GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	2 

SENATE BILL 754*
State Personnel and State Government Committee Substitute Adopted 5/12/93

Short Title:  Amend State Real Property Management.	(Public)
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Sponsors:
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Referred to:  Appropriations.
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April 8, 1993

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAWS GOVERNING THE ACQUISITION, DISPOSITION, AND MANAGEMENT OF STATE REAL PROPERTY.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 146-4 reads as rewritten:
"§ 146-4. Sales of certain lands; procedure; deeds; disposition of proceeds.
The Department of Administration may sell the vacant and unappropriated lands, swamplands, and lands acquired by the State by virtue of being sold for taxes, at public or private sale, at such times, upon such consideration, in such portions, and upon such terms as are deemed proper by the Department and approved by the Governor and Council of State, provided that any disposition shall only be made after the highest and best price, as determined by the Department of Administration and approved by the Governor and Council of State, is obtained after public bid, or public auction, after advertisement in one or more newspapers having general circulation in the general area where the property is located, including circulation in the county in which the property is located, for a minimum of once a week, for three weeks prior to the disposition.  Every deed conveying any part of those lands in fee shall be executed in the manner required by G.S. 146-74 through 146-78, and shall be approved by the Governor and Council of State as therein required. The net proceeds of all such sales of those lands shall be paid into the State Literary Fund. Whenever negotiations are begun by the Department for the purpose of selling swampland or the timber thereon, the Department shall promptly notify the State Board of Education of that fact. If the Board deems the proposed sale inadvisable, it may so inform the Governor and Council of State, who may give due consideration to the representations of the Board in determining whether to approve or disapprove the proposed transaction."
Sec. 2.  G.S. 146-15 reads as rewritten:
"§ 146-15. Definition of net proceeds.
For the purposes of this Subchapter, the term 'net proceeds' means the gross amount received from the sale, lease, rental, or other disposition of any State lands, less
(1)	Such expenses incurred incident to that sale, lease, rental, or other disposition as may be allowed under rules and regulations adopted by the Governor and approved by the Council of State; and,
 		(2)	A service charge to be paid into the State Land Fund.
The amount or rate of such service charge shall be fixed by rules and regulations adopted by the Governor and approved by the Council of State, but as to any particular sale, lease, rental, or other disposition, it shall not exceed ten percent (10%) of the gross amount received from such sale, lease, rental, or other disposition. Notwithstanding any other provision of this Subchapter, no service charge shall be paid into the State Land Fund from proceeds derived from the sale of land or products of land owned or held for the use of the Wildlife Resources Commission, or purchased or acquired with funds of the Wildlife Resources Commission."
Sec. 3.  G.S. 146-22 reads as rewritten:
"§ 146-22. All acquisitions to be made by Department of Administration.
Every acquisition of land on behalf of the State or any State agency, whether by purchase, condemnation, exchange, lease, rental, or gift, shall be made by the Department of Administration and approved by the Governor and Council of State; provided that if the proposed acquisition is an acquisition of land with an appraised value of at least twenty-five thousand dollars ($25,000), or its lease or rental, with a term which could exceed three years, or the annual rent of which could exceed twelve thousand dollars ($12,000), and the acquisition is for other than a transportation purpose, the acquisition may only be made after consultation with the Joint Legislative Commission on Governmental Operations.  In determining whether the appraised value is at least twenty-five thousand dollars ($25,000), the value of the property in fee simple shall be used.  The State may not purchase land as a tenant-in-common without consultation with the Joint Legislative Commission on Governmental Operations if the appraised value of the property in fee simple is at least twenty-five thousand dollars ($25,000).  Prior to the required presentation of any proposed acquisition of an interest in land, except for easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, to either the Joint Legislative Commission on Governmental Operations or the Council of State, a signed agreement, binding on the party the State is dealing with, shall be obtained."
Sec. 4.  G.S. 146-22.2 is repealed.
Sec. 5.  G.S. 146-26 reads as rewritten:
"§ 146-26. Donations and devises to State.
No devise or donation of land or any interest therein to the State or to any State agency shall be effective to vest title to the said land or any interest therein in the State or in any State agency until the devise or donation is accepted by the Governor and Council of State.  If the proposed devise or donation has an appraised value of at least twenty-five thousand dollars ($25,000), and the devise or donation is for other than a transportation purpose, the devise or donation shall be accepted only after consultation with the Joint Legislative Commission on Governmental Operations.  In determining whether the appraised value is at least twenty-five thousand dollars ($25,000), the value of the property in fee simple shall be used.  Notwithstanding the provisions of this section, no devise or donation shall be accepted until the State Budget Office has furnished to the Council of State, and, if applicable, the Joint Legislative Commission on Governmental Operations, for matters subject to their consultation, an estimate, previously reviewed by the Fiscal Research Division, of the projected renovation, maintenance, and operating costs of the property for the first 20 fiscal years after the devise or donation would be accepted.  Upon acceptance by the Governor and Council of State, title to the said land or interest therein shall immediately vest as of the time title would have vested but for the above requirement of acceptance by the Governor and Council of State."
Sec. 6.  G.S. 146-26.1 reads as rewritten:
"§ 146-26.1. Relocation assistance.
In the acquisition of any real property by the Department of Administration for a public use, the Department of Administration shall be vested with the authority as set forth in Article 2 of Chapter 133 of the General Statutes."
Sec. 7.  G.S. 146-27 reads as rewritten:
"§ 146-27. The role of the Department of Administration in sales, leases, exchanges, and rentals.
Every sale, lease, exchange, or rental of land owned by the State or by any State agency shall be made by the Department of Administration and approved by the Governor and Council of State; provided that if the proposed disposition is a disposition of land with an appraised value of at least twenty-five thousand dollars ($25,000), or its lease or rental with a term which could exceed three years, or the annual rent of which could exceed twelve thousand dollars ($12,000), the disposition may only be made after consultation with the Joint Legislative Commission on Governmental Operations. The Department of Administration may initiate proceedings for sales, leases, exchanges, and rentals of land owned by the State or by any State agency."
Sec. 8.  G.S. 146-28 reads as rewritten:
"§ 146-28. Agency must file application with Department; Department must investigate.
Any State agency, including the Department of Administration, desiring to sell, lease, exchange, or rent any land owned by the State or by any State agency shall file with the Department of Administration an application setting forth the facts relating to the proposed transaction, and shall furnish the Department with such additional information as the Department may request relating thereto. Upon receipt of such application, the Department of Administration shall promptly investigate all aspects of the proposed transaction, including particularly present and future State need for  the land proposed to be conveyed, leased, or rented.  Prior to the disposition of any State real property with a value in excess of ten thousand dollars ($10,000), except for disposition by easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, all State agencies must be notified in writing of the availability of such property at least 60 days in advance.  Any requests for, or interest in, any real property by any agency shall be carefully reviewed and considered by the State Property Office before the State proceeds to dispose of the property.  Any property not disposed of within 180 days of the date of the original notice to the agencies, shall be renoticed prior to a subsequent disposition."
Sec. 9.  G.S. 146-29 reads as rewritten:
"§ 146-29. Procedure for sale, lease, exchange, or rental.
(a)	If, after investigation, the Department of Administration determines that it is in the best interest of the State that land be sold, leased, exchanged, or rented, the Department shall proceed with its sale, lease, exchange, or rental, as the case may be, in accordance with rules adopted by the Governor and approved by the Council of State.
(b)	All lands to be disposed of valued in excess of fifty thousand dollars ($50,000), except for easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, shall only be disposed of after first receiving the highest and best price, under the best circumstances for the State, after advertisement in one or more newspapers having general circulation in the general area where the property is located, including circulation in the county in which the property is located, for a minimum of once a week, for three weeks prior to the disposition, in the classified advertisement section of the newspaper, in an advertisement, a minimum size of two columns wide and three column inches long.
(c)	Where land valued in excess of one hundred thousand dollars ($100,000), is to be disposed of by exchange, except exchanges with federal, county, or municipal governmental bodies, or other political subdivisions, the agreement shall not be approved until the disposition of the land has been advertised for a higher bid than the agreed exchange value as determined by applicable appraisals obtained by the State, in a newspaper having general circulation in the general area where the property is located, including circulation in the county in which the property is located, for a minimum of once a week, for three weeks prior to the disposition, in the classified advertisement section of the newspaper, in an advertisement, a minimum size of two columns wide and three column inches long.
(d)	All members of the General Assembly within whose districts the property to be disposed of is located, except for easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, shall be notified of the State's plan to dispose of the land, at least 30 days prior to the presentation of the proposed transaction to either the Joint Legislative Commission on Governmental Operations or the Council of State.
(e)	Prior to the required presentation of any proposed disposition of an interest in land, except for easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, to either the Joint Legislative Commission on Governmental Operations or the Council of State, a signed agreement, binding on the party the State is dealing with, shall be obtained.
(f)	If an agreement of sale, lease, exchange, or rental is reached, the proposed transaction shall then be submitted to the Governor and Council of State for their approval or disapproval. Every conveyance in fee of land owned by the State or by any State agency shall be made and executed in the manner  prescribed in G.S. 146-74 through 146-78."
Sec. 10.  G.S. 146-30 reads as rewritten:
"§ 146-30. Application of net proceeds.
The net proceeds of any disposition made in accordance with this Subchapter shall be handled in accordance with the following priority: First, in accordance with the provisions of any trust or other instrument of title whereby title to such real property was heretofore acquired or is hereafter acquired; second, as provided by any other act of the General Assembly; third, the net proceeds shall be deposited with the State Treasurer. Provided, however, nothing herein shall be construed as prohibiting the disposition of any State lands by exchange for other lands, but if the appraised value in fee simple of any property involved in the exchange is at least twenty-five thousand dollars ($25,000), then such exchange may not be made without consultation with the Joint Legislative Commission on Governmental Operations.
For the purposes of this Subchapter, the term 'net proceeds' means the gross amount received from the sale, lease, rental, or other disposition of any State lands, less
(1)	Such expenses incurred incident to that sale, lease, rental, or other disposition as may be allowed under rules and regulations adopted by the Governor and approved by the Council of State;
	and
	(2)	A service charge to be paid into the State Land Fund.
The amount or rate of such service charge shall be fixed by rules and regulations adopted by the Governor and approved by the Council of State, but as to any particular sale, lease, rental, or other disposition, it shall not exceed ten percent (10%) of the gross amount received from such sale, lease, rental, or other disposition. Notwithstanding any other provision of this Subchapter, the net proceeds derived from the sale of land or products of land owned by or under the supervision and control of the Wildlife Resources Commission, or acquired or purchased with funds of that Commission, shall be paid into the Wildlife Resources Fund. Provided, however, the net proceeds derived from the sale of land or timber from land owned by or under the supervision and control of the Department of Agriculture shall be deposited with the State Treasurer in a capital improvement account to the credit of the Department of Agriculture, to be used for such specific capital improvement projects or other purposes as are provided by transfer of funds from those accounts in the Current Operations Appropriations Act. Provided further, the net proceeds derived from the sale of park land owned by or under the supervision and control of the Department of Environment, Health, and Natural Resources shall be deposited with the State Treasurer in a capital improvement account to the credit of the Department of Administration to be used for the purpose of park land acquisition as provided by transfer of funds from those accounts in the Current Operations Appropriations Act. In the Current Operations Appropriations Act, line items for purchase of park and agricultural lands will be established for use by the Departments of Administration and Agriculture. The use of such funds for any specific capital improvement project or land acquisition is subject to approval by the Director of the Budget. No other use may be made of funds in these line items without approval by the General Assembly except for incidental expenses related to the project or land acquisition. Additionally with the approval of the Director of the Budget, either Department may request funds from the Contingency and Emergency Fund when the necessity of prompt purchase of available land can be demonstrated and funds in the capital improvement accounts are insufficient. Provided further, the net proceeds derived from the sale of any portion of the land in or around the unincorporated area known as Butner on or after July 1, 1980, shall be deposited with the State Treasurer in a capital improvement account to the credit of the Hospital to provide water and sewers and to bring those streets in the unincorporated area known as Butner not on the State highway system up to standards adequate for acceptance on the system, according to a plan adopted by the Department of Administration, and the Office of State Budget and Management, with the approval of the Board of County Commissioners of Granville County, to build industrial access roads to industries on the Butner lands, to construct new city streets on the Butner lands, extend water and sewer service on the Butner lands, and repair storm drains on the Butner lands."
Sec. 11. Article 8 of Chapter 146 of the General Statutes is amended by adding a new section to read:
"§ 146-36.1.  Appraisal of property to be acquired or disposed of by the State.
(a)	Where an appraisal of real estate or an interest in real estate is required by law to be made before acquisition or disposition of the property by the State or an agency of the State, the appraisal shall be made by a real estate appraiser licensed or certified by the State under Article 5 of Chapter 93A of the General Statutes.
(b)	All acquisitions and dispositions of real property by the State, exceeding five thousand dollars ($5,000) in value, except for easements, and leases for the State Farmers Markets, the State Fairgrounds, The University of North Carolina residential facilities, or other leases for periods of less than 45 days, shall only be acquired or disposed of after the State Property Office obtains at least one appraisal conducted by an independent appraiser for property appraised at less than one hundred thousand dollars ($100,000), and at least two appraisals for property appraised at one hundred thousand dollars ($100,000) or more.
(c)	Effective January 1, 1995, all appraisals relied upon by the State Property Office, shall be reviewed on behalf of the State by an appraiser, licensed or certified by the State under Article 5 of Chapter 93A of the General Statutes."
Sec. 12.  G.S. 146-65 reads as rewritten:
"§ 146-65. Exemptions from Chapter.
None of the provisions of Chapter 146 shall apply to:
(1)	The acquisition of highway rights-of-way, borrow pits, or other interests or estates in land acquired for the same or similar purposes, or to the disposition thereof, by the Board of Transportation; or
(2)	The North Carolina State Ports Authority, the authority and powers thereof set forth or provided for by G.S. 143B-452 through G.S. 143B-467 or to the exercise of all or any of such authority and powers,
Nor shall the provisions of Chapter 146 abrogate or alter any otherwise valid contract or agreement heretofore made and entered into by the State of North Carolina or by any of its subdivisions or agencies during the term or period of such contract or agreement."
Sec. 13.  G.S. 63A-23 reads as rewritten:
"§ 63A-23. Annual and quarterly reports.
The Authority shall, promptly following the close of each fiscal year, submit an annual report of its activities for the preceding year to the Governor, the General Assembly, and the Local Government Commission. Each report shall be accompanied by an audit of its books and accounts. The costs of all audits, whether conducted by the State Auditor's staff or contracted with a private auditing firm, shall be paid from funds of the Authority.
The Authority shall submit quarterly reports to the Joint Legislative Commission on Governmental Operations.  The reports shall summarize the Authority's activities during the quarter and contain any information about the Authority's activities that is requested by the Commission.
The Authority shall report at least annually to the Joint Legislative Commission on Governmental Operations, at such time as directed by the Commission, all acquisitions, dispositions, or exchanges of real property, the value of which exceeds twenty-five thousand dollars ($25,000), or all leases of real property, the terms which could exceed three years, or annual rents which could exceed twelve thousand dollars ($12,000)."
Sec. 14.  G.S. 113-315.30 reads as rewritten:
"§ 113-315.30. Approval of acquisition and disposition of real property.
Any transactions relating to the acquisition or disposition of real property or any estate or interest in real property, by the North Carolina State Seafood Industrial Park Authority, shall be subject to prior review by the Governor and Council of State, and shall become effective only after the same has been approved by the Governor and Council of State. Upon the acquisition of real property or other estate therein, by the Authority, the fee title or other estate shall vest in and the instrument of conveyance shall name the ' North Carolina Seafood Industrial Park Authority' as grantee, lessee, or transferee. Upon the disposition of real property or any interest or estate therein, the instrument of conveyance or transfer shall be executed by the North Carolina Seafood Industrial Park Authority. The approval of any transaction by the Governor and Council of State may be evidenced by a duly certified copy of excerpt of minutes of the meeting of the Governor and Council of State, attested by the private secretary to the Governor or the Governor, reciting such approval, affixed to the instrument of acquisition or transfer, and said certificate may be recorded as a part thereof, and the same shall be conclusive evidence of review and approval of the subject transaction by the Governor and Council of State. The Governor, acting with the approval of the Council of State, may delegate the review and approval of such classes of lease, rental, easement, or right-of-way transactions as he deems advisable, and he may likewise delegate the review and approval of the severance of buildings and timber from the land.
The Authority shall report at least annually to the Joint Legislative Commission on Governmental Operations, at such time as directed by the Commission, all acquisitions, dispositions, or exchanges of real property, the value of which exceeds twenty-five thousand dollars ($25,000), or all leases of real property, the terms which could exceed three years, or annual rents which could exceed twelve thousand dollars ($12,000)."
Sec. 15.  G.S. 143B-426.19 reads as rewritten:
"§ 143B-426.19. Purchase of supplies, material, equipment, and real property.
All the provisions of Article 3 of Chapter 143 of the General Statutes relating to the purchase of supplies, material and equipment by the State government and all provisions of Chapter 146 of the General Statutes relating to real property are applicable to the North Carolina Agency for Public Telecommunications."
Sec. 16.  G.S. 143B-455 reads as rewritten:
"§ 143B-455. Approval of acquisition and disposition of real property.
Any transactions relating to the acquisition or disposition of real property or any estate or interest in real property, by the North Carolina State Ports Authority, shall be subject to prior review by the Governor and Council of State, and shall become effective only after the same has been approved by the Governor and Council of State. Upon the acquisition of real property or other estate therein, by the North Carolina State Ports Authority, the fee title or other estate shall vest in and the instrument of conveyance shall name the 'North Carolina State Ports Authority' as grantee, lessee, or transferee. Upon the disposition of real property or any interest or estate therein, the instrument of conveyance or transfer shall be executed by the North Carolina State Ports Authority. The approval of any transaction by the Governor and Council of State may be evidenced by a duly certified copy of excerpt of minutes of the meeting of the Governor and Council of State, attested by the private secretary to the Governor or the Governor, reciting such approval, affixed to the instrument of acquisition or transfer, and said certificate may be recorded as a part thereof, and the same shall be conclusive evidence of review and approval of the subject transaction by the Governor and Council of State. The Governor, acting with the approval of the Council of State, may delegate the review and approval of such classes of lease, rental, easement, or right-of-way transactions as he deems advisable, and he may likewise delegate the review and approval of the severance of buildings and timber from the land.
The North Carolina State Ports Authority shall report at least annually to the Joint Legislative Commission on Governmental Operations, and at such other times as directed by the Commission, all acquisitions, dispositions, or exchanges of real property, the value of which exceeds twenty-five thousand dollars ($25,000), or all leases of real property, the terms which could exceed three years, or annual rents which could exceed twelve thousand dollars ($12,000)."
Sec. 17.  G.S. 143B-469.1(2) reads as rewritten:
"(2)	To rent, lease, buy, own, acquire, mortgage, otherwise encumber, and dispose of all such property, real or personal, as the Commission may deem necessary.  The North Carolina Ports Railway Commission shall report at least annually to the Joint Legislative Commission on Governmental Operations, and at such other times as directed by the Commission, all acquisitions, dispositions, or exchanges of real property, the value of which exceeds twenty-five thousand dollars ($25,000), or all leases of real property, the terms which could exceed three years, or annual rents which could exceed twelve thousand dollars ($12,000);".
Sec. 18.  Sections 1, 3, 4, 5, 7, 8, 9, 11, 13, 14, 16, and 17 of this act become effective October 1, 1993.  Sections 2, 6, 10, 12, and 15 of this act are effective upon ratification.