for purchase shall be executed by

27  the Board of Trustees of the Internal Improvement Trust Fund

28  within 9 months after the date of the receipt of tenant

29  petition and shall be for the average price of the three

30  appraisals.

31


                                  3

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1         (5)  Notwithstanding any other law to the contrary, the

  2  majority private business tenants shall have a right of first

  3  refusal to purchase the state facility, provided the majority

  4  private business tenants have petitioned the state in their

  5  petition. Such right of first refusal must be exercised within

  6  90 days after notice of the sale to the tenants.

  7         Section 2.  Paragraph (g) is added to subsection (3) of

  8  section 216.043, Florida Statutes, to read:

  9         216.043  Budgets for fixed capital outlay.--

10         (3)  Each legislative budget request for fixed capital

11  outlay submitted shall contain:

12         (g)  The unamortized cost of tenant improvements under

13  any lease executed after September 30, 2000, which is

14  terminated prior to the expiration of its term for the purpose

15  of relocating to a state-owned building.

16         Section 3.  Section 255.249, Florida Statutes, is

17  amended to read:

18         255.249  Department of Management Services;

19  responsibility; department rules.--

20         (1)  The Department of Management Services shall have

21  responsibility and authority for the custodial and preventive

22  maintenance, repair, and allocation of space of all buildings

23  in the Florida Facilities Pool and the grounds located

24  adjacent thereto.

25         (2)  The department shall require any state agency

26  planning to terminate a lease for the purpose of occupying

27  space in a new state-owned office building appropriated after

28  June 30, 2000, to state why the proposed relocation is in the

29  best interest of the state.

30         (3)  The department shall, to the extent feasible,

31  coordinate the vacation of privately owned leased space with


                                  4

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1  the expiration of the lease on that space and, when a lease is

  2  terminated prior to expiration of its base term, shall make a

  3  reasonable effort to place another state agency in the space

  4  vacated. Any state agency may lease the space in any building

  5  which was subject to a lease terminated by a state agency for

  6  a period of time equal to the remainder of the base term

  7  without the requirement of competitive bidding.

  8         (4)(2)  The department shall promulgate rules pursuant

  9  to chapter 120 providing:

10         (a)  Methods for accomplishing the duties outlined in

11  subsection (1).

12         (b)  Procedures for soliciting and accepting

13  competitive proposals for leased space of 5,000 square feet or

14  more in privately owned buildings, for evaluating the

15  proposals received, for exemption from competitive bidding

16  requirements of any lease the purpose of which is the

17  provision of care and living space for persons or emergency

18  space needs as provided in s. 255.25(10), and for the securing

19  of at least three documented quotes for a lease that is not

20  required to be competitively bid.

21         (c)  A standard method for determining square footage

22  or any other measurement used as the basis for lease payments

23  or other charges.

24         (d)  Methods of allocating space in both state-owned

25  office buildings and privately owned buildings leased by the

26  state based on use, personnel, and office equipment.

27         (e)  Acceptable terms and conditions for inclusion in

28  lease agreements.

29         (f)  Maximum rental rates, by geographic areas or by

30  county, for leasing privately owned space.

31


                                  5

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1         (g)  A standard method for the assessment of rent to

  2  state agencies and other authorized occupants of state-owned

  3  office space, notwithstanding the source of funds.

  4         (h)  For full disclosure of the names and the extent of

  5  interest of the owners holding a 4-percent or more interest in

  6  any privately owned property leased to the state or in the

  7  entity holding title to the property, for exemption from such

  8  disclosure of any beneficial interest which is represented by

  9  stock in any corporation registered with the Securities and

10  Exchange Commission or registered pursuant to chapter 517,

11  which stock is for sale to the general public, and for

12  exemption from such disclosure of any leasehold interest in

13  property located outside the territorial boundaries of the

14  United States.

15         (i)  For full disclosure of the names of all public

16  officials, agents, or employees holding any interest in any

17  privately owned property leased to the state or in the entity

18  holding title to the property, and the nature and extent of

19  their interest, for exemption from such disclosure of any

20  beneficial interest which is represented by stock in any

21  corporation registered with the Securities and Exchange

22  Commission or registered pursuant to chapter 517, which stock

23  is for sale to the general public, and for exemption from such

24  disclosure of any leasehold interest in property located

25  outside the territorial boundaries of the United States.

26         (j)  A method for reporting leases for nominal or no

27  consideration.

28         (k)  For a lease of less than 5,000 square feet, a

29  method for certification by the agency head or the agency

30  head's designated representative that all criteria for leasing

31  have been fully complied with and for the filing of a copy of


                                  6

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1  such lease and all supporting documents with the department

  2  for its review and approval as to technical sufficiency.

  3         (l)  The agency and the lessor, when entering into a

  4  lease of 5,000 or more square feet of a privately owned

  5  building, shall, prior to the effective date of the lease,

  6  agree upon and separately state the cost of tenant

  7  improvements which may qualify for reimbursement if the lease

  8  is terminated prior to the expiration of its base term. The

  9  department shall serve as mediator if the agency and the

10  lessor are unable to agree. The amount agreed upon and stated

11  shall, if appropriated, be amortized over the original base

12  term of the lease on a straight-line basis.

13         (m)  The unamortized portion of the tenant

14  improvements, if appropriated, shall be paid in equal monthly

15  installments over the remaining term of the lease. If any

16  portion of the original leased premises is occupied after

17  termination but during the original term by a tenant which

18  does not require material changes to the premises, then the

19  repayment of the cost of tenant improvements applicable to the

20  occupied but unchanged portion shall be abated during

21  occupancy. The portion of the repayment to be abated shall be

22  based on the ratio of leased space to unleased space.

23         (5)(3)  The Department of Management Services shall

24  prepare a form listing all conditions and requirements adopted

25  pursuant to this chapter which must be met by any state agency

26  leasing any building or part thereof.  This form shall be

27  certified by the agency head or the agency head's designated

28  representative.

29         Section 4.  Paragraph (b) of subsection (2), paragraph

30  (b) of subsection (3), and subsection (10) of section 255.25,

31  Florida Statutes, are amended to read:


                                  7

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1         255.25  Approval required prior to construction or

  2  lease of buildings.--

  3         (2)

  4         (b)  The approval of the Department of Management

  5  Services, except for technical sufficiency, need not be

  6  obtained for the lease of less than 5,000 square feet of space

  7  within a privately owned building, provided the agency head or

  8  the agency head's designated representative has certified

  9  compliance with applicable leasing criteria as may be provided

10  pursuant to s. 255.249(4)(2)(k) and has determined such lease

11  to be in the best interest of the state. Such a lease which is

12  for a term extending beyond the end of a fiscal year is

13  subject to the provisions of ss. 216.311, 255.2502, and

14  255.2503.

15         (3)

16         (b)  The Department of Management Services may approve

17  extensions of an existing lease of 5,000 square feet or more

18  of space if such extensions are determined to be in the best

19  interests of the state, but in no case shall the total of such

20  extensions exceed 11 months.  If at the end of the 11th month

21  an agency still needs space, it shall be procured by

22  competitive bid in accordance with s. 255.249(4)(2)(b).

23         (10)  The Department of Management Services may approve

24  emergency acquisition of space without competitive bids if

25  existing state-owned or state-leased space is destroyed or

26  rendered uninhabitable by an act of God, fire, malicious

27  destruction, or structural failure, or by legal action, if the

28  chief administrator of the state agency or the chief

29  administrator's designated representative certifies in writing

30  that no other agency-controlled space is available to meet

31  this emergency need, but in no case shall the lease for such


                                  8

CODING: Words stricken are deletions; words underlined are additions.






                                          HB 2007, First Engrossed



  1  space exceed 11 months. If the lessor elects not to replace or

  2  renovate the destroyed or uninhabitable facility, the agency

  3  shall procure the needed space by competitive bid in

  4  accordance with s. 255.249(4)(2)(b).  If the lessor elects to

  5  replace or renovate the destroyed or uninhabitable facility

  6  and the construction or renovations will not be complete at

  7  the end of the 11-month lease, the agency may modify the lease

  8  to extend it on a month-to-month basis for an additional 6

  9  months to allow completion of such construction or

10  renovations.

11         Section 5.  This act shall take effect upon becoming a

12  law.

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31


                                  9