(1) Extension of any lease may be authorized by the department for a maximum of one year from date of expiration if it is deemed to be in the best interest of the state. Such extension shall be issued upon such terms and conditions as the department may prescribe which may include an adjustment in rent.

(2) If a proposed use for the premises has not been determined, the department may issue a permit for an interim use to the last lessee for up to a maximum period of five years from date of expiration of the lease.

The permit may be issued in the same general form as a lease for a similar use of the premises under such terms and conditions as the department may prescribe. Upon expiration or termination of the permit, the premises can only be leased at public auction.