Federal Land Management:

Federal Land Transaction Facilitation Act Restrictions and Management Weaknesses Limit Future Sales and Acquisitions

GAO-08-196: Published: Feb 5, 2008. Publicly Released: Feb 5, 2008.

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The U.S. Department of the Interior's Bureau of Land Management (BLM), Fish and Wildlife Service, and National Park Service, and the U.S. Department of Agriculture's Forest Service manage about 628 million acres of public land, mostly in the 11 western states and Alaska. Under the Federal Land Transaction Facilitation Act (FLTFA), revenue raised from selling BLM lands is available to the agencies, primarily to acquire nonfederal land within the boundaries of land they already own--known as inholdings, which can create significant land management problems. To acquire land, the agencies can nominate parcels under state-level interagency agreements or the Secretaries can use their discretion to initiate acquisitions. FLTFA expires in 2010. GAO was asked to determine (1) FLTFA revenue generated, (2) challenges to future sales, (3) FLTFA expenditures, and (4) challenges to future acquisitions. To address these issues, GAO interviewed officials and examined the act, agency guidance, and FLTFA sale and acquisition data.

Since FLTFA was enacted in 2000, through May 2007 BLM has raised $95.7 million in revenue, mostly from selling about 17,000 acres. About 92 percent of the revenue raised, or $88 million, has come from land transactions in Nevada--1 of the 11 western states. Nevada accounts for the lion's share of the sales because of a rapidly expanding population, plentiful BLM land, and experience with federal land sales in southern Nevada. Most BLM field offices have not generated sales revenue under FLTFA. BLM faces several challenges to raising revenue through future FLTFA sales. In particular, BLM state and field officials most frequently cited the limited availability of knowledgeable realty staff to conduct the sales. These staff are often not available because they are working on higher priority activities, such as reviewing and approving energy rights-of-way. We identified two additional issues hampering land sales activity under FLTFA. First, while BLM has identified land for sale in its land use plans, it has not made the sale of this land a priority during the first 7 years of the program. Furthermore, BLM has not set goals for sales or developed a sales implementation strategy. Second, GAO found that some of the additional land BLM has identified for sale since FLTFA was enacted would not generate revenue for acquisitions because the act only allows the deposit of revenue from the sale of lands identified for disposal on or before the date of the act. The four land management agencies have spent $13.3 million of the $95.7 million in revenue raised under FLTFA: $10.1 million using the Secretaries' discretion to acquire nine parcels of land and $3.2 million for administrative expenses to prepare land for FLTFA sales. The agencies acquired the land between August 2007 and January 2008--more than 7 years after FLTFA was enacted, and BLM spent the administrative funds between 2000 and 2007, primarily for preparing FLTFA sales in Nevada. As of October 2007, no land had been purchased through the state-level interagency nomination process, which the agencies envisioned as the primary mechanism for acquiring land. Agencies face several challenges to completing future land acquisitions under FLTFA. Most notably, the act requires that the agencies use most of the funds to purchase land in the state in which the funds were raised; this restriction has had the effect of making little revenue available for acquisitions outside of Nevada. Furthermore, progress in acquiring priority lands has been hampered by weak agency performance in identifying inholdings and setting priorities for acquiring them, as required by the act. In addition, GAO found that the agencies have not established procedures to track implementation of the act's requirement that at least 80 percent of FLTFA revenue raised in each state be used to acquire inholdings in that state or the extent to which BLM is complying with agreed-upon fund allocations among the four participating agencies. Of the revenue generated by FLTFA sales, the agencies have agreed to allocate 60 percent to BLM, 20 percent to the Forest Service, and 10 percent each to the Fish and Wildlife Service and the Park Service.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: In a September 24, 2008 meeting, Bureau of Land Management (BLM) officials said that Congress had yet to act on the reauthorization of the Federal Land Transaction Facilitation Act (FLTFA), but added that numerous interested parties will be lobbying for the reauthorization in the spring of 2009. We will continue to monitor any action taken in terms of reauthorization of FLTFA and this matter for consideration in particular. On July 29, 2010, legislation extended FLTFA for a one-year period, through July 24, 2011. This legislation did not alter any other provisions in the original act. In a November 2, 2010 meeting, in commenting on the FLTFA extension, BLM officials said that at the time FLTFA expired on July 24, pursuant to the act, all funds in the Federal Land Disposal Account that had not been obligated by that time were removed from that account and transferred to the Land and Water Conservation Fund for use under section 3, as the act requires. They said this amounted to $52 million--$39 million which had been set aside for acquiring lands and $13 million which had been set aside for preparing land sales under FLTFA. The officials said that BLM has little incentive to conduct further land sales under FLTFA because of the costs and amount of work involved in preparing the sales and, given the limited one-year extension, the uncertainty that BLM and other agencies will be able to use any revenues generated to acquire lands. The officials said that efforts are being made to have the $52 million funding restored. As of August 2012, FLTFA has not been reauthorized and, therefore, the matter remains unimplemented.

    Matter: If Congress decides to reauthorize FLTFA in 2010, it may wish to consider revising the following provision to better achieve the goals of the act: FLTFA limits eligible land sales to those lands identified in land use plans in effect as of July 25, 2000-- this provision excludes more recently identified land available for disposal, thereby reducing opportunities for raising additional revenue for land acquisition.

  2. Status: Closed - Not Implemented

    Comments: In a September 24, 2008 meeting, Bureau of Land Management (BLM) officials said that Congress had yet to act on the reauthorization of the Federal Land Transaction Facilitation Act (FLTFA), but added that numerous interested parties will be lobbying for the reauthorization in the spring of 2009. We will continue to monitor any action taken in terms of reauthorization of FLTFA and this matter for consideration in particular. On July 29, 2010, legislation extended FLTFA for a one-year period, through July 24, 2011. This legislation did not alter any other provisions in the original act. In a November 2, 2010 meeting, in commenting on the FLTFA extension, BLM officials said that at the time FLTFA expired on July 24, pursuant to the act, all funds in the Federal Land Disposal Account that had not been obligated by that time were removed from that account and transferred to the Land and Water Conservation Fund for use under section 3, as the act requires. They said this amounted to $52 million--$39 which had been set aside for acquiring lands and $13 million which had been set aside for preparing land sales under FLTFA. The officials said that BLM has little incentive to conduct further land sales under FLTFA because of the costs and amount of work involved in preparing the sales and, given the limited one-year extension, the uncertainty that BLM and other agencies will be able to use any revenues generated to acquire lands. The officials said that efforts are being made to have the $52 million funding restored. As of August 2012, FLTFA has not been reauthorized and, therefore, the matter remains unimplemented.

    Matter: If Congress decides to reauthorize FLTFA in 2010, it may wish to consider revising the following provision to better achieve the goals of the act: The requirement that agencies spend the majority of funds raised from eligible sales for acquisitions in the same state--this provision makes it difficult for agencies to acquire more desirable land in states that have generated little revenue.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to our report, BLM stated that it would establish goals to offer Federal Land Transaction Facilitation Act (FLTFA)-eligible property for sale. In its 60-day letter, BLM stated it would establish such goals by June 30, 2008. In a September 24, 2008 meeting with BLM officials, the BLM National Land Sales Manager said that BLM had established FLTFA land sale goals for FY2009 and FY2010 of $25 million each. To set these goals, the lead contacted each of the BLM state offices to determine the amount of eligible land sales that could be conducted in the final 2 years of FLTFA. The lead compiled this information and subsequently approved $19 million worth of land sales for FY2009.

    Recommendation: To improve the implementation of the FLTFA mandate to raise funds to purchase inholdings, the Secretary of the Interior should direct the Director of BLM to develop goals for land sales.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: In response to our report, BLM stated that it would establish goals to offer Federal Land Transaction Facilitation Act (FLTFA)-eligible property for sale and further stated that it would identify areas where market conditions create an opportunity to prepare and offer public land for sale; for example, areas with rapidly appreciating land values. In its 60-day letter, BLM concurred with our recommendation and planned to implement it by June 30, 2008. In a September 24, 2008 meeting, the BLM National Land Sales Manager said that BLM had created a "Sales Incentive Program" that provides seed money for planning and carrying out FLTFA-eligible land sales. Information on this new program was disseminated in an August 12, 2008 email to BLM state office FLTFA sale leads. A copy was provided to GAO. Also in response to our review, BLM created the National Sales Manager position only months before to coordinate the management of the BLM sales program under FLTFA.

    Recommendation: To improve the implementation of the FLTFA mandate to raise funds to purchase inholdings, the Secretary of the Interior should direct the Director of BLM to develop a strategy for implementing these goals during the last 3 years of the program.

    Agency Affected: Department of the Interior

  3. Status: Closed - Not Implemented

    Comments: USDA provided no formal comment to our report. In its 60-day letter, USDA stated that its Land Acquisition Prioritization System (LAPS), generally used for land acquisitions under the Land and Water Conservation Fund (LWCF), also satisfies the land acquisition prioritization requirements under FLTFA. Their letter further stated that the Forest Service will coordinate with BLM to formalize the use of a single process to prioritize land acquisitions and that the agency's current actions comply with our recommendation. During a subsequent meeting on November 5, 2008, the Forest Service FLTFA program lead emphasized that LAPS can be easily modified to use for FLTFA acquisitions, and that, therefore, there was no need to improve the procedure to identify and set priorities for inholdings. This is similar to what the BLM FLTFA program lead told us about their current LWCF prioritization system in a September 24, 2008 meeting. The BLM lead said that in response to our report, BLM had intensified its efforts to educate state-level FLTFA implementation teams. Specifically, the BLM lead said that the 10 FLTFA teams met the goal, each holding a team meeting by October 2009. The program lead further stated that he personally attended 7 of the 10 meetings, educating team members about the availability and use of FLTFA funds, and clarifying misperceptions about the use of those funds. For example, the BLM lead said that several teams were under the mistaken impression that the fund allocations set forth in the national MOU had to be strictly adhered to, but were notified that those allocations were a target only, and that each agency member should feel free to submit projects beyond their allocation as long as such nominations merited selection.

    Recommendation: To enhance the departments' compliance with the act, the Secretaries of Agriculture and of the Interior should improve the procedure in place to identify and set priorities for acquiring inholdings.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: In its response to our report, Interior stated that BLM will coordinate with the other signatories to the National MOU to formalize the use of a single process to prioritize land acquisitions. In its 60-day letter, Interior stated that it and USDA have long-standing, well-regarded processes and procedures in place to identify and prioritize land acquisition goals and specifically cited the system for Land and Water Conservation Fund (LWCF) acquisitions. Interior agreed to continue to improve the procedures in place to identify and set priorities for acquiring inholdings and set an implementation date of September 30, 2008. In a September 24, 2008 meeting, the BLM FLTFA program lead said that the LWCF system for identifying and setting priorities for acquisitions works fine for FLTFA and that no changes had been made to this as a result of our recommendation. However, he added the implementation of FLTFA acquisitions, on the other hand, had not been going well. The BLM lead said that in response to our report, BLM had intensified its efforts to educate state-level FLTFA implementation teams. Specifically, the BLM lead said that the 10 FLTFA teams met the goal each holding a team meeting by October 2009. The program lead further stated that he personally attended 7 of the 10 meetings, educating team members about the availability and use of FLTFA funds, and clarifying misperceptions about the use of those funds. For example, the BLM lead said that several teams were under the mistaken impression that the fund allocations set forth in the national MOU had to be strictly adhered to, but were notified that those allocations were a target only, and that each agency member should feel free to submit projects beyond their allocation as long as such nominations merited selection. In a November 2, 2010 meeting, BLM officials reiterated their position that the LWCF system for identifying and setting priorities for acquisitions works fine for FLTFA and concluded that BLM did not plan to implement this recommendation. They added that they never thought the system needed to be improved and that any system needs to be flexible as land acquisitions are always very fluid transactions with willing sellers constantly shifting their positions.

    Recommendation: To enhance the departments' compliance with the act, the Secretaries of Agriculture and of the Interior should improve the procedure in place to identify and set priorities for acquiring inholdings.

    Agency Affected: Department of the Interior

  5. Status: Closed - Implemented

    Comments: In its response to our report, Interior agreed to implement our recommendation. Interior stated that BLM maintains data for all participating agencies on each specific parcel acquired using Federal Land Transaction Facilitation Act (FLTFA) funds and BLM is directing field staff to note in an automated land status tracking system (LR2000) whether a parcel is an inholding or adjacent land. In its 60-day letter, Interior again concurred with the recommendation and stated that it gathers and maintains data on each transaction and tracks whether the parcel is an inholding or adjacent land. The letter further states that BLM will prepare a final report in compliance with the FLTFA at sunset. In a September 24, 2008 meeting, the BLM FLTFA program lead provided a copy of the system used to track FLTFA expenditures, that includes a column for inholding versus adjacent land. The BLM lead also confirmed that staff are now required to enter this information for all FLTFA acquisitions into LR2000.

    Recommendation: To enhance the departments' compliance with the act, the Secretary of the Interior should direct the Director of BLM to establish a procedure to track the percentage of revenue spent on inholdings and on adjacent land.

    Agency Affected: Department of the Interior

  6. Status: Closed - Implemented

    Comments: In its response to our report, Interior stated that it would work with USDA to implement this recommendation. In its 60-day letter, Interior stated that this recommendation had been implemented. The letter further stated that BLM gathers data on each Federal Land Transaction Facilitation Act (FLTFA) transaction by agency and that BLM will prepare a final report in compliance with the MOU at FLTFA's sunset. In a September 24, 2008 meeting, the BLM FLTFA program lead said that the FLTFA expenditure spreadsheet he maintains fulfills this recommendation, as it is broken down by agency and the percentage used by each can be easily derived. He again emphasized, however, that the allocations established in the MOU are goals only, and that, while the agencies will try to adhere to them, they ultimately are not held to those allocations.

    Recommendation: To fully implement the National Memorandum of Understanding, the Secretaries of Agriculture and of the Interior should establish a procedure to track the fund allocations for land acquisitions by agency as provided in the memorandum of understanding.

    Agency Affected: Department of the Interior

  7. Status: Closed - Implemented

    Comments: USDA provided no formal comment to our report. In its 60-day letter, USDA stated that "BLM is responsible under FLTFA for keeping track of the sales, proceeds, and disbursement of funds ..." Their letter further stated they would continue to assist BLM in tracking these funds. The Forest Service FLTFA program lead said the BLM lead regularly provides data on program revenue and expenditures. In a September 24, 2008 meeting, the BLM lead reported that, in response to our report, he modified his spreadsheet that tracks FLTFA expenditures to account for inholdings versus adjacent lands and provided a copy for our review. In addition, he said that field staff are now required to indicate whether a parcel is an inholding or an adjacent parcel in LR2000, BLM's central public land tracking system.

    Recommendation: To fully implement the National Memorandum of Understanding, the Secretaries of Agriculture and of the Interior should establish a procedure to track the fund allocations for land acquisitions by agency as provided in the memorandum of understanding.

    Agency Affected: Department of Agriculture

 

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