By:  Denton                                           H.B. No. 2787
       73R1551 JRD-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to enabling the General Services Commission to purchase an
    1-3  existing building through Texas Public Finance Authority financing
    1-4  under certain circumstances.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Article 5, State Purchasing and General Services
    1-7  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
    1-8  adding Section 5.342 to read as follows:
    1-9        Sec. 5.342.  ACQUISITION OF EXISTING BUILDING AS ALTERNATIVE
   1-10  TO LEASING SPACE.  (a)  This section applies only to meeting office
   1-11  space needs of one or more state agencies in a county in which the
   1-12  state is leasing at least 50,000 square feet of usable office
   1-13  space.
   1-14        (b)  The commission may meet office space needs of one or
   1-15  more state agencies that are being met through leased space by
   1-16  purchasing one or more existing buildings in accordance with this
   1-17  section.  The purchase of a building may include the purchase of
   1-18  the building's grounds and related improvements.  The purchase of a
   1-19  building under this section must be:
   1-20              (1)  financed through bonds issued by the Texas Public
   1-21  Finance Authority; and
   1-22              (2)  approved by the legislature if it is in session or
   1-23  by the Legislative Budget Board if the legislature is not in
   1-24  session.
    2-1        (c)  The commission may purchase a building under this
    2-2  section only if the commission determines that the projected annual
    2-3  total space occupancy costs of the purchased space will not exceed,
    2-4  over the term of the bonded indebtedness, the projected annual
    2-5  total space occupancy costs of meeting the same space needs through
    2-6  leased space.  In this section, "total space occupancy costs"
    2-7  include:
    2-8              (1)  for leased space, the direct cost of the lease
    2-9  payments for the space;
   2-10              (2)  for purchased space, the direct cost of rental or
   2-11  installment payments for the space under Section 12(b), Texas
   2-12  Public Finance Authority Act (Article 601d, Vernon's Texas Civil
   2-13  Statutes);
   2-14              (3)  the cost of any necessary renovations;
   2-15              (4)  operating costs, including janitorial and utility
   2-16  costs; and
   2-17              (5)  for purchased space, the cost of maintaining a
   2-18  cash replacement reserve sufficient to service structural
   2-19  maintenance requirements reflecting the expected performance life
   2-20  of the major capital expense items of the building for the term of
   2-21  the bonded indebtedness.
   2-22        (d)  If the commission has made the necessary determination
   2-23  under Subsection (c) of this section and the purchase has been
   2-24  approved by the legislature or the Legislative Budget Board under
   2-25  Subsection (b) of this section, the Texas Public Finance Authority
   2-26  shall issue and sell bonds to finance the purchase in accordance
   2-27  with the Texas Public Finance Authority Act (Article 601d, Vernon's
    3-1  Texas Civil Statutes), and the commission may purchase the building
    3-2  in accordance with that Act and other applicable law.  The
    3-3  limitation prescribed by Section 9, Texas Public Finance Authority
    3-4  Act (Article 601d, Vernon's Texas Civil Statutes), relating to the
    3-5  location of a building for which bonds may be issued and sold does
    3-6  not apply to financing the purchase of a building under this
    3-7  section.
    3-8        (e)  Any person from whom real property or any existing
    3-9  buildings or other improvements are purchased under this section
   3-10  shall provide to the commission the name and the last known address
   3-11  of each person who:
   3-12              (1)  owns record legal title to the property,
   3-13  buildings, or other improvements; or
   3-14              (2)  owns a beneficial interest in the property,
   3-15  buildings, or other improvements through a trust, nominee, agent,
   3-16  or any other legal entity.
   3-17        (f)  When a state agency vacates leased space to move into
   3-18  space in a building purchased under this section or when the leased
   3-19  space itself is purchased under this section, the money
   3-20  specifically appropriated by the legislature or the money available
   3-21  to and budgeted by the agency for lease payments for the leased
   3-22  space for the remainder of the biennium may be used only for rental
   3-23  or installment payments for the purchased space under Section
   3-24  12(b), Texas Public Finance Authority Act (Article 601d, Vernon's
   3-25  Texas Civil Statutes), and for the payment of operating expenses
   3-26  for the purchased space that are incurred by the commission.  The
   3-27  comptroller may adopt rules for the administration of this
    4-1  subsection.
    4-2        SECTION 2.  Sections 4.15(c) and (m), State Purchasing and
    4-3  General Services Act (Article 601b, Vernon's Texas Civil Statutes),
    4-4  are amended to read as follows:
    4-5        (c)  Except as provided by this section and Article 6252-3e,
    4-6  Revised Statutes, the commission shall determine the amount of
    4-7  space in a building to be allocated to private tenants and the
    4-8  types of activities in which the tenants may engage based on the
    4-9  market for certain activities among employees and visitors in the
   4-10  building and in the vicinity of the building.  Except as provided
   4-11  by Subsection (m) <(l)> of this section, the amount of space
   4-12  allocated to private tenants may not exceed 15 percent of the total
   4-13  space in the building.  Any space leased to provide child care
   4-14  services for state employees shall not be counted in the 15 percent
   4-15  maximum.
   4-16        (m)  If the commission determines under Section 5.34 or 5.342
   4-17  of this Act that the purchase of an existing building is more
   4-18  advantageous to the state than constructing <the construction of> a
   4-19  new building or continuing to lease space for a state agency, but a
   4-20  purchase of the building would be subject to existing leases to
   4-21  private tenants that exceed 15 percent of the total space in the
   4-22  building, the commission may purchase the building subject to
   4-23  existing leases notwithstanding Subsection (c) of this section.
   4-24  When an existing lease to a private tenant expires, the commission
   4-25  may renew the lease subject to this section, including Subsection
   4-26  (c).
   4-27        SECTION 3.  Section 9(b), Texas Public Finance Authority Act
    5-1  (Article 601d, Vernon's Texas Civil Statutes), is amended to read
    5-2  as follows:
    5-3        (b)  When the acquisition or construction of a building has
    5-4  been authorized in accordance with this Act or under Section 5.34
    5-5  or 5.342, State Purchasing and General Services Act (Article 601b,
    5-6  Vernon's Texas Civil Statutes), the board shall promptly issue and
    5-7  sell bonds in the name of the authority under this Act, including
    5-8  Sections 10B and 16 of this Act, to finance the acquisition or
    5-9  construction of the building.  When the proceeds from the bond
   5-10  issuance are available, the board shall promptly deposit the
   5-11  proceeds in the state treasury under Section 23 of this Act and
   5-12  shall promptly make the determinations that are to be made by the
   5-13  board under Section 23 of this Act.
   5-14        SECTION 4.  Subsection (a), Section 10, Texas Public Finance
   5-15  Authority Act (Article 601d, Vernon's Texas Civil Statutes), as
   5-16  amended by Chapter 1244, Acts of the 71st Legislature, Regular
   5-17  Session, 1989, is amended to read as follows:
   5-18        (a)  Except as permitted by Sections 24A(b)(5) and 24A(d) of
   5-19  this Act or Section 5.34 or 5.342, State Purchasing and General
   5-20  Services Act (Article 601b, Vernon's Texas Civil Statutes), before
   5-21  the board may issue and sell bonds, the legislature by law must
   5-22  have authorized in this Act, the General Appropriations Act, or
   5-23  another Act the specific project for which the bonds are to be
   5-24  issued and sold and must have authorized the estimated cost of the
   5-25  project or the maximum amount of bonded indebtedness that may be
   5-26  incurred by the issuance and sale of bonds for the project.  In
   5-27  recognition that the cost estimates for acquisition, construction,
    6-1  repair, or renovation of a project will not be final at the time
    6-2  the project is authorized for financing and that the bonds may be
    6-3  issued to fund associated costs, including but not limited to
    6-4  reasonably required reserve funds, capitalized interest,
    6-5  administrative costs of the authority, and issuing expenses, the
    6-6  principal amount of any bond issue for that purpose may be up to
    6-7  1-1/2 the amount of the estimated cost for the project being
    6-8  financed.  For additional costs to be included in that principal
    6-9  amount, the board must affirmatively find that those costs are
   6-10  necessary and reasonable at the time the bonds are issued.
   6-11        SECTION 5.  The importance of this legislation and the
   6-12  crowded condition of the calendars in both houses create an
   6-13  emergency and an imperative public necessity that the
   6-14  constitutional rule requiring bills to be read on three several
   6-15  days in each house be suspended, and this rule is hereby suspended,
   6-16  and that this Act take effect and be in force from and after its
   6-17  passage, and it is so enacted.