Finance committee hears how proceeds from surplus property and vehicle sales are handled

Chairman Hawk asked how proceeds from the sale of surplus buildings, vehicles and equipment are recorded in the budget and what agencies may spend those funds on.

Bob Williams, a General Services staff member, said treatment of proceeds depends on jurisdiction and any restrictions on a particular property. "As with as it pertains to real property, real estate, kinda depends on who has jurisdiction of that property and any restrictions that are on it," Williams said. He added that proceeds from multi‑tenant office buildings generally remain in the facilities revolving fund to be used for future capital outlay and capital maintenance or preserved until appropriated.

A separate surplus division staff member who identified himself as Michael described treatment of proceeds from vehicle and personal property sales. He said the surplus division retains a small portion of proceeds to fund day‑to‑day sale operations while the remaining funds return to the owning agency for vehicle replacement or other asset needs. "Those vehicles that are sold, there's a portion that's kept by our surplus division to fund their operation... the remaining funds are returned to the agency or department who owned the asset," Michael said.

The committee heard examples intended to show current sale returns: staff said the state recently sold four pallet‑sized lots of computers that generated about $85,000, and that in a special instance the state discounted items to assist East Tennessee hurricane recovery. Committee members also were told that real property sales go through appraisal and sealed‑bid processes and that current market prices have generally exceeded appraisals.

No formal policy change or vote was taken; the discussion was a staff briefing during the committee's budget hearing.