Federal Land Management: Federal Land Transaction Facilitation Act Restrictions and Management Weaknesses Limit Future Sales and Acquisitions
Published: 2008-02-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: The four major federal land management agencies—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—administer approximately 628 million acres,  or about 28 percent of the land area in the United States. These public  lands are mostly in the 11 western states and Alaska, where the four  agencies manage lands that constitute significant portions of the states’  acreage, ranging from about 28 percent in Washington state to about 81  percent in Nevada. These lands have multiple uses, from preserving  cultural and natural treasures to accommodating the development of  resources, such as oil and gas, among other things. Historically, many  controversies have arisen over the agencies’ management of these lands,  including the selling of federal land and the purchasing of private land. In  these controversies, the agencies have had to balance the need to protect  resources in the land they manage with the need to respect the rights of  private landowners.
One particularly controversial issue has been managing federal lands with  inholdings, which are nonfederal lands within the boundaries of national  parks, forests, wildlife refuges, and other designated areas. In 2005, the  agencies estimated there were at least 70 million acres of inholdings  within the lands they manage. Inholdings can create significant  management problems for federal agencies in maintaining boundaries,  providing security, and protecting resources, among other things. The  federal land management agencies have had the authority to acquire  inholdings, but have had limited funding for exercising this authority.
Congress enacted the Federal Land Transaction Facilitation Act of 2000  (FLTFA), in part, to enhance the efficiency and effectiveness of federal  land management by allowing the four land management agencies to  acquire inholdings to promote the consolidation of ownership of public  and private lands in a manner that would allow for better overall resource  management. Revenue generated by the sale or exchange of public lands  under FLTFA has created another funding source available to the four  agencies to acquire land when appropriations for acquisitions have been  declining. These funds are available to the agencies without further  appropriation.
BLM, which manages approximately 256 million acres of federal land, is  authorized to sell or exchange land identified in its land use plans;4,  the  other three land management agencies have limited or no sales authority.  Therefore, the funds for FLTFA acquisitions must come from the revenue  generated by BLM sales or equalization payments derived from exchanges.  BLM may dispose of land that meets certain criteria, including land that is  difficult to manage, no longer needed, or needed for community  expansion. Thus, when BLM sells land, the sale generates revenue and  reduces the burden on its land managers to accomplish such tasks as  monitoring scattered acreage and boundaries.
The authority is provided in the Federal Land Policy and Management Act (FLPMA) of  1976 (Pub. L. 94-579) (1976) (codified at 43 U.S.C. § 1701 et seq.). FLPMA defines the 11  contiguous western states as Arizona, California, Colorado, Idaho, Montana, Nevada, New  Mexico, Oregon, Utah, Washington, and Wyoming (43 U.S.C. 1702, § 103 (o)). BLM’s Alaska  State Office is not currently participating in FLTFA because of its priority to settle Alaska  Native land claims. created by FLTFA. However, the act limits the revenue deposited into this  account to that generated from sales or exchanges of public lands  identified for disposal in a land use plan in effect as of July 25, 2000—the  date of FLTFA’s enactment. Money in the new account is available to BLM  and the other three agencies to purchase inholdings, and in some cases,  land adjacent to federally designated areas and containing exceptional  resources. The act expires in July 2010, and the Administration has  proposed revising and extending it.
BLM sells its land in one of three ways: competitive sales; modified  competitive sales, which provide a preference to existing land users or  adjoining landowners; and direct sales, which occur in special situations,  such as when parcels are completely surrounded by one landowner and  there is no public access. BLM prefers competitive sales because these  usually generate the most revenue and, therefore, are more likely to  increase the revenue available under FLTFA for land acquisitions. BLM  staff in headquarters, its 12 state offices, and 144 field offices nationwide  manage and conduct these sales. About 300 full-time equivalent staff, out  of a workforce of about 10,500 full-time equivalent staff, are responsible  for land and realty management in BLM. These staff are directly  responsible for land sales and acquisitions, along with other realty  responsibilities, such as processing energy rights-of-way and leasing and  permitting on public lands.
The federal land agencies have two methods for identifying land to acquire  under FLTFA. First, the agencies can nominate parcels through a process  laid out in state-level implementation agreements that were developed  under the direction of a national memorandum of understanding (MOU)  that implemented the program. Under the process, state-level interagency  teams are to review proposals for land acquisitions and forward their  nominations to the Secretaries of Agriculture and of the Interior for  approval. Second, the Secretaries can directly use a portion of FLTFA  revenue to acquire specific parcels of land at their own discretion. The  national MOU laid out the expectation that most acquisitions would occur  through the state-level process.
FLTFA places several restrictions on using funds from the new U.S.  Treasury account. Among other things, FLTFA requires that (1) no more  than 20 percent can be used for BLM’s administrative and other activities  necessary to carry out the land disposal program; (2) of the amount not  spent on administrative expenses, at least 80 percent of the revenue must  be expended in the state in which the funds were generated; and (3) at  least 80 percent of FLTFA revenue required to be spent on land  acquisitions within a state must be used to acquire inholdings (as opposed  to adjacent land) within that state. In addition, the national MOU sets the  allocation of funds from the FLTFA account for each agency—60 percent  for BLM, 20 percent for the Forest Service, and 10 percent each for the  Fish and Wildlife Service and the Park Service, but the Secretaries may  vary from these allocations by mutual agreement.
With FLTFA expiring in July 2010, you asked us to (1) determine the  extent to which BLM has generated revenue for the FLTFA program, (2)  identify challenges BLM faces in conducting future sales, (3) determine the  extent to which agencies have spent funds under FLTFA, and (4) identify  challenges the agencies face in conducting future acquisitions.
To address these objectives, we reviewed FLTFA, other applicable  authorities, and agency guidance, and interviewed FLTFA program leads  at the four agencies’ headquarters, officials with Interior’s Office of the  Solicitor, and officials with the Office of the Assistant Secretary for Land  and Minerals Management on FLTFA implementation. We also obtained  and analyzed data from BLM’s Division of Business Services on program  revenue and expenditures and visited the Division of Business Services  accounting officials in Lakewood, Colorado, to discuss the management of  the FLTFA account. We conducted semistructured interviews and  collected data from (1) the 10 BLM state officials responsible for the  FLTFA program in their office on the program’s status, completed and  planned FLTFA land sales and acquisitions, and the challenges faced in  conducting sales and acquiring land; (2) officials at the 7 BLM field offices  that have raised 97 percent of the FLTFA revenue; and (3) a  nongeneralizable sample of 11 of the 137 remaining BLM district and field  offices that had not conducted a competitive sale under FLTFA as of May  31, 2007 to determine why such sales have generally not occurred and  challenges faced to conducting future sales. With regard to acquisitions,  we reviewed available documentation for land acquisition proposals  considered by the 10 FLTFA interagency teams at the state level, agency  headquarters, and the Secretaries of Agriculture and of the Interior. During  our visits to BLM state offices (California, Nevada, New Mexico, and  Oregon) and field offices (Carson City, Nevada, and Las Cruces, New  Mexico), we interviewed officials and visited planned land acquisition  sites to learn about the details of the land acquisition process. A more  detailed description of our scope and methodology is presented in  appendix I. We performed our work between November 2006 and  February 2008 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: FLTFA, commonly called the “Baca Act,” provides for the use of revenue  from the sale or exchange of BLM land identified for disposal under land  use plans in effect as of the date of its enactment—July 25, 2000. The act  does not apply to land identified for disposal after its enactment, such as  through a land use plan amendment approved after that date. Revenue  generated under FLTFA are available to the Secretaries of Agriculture and  of the Interior for acquiring inholdings within certain federally designated  areas, or land adjacent to those areas and containing exceptional  resources, and for administrative and other expenses necessary to carry  out the land disposal program under the FLTFA.
To implement FLTFA, BLM has designated a program lead realty specialist  in headquarters, in each state office involved, and in each field office  within those states. The program lead duties are sometimes split between  land and realty staff who specialize in sales and others who specialize in  the acquisition process. In addition, to facilitate the use of FLTFA funds  for acquisition, the other three agencies sharing in the revenue, the Forest  Service, the Park Service, and the Fish and Wildlife Service, have also  designated realty staff to participate in interagency groups to decide on  acquisitions in each BLM state. BLM manages the FLTFA account through  its Division of Business Services.
subsections: section_title: Federal Land Sales Authorities and Process
paragraphs: Although FLTFA authorizes proceeds from eligible land sales and  exchanges to be used in acquiring land, it does not provide any new sales  authority. The sales authority, as stated in FLTFA, is provided by the  Federal Land Policy and Management Act of 1976 (FLPMA). FLPMA  authorizes the Secretary of the Interior to dispose of certain federal  lands—through sale and exchange, among other disposal methods—and  authorizes the Secretaries of Agriculture and of the Interior to acquire  certain nonfederal lands. FLPMA also authorizes the Secretary of  Agriculture to exchange land. FLPMA requires the Secretary of the Interior  to develop land use plans to determine which lands are eligible for  disposal and acquisition. The level of specificity differs in land use plans,  from describing general areas to naming specific parcels. In developing  these land use plans, agencies must work closely with federal, state, and  local governments and allow for public participation. Land use plans are  typically revised every 15 to 20 years to address changing land use  conditions in the area covered.
Sales and acquisitions must comply with requirements of FLPMA and  other applicable laws, which can require, among other things, an  assessment of the environmental impacts of the proposed land  transaction, assessment of natural and cultural resources, preparation of  appraisals, and public involvement. Furthermore, with regard to land sales  specifically, FLPMA requires that land be sold at the appraised fair market  value or higher.
Although BLM policy states that competitive sales are preferred when a  number of parties are interested in bidding on a parcel for sale, regulations  for the FLPMA land sales authority provide for other methods of sale  when certain criteria are met. The regulations state that modified  competitive sales may be used to permit the current grazing user or  adjoining landowner to meet the high bid at the public sale. This  procedure allows for limited competitive sales to protect ongoing uses, to  assure compatibility of the possible uses with adjacent land, and to avoid  dislocating current users. The regulations state that a direct sale may be  used when the land offered for sale is completely surrounded by land in  one ownership with no public access, when the land is needed by state or  local governments or nonprofit corporations, or when the land is  necessary to protect current equities in the land or resolve inadvertent  unauthorized use or occupancy of the land.
In completing the steps necessary to purchase land, third-party  organizations, such as The Nature Conservancy and The Trust for Public  Land, often provide assistance to the federal government. For example,  third parties may assist by purchasing desired land for eventual resale to  the federal government or by negotiating an option with the seller to  purchase land within a specified period of time, which provides additional  time for the federal agency to secure necessary funding for the purchase  or to comply with laws and regulations governing the acquisition.
section_title: Federal Land Acquisition Funding
paragraphs: The primary source for land acquisition funding for BLM, the Park Service,  the Forest Service, and the Fish and Wildlife Service, has traditionally  been the Land and Water Conservation Fund (LWCF), which was created  to help preserve, develop, and assure access to outdoor recreation  resources. To receive LWCF funding, the agencies independently identify  and set priorities for land acquisitions and then submit their list of priority  acquisitions in their annual budget request to Congress. LWCF funding is  available for land acquisition purposes only if appropriated by Congress,  unlike the funds in the FLTFA account, which are available without  further appropriation.
LWCF land acquisition appropriations have been declining in recent years.  Specifically, funds for the four agencies declined from $453.4 million  appropriated in fiscal year 2001 to $120.1 million appropriated in fiscal  year 2006, as depicted in figure 1. BLM has traditionally received the  lowest amount of LWCF land acquisition funding among the four agencies.  For example, in fiscal year 2006, BLM’s share of total appropriated LWCF  land acquisition funding was only $8.6 million, or about 7 percent of the  total appropriation. BLM’s land sales eligible under FLTFA have created  another funding source for the four agencies to acquire land. FLTFA  provides that if all funds in the account are not used by the sunset date in  2010, they will become available for appropriation under section 3 of the  Land and Water Conservation Fund Act.
section_title: Other Land Sale Laws
paragraphs: Other laws allow BLM to retain certain proceeds from federal land sales  and share them among agencies for land acquisitions, as well as other  purposes. The most notable of these is the Southern Nevada Public Land  Management Act of 1998 (SNPLMA). SNPLMA’s stated purpose is to  “provide for the orderly disposal of certain federal lands in Clark County,  Nevada, and to provide for the acquisition of environmentally sensitive  land in the State of Nevada.” Since enactment, SNPLMA has generated  just under $3 billion in revenue. As of September 2007, a portion of this  revenue has been spent, in part, to complete 41 land acquisition projects in  Nevada for a total of $129.1 million. Unlike FLTFA, SNPLMA has no  expiration date and its sales receipts are placed in an interest bearing  account. However, it has fewer acres available for disposal than FLTFA.
section_title: FLTFA Requirements on Use of Revenue and Other Key Provisions
paragraphs: FLTFA places a number of requirements on the use of revenue generated  under the act. Among these requirements, BLM must provide 4 percent of  sale proceeds to the state in which revenue was raised for education and  transportation purposes. Figure 2 illustrates these requirements using an  example of $1 million in revenue.
FLTFA also limits land acquisitions to land within and adjacent to  federally designated areas, such as national parks, national forests, and  national conservation areas. While most lands managed by the Fish and  Wildlife Service, the Forest Service, and the Park Service are federally  designated areas, many of the lands managed by BLM are not federally  designated areas; therefore, acquisitions within undesignated lands would  not qualify under FLTFA.
Furthermore, FLTFA requires that the Secretaries establish a procedure to  identify and set priorities for acquiring inholdings. As part of this process,  it called for the Secretaries to consider (1) the date the inholding was  established, (2) the extent to which the acquisition would facilitate  management efficiency, and (3) other criteria identified by the Secretaries.  The act also requires a public notice be published in the Federal Register  detailing the procedures for identifying inholdings and setting priorities for  them and other information about the program.
section_title: Memorandum of Understanding Implements FLTFA
paragraphs: To improve FLTFA implementation, the four agencies signed a national  MOU. Among other things, the MOU established a Land Transaction  Facilitation Council, which consists of the heads of the four agencies and  the U.S. Department of the Interior Assistant Secretary for Policy,  Management, and Budget to oversee the implementation and coordination  of activities undertaken pursuant to the MOU. The MOU also directed the  agencies to establish state-level implementation plans that would establish  roles and responsibilities, procedures for interagency coordination, and  field-level processes for identifying land acquisition recommendations and  setting priorities for these recommendations.
section_title: Proposed Amendments to FLTFA
paragraphs: The Administration has proposed revising and extending the act.  Specifically, the U.S. Department of the Interior’s fiscal year 2007 and 2008  budgets included proposals to    allow BLM to use updated land use plans to identify areas suitable for    allow a portion of receipts to be used by BLM for restoration projects,  require BLM to return 70 percent of net proceeds from eligible sales to the  U.S. Treasury, and   cap retention of receipts at $60 million per year.
In addition, the U.S. Department of the Interior called for Congress to  extend the FLTFA program to 2018.
section_title: BLM Has Raised Most FLTFA Revenue from Land Sales in Nevada
paragraphs: Since FLTFA was enacted in 2000, BLM has raised $95.7 million in  revenue, mostly by selling 16,659 acres. As of May 2007, about 92 percent  of the revenue raised, or $88 million, has come from land sales in  Nevada—1 of the 11 western states under FLTFA. Nevada accounts for  most of the sales because of rapidly expanding population centers coupled  with a high percentage of BLM land in the state and experience selling  land under the SNPLMA program. Most BLM field offices have not  generated revenue under FLTFA.
subsections: section_title: BLM Has Raised $95.7 Million from FLTFA Land Sales, Primarily in Two Nevada Field Offices
paragraphs: Between July 2000 and May 2007, BLM raised $95.7 million in revenue for  selling 16,659 acres, according to data verified by BLM state offices. In  addition, the BLM Division of Business Services reports exchange  equalization payments totaling $3.4 million. Nevada has accounted for the  great majority of the sales. As of May 2007, about 92 percent of the  revenue raised, or $88 million, has come from land transactions in Nevada.  More specifically, the Carson City and Las Vegas field offices generated a  total of $86.2 million, or 90 percent of all revenue generated under FLTFA,  mostly through a few competitive sales. For example, the Carson City  Field Office raised $39.1 million through 3 sales and Las Vegas Field Office  raised $33.6 million through 7 sales. Table 1 shows the state-by-state totals  of sales revenue generated, acres sold, and number of sales. See appendix  II for a listing of completed sales BLM state offices have reported to us.
Some of BLM’s Nevada field offices, particularly Las Vegas and Carson  City, have been in a unique position to raise the most funds under FLTFA  to date because of rapidly expanding populations, development in those  areas, and the availability of nearby BLM land. In addition, BLM Nevada  staff had previous experience with SNPLMA, the land sales program in the  Las Vegas area. In fact, the Nevada office used procedures and staff from  this program to initiate FLTFA’s sales and acquisition programs. According  to Nevada state office officials, BLM’s annual work plan for lands and  realty work specifically directed the Nevada office to continue to hold  FLTFA and SNPLMA land sales as appropriate.
Revenue from land sales and exchanges under FLTFA grew slowly in the  first years of the program but picked up in fiscal years 2004 and 2005, with  $16.6 million and $4.8 million, respectively. Revenue reached a peak in  fiscal year 2006, when a total of $71.1 million was collected. BLM officials  said the land sales market in Nevada has cooled since its peak in 2006.  Figure 3 shows the FLTFA revenue through May 2007.
The FLTFA account benefits from the proceeds of all types of  transactions, including land exchanges and land sales made on a  competitive, modified competitive, or direct basis. BLM sets the appraised  fair market value as the sales price for direct sales and as the minimum bid  price for competitive sales. Of the 265 completed sales reported by BLM  state offices, 149 were competitive, 33 were modified competitive, and 83  were direct. In terms of FLTFA revenue, the great majority, about 96  percent, has been raised from competitive sales. For example, in  December 2005, the Las Vegas Field Office sold a 40-acre parcel through a  competitive auction for $7.3 million, or 152 percent of its appraised fair  market value of $4.8 million. On a much smaller scale in a December 2006  competitive auction, the Burns District Office in Oregon sold 240 acres for  $47,000, or 163 percent of its appraised fair market value of $28,800. In  2006, the Carson City Field Office offered two parcels of about 100 and 106  acres with appraised fair market values of $10 million and $6.4 million,  respectively, in north Douglas County, Nevada, just south of the Carson  City limits. The former BLM parcels are contiguous and across a major  highway from three shopping centers. Through competitive auctions, BLM  received final prices of $16.1 million and $8.4 million, or 161 and 131  percent, respectively, of appraised value. Figure 4 shows areas in these  two parcels.
According to a GAO analysis of data from BLM’s Division of Business  Services and BLM state offices on land sales revenue collected in the  FLTFA account, only 12 of 144 field offices have conducted competitive  sales. An additional 28 field offices have generated FLTFA revenue  through direct or modified competitive sales. The remaining 104 offices  have not generated sales revenue for the FLTFA account. Table 2 shows  FLTFA sales by the method used and the amount of revenue generated.
Using the data provided by BLM state offices on completed FLTFA sales as  of May 31, 2007, we determined that the actual sales prices of the parcels  sold exceeded the appraised fair market value of those parcels by 52  percent.
section_title: BLM Faces Several Challenges to Future Sales under FLTFA
paragraphs: BLM state and field office officials most frequently cited the availability of  knowledgeable realty staff to conduct the sales as a challenge to raising  revenue from FLTFA sales. These staff may not be available because they  are working on activities that BLM has identified as a higher priority, 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 FLTFA sales. Goals are an  effective management tool for measuring and achieving results. Some BLM  state offices reported that they have planned FLTFA sales through 2010,  but BLM has no overall implementation strategy to generate funds to  purchase inholdings, as mandated by FLTFA. Since BLM has not laid out a  clear roadmap for FLTFA and did not make land sales a priority, it is  difficult to determine if BLM took full advantage of the opportunities for  generating revenue under the act. Second, BLM has revised some of its  land use plans since 2000 and identified additional land for disposal.  However, revenue from these potential sales is not eligible for the FLTFA  account because the act only applies to land that was identified for  disposal in a land use plan on or before the date of the act.
subsections: section_title: BLM State and Field Officials Most Frequently Cited Availability of Knowledgeable Staff as a Challenge to Conducting FLTFA Sales
paragraphs: According to BLM state and field officials, they face five challenges to  raising FLTFA revenue through sales. First, the most frequently identified  is the availability of knowledgeable realty staff to conduct the sales. This  challenge is followed, in order of frequency cited, by the time, cost, and  complexity of the land sales process; external factors, such as public  opposition to a sale; program and legal restrictions; and the land use  planning process. Except for FLTFA-specific program and legal  restrictions, the other challenges that BLM state and field offices cited are  probably faced in many public land sales. The following provides  examples of these challenges:    The availability of knowledgeable realty staff to conduct the sales. BLM  staff said realty staff must address higher priority work before land sales.  For example, Colorado BLM staff said that processing rights-of-way for  energy pipelines takes a huge amount of realty staff time, 100 percent in  some field offices, and poses one of the top challenges to carrying out  FLTFA sales in Colorado. In Idaho, staff also cited the lack of realty  staffing, which is down 40 percent from 10 years ago. Adding to the  staffing issue, the workload for energy-related uses in Idaho, such as  approving rights-of-way for transmission lines, has doubled. Other offices  cited turnover in staff and the lack of staff with training and experience to  conduct sales.
Time, cost, and complexity of the sales process. Much preparation must  be completed before a property can be sold. For example, several offices  cited the cost and length of the process that ensures a sale complies with  environmental laws and regulations. In addition, obtaining clearances  from experts related to cultural and natural resources on a proposed sale  can be time-consuming. For example, in the sale of 396 acres by the Las  Cruces District Office, officials said that the sale of the property was  delayed by the discovery of a significant cultural resource on the site. This  was eventually resolved by BLM retaining the small portion of the original  parcel containing the cultural resource.
External factors. BLM officials cited such factors such as public  opposition to a sale, market conditions, or lack of political support as  challenges. For example, Colorado BLM officials said that they have faced  strong local opposition to sales, and the El Centro Field Office staff in  California cited the lack of demand for the land from buyers as a  challenge. Some offices have experienced diminishing support of sales by  local governments over the time a sale is prepared.
Program and legal restrictions. The Arizona State Office staff and the  Elko Field Office staff cited the sunset date of FLTFA, less than 3 years  away, as a challenge because the sunset date may not allow enough time  to complete many more sales. Other offices said the MOU provision  requiring a portion of the land sale proceeds to be used by the three other  agencies reduces BLM’s incentive to do land sales because BLM keeps  only 60 percent of the revenue. Another challenge to the disposal of land  under FLTFA, especially in Nevada, has been the passage of land bills for  Lincoln and White Pine counties. The Lincoln County Land Act of 2000,  as amended, directs BLM to deposit most of the proceeds from the  disposal of not more than 103,328 acres into an account established by the  act. The White Pine County Conservation, Recreation, and Development  Act of 2006 directs BLM to deposit most of the proceeds from the disposal  of not more than 45,000 acres into a similar account. In total, BLM staff  estimate that, once mandated land use plan amendments are completed,  the two acts will result in the removal of about 148,000 acres from FLTFA  eligibility.
Land use planning. Some offices cited problems with the land use plans.
For example, the Idaho Falls District Office staff said that specific land for  sale is hard to identify in old land use plans. Nevada’s Elko Field Office  staff said that some lands that could be offered for sale were not available  because they were not designated in the land use plan at the time of  FLTFA’s enactment.
section_title: Most BLM States Have Planned FLTFA Sales through 2010, but BLM Lacks National Goals for the Program
paragraphs: BLM state offices reported planning FLTFA sales through 2010, but BLM  has not established national goals for FLTFA or emphasized sales.
subsections: section_title: BLM Plans FLTFA Sales through 2010
paragraphs: In response to our request to the 10 BLM state offices participating in  FLTFA, 8 reported planning 96 FLTFA sales totaling 25,406 acres through  2010. The other two state offices reported no planned sales. Of the 96  planned sales, 34 are planned as competitive, 6 as modified competitive,  and 52 as direct sales; the sales methods for 4 sales are unknown. The  BLM state offices did not report a fair market value for some of these  planned sales. Table 3 provides information on planned FLTFA sales and  appendix III provides a complete listing of the planned sales that BLM  state offices reported.
Figure 5 shows an example of a planned sale—the “North Fork” parcel to  be sold competitively in April 2008 by the field office in Las Cruces, New  Mexico. This 167-acre parcel is on the eastern edge of Las Cruces across  the street from residential subdivisions. BLM also plans to sell a similar  adjacent 180-acre parcel at the same time. The field office reported that  the purpose of these sales is to dispose of land that will serve important  public objectives, including but not limited to, expansion of communities  and economic development, which cannot be achieved prudently or  feasibly on land other than public land.
Although BLM offices plan sales, there is no assurance that these sales will  occur. For fiscal years 2004 and 2005, BLM headquarters compiled a list of  100 planned sales under FLTFA from information the state offices  provided. Because BLM headquarters did not know the status of these 100  planned sales, we followed up with the state offices and determined that  54 were actually completed. According to BLM’s state office leads for  these sales, 46 properties did not sell for several reasons, such as  environmental concerns; external factors; the availability of staff; and the  time, cost, and complexity of the sales. For example, Utah State Office  officials said a 1,450-acre parcel near St. George did not sell because  threatened and endangered species and cultural resource issues were  identified. In Wyoming, state office staff said only one of four proposed  sales occurred because of inadequate staffing and the competing priority  to address oil and gas-related realty issues.
section_title: BLM Has Not Established Goals or an Implementation Strategy for FLTFA Sales
paragraphs: BLM has established annual goals for the disposal of land through sales or  other means. For example, BLM’s fiscal year 2008 budget justification  contained a performance target to dispose of 11,500 acres and 30,000 acres  of land in fiscal years 2007 and 2008, respectively. However, BLM has not  established similar goals for FLTFA sales. For example, BLM’s fiscal year  2007 annual work plan for the lands and realty function—which guides the  activities to be completed in a given year—does not contain specific goals  for FLTFA. Rather, it states that lands and realty staff should continue to  hold land sales under FLTFA, especially in Nevada.
BLM did provide an estimate in its fiscal year 2008 budget justification for  FLTFA revenue—$12 million in fiscal year 2007 and $50 million in 2008.  However, BLM fell short of its estimate for fiscal year 2007; it reported  generating only $0.7 million from sales and exchanges. Moreover, when we  asked BLM headquarters staff for the basis of the fiscal year 2007 and 2008  revenue estimates, they said the estimates were based on professional  judgment and that they had no supporting information.
Our interviews with state and field office staff confirmed that there are  few goals for conducting FLTFA sales. According to 27 of the 28 state and  field office officials we spoke with, BLM headquarters had not provided  any goals; one state office said headquarters had emphasized getting their  land disposal program up and running in their office. According to 18 of  these 28 officials, their state and field office management had set no  targets or goals for FLTFA land sales. Of the 10 that did mention such  goals, 8 described the goal as a plan to sell specific parcels of land.
According to headquarters officials, BLM has tried to encourage FLTFA  sales but is not pressuring field offices to conduct them, and there is no  ongoing headquarters effort to oversee and manage sales because states  are responsible for conducting their own sales programs. The realty  managers explained that headquarters does not approve land sales but is  aware of them through reviews of Federal Register notices of the sales.  According to a headquarters official, BLM did not establish FLTFA goals  because BLM lacked realty staff to conduct land sales and other  impediments to sales generally, such as the lack of access, mineral leases,  mining claims, threatened or endangered species habitat, floodplains,  wetlands, cultural resources, hazardous materials, and title problems.
The establishment of goals is an effective management tool for measuring  and achieving results. As we have reported in the past on management  under the Government Performance and Results Act of 1993, leading  public sector organizations pursuing results-oriented management  commonly took the following key steps:    defined clear missions and desired outcomes,    measured performance to gauge progress, and    used performance information as a basis for decision making.
BLM has not fully implemented these steps in managing the FLTFA  program to sell land designated for disposal in its land use plans. To  measure BLM’s success in generating revenue and disposing of land under  FLTFA, actual performance would need to be compared with national  sales goals for FLTFA. Without national goals for making these sales a  priority, it is difficult for BLM to enhance the efficiency and effectiveness  of federal land management as called for in FLTFA through the acquisition  of inholdings and consolidation of public lands.
section_title: FLTFA’s Restriction on Land Available for Sale Reduces Potential Revenue
paragraphs: FLTFA requires BLM to deposit the proceeds into the special FLTFA  account from the sale or exchange of public land identified for disposal  under approved land use plans in effect on the date of its enactment.  Other proceeds from land sales and exchanges are typically deposited into  the U.S. Treasury’s general account. Many of BLM’s land use plans have  been revised or have been proposed for revision since FLTFA’s enactment,  and additional lands have been identified for disposal. For example, BLM  reported the Boise District Office in Idaho is currently planning a sale of  35 parcels. Five of the 35 parcels, with a total estimated value of $10.7  million, are not FLTFA eligible. Because of the land use plan restriction,  revenue from these five sales would not benefit the FLTFA account when  sold. While this restriction reduces the potential revenue that could be  dedicated to purchasing inholdings and adjacent land containing  exceptional resources under FLTFA, it does benefit the U.S. Treasury’s  general account.
According to 17 of the 28 BLM state and field realty staff we interviewed,  their office has land available for disposal that is not designated in an  FLTFA-eligible land use plan. For example, New Mexico state office  officials said that a number of land use plan amendments completed or  under development since FLTFA’s enactment have identified land for  disposal. They noted that the Las Cruces area land use plan is being  amended to adjust to the new direction of the city’s growth that has  occurred since the last plan was prepared in 1993. According to BLM New  Mexico staff, different or additional lands are expected to be designated  for disposal in the amended plan. Figure 6 shows land on the west side of  Las Cruces, New Mexico, that is expected to be designated for disposal in  the forthcoming revision to accommodate the community’s growth. Field  office officials said that input from local governments and other interests  have focused land sales growth in Las Cruces on the west side of the city  in order to create a buffer for the Organ Mountains on the east side.
section_title: Agencies Have Purchased Few Parcels with FLTFA Revenue
paragraphs: Since the enactment of FLTFA 7 years ago, BLM reports that the four land  management agencies have spent $13.3 million of the $95.7 million in  FLTFA revenue—$10.1 million to acquire nine parcels of land and $3.2  million in administrative expenses for conducting FLTFA sales. Agencies  spent the $10.9 million between August 2007 and January 2008 on the first  land acquisitions completed under FLTFA using the secretarial discretion  provided in the MOU. As of May 31, 2007, the agencies reported submitting  eight acquisition nominations to state-level interagency teams for  consideration. The New Mexico interagency team reported submitting six  additional nominations as of July 1, 2007. None of these 14 nominations— valued at $71.9 million—has resulted in a completed acquisition. The state- level process has not yet resulted in acquisitions because of the time taken  to complete interagency agreements and limited FLTFA funds available for  acquisition outside of Nevada. Although Nevada has proposed five  acquisitions, none have been completed. As for the remaining $3.2 million  in expenditures, BLM reports spending these funds on administrative  activities involved in preparing land for sale under FLTFA mostly between  2004 and 2007. BLM offices in Nevada spent $2.6 million of this total.
subsections: section_title: Under a Secretarial Initiative, BLM Reports Agencies Spent $10.1 Million on the First Land Acquisitions 7 Years after FLTFA Was Enacted
paragraphs: No land acquisitions had occurred during the first 7 years of FLTFA.  Because the state–level implementation process had not resulted in any  acquisitions, BLM decided to jump-start the acquisition program and  conduct purchases under secretarial discretion, as provided for in the  MOU. In the spring of 2006, BLM headquarters officials solicited  nominations from the FLTFA leads in each of the other three agencies.  Most of the nominations agency officials provided were previously  submitted for funding under LWCF. This secretarial initiative was  approved by the Secretaries of Agriculture and of the Interior in May 2007.
The 2007 secretarial initiative provided $18 million in funding for 13 land  acquisition projects, including 19 parcels of land located in seven states— Arizona, California, Colorado, Idaho, New Mexico, Oregon, and Wyoming.  Specifically, the initiative consisted of 9,049 acres and included projects  for each agency: six BLM projects for $10.15 million, two Fish and Wildlife  Service projects for $1.75 million, two Forest Service projects for $3.5  million, and three Park Service projects for $2.6 million. Only 1 of the 19  parcels is an adjacent land; the rest are inholdings.
Since the initiative was approved, BLM reported a number of changes that  the agencies made to the original list of land acquisition projects.  For  example, the total number of acres increased to 9,987 in a total of eight  states.  As of January 23, 2008, BLM reported that the agencies had wholly  or partially completed 8 of the 13 approved acquisition projects.   Specifically, the agencies spent $10.1 million between August 2007 and  January 2008 to complete the acquisition of the first nine parcels under the  secretarial initiative. The acquisitions include 3,381 acres in seven  states—Arizona, California, Idaho, Montana, New Mexico, Oregon, and  Wyoming. See table 4 for a complete description of the current status of  these projects.
Figure 7 shows part of the acquisition site within the La Cienega Area of  Critical Environmental Concern. According to BLM, it selected this site for  acquisition because (1) it is an archeologically rich area preserving ancient  rock art and (2) the riparian cottonwood and willow forest that line the  Santa Fe River and its La Cienega Creek tributary provide critical habitat  for threatened and endangered wildlife, such as the bald eagle and  southwest willow flycatcher. The final purchase price was $2.2 million.
To fund the acquisitions in the secretarial initiative of $18 million, the BLM  FLTFA program lead told us that the Secretaries approved the use of    $14.5 million of the funds from the 20 percent of revenue available for  acquisitions outside the state in which they were raised, and   $3.5 million of the revenue not used for administrative activities  supporting the land sales program.
section_title: Agencies Have Submitted Nominations under the State-Level Process, But None Have Resulted in a Land Acquisition
paragraphs: In addition to the acquisitions in the secretarial initiative, the agencies  have submitted 14 acquisition nominations valued at $71.1 million to state- level interagency teams for consideration, but not one has resulted in a  completed acquisition. Of the $14.1 million in land acquisitions awaiting a  secretarial decision, $13.7 million, or 97 percent, is for inholdings and  $458,000 million—or 3 percent—is for adjacent land. Table 5 shows the  data we gathered from BLM state offices on the status of the nominations  that have been submitted.
The Nevada interagency team has submitted a total of five nominations for  secretarial approval under FLTFA. It nominated two Forest Service  acquisitions—a total of 705 acres valued at $4.76 million—in 2004. These  were the first nominations submitted for secretarial approval under  FLTFA. The Forest Service was unable to complete the purchases because  of negotiating differences with the sellers. Of the remaining three Nevada  nominations, one valued at $16 million was approved in November 2007,  one valued at $10.6 million awaits approval, and one valued at $29 million  has been withdrawn by the Nevada interagency team.
The recently approved Nevada nomination is for the Pine Creek State  Park, an 80-acre inholding owned by the state of Nevada valued at $16  million (see fig. 8). BLM currently manages this inholding, which is located  in BLM’s Red Rock Canyon National Conservation Area. According to the  BLM nomination package, BLM would like to acquire this property to meet  the increasing recreational and educational needs of the park. BLM  explains that the property has recreational value; cultural resources;  riparian habitat; and habitat for the desert tortoise, currently a threatened  and endangered species.
The nomination that was withdrawn by the Nevada interagency team is the  320-acre Winter’s Ranch property, which is adjacent to the Humbolt- Toiyabe National Forest and several other properties acquired by BLM  under SNPLMA. BLM’s FLTFA program lead said the nomination of the  parcel was withdrawn, in part because it is not adjacent to a federally  designated area managed by BLM.
In its nomination to acquire Winter’s Ranch, the Carson City Field Office  said this parcel provides critical habitat for shorebirds, water fowl, and  other water-dependent species; offers unique recreational opportunities  for the public; and an undisturbed view for area commuters and tourists.  According to a Carson City Field Office official, three creeks run through  this property and irrigate the land, making it possible to sustain wildlife  habitat, such as raptors and migratory birds. The official said that about  $20 million of the estimated $29 million value of the Winter’s Ranch  property is for the water rights to the property, and that if BLM did not  obtain the water rights, other parties could acquire them and divert the  water resources to other areas, such as developing communities near  Reno. The Winter’s Ranch parcel is shown in figure 9.
Over one-half of the state-level interagency teams—Colorado, Idaho,  Montana, New Mexico, Oregon, and Utah—did not review any land  acquisitions proposals between July 2000, when FLTFA was enacted, and  May 2007. Furthermore, the Fish and Wildlife Service and the Park Service  have yet to submit a nomination for review under the state-level  interagency process. Fish and Wildlife Service and Park Service officials  based in California said they lacked the FLTFA funding necessary to  complete an acquisition and would have to wait until sufficient revenue  were available to allow them to nominate an acquisition.
In examining the headquarters review and approval process, we found that  the Land Transaction Facilitation Council established in the national MOU  has never met. The BLM FLTFA program lead explained that, as a practical  matter, it has not been necessary for this council to meet. Rather, in  practice, acquisition nominations are forwarded to the BLM lead and then  routed to his counterparts at the other three agencies for review.
Additional reviews are then conducted at the agency level and, ultimately,  at the secretarial level.
section_title: State-Level Process Has Not Yet Resulted in Acquisitions Because of the Time Taken to Complete Interagency Agreements and Limited Funds outside of Nevada
paragraphs: Although the agencies envisioned it as the primary process for nominating  land for acquisition under FLTFA, the state-level process established in the  national MOU and state-level interagency agreements has yet to result in a  completed land acquisition for two primary reasons. First, it has taken  over 6 years for the four agencies to complete all interagency  agreements—3 years for the agencies to complete a national MOU and an  additional 3 years for the agencies to complete all state-level  implementation agreements. Most agencies completed Federal Register  notifications of their procedures to identify and set priorities for  inholdings, as called for in the act, soon after state-level agreements were  signed. Nevada was the first state to complete the implementation  agreement in June 2004, and it published a Federal Register notice in  August 2004. Utah was the last state to complete these actions, reaching an  agreement in November 2006 and publishing its Federal Register notice in  March 2007. Table 6 summarizes the completion of implementation  agreements and the Federal Register publication for each state.
BLM officials told us that completion of these agreements was delayed for  a number of reasons, including attention to other priorities, difficulties  coordinating the effort with four agencies, and lack of urgency due to  limited revenue available for acquisitions.
Second, funds for acquisitions have been limited outside of Nevada.  Because FLTFA requires that at least 80 percent of funds raised must be  spent in the state in which they were raised and because 92 percent of  funds have been raised in Nevada, the majority of funds must be spent on  acquisitions in Nevada. However, as discussed earlier, no acquisitions have  yet been completed in Nevada. Additional factors, such as the fact that  about 92 percent of Nevada is already federally owned and that SNPLMA  has provided additional resources for land acquisitions in Nevada, may  have also contributed to the lack of a completed acquisition under FLTFA  in Nevada.
Outside of Nevada, agencies have had little money to acquire land. Several  agency officials, such as BLM state office officials in Utah and Oregon, told  us that additional revenue needs to be generated under FLTFA for land  acquisitions to occur. Moreover, Park Service and Forest Service officials  in California told us they are waiting for adequate funding before they  begin identifying and nominating acquisitions. The Forest Service official  explained that the agency could not make significant purchases with their  share of the FLTFA funds in California because of the high cost of real  estate.
section_title: BLM Reports Spending $3.2 Million on FLTFA Administrative Activities
paragraphs: Between the time FLTFA was enacted and July 20, 2007, BLM reports  spending $3.2 million on FLTFA administrative expenses to conduct land  sales under the act. The three other agencies do not have land sale  expenses under the program. The BLM Nevada offices spent 81 percent of  the revenue, or $2.6 million. BLM offices in Arizona, California, New  Mexico, and Oregon each spent over $100,000, and the remaining five  states spent a combined total of less than $50,000. States with the most  active sales programs generally spent the most FLTFA revenue. For  example, Nevada field offices conducted 106 of the 265 total sales under  FLTFA, or 40 percent of the sales. Table 7 summarizes administrative  expenditures by state as reported by BLM’s Division of Business Services.
BLM spent little FLTFA revenue on the administrative costs of land sales  during the first 3 years of the program. According to the BLM FLTFA  program lead, there was little incentive for BLM to sell its land because the  MOU was not in place. Spending has generally increased since then, with a  spike in fiscal year 2006. Figure 10 shows FLTFA expenditures from its  enactment to July 2007.
BLM’s Division of Business Services tracks FLTFA expenditures through  eight expenditure types. As table 8 shows, BLM offices spent 72 percent of  FLTFA expenditures —about $2.3 million—on personnel compensation  and benefits (e.g., staff to conduct sales).
section_title: Agencies Face Challenges in Completing Additional Acquisitions
paragraphs: BLM managers and we identified several challenges in completing  additional acquisitions before FLTFA expires in 2010. BLM officials most  commonly cited the time, cost, and complexity of the land acquisition  process as a challenge to conducting acquisitions under FLTFA. We also  found that the act’s restriction on the use of funds outside of the state in  which they were raised continues to limit acquisitions. Specifically, little  revenue is available for acquisitions outside of Nevada. Furthermore,  progress in acquiring priority land has been hampered by the agencies’  weak performance in identifying inholdings and setting priorities for  acquiring them, as required by the act. Finally, the agencies have yet to  develop effective procedures to fully comply with the act and national  MOU.
subsections: section_title: BLM Officials Most Commonly Cited the Time, Cost, and Complexity of the Land Acquisition Process as a Challenge, among Several, to Completing Acquisitions
paragraphs: BLM state and field officials from the 10 BLM state offices and 18 BLM  field offices we interviewed most commonly cited the time, cost, and  complexity of the land acquisition process as a challenge they face in  completing land acquisitions. The other most commonly cited challenges  were, in the order of frequency cited, (1) identifying a willing seller, (2) the  availability of knowledgeable staff to conduct acquisitions, (3) the lack of  funding to purchase land, (4) restrictions imposed by laws and regulations,  and (5) public opposition to land acquisitions. Some of the challenges BLM  state and field officials cited are likely typical of many federal land  acquisitions. Because they have had little experience with FLTFA  acquisitions, officials from the other three agencies had few comments  about challenges. The following provides examples of each of these  challenges:    Time, cost, and complexity of the land acquisition process. To complete  an acquisition under FLTFA, four agencies must work together to identify,  nominate, and rank proposed acquisitions, which must then be approved  by the two Secretaries. Officials at two field offices estimated the  acquisition process takes about 2-1/2 to 3 years. BLM officials from the  Wyoming State Office and the Las Cruces Field Office said that, with this  length of time, BLM must either identify a very committed seller willing to  wait to complete a transaction or obtain the assistance of a third party in  completing an acquisition. A third party could help either by purchasing  the land first, holding it, and then selling it to the government at a later  date, or by negotiating with the seller an option to buy the land within a  specified period. In terms of cost, some offices noted that they did not  have the funding required to complete all of the work involved to prepare  land acquisitions. In terms of complexity, a Utah State Office official said  BLM has more control over the process for submitting land acquisitions  under LWCF than FLTFA because FLTFA requires four agencies in two  departments to coordinate their efforts.
Identifying a willing seller. Identifying a willing seller can be problematic  because, among other things, the seller might have higher expectations of  the property’s value. For example, an Ely Field Office official explained  that, because of currently high real estate values, sellers believe they can  obtain higher prices from developers than from the federal government.  Further, an Idaho State Office official said that it is difficult to find a seller  willing to accept the appraised price and wait for the government to  complete the purchase.
Even when land acquisition nominations are approved, they may not result  in a purchase. For example, in 2004, under FLTFA, two approved  acquisitions for inholdings within a national forest in Nevada were  terminated. In one case, property values rose sharply during the  nomination process and, in an effort to retain some of their land, the seller  decided to reduce the acres for sale but maintain the price expectation.  Furthermore, the landowner decided not to grant access through the  parcel they were retaining to the Forest Service, thus eliminating the  opportunity to secure access to an inaccessible area of the national forest.   In the other case, during the course of the secretarial approval process, the  landowner sold portions of the land included in the original transaction to  another party, reducing the land available for the Forest Service to  purchase. According to Forest Service officials, in both cases the purchase  of the remaining parcels would not fulfill the original purpose of the  acquisitions due to reductions in resource benefits.  Therefore, the Forest  Service terminated both projects. Similarly, the SNPLMA program in  Nevada has had many terminated land acquisitions. Specifically, of the 116  land acquisition projects approved by the Secretary of the Interior from  enactment in October 1998 through September 2007, 41 have been  completed, 55 have been terminated, and 20 are pending. This represents a  47 percent termination rate. BLM did not report why these acquisitions  were terminated.
Availability of knowledgeable staff to conduct acquisitions. As is the case  with selling federal land, BLM officials reported that they lack  knowledgeable realty staff to conduct land acquisitions, as well as other  BLM or department staff to conduct appraisals, surveys, and resource  studies. Staff are occupied working on higher priority activities,  particularly in the energy area.
Lack of funding to purchase land. BLM officials in some states said they  lack adequate funds to acquire land under FLTFA. For example, according  to a field office official in Burns, Oregon, just one acquisition in a nearby  conservation area would nearly drain that state’s FLTFA account.
Restrictions imposed by laws and regulations. BLM officials said that  legal and other restrictions pose a challenge to acquiring land. BLM  Arizona and Grand Junction, Colorado, officials said that some federally  designated areas in their jurisdictions were established after the date of  FLTFA’s enactment, making the land within them ineligible for acquisition  under the act. BLM New Mexico officials said that FLTFA’s requirement  that land be inholdings or adjacent land is too limiting and argued that the  law generally should allow for the acquisition of land that has high  resource values. In terms of regulations, BLM Carson City Field Office  officials told us that the requirements they must follow regarding the  processing of title, survey, and hazardous materials issues pose a  challenge to conducting acquisitions.
Public opposition to land acquisitions. According to BLM officials from  the Elko and Ely Field Offices in Nevada, the public does not support the  federal government’s acquisition of federal land in their areas, arguing that  the government already owns a high percentage of land and that such  acquisitions result in the removal of land from the local tax base.
section_title: Compliance with Specific Provisions in FLTFA Continue to Pose Challenges to Future Acquisitions
paragraphs: FLTFA’s restriction on the use of funds outside of the state in which they  were raised continues to limit acquisitions. Specifically, as mentioned  earlier, little revenue is available for acquisitions outside of Nevada.
Furthermore, the Secretaries of Agriculture and of the Interior have given  only minimal attention to developing a procedure specific to FLTFA for  identifying inholdings and adjacent land and setting priorities for acquiring  them, as required by the act. According to BLM’s Assistant Director for  Minerals, Realty, and Resource Protection, the four agencies met this  requirement through their 2003 MOU. The official explained that the MOU  establishes “a program for identification of eligible lands or interests in  lands, and a process for prioritizing such lands or interests for  acquisition.” However, we found that the MOU only restates the basic  statutory language for this requirement and states that the Secretaries are  to establish a mechanism for identifying and setting priorities for acquiring  inholdings. We found no such mechanism or procedure at the national  level. While the state-level agreements do establish a process for reviewing  proposed acquisitions, six minimally elaborate and three do not elaborate  on the basic FLTFA criteria: the date the inholding was established, the  extent to which the acquisition will facilitate management efficiency, and  other criteria the Secretaries consider appropriate. One exception to this  is the Nevada state-level agreement. Because the agencies involved in  SNPLMA had already developed an interagency agreement to implement  that act, they modified that agreement to include FLTFA. The Nevada  agreement is generally more detailed than other state agreements and  includes more criteria for considering land acquisitions because of the  differences between the SNPLMA and FLTFA land acquisition authorities.  Also, unlike the other state agreements, the Nevada agreement uses a  quantitative system to rank acquisitions. Table 9 is a summary of criteria  each state-level agreement includes beyond the FLTFA criteria for  acquisition nominations.
When the agencies decided in 2006 to use the Secretaries’ discretionary  authority to make the initial FLTFA acquisitions, officials from all four  agencies told us they generally relied on acquisition proposals previously  identified for LWCF funding to quickly identify the parcels to acquire.  The agencies have systems to identify and set priorities for land  acquisitions under LWCF. These existing systems could serve as a basis  for systematically identifying and ranking FLTFA-eligible land for future  acquisitions.
section_title: The Agencies Have Yet to Establish Effective Procedures to Fully Comply with FLTFA and MOU Provisions
paragraphs: With respect to FLTFA, the agencies—and primarily BLM, as the manager  of the FLTFA account—have not established a procedure to track the act’s  requirement that at least 80 percent of funds allocated toward the  purchase of land within each state must be used to purchase inholdings  and that up to 20 percent may be used to purchase adjacent land. The  BLM FLTFA program lead said BLM considers this requirement when  making land acquisition decisions but has not established a system to  track it. The program lead noted that the requirement to use 80 percent for  inholdings is hard to track, as the act is written, because the acquisition  proposals are submitted in a piecemeal fashion.
With respect to the national MOU, BLM has not established a procedure to  track agreed-upon fund allocations—60 percent for BLM, 20 percent for  the Forest Service, and 10 percent each for the Fish and Wildlife Service  and the Park Service. The BLM FLTFA program lead told us the MOU  allocations should be treated as a target or a goal on a national basis and  they do not apply within a state. However, officials from the BLM Division  of Business Services and BLM’s Budget Office told us there is no  mechanism to track these allocations and were unable to tell us whether  the allocations should be followed at the state or national level. Knowing  whether the MOU fund allocations are set at the state or national level is  important because allocations that apply nationally provide more  flexibility than allocations at the state level. While BLM did not track the  allocations, most state-level interagency agreements provide guidance on  consideration of nominations that exceed the established allocations and  some BLM state office officials we spoke with were mindful of these  allocation targets. For example, in California, the interagency team had  agreed to “lend” BLM the funds from their allocations for a proposed BLM  acquisition because they themselves could not effectively use the small  portions of funding allocated to them. In contrast, in Oregon, BLM officials  said they had not considered such an arrangement. The BLM FLTFA  program lead said the funding decisions made by the Secretaries will be  tracked and further information will be provided to the state-level  interagency teams to clear up any misunderstanding of the requirement.
section_title: Conclusions
paragraphs: Congress anticipated that FLTFA would increase the efficiency and  effectiveness of federal land management by allowing the four agencies to  use certain land sales revenue without further appropriation to acquire  priority land. Seven years later, BLM has not taken full advantage of the  opportunity FLTFA offered. BLM has raised most of the funds for the  FLTFA account with land sales in just one state, and it and the other land  management agencies have made limited progress in acquiring inholdings  and adjacent land with exceptional resources. Because there are less than  3 years remaining until FLTFA expires and a significant amount of time is  needed to complete both sales and acquisitions, relatively little time  remains to improve the implementation of FLTFA.
We recognize that a number of challenges have prevented BLM from  completing many sales in most states, which limits the number of possible  acquisitions. Many of the challenges that BLM cited are likely faced in  many public land sales, as FLTFA did not change the land sales process.  However, we believe that BLM’s failure to set goals for FLTFA sales and  develop a sales implementation strategy limits the agency’s ability to raise  revenue for acquisitions. Without goals and a strategy to achieve them,  BLM field offices do not have direction for FLTFA sales. Moreover, the  lack of goals makes it difficult to determine the extent of BLM’s progress  in disposing of unneeded lands to raise funds for acquisitions.
As with sales, progress in acquiring priority land has been hampered by  weak agency performance in developing an effective mechanism to  identify potential land acquisitions and set priorities for inholdings and  adjacent land with exceptional resources, which FLTFA requires. Without  such a mechanism, it is difficult to assess whether the agencies are  acquiring the most significant inholdings and, thus, enabling them to more  effectively and efficiently manage federal lands. Although the agencies do  have systems to identify and set priorities for land acquisitions under  LWCF that could potentially be adapted for the FLTFA acquisitions as  well, they have not done so. Moreover, because the agencies have not  tracked the amounts spent on inholdings and agency allocations, they  cannot ensure compliance with the act or full implementation of the MOU.
As Congress considers the Administration’s proposal to amend and  reauthorize FLTFA, it may wish to reconsider the act’s requirements that  eligible lands are only those designated in the land use plans at the time  FLTFA was enacted and that most FLTFA revenue raised must be spent in  that state. Adjusting the eligibility of land use plans, as the Administration  has proposed, could provide additional resources for land acquisitions  under FLTFA. In addition, providing the agencies with more flexibility  over the use of funds may allow them to acquire the most desirable land  nationwide.
section_title: Matters for Congressional Consideration
paragraphs: If Congress decides to reauthorize FLTFA in 2010, it may wish to consider  revising the following provisions 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.
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.
section_title: Recommendations for Executive Action
paragraphs: We are making five recommendations.
To improve the implementation of the FLTFA mandate to raise funds to  purchase inholdings, we recommend that the Secretary of the Interior  direct the Director of BLM to    develop goals for land sales, and    develop a strategy for implementing these goals during the last 3 years of  the program.
To enhance the departments’ compliance with the act, we recommend that  the Secretaries of Agriculture and of the Interior improve the procedure in  place to identify and set priorities for acquiring inholdings.
To enhance the departments’ compliance with the act, we recommend that  the Secretary of the Interior direct the Director of BLM to establish a  procedure to track the percentage of revenue spent on inholdings and on  adjacent land.
To fully implement the National Memorandum of Understanding, we  recommend that the Secretaries of Agriculture and of the Interior establish  a procedure to track the fund allocations for land acquisitions by agency  as provided in the MOU.
section_title: Agency Comments
paragraphs: The Department of the Interior provided written comments on a draft of  this report. The department generally concurred with our report’s findings  and recommendations, stating that it will implement all of the  recommendations.  These comments are presented in appendix IV of this  report. In addition, Interior and the Department of Agriculture provided  technical comments on the draft report, which we have incorporated as  appropriate.
We are sending copies of this report to the Secretary of the Interior; the  Secretary of Agriculture; the Directors of BLM, the Park Service, and the  Fish and Wildlife Service; and the Chief of the Forest Service; and other  interested parties. We will also make copies available to others upon  request. In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-3841 or nazzaror@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to this report are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: With the Federal Land Transaction Facilitation Act of 2000 (FLTFA) set to  expire in July 2010, we were asked to (1) determine the extent to which  the Bureau of Land Management (BLM) has generated revenue for the  FLTFA program, (2) identify challenges BLM faces in conducting future  sales, (3) determine the extent to which the agencies have spent funds  under FLTFA, and (4) identify challenges the agencies face in conducting  future acquisitions. We also assessed the reliability of data BLM provided  on revenue generated and on expenditures to date under FLTFA.
For all four objectives, we reviewed FLTFA, other applicable laws,  regulations, and agency guidance. We interviewed the FLTFA program  leads at the headquarters offices for BLM, the Fish and Wildlife Service,  and the Park Service within the U.S. Department of the Interior, and the  Forest Service within the U.S. Department of Agriculture on program  status, goals, and management oversight for the program. To understand  BLM’s interpretation of key provisions of the act, we interviewed officials  with Interior’s Office of the Assistant Secretary for Land and Minerals  Management and Office of the Solicitor and, in some cases, requested the  department’s views on these provisions in writing.
To determine the extent to which BLM has generated and expended  FLTFA program revenue, we obtained and analyzed data from BLM’s  Division of Business Services on program revenue and visited Division of  Business Services accounting officials in Lakewood, Colorado, to discuss  the management of the FLTFA account. Using information provided by the  Division of Business Services and information we obtained from the  Federal Register, we prepared summary information on completed sales  by state and asked the 10 BLM state office officials responsible for the  FLTFA program in their state to verify and update that information. As  part of the request to state offices, we obtained data on planned FLTFA  land sales and completed and planned acquisitions through 2010. We  subjected the data provided by the field offices to electronic and logic  testing and followed up with the field contacts regarding questions. With  regard to acquisitions, we reviewed available documentation for land  acquisition proposals considered by the 10 FLTFA interagency teams at  the state level, agency headquarters, and the Secretaries of Agriculture and  of the Interior. During our visits to selected BLM state offices (California,  Nevada, New Mexico, and Oregon) and field offices (Carson City, Nevada,  and Las Cruces, New Mexico), we interviewed officials and visited  planned land acquisition sites to learn about the land acquisition process.  During these visits we also interviewed selected officials with the Fish and  Wildlife Service, the Forest Service, and the Park Service to learn about  their experience in drafting state-level interagency agreements and with  implementing land acquisitions under FLTFA. To assess the reliability of  data provided by the Division of Business Services on revenue and  expenditures, we interviewed staff responsible for compiling and reporting  the data at the Division of Business Services and at the state office and  field locations visited. We examined reports of this data from BLM’s  financial systems and related guidance and sought documentation on  selected entries into the system.
To determine whether BLM has sufficient internal controls over FLTFA  receipts and expenditures, we interviewed officials at the bureau’s  Division of Business Services and obtained, reviewed, and assessed the  system of internal controls for the U.S. Treasury account established  under FLTFA, including management’s written policies and procedures, as  well as control activities over collections, expenditures, and the records  for these transactions. We also reviewed documentation for a non- probability sample of 7 nonlabor FLTFA expenditures totaling $54,967 that  were charged by the Las Cruces Field Office to ensure proper  documentation. As of July 20, 2007, BLM offices had made a total of 15,706  expenditure transactions—858 nonlabor and 14,848 labor—nationwide.  The seven we chose included expenditures for appraisals and cultural  evaluations on properties being prepared for sale under FLTFA. We chose  these transactions because they were the largest ones and included a  single vendor. We also chose one expenditure made on a charge card  because it was slightly less than a reporting limit. We checked to ensure  that documentation for these expenditures included (1) an agreement or  contract between BLM and the entity to have specific work completed, (2)  an invoice detailing work performed, and (3) evidence of BLM supervisory  approval to pay for such services. After our review of the internal control  policies and procedures, testing and verification of data on revenue, and  obtaining documentation of the selected expenditures, the revenue and  expenditure data was considered sufficiently reliable for our report.
To identify challenges to conducting land sales and acquisitions, we  reviewed the FLTFA national memorandum of understanding, state-level  interagency agreements, and documentation of headquarters and state- level interagency team activities to learn about the policies and  procedures established for the implementation of FLTFA. We conducted  semistructured interviews using a web-based protocol with (1) the 10 BLM  state officials responsible for the FLTFA program in their state—Arizona,  California, Colorado, Idaho, Montana, Nevada, New Mexico,  Oregon/Washington, Utah, and Wyoming; (2) officials at the seven BLM  field offices that have raised 97 percent of the FLTFA revenue (as shown  in table 10); and (3) a nongeneralizable sample of 11 of the 137 remaining  BLM field offices that had not conducted a competitive sale under FLTFA  as of May 31, 2007 (as shown in table 11). From the field offices with no  competitive sales, we choose at least one office from each of the ten state  offices under FLTFA and we considered the proximity of lands managed  by field offices to urban areas. For California, we selected two additional  field offices—Palm Springs and Eagle Lake. We chose the Palm Springs  Field Office because it planned a major sale during our review and we  chose the Eagle Lake Field Office because, although it is located in  California, it manages some land in Nevada and has had no competitive  sales. Because all of the Nevada field offices have had competitive sales  and four Nevada offices were among the high revenue offices selected, we  decided to select the Eagle Lake office. To analyze the narrative responses  to some of the semistructured interview questions, we used the web-based  system to perform content analyses of select open-ended responses. To  conduct the content analyses to develop statistics on agreement among  the answers, two reviewers per question collaborated on developing  content categories based on survey responses and independently assessed  and coded each survey response into those categories. Intercoder  reliability (agreement) statistics were electronically generated in the  coding process, and agreement on all categories were 90 percent or above.  Coding disagreements were resolved through reviewer discussion. In  addition, analyses of the closed-ended responses were produced with  statistical software.
We also interviewed a range of officials about the land acquisition process.  These officials included FLTFA program leads at each agency’s  headquarters and selected state or regional-level contacts with each  agency, as well as officials from third-party organizations involved with  the land acquisition process, such as The Nature Conservancy and The  Trust for Public Land.
We performed our work between November 2006 and February 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
section_title: Appendix II: Completed FLTFA Land Sales, through May 2007
subsections: section_title: Betty Foster/Marble Canyon Co. Inc.
paragraphs: Eagle Lake Field Office  Pitchfork Cattle Co.
Royal Gorge Field Office  Cripple Creek & Victor  Gold Mining Company  Royal Gorge Field Office  Cripple Creek & Victor  Gold Mining Company  Royal Gorge Field Office  County of Boulder  White River Field Office  Taylor Temples  White River Field Office  Walter Powell  White River Field Office  Mark Slawson  White River Field Office  Chris Halandras  White River Field Office  Cross Slash 4 Ranch  White River Field Office  Big Mountain Ranch,  White River Field Office  Howard Cooper  Golden Reward  Mining Co.
Carson City Field Office  Carson Auto Mall, LLC  01/29/2004  Carson City Field Office  Raymond Sidney  Carson City Field Office  Jacob and Arezou  West Wendover  Project, LLC  Mt. Wheeler Power,  Inc.
The Crescent Group,  LLC  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Robert Dale Beck  Las Vegas Field Office  Rajwinder Dhaliwal  Las Vegas Field Office  Muscle Investments,  The Crescent Group,  LLC  Las Vegas Field Office  Edward Van Sloten  Las Vegas Field Office  Varinder Singh  Las Vegas Field Office  William Berdie Jr.
Las Vegas Field Office  Ominet Laughlin, LLC   05/12/2006  Las Vegas Field Office  DJL Enterprises, LLC  12/06/2005  Las Vegas Field Office  DJL Enterprises, LLC  12/06/2005  Las Vegas Field Office  DJL Enterprises, LLC  12/06/2005  Las Vegas Field Office  Peter Horne dba Halo  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Brooke Ann Mrofcza  Las Vegas Field Office  Brooke Ann Mrofcza  Las Vegas Field Office  Silver State Schools  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Las Vegas Field Office  Hardy Properties, LLC  12/08/2005  Cavanaugh Jr.
American Exchange  Services, Inc.
Van Grazing  Cooperative, Inc.
Van Grazing  Cooperative, Inc.
Tom and Diane   Grant Jr.
Lakeview District Office  Donald Rajnus  Lakeview District Office  Kennedy Land Co,  Lakeview District Office  Meadow Lake, Inc.
section_title: Appendix III: Detailed Information on Planned FLTFA Land Sales through 2010, as Reported by BLM State Offices
subsections: section_title: Acreage Fair market value Sale method
paragraphs: Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  Competitive public interest, expansion of  community and economic development  To resolve an unintentional, unauthorized  occupancy  Competitive public interest, expansion of  community and economic development  To resolve unauthorized use (agricultural)
To resolve unauthorized use (occupancy)
Accommodate use on adjoining lands (sewage  treatment ponds)
Resolve unauthorized use (agricultural)
Information not provided.
section_title: Appendix IV: Comments from the Department of the Interior
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Andrea Wamstad Brown, Assistant  Director; Mark Keenan; Emily Larson; John Scott; and Rebecca Shea made  key contributions to this report. Also contributing to the report were  Anthony Covacevich, Rich Johnson, Paul Kinney, and Carol Herrnstadt  Shulman.