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First Substitute S.B. 68

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Feb 26, 2013 at 5:16 PM by lpoole. -->

Senator Todd Weiler proposes the following substitute bill:


             1     
STATE SURPLUS PROPERTY PROGRAM AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Todd Weiler

             5     
House Sponsor: Brad R. Wilson

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill amends Title 63A, Chapter 2, Part 4, Surplus Property Service.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    modifies, and places limitations on, rulemaking authority of the Division of
             14      Purchasing and General Services;
             15          .    permits an agency to directly transfer surplus property to another agency without
             16      obtaining approval from the division;
             17          .    requires the division to contract with a person in the private sector to administer the
             18      majority of the state surplus property program;
             19          .    modifies provisions relating to assessing charges or fees to an agency for the
             20      acquisition, warehousing, distribution, sale, transfer, or handling of state surplus
             21      property;
             22          .    describes the duties of, and the requirements imposed on, the state surplus property
             23      contractor;
             24          .    grants rulemaking authority to the division to permit an agency to donate state
             25      surplus property to a charitable organization under certain circumstances or to



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             26
     dispose of, or destroy surplus property as waste; and
             27          .    makes technical changes.
             28      Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          63A-2-101.5, as enacted by Laws of Utah 2011, Chapter 207
             35          63A-2-103, as last amended by Laws of Utah 2011, Chapter 207
             36          63A-2-401, as last amended by Laws of Utah 2012, Chapters 212 and 369
             37          63A-2-404, as renumbered and amended by Laws of Utah 2011, Chapter 207
             38          63A-2-405, as renumbered and amended by Laws of Utah 2011, Chapter 207
             39          63A-2-408, as renumbered and amended by Laws of Utah 2011, Chapter 207
             40          63A-2-409, as enacted by Laws of Utah 2012, Chapter 427
             41      ENACTS:
             42          63A-2-410, Utah Code Annotated 1953
             43          63A-2-411, Utah Code Annotated 1953
             44      REPEALS:
             45          63A-2-403, as renumbered and amended by Laws of Utah 2011, Chapter 207
             46     

             47      Be it enacted by the Legislature of the state of Utah:
             48          Section 1. Section 63A-2-101.5 is amended to read:
             49           63A-2-101.5. Definitions.
             50          As used in this chapter:
             51          (1) "Division" means the Division of Purchasing and General Services created under
             52      Section 63A-2-101 .
             53          (2) "Federal surplus property" means surplus property of the federal government of the
             54      United States.
             55          [(2)] (3) "Information technology equipment" means equipment that is designed to
             56      electronically manipulate, store, or transfer a form of data.



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Senate 2nd Reading Amendments 2-26-2013 lp/trv
             57
         [(3)] (4) "Inventory property" means property in the possession of the division that is
             58      available for purchase by an agency or the public.
             59          [(4)] (5) "Judicial district" means a geographic district established by Section
             60      78A-1-102 .
             61          [(5)] (6) "Person with a disability" means a person with a severe, chronic disability
             62      that:
             63          (a) is attributable to a mental or physical impairment or a combination of mental and
             64      physical impairments; and
             65          (b) is likely to continue indefinitely.
             66          [(6)] (7) "Personal handheld electronic device":
             67          (a) means an electronic device that is designed for handheld use and permits the user to
             68      store or access information, the primary value of which is specific to the user of the device; and
             69          (b) includes a mobile phone, pocket personal computer, personal digital assistant, or
             70      similar device.
             71          [(7)] (8) "Property act" means the Federal Property and Administrative Services Act of
             72      1949, 40 U.S.C. Sec. 549.
             73          (9) "State surplus property" means surplus property that is not:
             74          (a) a vehicle; or
             75          (b) federal surplus property.
             76          (10) "State surplus property contractor" means the person described in Section
             77      63A-2-410 that the state contracts with to administer the state's program for the disposition of
             78      state surplus property.
             79          [(8)] (11) (a) "Surplus property" means property that an agency:
             80          (i) intends [for disposal] to divest itself of; and
             81          (ii) has acquired by purchase, seizure, or donation.
             82          (b) "Surplus property" does not include:
             83          (i) real property; S. [ or ]
             83a          (ii) assets of the School and Institutional Trust Lands Administration; or
             84           [ (ii) ] (iii) .S an aluminum can or an item made primarily of paper, plastic, or cardboard
             84a      that is:
             85          (A) discarded; and
             86          (B) recyclable.
             87          [(9) "Transfer" means transfer of surplus property without cash consideration except



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     for a fee described in Subsection 63A-2-401 (3)(c).]
             89          Section 2. Section 63A-2-103 is amended to read:
             90           63A-2-103. General services provided -- Subscription by state departments, state
             91      agencies, and certain local governmental entities -- Fee schedule.
             92          (1) [(a)] The director of the division:
             93          (a) shall operate, manage, and maintain:
             94          (i) a central mailing service; and
             95          (ii) an electronic central store system for procuring goods and services; [and]
             96          [(iii) the state]
             97          (b) shall, except when a state surplus property contractor administers the state's
             98      program for disposition of state surplus property, operate, manage, and maintain the state
             99      surplus property program;
             100          (c) shall, when a state surplus property contractor administers the state's program for
             101      disposition of state surplus property, oversee the state surplus property contractor's
             102      administration of the state surplus property program in accordance with Part 4, Surplus
             103      Property Services[.]; and
             104          [(b) The director]
             105          (d) may establish microfilming, duplicating, printing, addressograph, and other central
             106      services.
             107          (2) (a) Each state department and agency shall subscribe to all of the services described
             108      in Subsections (1)(a)(i) and (ii), unless the director delegates the director's authority to a
             109      department or agency under Section 63A-2-104 .
             110          (b) An institution of higher education, school district, or political subdivision of the
             111      state may subscribe to one or more of the services described in Subsections (1)(a)(i) and (ii).
             112          (3) The director shall:
             113          (a) except as provided in Part 4, Surplus Property Services, prescribe a schedule of fees
             114      to be charged for all services provided by the division to any department or agency after the
             115      director:
             116          (i) submits the proposed rate, fees, or other amounts for services provided by the
             117      division's internal service fund to the Rate Committee established in Section 63A-1-114 ; and
             118          (ii) obtains the approval of the Legislature, as required by Sections 63J-1-410 and



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             119
     63J-1-504 ;
             120          (b) when practicable, ensure that the fees are approximately equal to the cost of
             121      providing the services; and
             122          (c) periodically conduct a market analysis of fees, which analysis shall include
             123      comparison of the division's rates with the fees of other public or private sector providers
             124      where comparable services and rates are reasonably available.
             125          Section 3. Section 63A-2-401 is amended to read:
             126           63A-2-401. Utah surplus property program -- Definitions -- Administration.
             127          (1) As used in this part, "agency" means:
             128          (a) the Utah Departments of Administrative Services, Agriculture and Food, Alcoholic
             129      Beverage Control, Commerce, Heritage and Arts, Corrections, Workforce Services, Health,
             130      Human Resource Management, Human Services, Insurance, Natural Resources, Public Safety,
             131      Technology Services, and Transportation and the Labor Commission;
             132          (b) the Utah Offices of the Auditor, Attorney General, Court Administrator, Utah
             133      Office for Victims of Crime, Rehabilitation, and Treasurer;
             134          (c) the Public Service Commission and State Tax Commission;
             135          (d) the State Boards of Education, Pardons and Parole, and Regents;
             136          (e) the Career Service Review Office;
             137          (f) other state agencies designated by the governor;
             138          (g) the legislative branch, the judicial branch, and the State Board of Regents; and
             139          (h) an institution of higher education, its president, and its board of trustees for
             140      purposes of Section 63A-2-402 .
             141          (2) (a) The division shall make rules establishing a [state] surplus property program
             142      that meets the requirements of this chapter by following the procedures and requirements of
             143      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             144          (b) The rules shall include:
             145          [(i) a requirement prohibiting the transfer of surplus property from one agency to
             146      another agency without written approval from the division;]
             147          (i) procedures and requirements for transferring surplus property directly from one
             148      agency to another agency;
             149          (ii) procedures and requirements governing division administration requirements that



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     an agency must follow;
             151          (iii) requirements governing purchase priorities;
             152          (iv) requirements governing accounting, reimbursement, and payment procedures;
             153          (v) except as provided in Subsection (2)(e), procedures for collecting bad debts;
             154          (vi) requirements and procedures for [disposing] the disposition of firearms;
             155          (vii) except as provided in Subsection (2)(e), the elements of the rates or other charges
             156      assessed by the division for services and handling;
             157          (viii) except as provided in Subsection (2)(e), procedures governing the timing and
             158      location of public sales of [inventory] surplus property; and
             159          (ix) procedures governing the transfer of information technology equipment by state
             160      agencies directly to public schools.
             161          (c) Except as it relates to a vehicle or federal surplus property, the rules described in
             162      Subsection (2)(b)(i) may not require approval by the division, the director of the division, or
             163      any other person, for an agency to transfer surplus property directly to another agency.
             164          [(c)] (d) The division shall report all transfers of information technology equipment by
             165      state agencies to public schools to the Legislative Education Interim Committee at the end of
             166      each fiscal year.
             167          (e) When a state surplus property contractor administers the state's program for
             168      disposition of state surplus property:
             169          (i) rules made under the rulemaking authority described in Subsections (2)(b)(v) and
             170      (vii) apply only to surplus vehicles; and
             171          (ii) rules made under the rulemaking authority described in Subsection (2)(b)(viii)
             172      apply only to surplus vehicles and federal surplus property.
             173          (3) In creating and administering the program, as it relates to surplus vehicles and
             174      federal surplus property only, the division shall[: (a)], when conditions, inventory, and demand
             175      permit:
             176          [(i)] (a) establish facilities to store inventory property at geographically dispersed
             177      locations throughout the state; and
             178          [(ii)] (b) hold public sales of property at geographically dispersed locations throughout
             179      the state;
             180          (c) except as provided in Subsection (3)(d):



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             181
         [(b)] (i) establish, after consultation with the agency requesting the sale of surplus
             182      property, the price at which the surplus property shall be sold; and
             183          [(c)] (ii) transfer proceeds arising from the sale of state surplus property to the agency
             184      requesting the sale in accordance with Title 63J, Chapter 1, Budgetary Procedures Act, less a
             185      fee approved in accordance with Sections 63A-1-114 and 63J-1-410 , to pay the costs of
             186      administering the surplus property program.
             187          (d) When a state surplus property contractor administers the state's program for
             188      disposition of state surplus property, the provisions on Subsection (3)(c) only apply to surplus
             189      vehicles.
             190          (4) [Unless specifically exempted from] Except as otherwise expressly provided in this
             191      part, or by explicit reference to this part, each state agency shall [dispose of] divest and acquire
             192      surplus property only by participating in the division's program.
             193          Section 4. Section 63A-2-404 is amended to read:
             194           63A-2-404. Acquisition of federal surplus property -- Powers and duties --
             195      Advisory boards and committees -- Expenditures and contracts -- Clearinghouse of
             196      information -- Reports.
             197          (1) The division may:
             198          (a) acquire from the United States under and in conformance with the property act any
             199      federal surplus property under the control of any department or agency of the United States that
             200      is usable and necessary for any purposes authorized by federal law;
             201          (b) warehouse [that] federal surplus property if it is not real property; and
             202          (c) distribute [that] federal surplus property within this state to:
             203          (i) tax-supported medical institutions, hospitals, clinics, and health centers;
             204          (ii) school systems, schools, colleges, and universities;
             205          (iii) other nonprofit medical institutions, hospitals, clinics, health centers, schools,
             206      colleges, and universities that are exempt from taxation under Section 501(c)(3) of the United
             207      States Internal Revenue Code of 1954;
             208          (iv) civil defense organizations;
             209          (v) political subdivisions; and
             210          (vi) any other types of institutions or activities that are eligible to acquire the federal
             211      surplus property under federal law.



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             212
         (2) The division may:
             213          (a) receive applications from eligible health and educational institutions for the
             214      acquisition of federal surplus real property;
             215          (b) investigate the applications;
             216          (c) obtain opinions about those applications from the appropriate health or educational
             217      authorities of this state;
             218          (d) make recommendations about the need of the applicant for the property, the merits
             219      of the applicant's proposed use of the property, and the suitability of the property for those
             220      purposes; and
             221          (e) otherwise assist in the processing of those applications for acquisition of real and
             222      related personal property of the United States under the property act.
             223          (3) The division may appoint advisory boards or committees.
             224          (4) If required by law or regulation of the United States in connection with the
             225      [disposal] disposition of surplus real property and the receipt, warehousing, and distribution of
             226      surplus personal property received by the division from the United States, the division may:
             227          (a) make certifications, take action, and make expenditures;
             228          (b) enter into contracts, agreements, and undertakings for and in the name of the state
             229      including cooperative agreements with the federal agencies providing for use by and exchange
             230      between them of the property, facilities, personnel, and services of each by the other;
             231          (c) require reports; and
             232          (d) make investigations.
             233          (5) The division shall act as the clearinghouse of information for public and private
             234      nonprofit institutions, organizations, and agencies eligible to acquire federal surplus real
             235      property to:
             236          (a) locate both real and personal property available for acquisition from the United
             237      States;
             238          (b) ascertain the terms and conditions under which that property may be obtained;
             239          (c) receive requests from those institutions, organizations, and agencies and transmit to
             240      them all available information in reference to that property; and
             241          (d) aid and assist those institutions, organizations, and agencies in every way possible
             242      in those acquisitions or transactions.



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             243
         (6) The division shall:
             244          (a) cooperate with the departments or agencies of the United States;
             245          (b) file a state plan of operation;
             246          (c) operate according to that plan;
             247          (d) take the actions necessary to meet the minimum standards prescribed by the
             248      property act;
             249          (e) make any reports required by the United States or any of its departments or
             250      agencies; and
             251          (f) comply with the laws of the United States and the regulations of any of the
             252      departments or agencies of the United States governing the allocation of, transfer of, use of, or
             253      accounting for any property donated to the state.
             254          Section 5. Section 63A-2-405 is amended to read:
             255           63A-2-405. Charges and fees assessed for surplus property.
             256          (1) If approved in accordance with Sections 63A-1-114 and 63J-1-410 , the division:
             257          [(1)] (a) may assess charges and fees for the acquisition, warehousing, distribution, or
             258      transfer of [any property of the United States] federal surplus property for educational, public
             259      health, or civil defense purposes, including research, only if those charges and fees are
             260      reasonably related to the division's care and handling costs of acquiring, receipting,
             261      warehousing, distributing, or transferring the federal surplus property; and
             262          [(2)] (b) may reduce or eliminate charges on federal surplus property that is found not
             263      to be usable for the purpose for which it was procured[; and].
             264          [(3) shall limit the charges and fees assessed against real property to the reasonable
             265      administrative costs that the division incurred in effecting transfer.]
             266          (2) When there is a state surplus property contractor:
             267          (a) the division may not assess charges or fees to an agency for the acquisition,
             268      warehousing, distribution, sale, transfer, or handling of state surplus property; and
             269          (b) unless expressly provided otherwise in the contract between the division and the
             270      state surplus contractor, the state surplus contractor may not assess charges or fees to an agency
             271      for the acquisition, warehousing, distribution, sale, transfer, or handling of state surplus
             272      property.
             273          Section 6. Section 63A-2-408 is amended to read:



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             274
          63A-2-408. Authority of state or local subdivision to receive property --
             275      Revocation of authority of officer.
             276          (1) Notwithstanding any other provision of law, the governing board or the executive
             277      director of any state department, instrumentality, or agency or the legislative body of any city,
             278      county, school district, or other political subdivision may by order or resolution give any officer
             279      or employee the authority to:
             280          (a) as it relates to federal surplus property;
             281          [(a)] (i) secure the transfer to it of federal surplus property through the division under
             282      [the] the property act; and
             283          [(b)] (ii) obligate the state or political subdivision and its funds to the extent necessary
             284      to comply with the terms and conditions of those transfers[.]; and
             285          (b) as it relates to surplus property other than federal surplus property:
             286          (i) secure the direct transfer of surplus property to it; and
             287          (ii) obligate the state or political subdivision and its funds to the extent necessary to
             288      comply with the terms and conditions of those transfers.
             289          (2) The authority conferred upon any officer or employee by an order or resolution
             290      remains in effect until:
             291          (a) the order or resolution is revoked; and
             292          (b) the division has received written notice of the revocation.
             293          Section 7. Section 63A-2-409 is amended to read:
             294           63A-2-409. Disposition of certain surplus property by the legislative branch.
             295          This part does not apply to [disposal] disposition by the legislative branch of surplus
             296      property that is information technology equipment or a personal handheld electronic device, if
             297      the Legislative Management Committee, by rule, establishes its own policy for [disposal]
             298      disposition, by the legislative branch, of surplus property that is information technology
             299      equipment or a personal handheld electronic device.
             300          Section 8. Section 63A-2-410 is enacted to read:
             301          63A-2-410. State surplus property contractor -- Deposit of proceeds.
             302          (1) (a) The division shall, after issuing a request for proposals, award a contract to a
             303      person in the private sector to administer the state's program for disposition of state surplus
             304      property.



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             305
         (b) The request for proposals shall seek:
             306          (i) proposals that provide that the sole source of payment to the contractor will be a
             307      percentage of the amount for which the contractor sells state surplus property; and
             308          (ii) proposals that provide for alternative methods of payment.
             309          (2) The contract shall:
             310          (a) provide that the contractor may sell state surplus property by auction, bid, or other
             311      manner designed to get the best price available for the state surplus property;
             312          (b) prohibit the contractor from engaging in the sale of state surplus property in a
             313      manner that would constitute a conflict of interest;
             314          (c) require regular and detailed accounting to the division of:
             315          (i) the receipt and sale of state surplus property; and
             316          (ii) the receipt and payment of funds by the contractor; and
             317          (d) ensure public transparency regarding the sale of state surplus property by requiring
             318      that the contractor:
             319          (i) post online information related to a sale or attempted sale of state surplus property,
             320      including:
             321          (A) a description of the state surplus property;
             322          (B) the agency that requested sale of the surplus property;
             323          (C) the price at which the surplus property was sold; and
             324          (D) the date that the surplus property was sold; and
             325          (ii) post the information described in Subsection (2)(c)(i):
             326          (A) within a time frame described in the contract; and
             327          (B) for a period of time described in the contract.
             328          (3) The contractor may not:
             329          (a) unless expressly provided otherwise in the contract between the division and the
             330      contractor:
             331          (i) be required to store state surplus property; or
             332          (ii) charge for the storage of state surplus property;
             333          (b) administer the direct transfer of state surplus property from one agency to another
             334      agency;
             335          (c) administer the disposal or destruction, by an agency, of state surplus property as



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             336
     waste;
             337          (d) administer the donation by an agency of state surplus property to a charity; or
             338          (e) administer the disposition of state surplus property under Section 63A-2-406 ,
             339      63A-2-407 , 63A-2-408 , or 63A-2-409 .
             340          (4) The division shall, after paying the amount owed to the state surplus property
             341      contractor, transfer the remaining money received for the sale of a particular item of state
             342      surplus property to the agency that requested the sale of the particular item of state surplus
             343      property, in accordance with Title 63J, Chapter 1, Budgetary Procedures Act.
             344          (5) The division shall:
             345          (a) on or before August 31, 2013, give an oral report to the Government Operations
             346      Interim Committee regarding:
             347          (i) the division's progress and plans in relation to issuing the request for proposals
             348      described in this section; and
             349          (ii) rules passed or proposed, on or after May 14, 2013, in relation to the state surplus
             350      property program; and
             351          (a) (i) issue the request for proposals described in this section on or before September
             352      30, 2013; or
             353          (ii) in November 2013, give an oral report to the Government Operations Interim
             354      Committee, explaining why the request for proposals was not issued on or before September
             355      30, 2013.
             356          Section 9. Section 63A-2-411 is enacted to read:
             357          63A-2-411. Donation of state surplus property -- Disposal or destruction of state
             358      surplus property as waste.
             359          The division shall make rules, in accordance with Title 63G, Chapter 3, Utah
             360      Administrative Rulemaking Act, that permit an agency to destroy, dispose of as waste, or
             361      donate to a charitable organization state surplus property, if:
             362          (1) the state surplus property is worth less than $30;
             363          (2) the state surplus property fails to sell at auction;
             364          (3) the cost of selling the state surplus property is greater than or equal to the value of
             365      the state surplus property;
             366          (4) the state surplus property is no longer usable;



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             367
         (5) the state surplus property is damaged and cannot be repaired;
             368          (6) the state surplus property is damaged and the cost of repair is greater than or equal
             369      to the value of the state surplus property in a repaired state; or
             370          (7) the state surplus property can be replaced for less than the cost of repairing the state
             371      surplus property.
             372          Section 10. Repealer.
             373          This bill repeals:
             374          Section 63A-2-403, Methods of disposition of surplus authorized.


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