Senate Bill No. 528

Introduced by Senator Pan

February 26, 2015

An act to amend Section 13332.10 of the Government Code, relating to state government.

LEGISLATIVE COUNSEL’S DIGEST

SB 528, as introduced, Pan. State government: leases.

Existing law prohibits the Director of General Services from entering into a building lease if the state’s obligation as lessee is for the occupancy of a state agency with a lease period of 5 years or longer and an annual rental in excess of $10,000 unless, at least 30 days prior to entering into the lease, the director notifies, in writing, the chairperson of the committee in each house of the Legislature that considers appropriations and the Chairperson of the Joint Legislative Budget Committee, as specified.

This bill would extend the maximum lease period to 11 years, and would make legislative findings and declarations related to these provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature hereby finds and declares that
fixed term leases of ten years or longer are the standard in the
leasing industry, and that following industry standard lease terms
will encourage greater competition in the state leasing marketplace,
which leads to lower long-term costs for lessors, decrease costs to
the state by allowing the state to amortize its tenant improvements
over a longer term, and will result in overall cost savings by the
state. Therefore, it is the intent of the Legislature, by amending
Section 13332.10 of the Government Code, that the Department
of General Services should favor fixed term leases of ten years or
longer.

SEC. 2.  

Section 13332.10 of the Government Code is amended
to read:

13332.10.  

The Director of General Services may not enter into
a lease agreement between the state and another entity, public or
private, in which the state is lessee if the agreement is to be for
the lease of a building or building space, or both, which will be
for the occupancy of any agency or agencies of the state with a
firm lease period of begin delete five end delete begin insert eleven end insert years or longer and an annual rental
in excess of ten thousand dollars ($10,000), unless not less than
30 days prior to entering into the lease the Director of General
Services notifies the chairperson of the committee in each house
which considers appropriations and the Chairperson of the Joint
Legislative Budget Committee, or his or her designee, in writing
of the director’s intention to enter into the agreement, or not sooner
than such lesser time as the Chairperson of the Joint Legislative
Budget Committee, or his or her designee, may in each instance
determine. No funds appropriated in any Budget Act may be
encumbered or expended for any lease entered into on or after July
1, 1979, for office space in the County of Sacramento unless all
solicitations for leases for office space in the County of Sacramento
under the above-described conditions contain the statement, “The
state is anticipating capital construction in the City of Sacramento
and intends to eventually reduce the use of space on a leased basis.”