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Senate committee advances bill to raise municipal sale threshold from $1,000 to $10,000
Summary
The Senate Government Organization Committee voted to report Senate Bill 234 to the full Senate with a recommendation that it pass. The bill would raise the dollar threshold requiring a municipality to sell property at public auction and allow negotiated sales to adjacent property owners after written notice.
The Senate Government Organization Committee voted to report Senate Bill 234 to the full Senate with the recommendation that it pass, advancing a measure that would raise the dollar threshold at which municipalities must sell property at public auction from $1,000 to $10,000.
Committee counsel summarized the bill to the panel, saying, “This bill raises the threshold value at which municipal property, either real or personal, must be sold at public auction after publication of legal notice from $1,000 in current code to $10,000.” Counsel added that the bill “also provides that if a municipality makes a determination that the highest and best use of a piece of real property is that it be sold to an adjacent property owner, the municipality, instead of auctioning off the property at public auction, may negotiate a sale of the property to an adjacent property owner after providing written notice to all adjacent property owners.”
Why it matters: Counsel said the $1,000 threshold has not been updated for decades and imposes advertising costs that can exceed the proceeds from auctions of low-value personal property. “If you put it out for public auction and get a $400 or $500 bid or something like that, youve pretty much eaten up the cost of it just by paying for the legal advertising,” counsel said, explaining the municipal rationale for the change.
Questions from committee members focused on how property below the new threshold would be handled and on the negotiated-sale provision. The junior senator from the fifteenth asked, “Can you explain for real and personal property valued at less than $10,000 what happens to that property if this bill passes?” Committee counsel replied that property below the threshold “can dispose of it without having to do it at public auction. They can negotiate or a sale of it without the notification. They can do whatever they, feel is appropriate within their discretion.”
On negotiated sales to adjacent owners, a committee member asked why the bill would allow that instead of relying on auction and notice. Counsel said the statutory publication requirement currently ensures notice but that negotiation can produce a higher net return to the municipality: “In negotiation, you might be able to negotiate a better price.” The Municipal League was noted as present and available to present further detail if the committee wished; no league representative spoke in the recorded portion of the meeting.
No amendments were offered. The vice chair moved that the committee report the bill to the full Senate with the recommendation that it pass. The motion carried following the committees voice vote; the chair declared the motion adopted and said the bill will be reported to the full Senate.
Next steps: Senate Bill 234 will be placed on the Senates calendar for further consideration by the full body.
