Relates to enhancing operational efficiencies and promoting economies in support of the enterprise initiatives being undertaken by the office of general services

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:

*Section one of the bill would amend Public Buildings Law § 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 State.

*Section two of the bill would add new subdivisions (6) and (7) to Public Lands Law § 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.

*Section three of the bill would amend SFL § 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).

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

*Section five of the bill would make a technical conforming amendment to EDL § 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:

*Public Buildings Law § 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.

*Public Lands Law § 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.

*SFL § 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.

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

*EDL § 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 § 163(8) sets the threshold for mandatory advertisement at $50,000 ("all procurements by state agencies . . . in excess of fifty 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 § 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 leases 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 § 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 § 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 § 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 § 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 § 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.