(a) Before or after the award of construction contracts, or the arranging of financing, the commission and the department may negotiate a use and occupancy agreement. The state budget agency, after consulting with the state budget committee, must approve any use and occupancy agreement before the department may execute the agreement. The use and occupancy agreement:

1. (1) must set forth the terms and conditions of the use and occupancy;
2. (2) must set forth the amounts agreed to be paid at stated intervals for the use and occupancy;
3. (3) must provide that the department is not obligated to continue to pay for the use and occupancy but is instead required to vacate the facility if it is shown that the terms and conditions of the use and occupancy and the amount to be paid for the use and occupancy are unjust and unreasonable considering the value of the services and facilities thereby afforded;
4. (4) must provide that the department is required to vacate the facility if funds have not been appropriated or are not available to pay any sum agreed to be paid for use and occupancy when due;
5. (5) may provide for such costs as maintenance, operations, taxes, and insurance to be paid by the department;
6. (6) may contain an option to renew the agreement;
7. (7) may contain an option to purchase the facility for an amount equal to the amount required to pay the principal and interest of indebtedness of the commission incurred on account of the facility and expenses of the commission attributable to the facility;
8. (8) may not provide for payment of sums for use and occupancy until the construction of the facility has been completed and the facility is available for use and occupancy by the department; and
9. (9) may contain any other provisions agreeable to the commission and the department.

(b) In determining just and reasonable amounts to be paid for the use and occupancy of the facility under subsection (a)(3), the commission shall impose and collect amounts that in the aggregate will be sufficient to:

1. (1) pay the expenses of operation, maintenance, and repair of the facility, to the extent that the expenses are not otherwise provided; and
2. (2) leave a balance of revenues from the facility to pay the principal and interest (including any reserve or sinking funds) on bonds or loans as they become due and retire them at or before maturity.

(c) The department may negotiate and execute a use and occupancy agreement for all or any state agencies or branches of state government.

As added by Acts 1977, P.L.31, SEC.1. Amended by P.L.27-1985, SEC.9; P.L.15-1986, SEC.2.