AN ACT Relating to state leases; adding new sections to chapter 43.82 RCW; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. "Building" as used in this chapter means any building or buildings used as a part of, or in connection with, the operation of the state, to be constructed on the northeast corner of the state of Washington capitol campus located in Olympia on a three block site bounded on the north by 11th avenue, on the east by Jefferson street, on the south by 12th avenue and on the west by Washington street, and approved by the state capitol committee, and includes the site and appurtenances, including but not limited to, heating facilities, water supply, sewage disposal, landscaping, walks, drives, and parking facilities.

NEW SECTION. Sec. 2. The state may, as lessee, lease a building for its use for a term of not to exceed fifty years. A lease of a building executed pursuant to this chapter may grant the state an option to renew for a further term on like conditions, or an option to purchase the building covered by the lease at any time prior to the expiration of the term. A lease with an option to purchase shall provide that all sums paid as rent up to the time of exercising the option shall be credited toward the payment of the purchase price as of the date of payment. The lease shall not provide, nor be construed to provide, that the state is under any obligation to purchase the leased building.

The lease of a building may provide that, as a part of the rental, the state may pay taxes and assessments on the leased building, maintain insurance thereon for the benefit of the lessor, and assume responsibilities for repair, replacement, alterations, and improvements during the term of the lease.

NEW SECTION. Sec. 3. The state may, in anticipation of the acquisition of a site and the construction of a building, execute a lease, as lessee, prior to the actual acquisition of the site and the construction of the building, but the lease shall not require payment of rental by the state until the building is ready for occupancy. The lessor shall furnish a bond satisfactory to the state conditioned on the delivery of possession of the completed building to the state at the time prescribed in the lease, unavoidable delay excepted. The lease shall provide that no part of the cost of construction of the building shall ever become an obligation of the state.

NEW SECTION. Sec. 4. The state, if it desires to have a building for its use erected on land owned, or to be acquired, by it, may, as lessor, lease the land for a reasonable rental for a term of not to exceed fifty years if the state leases back the building or a portion thereof for the same term. The leases shall contain terms as agreed upon between the parties and shall include the following provisions:

(1) No part of the cost of construction of the building shall ever be or become an obligation of the state.

(2) The state has a prior right to occupy any or all of the building upon payment of rental as agreed upon by the parties, which rental shall not exceed prevailing rates for comparable space.

(3) During any time that all or any portion of the building is not required for occupancy by the state, the lessee of the land may rent the unneeded portion to suitable tenants approved by the state.

(4) Upon the expiration of the lease, all buildings and improvements on the land shall become the property of the state.

NEW SECTION. Sec. 5. (1) In the procurement of a building pursuant to this chapter, a lease and lease-back agreement requiring a lessee to build on state property shall be made pursuant to a competitive selection procedure providing an equal and open opportunity to qualified parties and upon terms most advantageous to the state. The selection procedure shall take into consideration the qualifications and performance data of the proposed lessee including but not limited to the scope, complexity and nature of the agreement; the ability, capacity, experience and reputation of the prospective lessee; the responsiveness to solicitation requirements; the quality of previous performance; and the compliance with statutes and rules relating to contracts or services. The state shall conduct discussions with at least two proposed lessees regarding anticipated concepts and advisability of alternative methods of accomplishing the agreement. The state shall select from the proposed lessees, based on criteria established by the state, the firm deemed to be the most highly qualified to provide the services required for the project. The state shall then negotiate a contract with the most qualified firm for such lease and lease-back agreement at a price the state determines to be fair and reasonable to the state, with the approval of the legislature or state capitol committee as required by section 1 of this act. In making this determination, the state shall take into account the estimated value of the agreement as well as the scope, complexity and nature of the building.

(2) If the state is unable to negotiate a satisfactory agreement with the firm selected at a price the state determines to be fair and reasonable, negotiations with that firm shall be formally terminated and the state shall select other firms and continue in accordance with subsection (1) of this section until an agreement is reached or the process is terminated.

NEW SECTION. Sec. 6. All leases executed pursuant to this chapter shall be exempt from the taxes imposed by chapter 82.45 RCW, RCW 82.04.040, 82.08.090, and by rules and regulations of the department of revenue issued pursuant thereto.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act shall constitute new sections in chapter 43.82 RCW.

NEW SECTION. Sec. 8. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.