KRS 48.111: Governor to include in executive budget recommendation a recommended

program for rental of space costing more than $200,000 annually -- Restriction

on certain leases -- Exception.

(1) The Governor shall include in the executive branch budget recommenda tion and in

the draft branch budget bill for the executive branch submitted to each even -

numbered-year regular session of the General Assembly pursuant to KRS 48.110,

for the biennium period beginning July 1, 1992, and for each biennium thereafter, a

recommended program for rental of any space for which the annual rental cost will

exceed two hundred thousand dollars ($200,000).

(2) The recommended program for leased space shall include:

(a) A summary description of each specific two hundred thousand dollar

($200,000) lease project recommended for funding during the biennium; and

(b) For each project:

1. The name of the agency for which space will be leased;

2. The purpose and justification for the lease;

3. Whether the lease contains a purchase option which will be exercised

during the biennium pursuant to KRS 56.806(4) and the estimated

purchase price;

4. a. Whether the lease contains a lease -purchase which will be

completed during the biennium pursuant to KRS 56.806(5) prior to

the total amortization, throu gh lease payments, of the fair market

value of the leased property as of the time the lessor and the

Commonwealth entered into the lease; and

b. The estimated sum of money that will have to be paid in addition

to rent paid to complete the purchase;

5. The estimated cost of the lease; and

6. The recommended sources of funds.

(3) All information required by subsection (2) of this section shall be included in the

executive branch budget recommendation. The branch budget bill for the executive

branch shall contain only the information specified in subparagraphs 1. and 2. of

subsection (2)(b) of this section.

(4) Except as provided in subsection (5) of this section, no lease with an annual rental

cost which will exceed two hundred thousand dollars ($200,000) shall be executed

unless the lease has been identified and included in the bra nch budget bill. The

branch budget bill for the executive branch shall authorize the expenditure by the

budget unit that will occupy the premises.

(5) A lease with an annual rental cost exceeding two hundred thousand dollars

($200,000) may be authorized ev en though it is not specifically listed in the branch

budget bill, subject to the following conditions and procedures:

(a) A lease is awarded as the result of the consolidation of leases in which case, in

addition to subsection (6) of this section, the pro visions of KRS 56.803 and

56.823(2) or of KRS 56.805(2) and 56.823(3) shall apply, as appropriate; or

(b) A lease is awarded as the result of an agency occupying substantially less

space than it should, under the standards for space set by the Department f or

Facilities Management, in which case, in addition to subsection (6) of this

section, the provisions of KRS 56.803 and 56.823(2) or of KRS 56.805(2) and

56.823(3) shall apply, as appropriate. The space allocated under the new lease

shall not exceed the space which should be allocated pursuant to the standards

for space; or

(c) A lease with an annual rental cost of less than two hundred thousand dollars

($200,000) is renewed or replaced for an annual rental cost that exceeds two

hundred thousand dollars ($ 200,000), but only if that request and subsequent

renewal or replacement lease is:

1. From the same state agency lessee whose initial lease was under two

hundred thousand dollars ($200,000);

2. For the same or substantially the same square footage as the i nitial lease

that was under two hundred thousand dollars ($200,000);

3. The result of the competitive leasing process authorized by KRS 56.803;

4. For an annual lease payment of less than two hundred and fifty thousand

dollars ($250,000); and

5. Effective only until June 30 of the next even -numbered year unless

authorized in the branch budget bill; or

(d) A lease is awarded as the result of an emergency in which case the provisions

of KRS 56.805(3) and (4) and KRS 56.823(5) shall apply; or

(e) 1. Fifty percent (50%) or more of the actual cost shall be funded by federal

or private funds; and

2. Money specifically budgeted and appropriated by the General Assembly

for another purpose shall not be allotted or reallotted for expenditure on

the lease. Money utiliz ed shall not jeopardize any existing program and

shall not require the use of current general funds specifically dedicated

to existing programs; and

3. The Finance and Administration Cabinet shall comply with the

requirements of subsection (6) of this section.

(6) (a) No later than five (5) business days after an advertisement for lease proposals

pursuant to paragraph (a) or (b) of subsection (5) of this section, the cabinet

shall provide the Capital Projects and Bond Oversight Committee with a copy

of the advertisement and shall state in writing to the committee that the copy

is being provided in compliance with this paragraph.

(b) Prior to final authorization of a lease pursuant to paragraph (e) of subsection

(5) of this section, the cabinet shall report t o the Capital Projects and Bond

Oversight Committee:

1. The name of the agency for which space will be leased;

2. The purpose and justification for the lease;

3. The estimated cost of the lease;

4. The source of funds; and

5. Whether the requirements of pa ragraph (e) of subsection (5) of this

section have been met.

(c) Within thirty (30) days after the report required in paragraph (b) of this

subsection has been submitted to the committee, the committee shall conduct

its review and decide whether to approve or disapprove the proposed lease

authorization. The Legislative Research Commission shall promptly transmit

the committee's findings and determinations to the Finance and

Administration Cabinet.

(d) If the committee disapproves a proposed lease authorization, the secretary of

the Finance and Administration Cabinet shall:

1. Revise the proposed lease authorization to comply with the objection of

the committee; or

2. Cancel the proposed lease authorization; or

3. Determine to proceed with the proposed lease authorization disapproved

by the committee.

(e) The decision made by the secretary of the Finance and Administration Cabinet

under paragraph (d) of this subsection shall be communicated to the

committee in writing within thirty (30) days of the committee's disapproval.

(f) The Legislative Research Commission shall maintain records of the

committee's disapproval of a proposed lease authorization and the cabinet's

report of its actions on a disapproved p roposed lease authorization. If the

committee disapproves a proposed lease authorization, the Legislative

Research Commission shall transmit the committee's disapproval and the

cabinet's action on the disapproval to the appropriate interim joint committee

of the Legislative Research Commission and to the General Assembly when

next convened in an even-numbered-year regular session.

(g) If, after committee review, a lease is authorized, the lease shall be awarded

pursuant to this section and KRS 43.050 and 56 .800 to 56.823 and shall be

subsequently reviewed pursuant to the appropriate subsection of KRS 56.823.