S-2794               _______________________________________________

                                                   SENATE BILL NO. 6073

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senators Fleming, Sellar, Bottiger and Hayner

Read first time 4/15/87.  Under suspension of rules, advanced to second reading and held on calendar.

AN ACT Relating to state leases; adding a new chapter to Title 79 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, and approved by the legislature or, in the case of buildings in Thurston county, approved by the state capital 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.     A lease and lease-back agreement requiring a lessee to build on state property shall be made pursuant to a call for bids upon terms most advantageous to the state.  The call for bids shall be given by posting notice thereof in a public place and by publication for two consecutive weeks before the date fixed for opening the bids.  The state may reject all bids and make further calls for bids in the same manner as the original call.  If no bid is received on the first call, the state may readvertise and make a second call, or may execute a lease without any further call for bids.

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 a new chapter in Title 79 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.