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Committee asks where proceeds from surplus property sales are recorded and used
Summary
Members of the Finance, Ways and Means Committee asked agency staff to explain how proceeds from surplus real estate, vehicles and equipment are handled; staff said proceeds generally remain with the owning agency or the facility revolving fund, with the surplus division retaining a small operating percentage for sales.
Chairman Hawk asked agency staff how dollars from surplus property sales are recognized in the budget and where the funds go after sale.
An agency speaker explained that treatment depends on which agency has jurisdiction and any restrictions tied to the property. For many state office buildings and multi-tenant properties, proceeds remain with the facility’s revolving fund and are available for future capital outlay or maintenance when appropriated. If another agency owns the asset, proceeds typically return to that agency unless there is a specific fund designation.
Bob Williams said the state obtains appraisals for real estate and then follows a sealed-bid process; he asserted market prices are strong and the state frequently collects more than appraised value. He also described the use of GovDeals public auctions for personal property and said the state actively markets surplus assets.
A separate speaker identified as Michael described how vehicle sales are handled: the surplus division retains a portion to fund its operations and the remainder returns to the owning division (for example, vehicle and asset management) to help replace fleet vehicles. Michael said proceeds from a recent small lot of computer equipment fetched about $85,000 and that in a hurricane-relief example the state discounted items to assist East Tennessee recipients.
Committee members did not take formal action during the exchange. Agency staff said they would follow up with property-specific answers if the committee provided particular examples to examine.
