1     
STATE SURPLUS PROPERTY AMENDMENTS

2     
2015 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Todd Weiler

5     
House Sponsor: Brad M. Daw

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to state surplus property.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies definitions applicable to the Division of Purchasing and General Services
13     and state surplus property;
14          ▸     modifies provisions relating to the administration of the state surplus property
15     program;
16          ▸     modifies property that is included within the definition of state surplus property; and
17          ▸     modifies provisions relating to the disposition of state surplus property with a
18     minimal value.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          None
23     Utah Code Sections Affected:
24     AMENDS:
25          63A-2-101.5, as last amended by Laws of Utah 2013, Chapter 151
26          63A-2-102, as last amended by Laws of Utah 1997, Chapter 252
27          63A-2-103, as last amended by Laws of Utah 2013, Chapter 151
28          63A-2-104, as last amended by Laws of Utah 1997, Chapter 252
29          63A-2-105, as last amended by Laws of Utah 1997, Chapter 252
30          63A-2-401, as last amended by Laws of Utah 2013, Chapters 49 and 151
31          63A-2-405, as last amended by Laws of Utah 2013, Chapter 151
32          63A-2-408, as last amended by Laws of Utah 2013, Chapter 151
33          63A-2-409, as last amended by Laws of Utah 2013, Chapters 15 and 151
34          63A-2-410, as enacted by Laws of Utah 2013, Chapter 151
35     REPEALS AND REENACTS:
36          63A-2-411, as enacted by Laws of Utah 2013, Chapter 151
37     REPEALS:
38          63A-2-406, as renumbered and amended by Laws of Utah 2011, Chapter 207
39          63A-2-407, as renumbered and amended by Laws of Utah 2011, Chapter 207
40     

41     Be it enacted by the Legislature of the state of Utah:
42          Section 1. Section 63A-2-101.5 is amended to read:
43          63A-2-101.5. Definitions.
44          As used in this chapter:
45          (1) "Division" means the Division of Purchasing and General Services created under
46     Section 63A-2-101.
47          (2) "Federal surplus property" means surplus property of the federal government of the
48     United States.
49          (3) "Information technology equipment" means equipment [that is designed to
50     electronically manipulate, store, or transfer a form of data.] capable of downloading, accessing,
51     manipulating, storing, or transferring electronic data, including:
52          [(4) "Inventory property" means property in the possession of the division that is
53     available for purchase by an agency or the public.]
54          [(5) "Judicial district" means a geographic district established by Section 78A-1-102.]
55          (a) a computer;
56          (b) a smart phone, electronic tablet, personal digital assistant, or other portable
57     electronic device;
58          (c) a digital copier or multifunction printer;
59          (d) a flash drive or other portable electronic data storage device;
60          (e) a server; and
61          (f) any other similar device.
62          [(6)] (4) "Person with a disability" means a person with a severe, chronic disability
63     that:
64          (a) is attributable to a mental or physical impairment or a combination of mental and
65     physical impairments; and
66          (b) is likely to continue indefinitely.
67          [(7) "Personal handheld electronic device":]
68          [(a) means an electronic device that is designed for handheld use and permits the user
69     to store or access information, the primary value of which is specific to the user of the device;
70     and]
71          [(b) includes a mobile phone, pocket personal computer, personal digital assistant, or
72     similar device.]
73          [(8)] (5) "Property act" means the Federal Property and Administrative Services Act of
74     1949, 40 U.S.C. Sec. 549.
75          (6) "Purchasing director" means the director of the division appointed under Section
76     63A-2-102.
77          (7) "Smart phone" means an electronic device that combines a cell phone with a
78     hand-held computer, typically offering Internet access, data storage, and text and email
79     capabilities.
80          (8) "State agency" means any executive branch department, division, or other agency of
81     the state.
82          (9) "State surplus property" [means surplus property that is not]:
83          (a) means state-owned property, whether acquired by purchase, seizure, donation, or
84     otherwise:
85          [(a) a vehicle; or]
86          [(b) federal surplus property.]
87          (i) that is no longer being used by the state or no longer usable by the state;
88          (ii) that is out of date;
89          (iii) that is damaged and cannot be repaired or cannot be repaired at a cost that is less
90     than the property's value;
91          (iv) whose useful life span has expired; or
92          (v) that the state agency possessing the property determines is not required to meet the
93     needs or responsibilities of the state agency;
94          (b) includes:
95          (i) a motor vehicle;
96          (ii) equipment;
97          (iii) furniture;
98          (iv) information technology equipment; and
99          (v) a supply; and
100          (c) does not include:
101          (i) real property;
102          (ii) an asset of the School and Institutional Trust Lands Administration, established in
103     Section 53C-1-201;
104          (iii) a firearm or ammunition; or
105          (iv) an office or household item made of aluminum, paper, plastic, cardboard, or other
106     recyclable material, without any meaningful value except for recycling purposes.
107          (10) "State surplus property contractor" means [the] a person [described in Section
108     63A-2-410 that the state contracts with to administer the state's program for the disposition of]
109     in the private sector under contract with the state to provide one or more services related to the
110     division's program for the management and disposition of state surplus property.
111          [(11) (a) "Surplus property" means property that an agency:]
112          [(i) intends to divest itself of; and]
113          [(ii) has acquired by purchase, seizure, or donation.]
114          [(b) "Surplus property" does not include:]
115          [(i) real property;]
116          [(ii) assets of the School and Institutional Trust Lands Administration; or]
117          [(iii) an aluminum can or an item made primarily of paper, plastic, or cardboard that
118     is:]
119          [(A) discarded; and]
120          [(B) recyclable.]
121          Section 2. Section 63A-2-102 is amended to read:
122          63A-2-102. Director of division -- Appointment.
123          (1) The executive director [of the department] shall appoint the director of the Division
124     of Purchasing and General Services with the approval of the governor.
125          (2) The purchasing director [of the Division of Purchasing and General Services] is
126     also the state's chief procurement officer.
127          Section 3. Section 63A-2-103 is amended to read:
128          63A-2-103. General services provided -- Subscription by state departments, state
129     agencies, and certain local governmental entities -- Fee schedule.
130          (1) The purchasing director [of the division]:
131          (a) shall operate, manage, and maintain:
132          (i) a central mailing service; and
133          (ii) an electronic central store system for procuring goods and services;
134          (b) shall, except when a state surplus property contractor administers the state's
135     program for disposition of state surplus property, operate, manage, and maintain the state
136     surplus property program;
137          (c) shall, when a state surplus property contractor administers the state's program for
138     disposition of state surplus property, oversee the state surplus property contractor's
139     administration of the state surplus property program in accordance with Part 4, Surplus
140     Property Services; and
141          (d) may establish microfilming, duplicating, printing, addressograph, and other central
142     services.
143          (2) (a) Each state [department and] agency shall subscribe to all of the services
144     described in [Subsections] Subsection (1)(a)[(i) and (ii)], unless the director delegates the
145     director's authority to a [department or] state agency under Section 63A-2-104.
146          (b) An institution of higher education, school district, or political subdivision of the
147     state may subscribe to one or more of the services described in [Subsections] Subsection
148     (1)(a)[(i) and (ii)].
149          (3) (a) The purchasing director shall:
150          [(a) except as provided in Part 4, Surplus Property Services,]
151          (i) prescribe a schedule of fees to be charged for all services provided by the division
152     [to any department or agency] after the purchasing director:
153          [(i)] (A) submits the proposed rate, fees, or other amounts for services provided by the
154     division's internal service fund to the Rate Committee established in Section 63A-1-114; and
155          [(ii)] (B) obtains the approval of the Legislature, as required by [Sections 63J-1-410
156     and ] Section 63J-1-504;
157          [(b) when practicable,] (ii) ensure that the fees are approximately equal to the cost of
158     providing the services; and
159          [(c) periodically] (iii) annually conduct a market analysis of fees[, which analysis].
160          (b) A market analysis under Subsection (3)(a)(iii) shall include a comparison of the
161     division's rates with the fees of other public or private sector providers [where] if comparable
162     services and rates are reasonably available.
163          Section 4. Section 63A-2-104 is amended to read:
164          63A-2-104. Delegation of general services to departments or agencies -- Writing
165     required -- Contents -- Termination.
166          (1) The purchasing director [of the Division of Purchasing and General Services], with
167     the approval of the executive director, may delegate, in writing, [his] the purchasing director's
168     authority to perform or control any general services function to [other] another state [agencies
169     and institutions] agency by contract or other means authorized by law, if:
170          (a) in the judgment of the executive director, the state [department or] agency has
171     requested the authority; and
172          (b) the state [department or] agency has the necessary resources and skills to perform
173     or control the functions.
174          (2) The purchasing director may delegate [his] the purchasing director's authority only
175     when the delegation would result in net cost savings or improved service delivery to the state
176     as a whole.
177          (3) The written delegation shall contain [the following]:
178          (a) a precise definition of each function to be delegated;
179          (b) a clear description of the standards to be met in performing each function
180     delegated;
181          (c) a provision for periodic administrative audits by the department; and
182          (d) a date on which the agreement shall terminate if not previously terminated or
183     renewed.
184          (4) An agreement to delegate functions to a state agency [or institution] may be
185     terminated by the department if the results of an administrative [audits] audit conducted by the
186     department reveal lack of compliance with the terms of the agreement.
187          Section 5. Section 63A-2-105 is amended to read:
188          63A-2-105. Director to approve certain purchases.
189          (1) [Each] A state agency that intends to purchase any mail-related equipment or copy
190     machine shall submit a purchase request to the purchasing director [of the Division of General
191     Services].
192          (2) The purchasing director shall review [those requests] a request under Subsection
193     (1) to ensure that:
194          (a) the authority to perform those functions has been appropriately delegated to the
195     state agency under this part;
196          (b) the equipment meets proper specifications; and
197          (c) the benefits from the state agency's purchase of the equipment outweigh the benefits
198     of having the same functions performed by the [Division of Purchasing and General Services]
199     division.
200          Section 6. Section 63A-2-401 is amended to read:
201          63A-2-401. Utah surplus property program -- Definitions -- Administration.
202          [(1) As used in this part, "agency" means:]
203          [(a) the Utah Departments of Administrative Services, Agriculture and Food, Alcoholic
204     Beverage Control, Commerce, Heritage and Arts, Corrections, Workforce Services, Health,
205     Human Resource Management, Human Services, Insurance, Natural Resources, Public Safety,
206     Technology Services, and Transportation and the Labor Commission;]
207          [(b) the Utah Offices of the Auditor, Attorney General, Court Administrator, Utah
208     Office for Victims of Crime, Rehabilitation, and Treasurer;]
209          [(c) the Public Service Commission and State Tax Commission;]
210          [(d) the State Boards of Education, Pardons and Parole, and Regents;]
211          [(e) the Career Service Review Office;]
212          [(f) other state agencies designated by the governor;]
213          [(g) the legislative branch, the judicial branch, and the State Board of Regents; and]
214          [(h) an institution of higher education, its president, and its board of trustees for
215     purposes of Section 63A-2-402.]
216          (1) The division shall determine the appropriate method for disposing of state surplus
217     property.
218          (2) In accordance with Title 63G, Chapter 6a, Utah Procurement Code, the division
219     may contract with one or more state surplus property contractors to assist with the disposition
220     of state surplus property by:
221          (a) online auction;
222          (b) live auction;
223          (c) pick up, sale, and disposal;
224          (d) disposal;
225          (e) destruction; or
226          (f) another method approved by the purchasing director.
227          (3) (a) A state agency shall use the services of the state surplus property contractors
228     under contract with the division for the disposition of state surplus property unless the
229     purchasing director authorizes an exception in writing.
230          (b) Justification for an exception under Subsection (3)(a) includes:
231          (i) a security issue;
232          (ii) the need for restricted public access to the state surplus property;
233          (iii) a lack of adequate storage space; and
234          (iv) an issue specific to the state agency, as approved by the purchasing director.
235          [(2) (a) The] (4) (a) By following the procedures and requirements of Title 63G,
236     Chapter 3, Utah Administrative Rulemaking Act, the division shall make rules establishing a
237     surplus property program that meets the requirements of this chapter by following the
238     procedures and requirements of Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
239          (b) The rules under Subsection (4)(a) shall include:
240          (i) procedures and requirements for transferring state surplus property directly from
241     one state agency to another [agency];
242          (ii) procedures and requirements governing division administration requirements that
243     [an agency must] a state agency is required to follow;
244          (iii) requirements governing purchase priorities;
245          (iv) requirements governing accounting, reimbursement, and payment procedures;
246          (v) [except as provided in Subsection (2)(d),] procedures for collecting bad debts;
247          (vi) requirements and procedures for the disposition of firearms;
248          (vii) [except as provided in Subsection (2)(d),] the elements of the rates or other
249     charges assessed by the division for services and handling;
250          (viii) [except as provided in Subsection (2)(d),] procedures governing the timing and
251     location of public sales of state surplus property; [and]
252          (ix) procedures governing the [transfer] disposition of information technology
253     equipment; and
254          (x) procedures governing the transfer of information technology equipment by state
255     agencies directly to public schools.
256          (c) Except as it relates to a vehicle or federal surplus property, the rules described in
257     Subsection [(2)] (4)(b)(i) may not require approval by the division, the purchasing director [of
258     the division], or any other person, for [an] a state agency to transfer state surplus property
259     directly to another state agency.
260          [(d) When a state surplus property contractor administers the state's program for
261     disposition of state surplus property:]
262          [(i) rules made under the rulemaking authority described in Subsections (2)(b)(v) and
263     (vii) apply only to surplus vehicles; and]
264          [(ii) rules made under the rulemaking authority described in Subsection (2)(b)(viii)
265     apply only to surplus vehicles and federal surplus property.]
266          [(3) In creating and administering the program, as it relates to surplus vehicles and
267     federal surplus property only, the division shall, when conditions, inventory, and demand
268     permit:]
269          (5) The division may:
270          (a) establish facilities to store [inventory] state surplus property at [geographically
271     dispersed] appropriate locations throughout the state; [and]
272          (b) hold public sales of state surplus property at geographically dispersed locations
273     throughout the state;
274          [(c) except as provided in Subsection (3)(d):]
275          [(i) establish,] (c) after consultation with the state agency requesting the sale of state
276     surplus property, establish the price at which the surplus property shall be sold; and
277          [(ii)] (d) as provided in Title 63J, Chapter 1, Budgetary Procedures Act, transfer
278     proceeds [arising from] generated by the sale of state surplus property to the state agency
279     requesting the sale [in accordance with Title 63J, Chapter 1, Budgetary Procedures Act, less],
280     reduced by a fee approved in accordance with [Sections 63A-1-114 and 63J-1-410,] Subsection
281     63A-2-103(3) to pay the division's costs of administering the state surplus property program.
282          [(d) When a state surplus property contractor administers the state's program for
283     disposition of state surplus property, the provisions on Subsection (3)(c) only apply to surplus
284     vehicles.]
285          [(4)] (6) Except as otherwise expressly provided in this part, or by explicit reference to
286     this part, each state agency shall divest and acquire state surplus property only by participating
287     in the division's program.
288          (7) A state agency may declare property owned by the state agency to be state surplus
289     property by making a written determination that the property:
290          (a) is excess property that is no longer being used;
291          (b) has exceeded its useful life;
292          (c) is no longer usable;
293          (d) (i) is damaged; and
294          (ii) (A) cannot be repaired; or
295          (B) cannot be repaired at a cost that is less than the property's value; or
296          (e) is no longer required to meet the state agency's needs or responsibilities.
297          Section 7. Section 63A-2-405 is amended to read:
298          63A-2-405. Charges and fees assessed for surplus property.
299          [(1)] If approved in accordance with Sections [63A-1-114 and] 63J-1-410[,] and
300     63J-1-504, the division may:
301          [(a) may] (1) assess charges and fees for the acquisition, warehousing, distribution, or
302     transfer of state surplus property or of federal surplus property [for educational, public health,
303     or civil defense purposes, including research, only if those charges and fees are reasonably]
304     [related] to cover the division's [care and] costs of handling [costs of], acquiring, receipting,
305     warehousing, distributing, or transferring [the] state surplus property or federal surplus
306     property; and
307          [(b) may] (2) reduce or eliminate charges on state surplus property or federal surplus
308     property that is found not to be usable for the purpose for which it was procured.
309          [(2) When there is a state surplus property contractor:]
310          [(a) the division may not assess charges or fees to an agency for the acquisition,
311     warehousing, distribution, sale, transfer, or handling of state surplus property; and]
312          [(b) unless expressly provided otherwise in the contract between the division and the
313     state surplus contractor, the state surplus contractor may not assess charges or fees to an agency
314     for the acquisition, warehousing, distribution, sale, transfer, or handling of state surplus
315     property.]
316          Section 8. Section 63A-2-408 is amended to read:
317          63A-2-408. Authority of state or local subdivision to receive property --
318     Revocation of authority of officer.
319          (1) Notwithstanding any other provision of law, the governing board or the executive
320     director of any state department, instrumentality, or agency that is not a state agency, or the
321     legislative body of any city, county, school district, or other political subdivision may by order
322     or resolution give any officer or employee the authority to:
323          [(a) as it relates to federal surplus property:]
324          [(i)] (a) secure the transfer [to it] of state surplus property or federal surplus property
325     through the division under the property act; and
326          [(ii)] (b) obligate the state or political subdivision and its funds to the extent necessary
327     to comply with the terms and conditions of those transfers[; and].
328          [(b) as it relates to surplus property other than federal surplus property:]
329          [(i) secure the direct transfer of surplus property to it; and]
330          [(ii) obligate the state or political subdivision and its funds to the extent necessary to
331     comply with the terms and conditions of those transfers.]
332          (2) The authority conferred upon any officer or employee by an order or resolution
333     remains in effect until:
334          (a) the order or resolution is revoked; and
335          (b) the division has received written notice of the revocation.
336          Section 9. Section 63A-2-409 is amended to read:
337          63A-2-409. Disposal of certain surplus property.
338          This part does not apply to disposition by:
339          (1) the legislative branch of surplus property that is information technology equipment
340     [or a personal handheld electronic device], if the Legislative Management Committee, by rule,
341     establishes its own policy for disposition, by the legislative branch, of surplus property that is
342     information technology equipment [or a personal handheld electronic device]; or
343          (2) the Department of Transportation of surplus personal property that was acquired as
344     part of a transaction or legal action by the Department of Transportation acquiring real property
345     for a state transportation purpose.
346          Section 10. Section 63A-2-410 is amended to read:
347          63A-2-410. State surplus property contractor -- Deposit of proceeds.
348          (1) [(a)] The division [shall, after issuing a request for proposals,] may, as the
349     purchasing director determines, issue a solicitation under Title 63G, Chapter 6a, Utah
350     Procurement Code, and award a contract to a person in the private sector to provide services
351     necessary to administer the state's program for disposition of state surplus property.
352          [(b) The request for proposals shall seek:]
353          [(i) proposals that provide that the sole source of payment to the contractor will be a
354     percentage of the amount for which the contractor sells state surplus property; and]
355          [(ii) proposals that provide for alternative methods of payment.]
356          [(2) The contract shall:]
357          [(a) provide that the contractor may sell state surplus property by auction, bid, or other
358     manner designed to get the best price available for the state surplus property;]
359          [(b) prohibit the contractor from engaging in the sale of state surplus property in a
360     manner that would constitute a conflict of interest;]
361          [(c) require regular and detailed accounting to the division of:]
362          [(i) the receipt and sale of state surplus property; and]
363          [(ii) the receipt and payment of funds by the contractor; and]
364          [(d) ensure public transparency regarding the sale of state surplus property by requiring
365     that the contractor:]
366          [(i) post online information related to a sale or attempted sale of state surplus property,
367     including:]
368          [(A) a description of the state surplus property;]
369          [(B) the agency that requested sale of the surplus property;]
370          [(C) the price at which the surplus property was sold; and]
371          [(D) the date that the surplus property was sold; and]
372          [(ii) post the information described in Subsection (2)(c)(i):]
373          [(A) within a time frame described in the contract; and]
374          [(B) for a period of time described in the contract.]
375          [(3) The contractor may not:]
376          [(a) unless expressly provided otherwise in the contract between the division and the
377     contractor:]
378          [(i) be required to store state surplus property; or]
379          [(ii) charge for the storage of state surplus property;]
380          [(b) administer the direct transfer of state surplus property from one agency to another
381     agency;]
382          [(c) administer the disposal or destruction, by an agency, of state surplus property as
383     waste;]
384          [(d) administer the donation by an agency of state surplus property to a charity; or]
385          [(e) administer the disposition of state surplus property under Section 63A-2-406,
386     63A-2-407, 63A-2-408, or 63A-2-409.]
387          [(4) The division shall, after paying the amount owed to the state surplus property
388     contractor, transfer the remaining money received for the sale of a particular item of state
389     surplus property to the agency that requested the sale of the particular item of state surplus
390     property, in accordance with Title 63J, Chapter 1, Budgetary Procedures Act.]
391          [(5) The division shall:]
392          [(a) on or before August 31, 2013, give an oral report to the Government Operations
393     Interim Committee regarding:]
394          [(i) the division's progress and plans in relation to issuing the request for proposals
395     described in this section; and]
396          [(ii) rules passed or proposed, on or after May 14, 2013, in relation to the state surplus
397     property program; and]
398          [(b) (i) issue the request for proposals described in this section on or before September
399     30, 2013; or]
400          [(ii) in November 2013, give an oral report to the Government Operations Interim
401     Committee, explaining why the request for proposals was not issued on or before September
402     30, 2013.]
403          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
404     division shall make rules pertaining to the process and procedures relating to services provided
405     by a person awarded a contract under Subsection (1).
406          Section 11. Section 63A-2-411 is repealed and reenacted to read:
407          63A-2-411. Disposal of state surplus property with minimal value.
408          (1) As used in this section, "minimal value" means a value of less than $100.
409          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
410     division shall make rules that permit a state agency to dispose of property with a minimal value
411     that the state agency has declared to be state surplus property as provided in Subsection
412     63A-2-401(7).
413          (3) The division's rules under Subsection (2) shall permit a state agency to dispose of
414     state surplus property with a minimal value by:
415          (a) destroying the property;
416          (b) disposing of the property as waste; or
417          (c) donating the property to:
418          (i) a charitable organization; or
419          (ii) an employee of the state agency.
420          (4) Property of a state agency is presumed to have a minimal value if the property is
421     not purchased after the state agency offers the property for sale to the public at a price above
422     $100 for at least seven days:
423          (a) through an online auction;
424          (b) through a live auction;
425          (c) at a retail location managed by the division; or
426          (d) through another sale method approved by the director.
427          Section 12. Repealer.
428          This bill repeals:
429          Section 63A-2-406, Rulemaking on giving priority to state and local agencies in
430     purchasing surplus property -- Rulemaking on the sale or use of a personal handheld
431     electronic device.
432          Section 63A-2-407, Transfer of information technology equipment for persons
433     with a disability.