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[Utah Administrative Code Table of Contents]
[Title R028. Table of Contents]
R28-1-1 Purpose.
This rule sets forth policies and procedures which govern the acquisition and disposition of state and federal surplus property. It applies to all state and local public agencies and eligible non-profit educational and health institutions when dealing with federal surplus property. It also applies to all state agencies unless specifically exempted by law and to the general public when dealing with state surplus property.
R28-1-2 Authority.
Under the provisions of Title 63A, Chapter 9, Part 8, the Utah State Agency for Surplus Property (USASP) within the Division of Fleet Operations, under the Department of Administrative Services is responsible for operating both a state and a federal surplus property program. The standards and procedures governing the operation of these two programs are found in two separate State Plans of Operation, one for state surplus property and a second plan for federal surplus property, the latter being a contract between the state and federal government. The State Plans of Operation may be reviewed at the USASP.
R28-1-3 Procedures.
A. State-owned personal property shall not be destroyed, sold, transferred, traded-in, traded, discarded, donated or otherwise disposed of without first submitting a properly completed form SP-1 to and receiving authorization from the USASP.
This rule applies to and includes any residue that may be remaining from agency cannibalization of property.
B. When a department or agency of state government determines that state-owned personal property is in excess to current needs, they will make such declaration using Form SP-1. State-owned personal property shall not be processed by the USASP unless the appropriate form is executed.
C. A standard form SP-3 is required when it is determined that state-owned personal property should be abandoned and destroyed. The SP-3 is generated by the USASP after receiving a form SP-1 and reviewing the property being disposed of by the agency.
D. State-owned information technology equipment may be transferred directly to public institutions, such as schools and libraries by the owning agency. However, a form SP-1 must still be completed and forwarded to the USASP to account for the transfer of the equipment. In such cases, the USASP will not assess a fee to the donating agency. Similarly, the USASP is authorized to donate computer equipment received as surplus property from agencies to the Utah Correctional Industries (UCI) for refurbishment and upgrade. Subsequent to refurbishing and upgrading, UCI may sale the equipment to public schools. In such cases, the costs associated with refurbishing and upgrading the equipment shall be borne by UCI and subsequent sale to public schools shall be governed by the Department of Corrections.
E. Federal surplus property is not available for sale to the general public, on a day-to-day basis. Donation of federal surplus property shall be administered in accordance with the procedures identified in the State Plan of Operation for the Federal Property Assistance Program. Public auctions of federal surplus property are authorized under certain circumstances and conditions. The USASP Manager shall coordinate such auctions when deemed necessary or appropriate. Federal surplus property auctions are conducted locally, but are regulated and accomplished by a representative of the U.S. General Services Administration.
F. The USASP Manager or designee may make an exception to the written authorization requirement identified in paragraph A above. Exceptions must be for good cause and must consider:
1. The cost to the state;
2. The potential liability to the state;
3. The overall best interest of the state.
R28-1-4 Related Party Transactions.
A. The USASP has a duty to the public to ensure that State-owned surplus property is disposed of at fair market value, in an independent and ethical manner, and that the property or the value of the property has not been misrepresented. A conflict of interest may exist or appear to exist when a related party attempts to purchase surplus property.
B. A related party is defined as someone who may fit into any of the following categories pertaining to the surplus property in question:
1. Has purchasing authority.
2. Has maintenance authority.
3. Has disposition or signature authority.
4. Has authority regarding the disposal price.
5. Has access to restricted information.
6. Is perceived to be a related party using other criteria which may prohibit independence.
C. Owning state agencies must list any recommended purchasers on the standard form SP-1 and specify whether they are considered to be a related party.
D. When a prospective purchaser is identified or determined to be a related party, the USASP will employ one of the following procedures:
1. The USASP may require written justification and authorization from the Department or Division Head or authorized agent. Justification may include reference to maintenance history, purchase price and the absence of conflicts of interest. If the related party is an authorized agent, a higher approval may be sought.
2. The USASP may choose to hold the property for sale by public auction or sealed bid. The prospective buyer may then compete against other bidders.
3. The USASP may hold the property for a 30 day period before allowing the related party the opportunity to purchase the property, thus allowing for purchase of the property in accordance with the priorities listed below.
R28-1-5 Priorities.
A. Public agencies are given priority for the purchase of state-owned surplus property.
B. Property received by the USASP that is determined to be unique, in short supply or in high demand by public agencies shall be held for a period of 30 days before being offered for sale to the general public.
C. For this rule, the entities listed below, in priority order, are considered to be public agencies:
1. State Agencies
2. State Universities, Colleges, and Community Colleges
3. Other tax supported educational agencies or political subdivisions in the State of Utah including cities, towns, counties and local law enforcement agencies
4. Other tax supported educational entities
5. Non-profit health and educational institutions
D. State-owned personal property that is not purchased by or transferred to public agencies during the 30-day hold period may be offered for public sale.
E. The USASP Manager or designee shall make the determination as to whether property is subject to the 30-day hold period. The decision shall consider the following:
1. The cost to the state;
2. The potential liability to the state;
3. The overall best interest of the state.
R28-1-6 Accounting and Reimbursement.
A. The USASP will record and maintain records of all transactions related to the acquisition and sale of all state and federal surplus property. A summary of the total yearly sales of state surplus by agency or department will be provided to the legislature following the close of each fiscal year.
B. Reimbursements to state agencies from the sale of their surplus property will be made through the Division of Finance on interagency transfers or warrant requests. The Surplus Agency is authorized to deduct operating costs from the selling price of all state surplus property. In all cases property will be priced to sale for fair market value. Items that are not marketable for whatever reason may be discounted in price or disposed of by abandonment, donation, or sold as scrap.
C. Deposits from cash sales will be made to the State Treasurer in accordance with Title 51, Chapter 7.
D. The USASP may maintain a federal working capital reserve not to exceed one year's operating expenses. In the event the Surplus Agency accumulates funds in excess of the allowable working capital reserve, they will reduce their service and handling charge to under recover operating expenses and reduce the Retained Earnings balance accordingly. The only exception is where the USASP is accumulating excess funds in anticipation of the purchase of new facilities or capital items. Prior to the accumulation of excess funds, the USASP must obtain the written approval of the Executive Director of the Department of Administrative Services.
R28-1-7 Payment.
A. Payment received from public purchasers may be in the form of cash and/or certified funds, authorized bank credit cards, and business or personal checks. Personal checks must be guaranteed with a bank card and may not be accepted for amounts exceeding $200. Unguaranteed personal checks or 2-party checks shall not be accepted.
B. Payment received from state subdivisions shall be in the form of agency or subdivision check.
C. Payment made by public purchasers shall be at the time of purchase and prior to removal of the property purchased. Payment for purchases by state subdivisions shall be within 60 days following the purchase and removal of the property.
D. The USASP Manager or designee may make exceptions to the payment provisions of this rule for good cause. A good cause exception requires a weighing of:
1. The cost to the state;
2. The potential liability to the state;
3. The overall best interest of the state.
R28-1-8 Bad Debt Collection.
A. If a check from the general public, state subdivisions, or other agencies is returned to the USASP for "insufficient funds", the USASP shall initiate formal collection procedures.
B. The USASP shall initiate the following procedures to collect a bad debt:
1. The debtor may not make any future purchases from the USASP until the debt is paid in full.
2. The USASP shall send a certified letter to the debtor stating that the debtor has 15 days to pay the full amount owed with cash or certified funds, including any and all additional fees associated with the collection process, such as returned check fees.
3. The letter shall also state that if the balance is not paid within the 15 day period, the matter will be referred to the Office of State Debt Collection for formal collection proceedings.
C. The USASP Director or designee may make exceptions to the collection provisions of this rule for good cause. A good cause exception requires a weighing of:
1. The cost to the state;
2. The potential liability to the state;
3. The overall best interest of the state.
R28-1-9 Public Sales of Surplus Property.
A. State-owned surplus property may be purchased at any time by the general public, subject to any 30-day holding period that may be applicable, as described above.
B. At the discretion of the USASP Manager, any state-owned surplus property may be sold to the general public by auction or sealed bid. Property to be auctioned may be consigned out to an auction service. If a consignment approach is considered, the USASP Manager must ensure that the auction service is contracted by and authorized as a vendor by the Division of Purchasing.
C. Federal surplus property auctions to the general public may be accomplished on occasions and subject to the limitations as indicated previously.
D. The frequency of public auctions, for either State-owned or federal surplus property will be regulated by current law as applicable, the volume of items held in inventory at the USASP, and the profitability of conducting auctions versus other approaches to disposing of surplus property.
[Indexing]
KEY: state property
November 1, 1999
[Editor's note: Below are references
to the Utah Code that are listed by the
agency making this rule as authority
for the rule.]
63A-9-801
Notice of Continuation March 19, 1997
