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Senate committee briefed on state property sales: capital bill, fair market value and proceeds rules
Summary
State buildings staff told the Senate committee how surplus state property is handled: sales generally appear in the capital bill, must be at fair market value, and proceeds are returned to capital funds rather than operating budgets.
The Vermont Senate Committee on Institutions was briefed May 13 on how the state disposes of surplus real property, when the capital bill is used to authorize transfers and sales, and how proceeds are handled.
A Department of Buildings and General Services presenter said the state typically brings proposals to sell property through the capital bill so that members of the appropriations and institutions committees can review the recommendation and any conditions attached to a sale. “If we have a proposal that we wanna consider selling, I bring that forth in the capital bill,” the presenter said.
The presenter described the statutory framework: the general assembly, through consent of the governor or through the capital bill, authorizes sales; property “has to be at the highest bidder for public auction” per statute language cited in the session; and the state will not sell property for less than fair market value, which is generally determined using a broker. The presenter also described examples in which the legislature granted a local municipality a right of first refusal or special conditions tied to reuse, including past examples in Waterbury and Williston.
Committee members asked whether proceeds from sales can be used for agency operating budgets; the presenter said they cannot. “We can't… align it to my operating budget. It has to come back, and that will be your property transactions in the capital bill,” the presenter told the committee.
Senators and staff discussed how the capital bill process allows legislators to attach conditions to sales, to allocate proceeds to particular capital priorities and to ensure public review of proposed transactions. No formal transaction was presented or voted on at the meeting; the discussion was informational and intended to help new committee members understand the legal and procedural framework for state property transactions.
