16436-3:N:11/15/1999:JRC/mfp LRS1999-6094R1




HB43
By Representative Oden
RFD State Government
Rd 1 15-NOV-1999


Under existing law, surplus property owned by the state is sold to eligible entities. This bill would expand certain definitions for purposes of the surplus property division of the Alabama Department of Economic and Community Affairs; would provide that payment for purchases of surplus property must be made within a certain time period; would establish an additional account within the State Treasury to be known as the surplus federal property inventory purchase account; and would provide that the division would make available for sale to the general public certain remaining unsold surplus property.

A BILL
TO BE ENTITLED
AN ACT

Relating to the Surplus Property Division of the Alabama Department of Economic and Community Affairs; to amend Section 41-16-120, Code of Alabama 1975, to establish a definition for the term eligible entity for use throughout Article 6 of the state public contracts law, to establish a definition for the term property manager for use throughout Article 6 of the state public contracts law; to provide that the Surplus Property Division of the Department of Economic and Community Affairs shall have authority to sell surplus property to eligible entities, and to provide that payment for purchases of surplus property shall be made within 60 days following such purchase; to amend Section 41-16-122, Code of Alabama 1975, to establish and provide for a third account within the State Treasury for the operation of the surplus property function, to be known as the surplus federal property inventory purchase account, authorizing moneys to be transferred and deposited into this account from the federal surplus property account and the state surplus property account, and authorizing the purchase of surplus federal personal property by the Surplus Property Division of the Department of Economic and Community Affairs for resale by the division; and to amend Sections 41-16-120, 41-16-122, and 41-16-123, Code of Alabama 1975, to provide that the division shall have the authority to make available for sale to the general public such remaining unsold surplus property, as established by the division and set out in its published rules.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Sections 41-16-120, 41-16-122, and 41-16-123, Code of Alabama 1975, are amended to read as follows:

41-16-120.

"(a) The director of the department of economic and community affairs shall be responsible for the distribution, transfer, or disposal of all surplus personal property owned by the state and all right, title, interest, and equity in said property shall be transferred to said department for such purpose. The director may delegate to the chief of the surplus property division such supervision and control of the distribution or disposal of the aforementioned state owned surplus personal property.

"(b) As used in this article, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

"(1) DIVISION.
Surplus property division of the department of economic and community affairs.
"(2) SURPLUS PROPERTY.
That property declared by the personal property management coordinator manager of each state department, bureau, board, commission or agency to be surplus and so designated in writing to the chief of the division. All real property owned by any state department, bureau, board, commission, agency or institution, and any subdivision thereof; including, but not limited to, real property owned by any state college, university, two-year college, technical school, or other postsecondary institution of higher learning shall be handled in the manner provided in section 41-4-33, or such other provisions of law as may be appropriate but in no circumstance shall any law regarding real property acquired, owned or disposed of by the state or any subdivision thereof be amended, substituted or in other manner altered by this article.
"(3) ELIGIBLE AGENCY ENTITY.
Any city, county, board of education, volunteer fire department, civil defense agency or state department, board, bureau, commission or agency public agency or nonprofit educational or public health institution or organization that is eligible to participate as a recipient of surplus property pursuant to the Federal Property and Administrative Services Act of 1949, as amended, and that is not found to be in violation of division rules and regulations during the 12 months immediately preceding the intended purchase.
"(4) COORDINATOR PROPERTY MANAGER.
That officer or employee who shall be designated by the head of each department, board, bureau, commission, institution, corporation or agency of the state, in writing, to the division and the State Auditor's Office, to be the personal property management coordinator manager.

"(c) The coordinator property manager shall report to the surplus property division of the department of economic and community affairs any personal property declared surplus by his department, board, bureau, commission, institution, corporation, or agency and deliver said property to any place designated by the division to be the proper place for such delivery.

"(d) The division director or his designee shall be authorized to promulgate such administrative rules and regulations as deemed necessary including, but not limited to:
"(1) Promotion of surplus property;
"(2) Shipment of surplus property;
"(3) Storage of surplus property;
"(4) Length of retention of surplus property;
"(5) Public auction of surplus property;
"(6) Such other rules and regulations as, from time to time, may be determined to be necessary.

"(e) The division shall have authority to sell surplus property at fair market value, as established by the division and set out in its published rules, to incorporated cities, counties, volunteer fire departments, boards of education, civil defense agencies and state departments, boards, bureaus, commissions, or agencies eligible entities as defined in subsection (b)(3) of this section. Payment for purchases by any of the abovementioned entities shall be made within 30 days after such purchase. If payment is not made within 30 60 days after a purchase, then such purchase shall be declared void and in default, and the property shall be returned immediately by the defaulting purchaser to the division.

"Provided, however, the governing body of any municipality with a population of less than 5,000 shall be given preference on the disposal of all surplus motor vehicles owned by the state of Alabama except those motor vehicles transferred to other state agencies.

"Said municipalities shall notify the division, in writing, of type motor vehicle needed. A list shall be maintained by the division of such needs on a first come, first served basis and will be used to notify the municipalities when needed vehicles become available. Any municipality so notified shall have seven work days in which to reply to the notice and accept or refuse the available vehicle.

"(f) Any nonprofit corporation eligible entity which is authorized to purchase federal surplus property shall be authorized to purchase state surplus property under this section provided the corporation complies with all federal laws, regulations and guidelines regarding the purchase of surplus federal property.

41-16-122.

"(a) The division shall be authorized to collect fees for transfer, handling, shipping, classification, warehousing, bidding, destruction, scrapping, or other disposal of property and such other fees as may be deemed appropriate in order to insure the continued efficient operation of the surplus property function of the department.

"(b) The division shall be exclusively authorized to receive donated federal surplus property from any source, including the General Services Administration (GSA), for distribution following required federal guidelines in the same manner as state surplus property. The division shall also be exclusively authorized to purchase GSA property of any nature including, but not limited to, vehicles of any type for resale.

"(c)(b) The division shall establish two three accounts within the state treasury for the operation of the surplus property function as follows:
"(1) The first account shall be known as the federal surplus property account into which all moneys received from the distribution of federally donated surplus property shall be deposited;
"(2) The second account shall be known as the state surplus property account into which all moneys received from the distribution of state owned surplus property and any funds appropriated from the state general fund for the operation of the surplus property function shall be deposited.
"(3) The third account shall be known as the surplus federal property inventory purchase account into which moneys received by the division from the sale and distribution of surplus federal and state property and deposited into the federal surplus property account or the state surplus property account may be transferred and deposited as approved by the director, and the moneys from which account shall be used for the purchase of surplus federal property for resale within the State of Alabama, as established by the division and set out in its published rules. This account shall not be subject to appropriation spending restrictions but shall be a perpetual inventory account. Initial moneys to establish this account shall be deposited from such other department moneys as approved by the director. Transfers of moneys may be made from time to time, with approval of the director, between this account and the federal surplus property account, and between this account and the state surplus property account, subject to the needs of each account.

"(c) (d) Any moneys deposited into either any of the three aforementioned surplus property accounts may be expended from time to time by the department for operation of the surplus property function including, but not limited to, repairs, salaries, rent, travel, acquisition of exchange and surplus property, and all other necessary operating expenditures providing, however, that on September 30 any unencumbered moneys remaining in the state surplus property account, up to an amount equal to the operating expenses of the quarter ending on September 30, shall be set aside for use during the quarter beginning October 1 for the purposes heretofore stated and any remainder shall revert to the state general fund. The federal surplus property account and the surplus federal property inventory purchase account shall be a perpetual account accounts, and funds therein shall not revert to the state general fund.

41-16-123.

"This section shall apply only to that property that has been held by the division for a period of not less than 60 days from the date the property is first published in the list of surplus property, as set out in subsection (b) of Section 41-16-121, and not purchased by any agency eligible entity as set out in subsection (e) of Section 41-16-120. as follows:

"(1) All contracts made by or on behalf of the State of Alabama or a department, board, bureau, commission, institution, corporation, or agency thereof, of whatever nature for the sale or disposal of tangible personal property owned by the State of Alabama, other than the following:

"a. Alcoholic beverages.

"b. Products of the Alabama Institute for Deaf and Blind.

"c. Barter arrangements of the state prison system.

"d. Books.

"e. School supplies.

"f. Food.

"g. Property used in vocational projects.

"h. Livestock.

"i. Property owned by any state college or university, including those state two-year colleges under the control of the Board of Education of the State of Alabama, which has market value or which has trade-in value which may be credited against the cost of replacement property purchased in accordance with the Alabama competitive bid laws. For property owned by those state two-year colleges under control of the State Board of Education, the college shall file with the Chancellor of the Postsecondary Education Department, on forms provided by the chancellor, a list of the property to be sold, the auctioneer to be used, the place the property will be sold, and when and where the property will be advertised pursuant to state law. After the sale, the college shall file a report with the chancellor stating the property sold at auction, the price paid for each piece of property, the amount received from sale of each piece of property, the account to which auction receipts were deposited, a copy of the advertisement, and the commission paid to the auctioneer.

"j. Types of property, the disposal of which is otherwise provided or by law or which, by nature, are incapable of sale by auction or bid, shall be let by free and open competitive public auction or sealed bids. This subsection shall not be construed to prevent disposal by the division of property owned by a state college or university should there be an agreement between the division and the respective college or university for the disposal by free and open competitive public auction or sealed bids as described in this subsection.

"(2) Every proposal to make a sale covered by this section shall be advertised for at least two weeks in advance of the date fixed for receiving bids. The advertisement shall appear at least once a week for two consecutive weeks in a newspaper of general circulation in the county where the sale is to be made, and a copy of the proposal shall simultaneously be posted on a readily accessible public bulletin board at the main office of the chief of the division. Advertisements for bids shall state the item or items to be sold, by class and description, where the property is located and the dates, time, and place the property may be inspected. The advertisements shall further state the date, time, and place of auction or opening of sealed bids, and no bid shall be received at any time after the time advertised.

"(3) The bids shall be publicly taken or opened, in case of sealed bids, by the chief of the division and all bidders shall be entitled to be present in person or by representative.

"(4) The award of the contract shall be made to the successful bidder within 72 hours after taking of the bids.

"(5) The bid of the successful bidder so marked, as well as the bids of the unsuccessful bidders in the case of sealed bids, shall be placed on file open to public inspection and shall become matters of public record.

"(6) If a successful bidder shall fail to accept award of a contract, then he or she shall be prohibited from bidding at any sale held by the division for a period of 12 months following the failure to accept.

"(7) The chief of the division may sell all items by lot or by individual item, whichever method, in his or her opinion, will bring the highest return for the items advertised.

"(8) In the event all bids received are less than the estimated market value of the property, the chief of the division shall reject all bids and readvertise and rebid.

"(9) Nothing herein shall be construed to prevent the chief of the division from contracting with the highest bidder for any type of property to sell to that bidder all of that type of property at his or her bid price during that fiscal year providing that arrangement was included in the initial request for bids.

"(10) All property advertised pursuant to this section shall be available for inspection during the normal state office hours and at whatever place advertised for at least 48 hours prior to sale.

"(11) All property sold pursuant to this section shall be paid for by the purchaser or his or her representative by cashier's check, bank draft, certified check, U.S. currency, or notarized bank letter stating that the holder may purchase surplus property and also stating a maximum amount, at the time of acceptance of bid and award of contract, and the removal shall be not later than seven days after the awarding of the contract and the time limit of seven days shall not be applicable to sales of standing timber.

"(12) All proceeds from sales made pursuant to this section shall be paid into the State Treasury or other legally authorized depositary to be credited to the proper fund as set out in subsection (b) (c) of Section 41-16-122 prior to final distribution as set out in subdivision (16) of this section.

"(13) No officer or employee of the State of Alabama or any of its departments, boards, bureaus, commissions, institutions, corporations, or agencies shall act as agent for any bidder and the officers or employees shall not be excluded from bidding on or purchasing state property at public sale or sealed bid.

"(14) Any sale of tangible personal property or standing timber of the state made in violation of the terms of this article shall be null and void, and the person or persons responsible for the violation shall be subject to liquidated damages of not less than $1,000 one thousand dollars ($1,000) nor more than $10,000 ten thousand dollars ($10,000), which may be recovered for the State of Alabama by the Attorney General by civil action in the Circuit Court of Montgomery County. Any moneys recovered by the Attorney General under this section shall be equally divided between the Office of the Attorney General and the State General Fund.

"(15) The provisions of this article shall not apply to the sale of diseased, storm, or fire-damaged timber, nor shall it apply to timber cut on rights-of-way or easements. The timber may be sold or otherwise disposed of in a manner the Commissioner of Conservation and Natural Resources deems in the best interest of the state and no sale of diseased timber shall be made until the State Forester shall certify that the timber is diseased, and the certification shall be in written form and filed with the Director of Finance.

"(16) Whenever any surplus property that was purchased with either earmarked state funds or restricted federal funds is sold by the division, the proceeds from the sale, less administrative expenses, shall be deposited to the credit of the specific fund of the state department, commission, or agency from which the original purchase of the property was made within 30 days from receipt of the proceeds. If the source of the original purchase of the property was a General Fund appropriation, then the sale proceeds, less any administrative fee, as set out in the rules authorized to be promulgated by the division, shall be credited to the account from which it was purchased. In no event shall the administrative fee exceed 25 percent of the gross sale price.

"(17) All educational and eleemosynary institutions, not exempted in subdivision (1) of this section, governed by a board of trustees or other similar governing body, the Department of Mental Health and Mental Retardation, and State Docks Department shall be governed by the provisions of this article.

"(18) Violation of the provisions of this article shall constitute a Class B misdemeanor punishable as prescribed by law.

"(19) Following the implementation of subdivisions (1) to (18), inclusive, of this section, the division shall have the authority to make available for sale to the general public such remaining unsold surplus property, as established by the division and set out in its published rules."

Section 2. This act shall become effective immediately upon its passage and upon approval by the Governor, or its otherwise becoming law.


State Property
Contracts
Economic and Community Affairs Department
Surplus Property
Property, Real and Personal
Code Amended