State Surplus Property/Third-Party Auctions.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 231

Short Title: State Surplus Property/Third-Party Auctions. (Public)
Sponsors: Senators McInnis, Sawyer, and Settle (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 6, 2025
*S231-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW FOR STATE AGENCIES TO UT ILIZE THIRD-PARTY AUCTION 2
SITES FOR THE SALE OR DISPOSITION OF STATE-OWNED PROPERTY. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Part 1 of Article 3A of Chapter 143 of the General Statutes reads as 5
rewritten: 6
"Article 3A. 7
"Surplus Property. 8
"Part 1. State Surplus Property Agency. 9
"§ 143-64.01. Department of Administration designated State Surplus Property Agency. 10
The State Surplu s Property Agency division within the Department of Administration is 11
designated as the State agency for State surplus property, and with respect to the acquisition of 12
State surplus property the agency shall be subject to the supervision and direction of the Secretary 13
of Administration. 14
"§ 143-64.02. Definitions. 15
The following definitions apply in Part 1 of this Article: 16
(1) Agency. – An existing A unit of the executive branch, including any 17
department, institution, commission, committee, board, division, or bureau of 18
the State. The term includes the Council of State , The University of North 19
Carolina, and the State Board of Community Colleges. 20
… 21
(4) State owned. State-owned property. – Supplies, materials, and equipment 22
equipment, inventory, farm products, goods, and consumer goods, as those 23
terms are defined in Chapter 25 of the General Statutes, in the possession of 24
the State of North Carolina and purchased with State funds, personal property 25
donated to the State, or personal property purchased with other funds that give 26
ownership to the State.State, or personal property rightfully seized or acquired 27
by the State. The term does not include real property. 28
(5) Surplus property. – Personal State-owned property that is obsolete, unused, or 29
no longer needed by a State agency. 30
"§ 143-64.03. Powers and duties of the State agency for surplus property. 31
(a) The State Surplus Property Agency is authorized and directed to:to do the following: 32
(1) Sell Coordinate the sale of all State owned supplies, materials, and equipment 33
that are surplus, obsolete, or unused surplus property and sell all seized 34
vehicles and other conveyances that the State Surplus Property Agency is 35
authorized to sell;sell. 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 231-First Edition
(2) Warehouse such property; andproperty. 1
(3) Distribute such property to tax-supported or nonprofit tax -exempt 2
organizations. 3
(b) The State Surplus Property Agency is authorized and empowered to act as a 4
clearinghouse of information for agencies and private nonprofit tax -exempt organizations, to 5
locate property available for acquisition from State agencies, to ascertain the terms and conditions 6
under which the property may be obtained, to receive requests from agencies and private 7
nonprofit tax-exempt organizations, and transmit all available information about the property, 8
and to aid and assist the agencies and private nonprofit tax-exempt organizations in transactions 9
for the acquisition of State surplus property. Prioritization should be given to distributing 10
computer equipment to nonprofit entities that refurbish computers a nd donate them to 11
low-income students or households in this State, the State Surplus Property Agency shall 12
distribute the computer equipment at no cost or the lowest possible cost to the nonprofit entities 13
and must give consideration to the counties where the computer equipment will be donated to 14
ensure that all geographic regions of the State benefit from the distributions. 15
(b1) Nothing in this Article, or any administrative rules promulgated under this Article, 16
shall be deemed to prohibit The University of North Carolina from doing the following: 17
(1) Conveying surplus computer equipment at no cost. The University of North 18
Carolina is encouraged to prioritize distribution to nonprofit entities that 19
refurbish computers to donate to low -income students or hou seholds in the 20
State. Any conveyance to a nonprofit under this subdivision shall be 21
conditioned upon, and in consideration of, the nonprofit's promise to refurbish 22
the computer equipment and its donation to low -income students or 23
households in the State an d the nonprofit's reporting of information required 24
by subsection (b2) of this section. After an initial conveyance, The University 25
of North Carolina shall not convey additional surplus computer equipment to 26
a nonprofit, unless that nonprofit has reported the information required by 27
subsection (b2) of this section for prior conveyances. 28
(2) Entering into agreements with one or more vendors to trade in any 29
technological equipment purchased from the vendor or to allow a vendor to 30
buy back any technological equipment even if the equipment was not 31
purchased from that vendor. 32
(b2) When either distributing surplus computer equipment as provided in subdivision (1) 33
of subsection (b1) of this section or entering into a trade -in or buyback agreement under 34
subdivision (2) of subsection (b1) of this section, The University of North Carolina shall keep 35
records on the type of computer equipment distributed or the technological equipment subject to 36
the agreement, the number of computers distributed or the type and quantit y of technological 37
equipment subject to the agreement, the name of the nonprofit that received the distributions or 38
the name of the vendor subject to the agreement, and the nonprofit's report on donations of 39
refurbished computers to low -income students or households in the State. If the nonprofit is 40
unable to refurbish computer equipment for any reason, its report shall include the disposition of 41
such computer equipment. A nonprofit shall provide a report to the Board of Governors of The 42
University of North Carolina by February 1, 2022, and by February 1 of each year thereafter. The 43
report shall contain the information required by this subsection and any other information the 44
Board of Governors deems reasonably necessary to ensure the conditions required und er this 45
subsection are satisfied. The Board of Governors of The University of North Carolina shall 46
submit a report containing the information required to be collected under this subsection to the 47
Joint Legislative Education Oversight Committee by December 1, 2022, and by March 1 of each 48
year thereafter. 49
General Assembly Of North Carolina Session 2025
Senate Bill 231-First Edition Page 3
(c) The State agency for surplus property, Surplus Property Agency, in the administration 1
of Part 1 of this Article, shall cooperate to the fullest extent consistent with the provisions of Part 2
1 of this Article, with the departments or agencies of the State. 3
(d) The State agency for surplus property Surplus Property Agency may sell or otherwise 4
dispose of surplus property, including motor vehicles, through an electronic auction service or 5
any third-party auction service. The General Assembly and the Judicial Department may sell or 6
otherwise dispose of State-owned or surplus property within their possession and control. 7
"§ 143-64.03A. Third-party auctions; auction procedures; reporting. 8
(a) An agency may utilize a third -party auction service by submitting a petition to the 9
State Surplus Property Agency for approval. All petitions submitted under this subsection shall 10
be approved unless one or more of the circumstances listed in subsection (b) of this section apply. 11
The State Surplus Property Agency shall app rove or deny a petition submitted under this 12
subsection within 30 days of submission and shall transmit the approval or denial to the agency 13
in writing. A denial of a petition shall include a detailed justification for the denial under one or 14
more of the circumstances listed in subsection ( b) of this section. Within 30 days of receiving a 15
denial, a n a gency may appeal the denial by submitting a written appeal to the Secretary of 16
Administration detailing why the denial of the petition under subsection ( b) of this section was 17
improper. The Secretary of Administration may uphold the initial petition denial or approve the 18
petition as submitted. 19
(b) The State Surplus Property Agency may deny a petition to use a third -party auction 20
service submitted under this section if one or more of the following circumstances apply: 21
(1) The third-party auction service has had a license denied , suspended, or 22
revoked pursuant to Chapter 85B of the General Statutes or faced any other 23
similar disciplinary action by a State or federal governmental entity. 24
(2) The third-party auction service is or was debarred from entering into contracts 25
by the Department of Administration pursuant to Article 3 of Chapter 143 of 26
the General Statutes. 27
(3) The third-party auction service charges the State a fee, or any combination of 28
fees to the State, that exceeds eight percent (8%) of the final selling price of 29
the item. 30
(c) Upon a finding that one or more of the circumstances listed in subsection ( b) of this 31
section apply, a prior approval of a petition to use a third-party auction service under this section 32
is subject to revocation by the State Surplus Property Agency upon written notice to the agency 33
utilizing the third-party auction service. Within 30 days of receiving the notice of revocation, an 34
agency may appeal the revocation by submitting a written appeal to the Secretary of 35
Administration detailing why the revocation was improper. The Secretary of Administration may 36
uphold or rescind the notice of revocation. 37
(d) All items that are listed through a third-party auction site or through a Department of 38
Administration auction site shall be listed a minimum of three times before disposal of the item. 39
An agency may dispose of items that have not sold after three attempts. All items, whether the 40
item is sold by a third -party auction service or by the Department of Administration in -house 41
auction platform, that are valued at one hundred dollars ($100.00) or more based on fair market 42
value shall have a minimum bid price set at no less than twenty -five percent (25%) of the fair 43
market value of the item. Fair market value shall be determined by the selling agency or, at the 44
selling agency 's discretion, by a certified appraiser licensed pursuant to Chapter 95E of the 45
General Statutes. If an agency chooses to use a third-party auction service, the agency must first 46
report the item to the State Surplus Property Agency . Items listed through a third-party auction 47
service may be stored at a location chosen by the agency, including the State Surplus Property 48
warehouse, an agency facility, or a third-party auction service facility. 49
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 231-First Edition
(e) Each agency shall keep a record of items sold through third -party auction services 1
and items that were disposed of. The following information shall be retained by the agency for a 2
period of three years: 3
(1) The name of the item listed on the third-party auction site, along with any 4
identifiable information used in the sale or disposition of the item. 5
(2) The final bid amount for the item. 6
(3) The amount received by the agency for the sale or disposition of the item. 7
(4) The amount paid to the third-party auction service, if any. 8
(5) If disposed after being unable to sell, the manner of disposition. 9
(f) On January 1, and then annually thereafter, each agency utilizing a third-party auction 10
service shall submit to the Joint Legislative Oversight Committee on General Government a 11
report that includes the following: 12
(1) A listing of the third -party auction services that were used to sell surplus 13
items. 14
(2) The total funds received by sales through each auction service. 15
(3) The total funds distributed to each agency. 16
(4) The total funds disbursed to the Department of Administration. 17
(g) On January 1, and then annually thereafter, the State Surplus Property Agency shall 18
submit to the Joint Legislative Oversight Committee on General Governmen t a report that 19
includes the following: 20
(1) The number of petitions submitted from agencies under this section. 21
(2) The number of petitions from agencies that were denied. 22
(3) A detailed justification of why each petition was denied. 23
(4) The results of any appeals that were submitted to the Secretary of 24
Administration. 25
Once a petition has been approved, the agency shall be allowed to continue using the 26
third-party auction service, unless the approval is revoked pursuant to subsection ( c) of this 27
section. 28
"§ 143-64.04. Powers of the Secretary to delegate authority. 29
(a) The Secretary of Administration may delegate to any employees of the State agency 30
for surplus property Surplus Property Agency such power and authority as he or they deem the 31
Secretary deems reasonable and proper for the effective administration of Part 1 of this Article. 32
The Secretary of Administration may, in his the Secretary's discretion, bond any person in the 33
employ of the State agency for surplus property, Surplus Property Agency handling moneys, 34
signing checks, or receiving or distributing property from the United States under authority of 35
Part 1 of this Article. 36
(b) The Secretary of Administration may adopt rules necessary to carry out Part 1 of this 37
Article. 38
"§ 143-64.05. Service charge; receipts. 39
(a) The State agency for surplus property Surplus Property Agency may assess and 40
collect a service charge (i) for the acquisition, receipt, warehousing, distribution, or transfer of 41
any State surplus property; (ii) for the transfer or sale of recyclable material; and (iii) for the 42
towing, storing, processing, maintaining, and selling of motor vehicles seized pursuant to 43
G.S. 20-28.3. The service charge authorized by this subsection does not apply to the transfer or 44
sale of timber on land own ed by the Wildlife Resources Commission or the Department of 45
Agriculture and Consumer Services. No fee or service charge may be assessed or charged to an 46
agency utilizing a third-party auction service pursuant to G.S. 143-64.03A. 47
…." 48
SECTION 2. This act is effective when it becomes law. 49