Date Requested:March 22, 2005
Time Requested:03:30 PM
Agency: Puchasing Division
CBD Number: Version: Bill Number: Resolution Number:
2005R1513 Intro SB728
CBD Subject: Cannibalization of State Property
FUND(S)
2281
Sources of Revenue
Special Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This proposed legislation addresses the issue of cannibalization of property and the disposal of waste of state property.
    
    Regarding cannibalization of property, the legislation authorizes the Purchasing Director to establish procedures that permit the cannibalization when it is in the best interest of the state. The procedures must be approved by the director prior to the cannibalization of property with the initial value of over $10,000. Agencies would have to request in writing or electronically, such action.
    
    Concerning the disposal of waste of state property, the legislation also authorizes the Purchasing Director to establish procedures to allow state agencies to dispose of property in a landfill or by other lawful means of waste disposal. Agencies would have to follow a similar manner of requesting permission to utilize this method of disposal and obtain the Purchasing Director’s approval.
    
    There will be a financial impact from the passage of this legislation. However, it is difficult to assess the extent of this impact because cannibalization has been prohibited in the past.
    
    Please note the Surplus Property Unit is a special revenue agency, with 100 percent of its funding generated from sales. If agencies began to cannibalize property, the revenues that Surplus Property would receive from the cannibalized items would be far less than property which would be retired intact.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    This legislation may have a negative affect on Surplus Property Unit’s revenues, the extent of which is unknown at this time.


Memorandum
Person submitting Fiscal Note:
Diane Holley
Email Address:
dholley@wvadmin.gov
    This bill indicates that approval must be attained by the Purchasing Director in order to cannibalize property with the initial value of over $10,000; however, it does not specify procedures for cannibalization under $10,000, which is the bulk of the state’s inventory, including lawn equipment, computers, communication and power equipment.
    
    In addition, this bill does not address the disposal of the residual components of property after the cannibalization has been completed; thus, this legislation could affect inventory accountability.
    
    Please note the Surplus Property Unit is a special revenue agency, with 100 percent of its funding generated from sales. If agencies began to cannibalize property, the revenues that Surplus Property would receive from the cannibalized items would be far less than property which would be retired intact.