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Department of Interior

Recommendations and Actions

DOI07: Improve the Land Acquisition Policies of DOI

BACKGROUND

The Department of the Interior (DOI) manages approximately 500 million acres of land and has responsibility for thousands of historical and cultural sites across the nation. The Department of Agriculture's Forest Service (USFS) manages another 197 million acres of land. To effectively address current priorities, such as habitat for endangered species, migratory waterfowl laws, and wetland protection, federal agencies often need to acquire additional lands. An effective acquisition program can provide the means for developing efficient and cost effective management units that result in lower management costs per acre and better service to the public.

DOI lands provide important natural resources, recreational and scenic values, as well as an abundance of resource commodities and revenue to federal, state, and local governments. The following federal agencies have major land ownership interests: the Bureau of Land Management (BLM), 270 million acres; the Fish and Wildlife Service (FWS), 90 million acres; and the National Park Service (NPS), 80 million acres and 367 natural, cultural, and historical units. BLM's public lands are located in 28 states and, in many instances, are intermingled with tracts of land owned by private entities, state and local governments, and other federal agencies. FWS lands currently include 485 wildlife refuges, 78 fish hatcheries, and 13 research centers. NPS units range from less than one acre to more than 13 million acres in size. They include parks, monuments, seashores, historic sites, historical parks, military parks, memorials, recreation areas, rivers, and parkways.

Federal land acquisition is accomplished primarily by the DOI and the Department of Agriculture using the Land and Water Conservation Fund (LWCF). Bureaus acquire additional land and real property for several purposes:

--to protect nationally important wetlands and fish and wildlife habitat;

--to preserve nationally important natural and historic resources;

--to provide for public use and enjoyment through enhanced recreational opportunities; and

--to promote effective management of existing departmental land and resources.

For fiscal years 1986 through 1991, Congress appropriated about $813 million to DOI for land acquisition from the LWCF. Bureau expenditures were broken down as follows: BLM $58 million, FWS $367 million, and NPS $388 million.[Endnote 1] The proposed appropriation from the LWCF for fiscal year 1994 is $208 million, including funds for state grants and the USFS.

In past years, DOI has used inconsistent methods for determining land acquisition priorities. Beginning in 1990, the LWCF acquisition process required each concerned bureau to prepare a priority acquisition ranking list for funding. Bureaus use different methods for establishing priorities for proposed purchases but all use the Office of Management and Budget (OMB) system as an overlay. The OMB system uses four minimum criteria:

--whether the proposed acquisition is within the boundaries of or is adjacent to an authorized unit;

--absence of known health or safety hazards;

--absence of opposition from current owners; and

--a limit of 10 percent of the purchase price for the infrastructure expenses.

These lists are then submitted to DOI's Office of the Budget which compiles a joint list using the OMB procedure.[Endnote 2] This list is submitted to Congress with the President's annual budget. Congress receives the list and modifies it significantly, adding new properties so that the list often bears little resemblance to the original priorities set forth by the bureaus. For the 1994 budget proposal, FWS used its own land acquisition priority system, BLM used the land acquisition priority procedure developed by OMB, and NPS did not use any standard system.

In a 1993 study, the National Research Council found "the OMB method for setting federal acquisition priorities among the priorities of individual agencies forces nonadditive criteria into a single composite ranking. This skews results in favor of potential land acquisition that would best meet specific purposes. The current approach also emphasizes certain considerations at the expense of others and diminishes the agencies' ability to fulfill their legislative charges.''[Endnote 3] In essence, OMB's current method compares incompatible qualities, such as recreational value and endangered species value. The system applies the same set of criteria nationwide and across all agencies, despite regional needs and agency mission, resulting in significant modifications of individual bureaus' priorities.

The system also permits micromanagement since the bureaus' priorities are often obscured by OMB's single-ranking system. The differences between bureau lists and projects eventually funded by Congress have led critics to charge that political considerations sometimes override objective criteria and agency mission. According to critics, Congress is often the focus of political input to the acquisition process, and together with the OMB ranking system, prevents the department from making long-term decisions which provide for wise ecosystem planning and management.

Another method of land acquisition is for department bureaus to ask nonprofit organizations to assist in the acquisition of properties when a project has not yet been authorized or funded. Nonprofit organizations support acquisition projects by:

--actively lobbying for congressional support;

--providing assurance that funds will be available for purchase of a proposed project when there is a willing seller; and

--obtaining property at less than fair market value through their tax-exempt status.[Endnote 4]

A May 1992 Inspector General's (IG) Report questioned the legality and propriety of some acquisitions facilitated by nonprofit organizations. During a six- year study period, the IG found that approximately 30 percent of acquisitions had been facilitated by nonprofit organizations. The IG report listed instances where bureaus had acquired land from nonprofit organizations at excessive prices, resulting in what were perceived to be undue profits to the organization, and expressed a concern that the nonprofit organizations were driving bureaus' acquisition priorities. The DOI Solicitor subsequently issued an opinion clarifying and concurring with some of the issues addressed in the IG report.

Rational land management strategies require that DOI be able to acquire lands using a comprehensive approach to achieve widely accepted goals and to have a set amount of discretionary funds so the Secretaries of the Interior and Agriculture can take advantage of unforeseen opportunities or urgent acquisition developments. It is vital that a system be developed which establishes criteria for decision making and incorporates the needs of the land management agencies within established national goals. Well-developed, objective criteria will provide a framework for good decisions and effective implementation.

ACTIONS

1. The Secretaries of the Interior and Agriculture and the Director of OMB should modify the process for determining land acquisition priorities and modify current procedures.

The new system should be separated into three parallel ranking systems reflecting major objectives of federal land acquisition. The suggested base categories are outdoor recreation resources, resource protection, and cultural heritage protection. [Endnote 5] Objective criteria should be developed for each category. The bureaus should develop acquisition lists based on the established criteria. The Secretary of the Interior should consolidate and prioritize DOI's requests into a single list. The Secretary of Agriculture should do the same for USFS. Development of criteria for the categories and the annual combination of the lists should be completed by a collaborative effort between policy level officials from DOI, USDA, and OMB, supported by appropriate technical specialists.

2. DOI should issue a series of policy directives for the NPS, BLM, and FWS to address the issue outlined in the IG Report and clarified in the Solicitor's opinion of July 30, 1992.

These directives should reaffirm the usefulness of nonprofit organizations to land acquisition objectives of the bureaus, better define the relationship between the two, and provide further guidelines for the implementation of that relationship. Specific guidelines should:

--direct DOI bureaus to immediately discontinue the practice of paying interest for income forgone;

--limit payment for land acquired to the basis of the purchase price plus allowable expenses, or the approved independent appraisal value plus normal closing costs;

--establish an evaluation team at the department level which would evaluate land acquisitions; and

--require that all nonprofit transactions be subject to an annual audit.

IMPLICATIONS

Modifying the ranking system for determining land acquisitions would focus the land purchased on specific purposes and objective criteria, not upon the individual land parcels. The bureaus and agencies could then prepare overall strategic plans that identify land acquisition priorities based upon future needs.

The issuance of final department guidelines on the use of nonprofit organizations will resolve the concerns of the IG report, establish uniform operating procedures, and clarify working relationships with nonprofit organizations.

FISCAL IMPACT

Implementation of the proposal would be budget neutral. It would not affect appropriations but would focus land acquisition for the bureaus. This would have a positive effect on management decisions and improve unit operations.

ENDNOTES

1. U.S. Department of the Interior (DOI), Office of the Inspector General, Audit Report, Department of the Interior Land Acquisition Conducted with the Assistance of Nonprofit Organizations, No. 92-I-833 (Washington, D.C., May 1992), p. 25.

2. National Research Council, Setting Priorities for Land Conservation (Washington,D.C.: National Academy Press, 1993), pp. 237-241.

3. Ibid.

4. DOI, p. 4.

5. National Research Council, p. 9.

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