Public Property  

Title 22 | Chapter 2 | Subchapter 114




22-2-114. Leasing responsibilities.

(a) It is the intent of the General Assembly that state agencies be housed, whenever possible, in public buildings as soon as space and facilities in public buildings are available and that the acquisition and granting of leasehold interests in land be regulated and supervised by the Arkansas Building Authority. The authority and all other state agencies are authorized and directed to implement that intent as follows: (1) (A) The authority is given the authority and responsibility to act as the leasing agent for all state agencies and component parts thereof, acting either as lessor or lessee, and to act as the agent for leasing space in all public buildings located in the State of Arkansas.

(B) In addition, the authority is given the authority and responsibility to act as the leasing agent for any nonagency state entity if requested in writing by a nonagency state entity to act in that manner and if the responsibility for the services is accepted in writing by the authority.

(C)(i) After July 1, 1975, no state agency shall enter into or renew or otherwise negotiate a lease between itself as lessor or lessee and a nongovernmental or other government lessor or lessee.

(ii) The authority shall determine the needs of the state agency, locate appropriate rental space, and act as the agent for the state agency in negotiating the lease for the rental space;

(2) All state agencies and component parts thereof, when requested by the authority, shall execute and enter into leases with the authority for the leasing or renting of space and facilities in any public buildings. The leases may be upon such conditions, for such terms, for such rentals, and may contain such other provisions as may be determined by the Arkansas Building Authority Council and the state agency involved to be appropriate and in the best interests of all concerned;

(3) Any state agency or component part thereof needing new or additional space shall notify the authority, and the authority shall prepare a lease for the space based upon the standards and criteria as adopted by the council. If space is available in a public building, the lease will be negotiated for placement in the public building;

(4) If the Leasing Section of the authority determines that adequate space is not available in public buildings, it shall act as provided in subdivision (a)(1) of this section to obtain adequate space from a privately owned facility;

(5)(A)(i) The council shall adopt standards and criteria for the leasing and utilization of space and the allocation of space to state agencies.

(ii) These standards and criteria shall be used as a basis for all planning, leasing of space, allocation of space to state agencies, or advising state agencies on leasing considerations.

(iii) These standards and criteria shall include, but not be limited to, equipment, work stations, private offices, conference rooms, reception areas, general equipment, vaults, and the necessary space to ensure adequate and effective circulation within and access to all state agencies, including parking and traffic patterns.

(B) In cities and towns having a population of less than twenty-five thousand (25,000) according to the last federal decennial census, for those state agencies providing direct public access services, preference shall be granted to lease space located in existing buildings in the central business district, as defined by the locality's planning commission, or, in the absence thereof, by the municipality's governing body, except in cases where location within the central business district would impair or restrict the intent of the services being provided to the public or the State’s proximity to other state or nongovernmental services or where rental rates justify other locations;

(6) Leases as to office space, buildings, structures, parking lots, and grounds from private individuals, firms, and corporations by state agencies and component parts thereof shall be on a standard lease form approved by the council. The standard lease form shall contain all terms and conditions deemed necessary based on the type and purpose of the leased property. The council also shall adopt a standard lease form to be used by state agencies when subleasing from the authority. Both standard lease forms shall be approved as to the legality of form and content by the Attorney General before becoming a requirement; and

(7) The authority shall obtain and maintain files of all leases in existence from and after July 1, 1975, to which a state agency or component part thereof is a party.

(b) All leases referred to in this section and all covenants and agreements contained therein shall be binding in all respects upon the parties thereto and their successors, and all the provisions thereof shall be enforceable by mandamus and other remedies provided by law.

(c) This section shall not apply to the State Highway Commission, the Arkansas State Highway and Transportation Department, or the Arkansas State Game and Fish Commission.

History. Acts 1975, No. 716, § 8; 1979, No. 411, § 1; A.S.A. 1947, § 5-1025; Acts 1999, No. 859, § 1; 2001, No. 238, § 1.

Arkansas Building Authority (ABA) was established under ACA §22-2-104. Guidance on other areas of responsibility of ABA can be found in R1-19-4-524, "Construction and Permanent Improvements," and R1-19-4-1415, "Procedures for Approval of Design Professionals."

R1-22-2-114 Leases of Office Space, Buildings, Structures, Parking Lots and Grounds

Agencies should review lease contracts before signing and ensure that they are not committing their agencies to make lease payments beyond the end of a biennial period. The contract should include language to allow termination of the lease in the event sufficient appropriations or funding does not exist to fulfill the obligation.

Arkansas Building Authority (ABA) is specifically given the authority to act as the leasing agent for state agencies for leases of space, buildings, structures, parking lots and grounds. Agencies are prohibited from negotiating directly with the Lessor or Lessee. ACA §22-2-114

"state agency" is defined under the authority of ABA as any board or commission, agency, department, institution of higher education including colleges, universities, and vocational-technical schools or other state institutions. "State agency" shall not include any county, municipality, school district, subdivision, or unit thereof of the State of Arkansas, the Arkansas State Highway and Transportation Department, the State Highway Commission, Arkansas State Game and Fish Commission or asset held as an investment of any retirement system. ACA §22-2-102, §22-2-103(a), and §22-2-114

While Constitutional Offices are not defined as a state agency under Ark. Code Ann. 22-2-114(a) (1) (B), ABA has the authority to enter into agreements with other state entities, such as Constitutional Offices to act as their leasing authority.

Leasing regulations may be found on the ABA web site and are referenced as §5-100 through §5-104 within the ABA Minimum Standards and Criteria. Questions regarding lease issues other than accounting should be directed to the ABA Real Estate Services Administrator. Access to the ABA web site can be found at: ABA will provide a document to the agency with any proposed lease that sets out clearly the terms of the lease that will indicate the following determinations:

1. Whether the ownership of the property transfers to the lessee at the end of the lease term.

2. Whether the lease contains a bargain purchase option.

3. Whether the lease term is equal to 75% or more of the life of the leased asset. The life of a used leased asset will be calculated using 75% of the suggested useful life in the State’s capital assets policy.

4. Whether the present value of rental and other minimum lease payments equals or exceeds 90% of the fair market value amount of the leased asset. ABA shall require the lessor to obtain an appraisal to determine the fair market value of the property or calculate the fair market value. An appraisal is good for two years.

If the determination is made that the lease is in fact a capital lease, the Department of Finance and Administration–Office of Accounting will provide an amortization schedule to the agencies and assist with proper accounting.

PLEASE NOTE: For detailed accounting procedures refer to the Leases of Tangible Personal Property (Equipment) Section R1-19-11-238.

22-8-102. Leasing and renting of vehicles by state agencies.

(a) For purposes of this section: (1) "Lease" means obtaining the use of a motor vehicle from any source for a monetary fee, for a period of thirty-one (31) days or more; and

(2) "Rental" means obtaining the use of a motor vehicle from any source for a monetary fee for a period of thirty (30) days or less.

(b)(1) Before any state agency shall lease any motor vehicle or renew any existing lease for a motor vehicle, the agency shall submit a written request to the State Procurement Director identifying the motor vehicles sought to be leased by the agency and all facts and circumstances the director may request to enable him or her to determine the economics, need, and feasibility of leasing the motor vehicle.

(2) Upon receipt, the director shall review the request to lease the motor vehicle, and if he or she determines that the lease is in the best interest of the State of Arkansas and that the agency has adequate funds to pay the lease, he or she may approve the request but only if he or she has first received the approval of the Legislative Council.

(3) After receiving the approval of the Legislative Council, the director shall stamp his or her approval on the request and return it to the state agency, which may then proceed to enter into the lease as proposed and approved by the director.

(4) In emergency situations, the director may approve a temporary lease of a motor vehicle, not to exceed thirty (30) days, but only if he or she has sought the advice of the Chair of the Legislative Council and scheduled the temporary lease of a motor vehicle for consideration at the next meeting of the Legislative Council.

(c) If the director disapproves a proposed lease of a motor vehicle, he or she shall stamp his or her disapproval on the request and return it to the state agency, and it shall be unlawful for the state agency to proceed to lease the motor vehicle.

History. Acts 1977, No. 455, § 3; A.S.A. 1947, § 14-526; Acts 2001, No. 588, § 1.

R1-22-8-102. Leasing and renting of vehicles by state agencies

Executive branch agencies will continue to submit State Vehicle Requests to the DFA-Office of Information Services (OIS) as outlined in the Arkansas State Vehicle Fleet Management Guide at:

When the request involves a lease, the "lease justification letter" addressed to the State Procurement Director will also be submitted with the vehicle request to OIS. If the vehicle request is tentatively approved by OIS, a copy of the request and the requesting agency’s "lease justification letter" will be forwarded to the Office of State Procurement (OSP). The State Procurement Director will evaluate and process the lease request in accordance with the State Procurement Law and ACA 22-8-102. If the lease is approved by the Legislative Council and the State Procurement Director, OSP will notify OIS and the State Vehicle Request will be given final approval and processed. A State Vehicle Request involving a lease cannot receive final approval until the lease itself has been reviewed and approved.