KRS § 56.813 — KY Code / Title VII / Chapter 56 / Section 56.813
56.813 Request for additional space -- Improvements in premises -- Use of funds to improve leased building that state will own at end of lease term -- Amendment or modification of leases -- Emergency modification -- Register of proposed lease modifications
Status: in_force

56.813 Request for additional space -- Improvements in premises -- Use of funds to

improve leased building that state will own at end of lease term -- Amendment

or modification of leases -- Emergency modification -- Register of proposed

lease modifications.

(1) An agency may request that the Finance and Administration Cabinet provide

additional space in a building in which space is already leased by the state. If the

cabinet determines there is need for more space, the current lease may be amended,

with agreement of the lessor, to increase the leased space. However, the rental rate

paid for the additional space shall not exceed the square foot rental rate fixed by the

original lease. A lease may also be modified with agreement of the lessor to

decrease the number of square feet leased and the rent shall be appropriately

reduced.

(2) (a) 1. When an agency occupying leased premises desires improvements in the

premises, the agency shall obtain the cabinet secretary's approval for the

improvements at an estimated cost before the lessor makes the

improvements.

2. If the improvements cost more than ten thousand dollars ($10,000), the

agency shall obtain the cabinet secretary's approval for the rent increase

necessary to amortize the cost of the improvements in full over the life

of the lease. No other financing method shall be used.

3. a. If the improvements cost ten thousand dollars ($10,000) or less,

the agency shall obtain the cabinet secretary's approval for the

dollar amount necessary to pay for the cost of the improvements at

direct state expense or the rent increase necessary to amortize the

cost of the improvements in full over a period of time which shall

run no longer that the life of the lease. No other financing method

shall be used. No improvement shall be artificially divided so as to

qualify under the provisions of this subparagraph.

b. Any improvements approved under this subparagraph with a cost

between one thousand dollars ($1,000) and ten thousand dollars

($10,000) shall be reported semiannually by the Finance and

Administration Cabinet to the Capital Projects and Bond Oversight

Committee established by KRS 45.790. The report shall include,

for each project, the agency for which the improvement was made,

the cost, a description of the work performed, and the property

identification number.

(b) Any rent increase necessary to amortize a cost pursuant to paragraph (a) of

this subsection shall not extend beyond the period required to accomplish the

agreed amortization.

(c) The cabinet secretary shall amend a lease to reflect a rent increase necessary to

amortize a cost pursuant to paragraphs (a) and (b) of this subsection, and the

amendment shall state that the rent increase is for the purpose of amortizing

this cost.

(d) For any building leased by a state agency that the state will own upon

termination of the lease or expiration of the lease term, and for which no

modification of the lease may be made to amortize improvements to the

property, the cabinet may use funds provided by state agencies to improve,

renovate, or refit the building to better satisfy the needs of the agencies

occupying the leased property up to six hundred thousand dollars ($600,000)

without additional approval of the General Assembly.

(3) Any modification to an existing lease which is required because of an emergency as

described at KRS 56.805(3) shall be made pursuant to KRS 56.805(3) and (4) and

this section.

(4) The Division of Real Properties, within the Department for Facilities and Support

Services, shall maintain a register of all proposed lease modifications which, if

approved, will result in the payment of a square foot rate for the leased space which

is greater than the square foot rate contained in the original lease. All such proposed

modifications shall be filed and kept in the register for public inspection and

comment for thirty (30) calendar days. Comments received from the public during

the period shall be considered before the lease modification is executed by the

parties and becomes binding against the Commonwealth. After receiving

comments, if the secretary determines that the proposed modifications are not in the

interest of the Commonwealth, he or she may require the agency to continue

operation in its present space or cancel the lease and seek more suitable space. The

lessor, under any lease proposed to be modified as contemplated therein, shall be

advised of the requirements of this subsection and cautioned that the

Commonwealth shall have no liability for any action undertaken by the lessor in

anticipation of, but prior to execution of, the modifications of the lease.