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RULE §126.5Disposition of Surplus and Salvage Property to the Public by Competitive Bidding, Auction, or Direct Sale

(a) Method of Sale. The Commission will consider the following criteria when determining the method of sale for surplus and salvage property:

  (1) geographic location;

  (2) cost of transportation if applicable;

  (3) sales history for similar property;

  (4) type of property; and

  (5) condition of property.

(b) Disposition by direct sale to the public.

  (1) Location and method of direct sales. Direct sales operations may be conducted at designated state facilities or warehouses approved by the Commission or by live or Internet auction.

    (A) Access. The general public, political subdivision, and assistance organizations will have equal access.

    (B) Payment. A purchaser under this section must pay for the surplus or salvage property by an approved method of payment at the time of sale and prior to obtaining possession or actual title to the property.

    (C) Live auctions. Surplus or salvage property sold through the live auction method shall be accompanied by an auctioneer's paid receipt. The auctioneer's paid receipt will serve as the authorization of the Commission that the purchaser has in good faith complied with the conditions of the sale.

    (D) Internet auctions. The Commission may contract with one or more commercial Internet auction sites for sale of state surplus or salvage property. Property on the Internet auction site shall be posted for at least ten (10) calendar days.

  (2) Transfer of property. When a purchaser or successful bidder has paid the full amount due for the purchase of surplus or salvage property, the Commission or its designee shall notify both the successful bidder and the state agency holding the title of the surplus or salvage property and authorize the transfer of possession. In the case of vehicles or other items which require title transfer, it shall be the responsibility of the state agency holding title to complete the transfer of title to the purchaser or successful bidder.

  (3) Forfeiture. In the event a purchaser or successful bidder pays for the property, but fails to remove the property within the time specified, the purchaser or successful bidder forfeits his rights to the property and any monies tendered, and ownership of the property reverts to the state.

(c) Direct Donations to Assistance Organizations and Local Governmental Entities.

  (1) If the Commission determines that disposition by public sale is not in the State's best interest then the Commission may destroy the property as worthless salvage or donate it to an assistance organization or local government entity.

  (2) A State agency may also make similar donations if the agency first notifies the Commission and provides sufficient information for the Commission to determine the donation is in the State's best interest. The State agency is responsible for documenting the donation and any proceeds in the Comptroller's State Property Accounting System.

  (3) The Commission may charge the recipient a fee (not to exceed 10% of the item's market value) to cover the costs of the donation.

(d) Returns on Small Value Items--For the purpose of this section, Small Value Items are non-capitalized items in the Comptroller's State Property Accounting System. The Commission may not provide participating State agencies with monetary returns on the transfer or sale of that agency's small value items. However, the Commission will allow the State agency to receive a return in the form of transfers of similar items at zero or reduced cost.

Source Note: The provisions of this §126.5 adopted to be effective November 15, 2011, 36 TexReg 7660; amended to be effective September 29, 2016, 41 TexReg 7473

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