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CHAPTER 5-24A

DISPOSAL OF STATE SURPLUS PROPERTY

5-24A-1      Definition of terms.
5-24A-2      Disposition of surplus property by Bureau of Administration.
5-24A-3      Declaration of surplus property required for disposition.
5-24A-4      Protection of surplus property prior to disposal.
5-24A-5      Requirements for disposition.
5-24A-6      Property with fair market value greater than one hundred dollars.
5-24A-7      Property with fair market value less than one hundred dollars.
5-24A-8      Surplus personal computer equipment.
5-24A-9      Disposal by agency or bureau.
5-24A-10      Fixed assets.
5-24A-11      Trade-in requirements.
5-24A-12      Hazardous materials.
5-24A-13      Retention and disposition of sales proceeds.
5-24A-14      Conveyance in the name of the state.
5-24A-15      Donations prohibited--Exception.
5-24A-16      Promulgation of rules regarding disposal of surplus property.
5-24A-17      Liquidation of State Cement Plant Commission property.
5-24A-18      Disbursement of proceeds from liquidation of State Cement Plant Commission property.


     5-24A-1.   Definition of terms. Terms used in this chapter mean:
             (1)      "Administrator," the director of property management for the Bureau of Administration;
             (2)      "Authorized entity," a political subdivision, school, Indian tribe, or any nonprofit educational or health institutions as determined under Section 501 of the Internal Revenue Code;
             (3)      "Bureau," the Bureau of Administration;
             (4)      "Cannibalization," to take salvageable parts from a disabled machine for use in building or repairing another machine; or to make use of a part taken from one thing in building or repairing something else;
             (5)      "Disposed," the destruction, sale, transfer, trade in, discarding, or donation of state personal property;
             (6)      "Fair market value," the price at which sales have been consummated for assets of like type, quality, and quantity in a particular market at time of acquisition;
             (7)      "Fixed asset," personal property that has an expected life exceeding one year and has an initial purchase cost of five thousand dollars or more;
             (8)      "Net disposal value," the fair market value less the expense of the most cost effective disposal method;
             (9)      "Personal property," all property which, due to its nature or physical characteristics, cannot be included within the scope or definition of real property. The term includes property capable of being moved from one place to another and usually has a useful life of temporary duration as compared to real property. The term does not include livestock, seed, nursery stock, or organisms purchased for use in research, agricultural, landscaping, or forestry activities of state institutions or agencies or products derived or made from them. The term does not include foodstuffs or inventory purchased for resale by state institutions;
             (10)      "Proceeds," funds derived from the sale of surplus property;
             (11)      "Property manager," the chief administrative officer of the agency or an authorized agent;
             (12)      "Public auction," either a tangible event at a public location, an electronic event which is advertised and made available to the public via the internet, or some other bid process which is advertised and made available to the public;
             (13)      "Public agency," any unit of state, local, or tribal government within the State of South Dakota;
             (14)      "Surplus property," any item of personal property that is no longer needed by the owning agency.

Source: SL 2008, ch 32, § 1.


     5-24A-2.   Disposition of surplus property by Bureau of Administration. The Bureau of Administration is responsible for the disposition of all surplus property for all state agencies. No state agency may dispose of surplus property without the written authorization of the bureau which may be in electronic format.

Source: SL 2008, ch 32, § 2.


     5-24A-3.   Declaration of surplus property required for disposition. Before any state-owned personal property is disposed of, the agency property manager shall declare the property surplus in the manner prescribed by this chapter.

Source: SL 2008, ch 32, § 3.


     5-24A-4.   Protection of surplus property prior to disposal. Any state agency is responsible for the preservation of its surplus property prior to its disposal. The agency shall make reasonable efforts to protect its surplus property from the elements, theft, or any other means of destruction or deterioration.

Source: SL 2008, ch 32, § 4.


     5-24A-5.   Requirements for disposition. State-owned property may not be disposed until the following steps have been taken:
             (1)      The agency property manager declares the property surplus;
             (2)      The property manager submits a form, prescribed by the bureau, to the administrator for approval. The form shall state in part:
             (a)      The legal name of the state agency;
             (b)      The complete address or location of the surplus property;
             (c)      A desired method of disposal of the surplus property as authorized in this chapter;
             (d)      The reason the property has been declared as surplus property;
             (e)      An estimate, current value, suggested selling price, or minimum acceptable price;
             (f)      A statement that the contents of the form have been reviewed by the property manager of the agency and that the facts contained in the form are true and correct;
             (g)      The fixed asset number if applicable; and
             (h)      Any other information determined by the bureau to be necessary;
             (3)      The administrator shall review the request and estimate the property's fair market value. The administrator shall, thereupon, designate the manner of disposal. Written notification of the designation shall be sent to the submitting agency property manager; and
             (4)      The agency shall maintain a record of all property it disposes of in a manner prescribed by the bureau.

Source: SL 2008, ch 32, § 5.


     5-24A-6.   Property with fair market value greater than one hundred dollars. If the property has an estimated fair market value greater than one hundred dollars, the administrator may designate one of the following methods of disposal:
             (1)      Transfer to another state agency or Indian tribe with or without charge;
             (2)      Public auction;
             (3)      Exchange as trade-in for replacement equipment;
             (4)      Private direct sales at no less than ninety percent of the fair market value;
             (5)      Direct sales to any authorized entity at no less than ninety percent of the fair market value; or
             (6)      Cannibalization.
     If the expense of disposal under this section would reduce the net disposal value of the property to less than one hundred dollars, the property may be disposed of pursuant to the provisions of § 5-24A-7.

Source: SL 2008, ch 32, § 6.


     5-24A-7.   Property with fair market value less than one hundred dollars. If the property has an estimated fair market value less than one hundred dollars, the administrator may designate one of the following methods of disposal:
             (1)      Transfer to a state agency or authorized entity with or without charge;
             (2)      Internet sales;
             (3)      Public auction;
             (4)      Sale of the property as scrap;
             (5)      Exchange as trade-in for replacement equipment;
             (6)      Sales through agents for a negotiated fee;
             (7)      Direct sales to the public for established prices;
             (8)      Cannibalization; or
             (9)      Disposal at a landfill, recycling center, or other waste facility.

Source: SL 2008, ch 32, § 7.


     5-24A-8.   Surplus personal computer equipment. In addition to the disposal options set out in § 5-24A-7, the administrator may designate that surplus personal computer equipment having an estimated fair market value less than one hundred dollars be distributed to families designated by the Department of Social Services as eligible for Title XIX assistance, Temporary Assistance for Needy Families pursuant to chapter 28-7A, or to licensed foster homes.

Source: SL 2008, ch 32, § 8.


     5-24A-9.   Disposal by agency or bureau. The administrator shall either authorize the agency to dispose of the property itself or to transfer the property to the bureau for disposal.

Source: SL 2008, ch 32, § 9.


     5-24A-10.   Fixed assets. If the property disposed of under the provisions of §§ 5-24A-1 to 5-24A-16, inclusive, is a fixed asset, the agency shall submit a fixed asset retirement form as designated by the bureau.

Source: SL 2008, ch 32, § 10.


     5-24A-11.   Trade-in requirements. Before the administrator authorizes a trade-in of property, the administrator shall determine that the net benefit to the state exceeds the benefit that would be derived from a public sale of the item.

Source: SL 2008, ch 32, § 11.


     5-24A-12.   Hazardous materials. The bureau may not receive, store, handle, or process any equipment, fluids, chemicals, residue, or other property which have been identified as hazardous by the bureau. Each state agency that has surplus hazardous materials is responsible for proper handling and disposal of those materials.

Source: SL 2008, ch 32, § 12.


     5-24A-13.   Retention and disposition of sales proceeds. Any money derived from the sale of public personal property shall be retained in a revolving account. This revolving account shall be used to pay the administrative expenses pertaining directly to the transportation, sale, and storage of surplus public personal property. Any money derived from the sale of property acquired by dedicated funds, internal service funds, or property inventoried by constitutional institutions, less the administrative expenses pertaining directly to the transportation, storage, and sale of such property shall be returned to the respective fund or institution. Any money derived from the sale of property not acquired by dedicated funds, internal service funds, or property inventoried by constitutional institutions, less the administrative expenses pertaining directly to the transportation, storage, and sale of the property, shall be paid to the state treasurer at the end of each fiscal year.

Source: SL 2008, ch 32, § 13.


     5-24A-14.   Conveyance in the name of the state. On approval of the sale of any personal property by the bureau, the conveyance of the personal property shall be made in the name of the State of South Dakota acting by and through the bureau by bill of sale or title certificate executed by the commissioner of administration or the commissioner's authorized representative.

Source: SL 2008, ch 32, § 14.


     5-24A-15.   Donations prohibited--Exception. Except as provided in § 5-24A-8, donations of state property to any private individual, for-profit organization, or state employee is prohibited. The sale of state property to any state employee is prohibited unless items are sold at public auctions.

Source: SL 2008, ch 32, § 15.


     5-24A-16.   Promulgation of rules regarding disposal of surplus property. The commissioner of the Bureau of Administration may promulgate rules pursuant to chapter 1-26 to carry out the functions of this chapter regarding the disposal of state surplus personal property.

Source: SL 2008, ch 32, § 16.


     5-24A-17.   Liquidation of State Cement Plant Commission property. Notwithstanding any other provision of law, including chapters 5-2, 5-7, and 5-24A, the commission shall, not later than June 30, 2011, liquidate all of the commission's remaining property, excluding any mineral estates owned or leased by the commission. If liquidating property with an estimated fair market value of greater than one hundred dollars, the commission shall dispose of the property in a manner consistent with the provisions of § 5-24A-6.

Source: SL 2010, ch 32, § 1.


     5-24A-18.   Disbursement of proceeds from liquidation of State Cement Plant Commission property. Notwithstanding any other provision of law, the commission shall disburse the proceeds from the liquidation of the commission's property, to the extent proceeds are available, as follows:
             (1)      First, to pay any remaining noncontingent, liquidated liabilities of the commission;
             (2)      Second, the amount of three hundred fifty thousand dollars to the Bureau of Human Resources for the purpose of administering and paying existing and future workers compensation claims and life insurance coverage of former employees of the commission;
             (3)      Third, to the South Dakota Retirement System for the purpose of funding benefits payable to former employees of the commission. The amount disbursed shall be determined by the commission based upon an actuarial review for the fiscal year ending June 30, 2010; and
             (4)      Fourth, the remainder shall be paid into the trust fund created by S.D. Const., Art. XIII, § 20.

Source: SL 2010, ch 32, § 6; SL 2012, ch 23, § 92.


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