Answer

The entity must receive Fair Market Value (FMV) for the sale of surplus property. The Attorney General (AG) has stated that FMV means “the price at which property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell and both parties have reasonable knowledge of relevant facts.” AG Op. No. 09-0293, AG Op. No. 08-0226, AG Op. No. 06-0236. The AG has further stated that “obtaining an appraisal is a very common method used to determine the fair market value of a piece of property.” AG Op. No. 11-0114. However, the AG has noted that “once an appraisal is obtained, the fair market value of a piece of property can be further tested by offering the property for sale to the public, thereby subjecting the property to actual market conditions.” AG Op. No. 11-0114 and AG Op. No. 06-0236. In this case, the public entity should advertise the surplus vehicle with the appraised value as the “minimum bid” reserving the right to reject all bids if no bids of at least minimum value are received. If that happens, the process to sell the vehicle must start again. The fact that no minimum bids were received at the first sale should be factored into a re-appraisal of the vehicle. The re-appraisal will be the minimum bid (FMV) for the next sale of the vehicle. Louisiana Legislative Auditor website: 07/16/2025 02:17:29 AM