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[Exchange of Lands for Federal Coal Lease Bidding Rights]

B-209981 Dec 30, 1982
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Highlights

GAO was asked by the Bureau of Land Management (BLM) to determine whether BLM has the authority to agree to a proposal from the Montana Power Company. The proposal relates to the exchange of bidding rights and inclusion of Company lands in the Rattlesnake National Recreation Area and Rattlesnake Wilderness. The request indicated that under applicable legislation lands owned by the Company have been appraised at approximately $17.5 million and that one acquisition method provided for in the legislation is for the exchange of the lands for bidding rights in an amount equal to the lands' value. These rights may be used to pay the bonus or other payment required to the successful bidder for competitive Federal coal leases. Under the proposed exchange agreement, the Company would use its bidding rights for only half of any lease payment, assuring a 50-percent payment in cash. The payment would be remitted to the State as its 50-percent share of money received from sales, bonuses, royalties and rentals of Federal public lands under other applicable legislation. The BLM tentative conclusion was that the statement of intent that established the proposed method of payment, had no effect on the disbursement of cash to be received from the Company, because all mention of the statement was removed before the bill was enacted, and the statement is ambiguous regarding the 50-percent payment. GAO held that: (1) since bidding rights are not money, State payment may not be based on their receipt; (2) under the proposed exchange agreement where Montana Power Company's total payment is in cash, but is accompanied by notice of use of bidding rights, Treasury would be required to pay the Company for the amount of rights used pursuant to the notice. Reimbursement to the Company is not proper absent authority to retire bidding rights by payment and lack of available appropriation for that purpose; and (3) increased bidding rights are not legally permissible since their value is limited to fair market value of lands under the Rattlesnake National Recreation Area and Wilderness Act. Accordingly, the value of bidding rights called for in the proposed exchange agreement is not legally permissible.

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