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A09690 Memo:


TITLE OF BILL:  An act to amend the public buildings law, the public
lands law, the state finance law and the economic development law, in
relation to enhancing operational efficiencies and promoting economies
in support of the enterprise initiatives being undertaken by the
office of general services

Purpose of Bill:  This bill would amend sections of the Public
Buildings Law, the Public Lands Law, the State Finance Law (SFL) and
the Economic Development Law (EDL) to provide for enhanced operational
efficiencies and savings in support of enterprise initiatives being
undertaken by the Office of General Services (OGS).

Summary of Provisions:  o Section one of the bill would amend Public
Buildings Law S 3(14) to authorize the Commissioner of General
Services (Commissioner) to enter into leases or operating agreements
for State-owned surplus real property to produce revenue for the

o Section two of the bill would add. new subdivisions (6) and (7) to
Public Lands Law S 33 to provide for disposition of State surplus real
property for fair market or for less than fair market value other than
through public auction, under limited circumstances.

o Section three of the bill would amend SFL S 112(2) to allow
extensions of centralized contracts, where the extension is provided
for in the contract, to go forward without review and formal approval
by the Office of the State Comptroller (OSC). This would apply only to
centralized contracts entered into after April 1, 2011 (centralized
contracts that are not subject to OSC review and approval).

o Section four of the bill would amend SFL S 97-g of to authorize OGS
to provide energy products as a centralized service to public
authorities and public benefit corporations.

o Section five of the bill would make a technical conforming amendment
to EDL S 146 so that it is consistent with the requirements of SFL
163(8) relating to the mandatory advertisement of state procurement
opportunities in the Contract Reporter.

Existing Law:  o Public Buildings Law S 3 (14) requires Commissioner
approval of revenue-producing leases and operating agreements for
surplus State real property, but the leases and agreements themselves
must be managed by the agency, department, commission or other State
entity that controls the property.

o Public Lands Law S 33 does not provide for disposition of surplus
real proper without a formal competitive process for fair market value
or for less than fair market value, even where such processes have not
resulted in the sale of the property.

o SFL S 112(2) requires OSC approval of all contract extensions,
including those provided for in centralized contracts that were not
originally subject to review or approval, by OSC.

o SFL S 97-g does not authorize providing centralized services to
public authorities or public benefit corporations.

o EDL S 146 prohibits the Comptroller from approving contracts valued
at more than $15,000 if they have not been advertised in the Contract
Reporter, but SFL S 163(8) sets the threshold for mandatory
advertisement at $50,000 ("all procurements by state agencies in
excess of fitly thousand dollars shall be advertised in the state's
procurement opportunities newsletter in accordance with article four-C
of the economic development law").

Prior Legislative History: None.

Statement in Support:  Public Buildings Law S 3(14) provides for
re-use of the State's surplus real property. Under current law, if any
agency, department, commission or other State entity having control
over such surplus property determines that the property could be used
to produce revenue through leasing or an operating agreement, that
agency or other entity must obtain approval to do so from the
Commissioner but must handle entering into the lease or operating
agreement itself.  Consistent with initiatives to align agency
responsibilities more closely with their core missions, this amendment
would place responsibility for entering into leased and operating
agreements with OGS, which has expertise in that area, and allow other
agencies to dedicate their resources to their core missions.

Public Lands Law S 33 provides for disposition of State surplus real
property through public auctions or formal competitive processes
(e.g., a request for proposals). These are open processes and are the
preferred method for disposition of State surplus real property.
Surplus real property, however, is not uniform in nature, and in some
limited circumstances, due to location, past use, environmental
issues, impediments to best new use or other factors, it may not be
suitable for disposition through a public auction or a formal
competitive process. This bill would provide for alternative
disposition methods, allowing State surplus real property to be sold
for fair market value or for less than fair market value where it has
been offered through the traditional methods, but no sale has
resulted. These alternative sales would allow the State both to avoid
having to continue to expend resources to maintain and operate these
properties and to realize revenue.

SFL S 112(2) of the State Finance Law is currently interpreted by the
Comptroller to require' approval of contract extensions that are
included in the original contract award for a centralized contract.
Part L of L.2012, c. 55 eliminated OSC formal review and approval of
centralized contract awards, so it does not make sense that OSC would
be called upon subsequently to review and approve the use of a term of
a centralized contract. Furthermore, formal review and approval of
extensions can result in delays in continuing to make goods and
services available for purchase by State agencies and other authorized
purchasers from centralized contract awards. This amendment would
resolve the inconsistency in the law and prevent delays in contract
extensions. It would affect only those contracts awarded after April
1, 2011.

The proposed amendment to SFL S 97-g would permit OGS to provide
energy products (primarily electricity) as a centralized service
provided to public authorities and public benefit corporations. OGS
already provides such centralized services to state agencies and local
governments, and this has produced savings for both. This amendment is
expected to reduce costs similarly for public authorities and public
benefit corporations.

The proposed amendment to EDL S 146 is a technical amendment that
would resolve an inconsistency between statutory provisions regarding
the value threshold at which advertisement of a procurement
opportunity in the Contract Reporter (referred to in statute as the
"procurement opportunities newsletter") is mandatory. Currently, SFL
163, as amended by Part L of L.2012, c. 55, states that the threshold
is $50,000 for all state procurements, but EDL S 146, last amended by
L.2000, c. 95, states that the Comptroller cannot approve contracts of
a value of $15,000 or more if the procurement opportunity was not
published in the Contract Reporter.

Budget Implications:  Amendments to the Public Lands Law may produce
additional revenue.  Changes to the State Finance Law will produce
efficiencies and cost containment.

Local Impact:  None.

Effective Date:  Immediately.
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