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SPA Process User’s Guide – Chapter 2 – General Policies

Surplus Property

Surplus property is any personal property that is in excess of the needs of any state agency. Surplus property may be new, used or salvage.

Surplus property must first be made available to eligible entities such as other Texas state agencies, political subdivisions and assistance organizations before it can be offered to the general public. For a description of political subdivisions and assistance organizations, see the Texas Facilities Commission’s (TFC) Certificate of Acquisition form.

Per Texas Government Code Annotated Section 2175, TFC is the state authority for administering the state surplus and salvage property program. State agencies must use the TFC surplus process for disposal of surplus, and salvage state agency property unless exempted by statute. Without specific authority, agencies cannot donate, sell or transfer assets outside the state or to state employees.

For surplus information, policies, procedure, questions about surplus property and contact information, please see the Texas Facilities Commission State Surplus Property website.

Policy

State agencies not exempted from the general provisions for surplus and salvage property (Texas Government Code Annotated Section 2175) must follow the TFC’s and Comptroller’s office policies and procedures for transfer, sale or disposal of surplus property. When applicable, agencies must adhere to the federal guidelines and regulations for disposal of surplus property.

State agencies are required to enter all non-exempt surplus and salvage property in the TFC Surplus Process. To initiate the surplus disposal process, agencies must enter the asset on the Surplus Property Process screen (see Disposal Method 05) in SPA, which officially notifies TFC that surplus property is available for sale or other disposition. Surplus assets are electronically submitted to TFC each night. Once an asset has been submitted to the process, it will remain locked in a disposal method (DM) 06 until released (donated or sold and sent back to SPA electronically) by TFC.

During the TFC advertisement period, state property is available for transfer to state agencies, political subdivisions, and TFC-approved assistance organizations. Requests from state agencies have priority over all other organizations; however, if no state agency requests the property during advertisement, the first organization requesting the property and agreeing to the price is entitled to it at the end of the required advertisement period.

During the TFC advertisement period, state agencies can directly transfer assets to other state agencies at a price agreed to by both agencies. TFC is not involved in interagency transfers during the advertisement period. If a transfer occurs during this time, the selling agency must contact TFC to request that TFC update SPA with a DM 5r. The selling agency must then remove the asset from the surplus process and complete an interagency transfer in SPA and arrange for asset pickup with the buying agency.

For assets sold to political subdivisions or TFC-approved assistance organizations during the advertisement period, agencies must contact TFC for assistance with TFC policy and procedure for disposing these items. TFC will update the SPA disposal method to DM 5c. After the organization physically acquires the asset, the agency must update SPA from DM 5c to the final disposal method:

  • DM 08 – donated/sold to political subdivision
  • DM 09 – donated/sold to TFC approved assistance organization

If property is not transferred or sold during the advertisement period, it will be automatically entered into the TFC surplus process to be sold in the TFC storefront, auction or donated by TFC. Agencies must contact TFC for information regarding the asset while it is in the TFC surplus process. During this process, the asset is locked in a DM 06 in SPA and cannot be updated by the agency or a SPA analyst. Only TFC can update assets that are currently in the process. When an asset is sold or donated, TFC will update SPA to one of the following final hard disposal methods:

  • DM 33TFC Surplus Process Sale to Public — Property sold or auctioned to the public through the TFC Surplus Process.
  • DM 34TFC Donation — Property that is donated by TFC during the TFC surplus process.

If a capitalized asset is purchased by an agency from the TFC storefront, the transaction must be processed as an interagency transfer even if the purchase occurs after the TFC advertisement period. If this occurs, the asset must be updated by TFC to a DM 5r in SPA and the agencies must complete an interagency transfer.

If the property is data processing equipment (computers or related peripherals), all state agencies not exempt from the surplus process must send all data processing equipment to a school district, open enrollment charter school or the Texas Department of Criminal Justice after the TFC advertisement period has ended. The agency disposing of the data processing equipment may not collect a fee or other reimbursement and the data processing equipment cannot be sold to the general public. These assets will be updated by TFC to a DM5c after the advertisement period; then the agency must make arrangements to transport the assets to the appropriate recipient. After physical disposal, update the asset in SPA to the final disposal method code DM 15 – TDCJ Computer Recovery Program.

TFC may authorize a state agency to dispose of surplus or salvage property, bypassing the procedures above. For example, TFC may authorize the agency to sell the property by competitive bid, auction or direct sale to the public but this requires prior authorization from TFC. TFC determines which method of sale shall be used depending on what is most economically advantageous to the state under the circumstances. Agencies must use DM 35 (TFC Authorized Sale or Donation) to report this type of disposal.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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