Western Land Group, Inc. 

Public Lands Specialists

A public land exchange is a real estate transaction where a non-federal party exchanges its land for land owned by the state or federal government. Exchanges are a tool used by Federal and State agencies to acquire land. The lands to be exchanged must be of equal monetary value, determined to serve the public interest and preferably located within the same area.

Federal and State lands make up a large proportion of the land base in the western United States. In Colorado, for example, public lands make up 42% of the state. The location and configuration of these lands is largely the result of historical accident, not strategic planning. Due to the process by which the public lands were created, substantial portions of the public landownership consist of either isolated parcels that are difficult to access and manage or lands that provide few public resource values.

Land exchanges are a valuable tool for land management agencies to acquire threatened wetlands, wildlife habitat and park lands for public benefit while disposing of lands that are difficult, if not impossible, to manage. As a result of reduced appropriations for Land and Water Conservation Fund purchases, land exchanges are a vital way Federal agencies can acquire land while at the same time disposing of property that has few public benefits. In addition, land exchanges offer local communities the opportunity to direct future growth and preserve private lands containing significant local natural, historic and recreational resource values. Land exchanges can be cost effective and offer win-win opportunities for the public.

The federal land exchange process is designed to insure that the exchange is approximately equal in value (as defined by the exchange regulations) and is in the public interest. The valuation process and the public interest determination process proceed along separate but parallel tracks. Federal land exchanges, whether Forest Service, Bureau of Land Management, or other federal agency, have similar although not identical processes. Land exchanges and conveyances involving State lands tend to follow a different process as determined by State regulations. The following describes the federal land exchange process in a generalized way.

The formal exchange process begins with the submission and execution of an Agreement to Initiate (ATI) an exchange with the agency. While not part of the formal process, informal conferences should be held with the agency prior to submission of the Agreement to Initiate. Items for discussion include the structure of the proposed exchange, the agency's willingness to process the exchange and the responsibilities of the various parties.

Both the Forest Service and BLM require national team review and preparation of Feasibility Analyses on all exchange proposals involving federal lands valued at $500,000 and over. Projects involving federal lands valued at less than $500,000 require the preparation of a Feasibility Analysis although typically they do not have to be reviewed by the national team. The Feasibility Analysis assures that adequate information is obtained prior to pursuing a proposal and is used as a basis for case review by the NLAT.

Following approval of the Feasibility Analysis and execution of the Agreement to Initiate, the agency requests the Bureau of Land Management (BLM) to serialize the case and segregate the selected federal lands from appropriation under the public land laws and mineral laws for a period not to exceed five (5) years. This prevents the filing of new unpatented mining claims which could impede the exchange. At this early stage, a mineral report is also requested from the United States Geological Survey.

Initial public comment regarding the exchange begins with a legal notice announcing the proposed exchange. This notice is published in local newspapers once a week for four consecutive weeks. The notice is also sent to local and State public officials, including county commissioners, the Congressional delegation, authorized users and others. Comments on the proposed exchange may be submitted to the agency by any person up to 45 days following the initial date of publication. During this period, the agency typically provides briefings regarding the exchange to a number of local entities. During this stage of the process, it is important to monitor comments received and make appropriate responses to insure issues and concerns are addressed in an appropriate manner.

An environmental analysis of the proposed exchange is then prepared. This analysis contains information gathered to date, including data from previous environmental reports, agency studies, public comments and resource issue analyses.

Valuation proceeds along on separate but parallel track. FLPMA requires that the value of exchanged lands be equal, adjusted for any difference in value by cash equalization payments up to 25% of the value of the federal lands to be disposed. Agency regulations require that values for exchange purposes be determined by appraisal. Appraisals for land exchanges and other land tenure adjustments involving federal agencies are guided by the Uniform Appraisal Standards for Federal Land Acquisitions. This document, published in 1973 and updated in 1992, offers standards for appraising federal acquisitions, typically by condemnation.

Once the public interest determination and valuation processes are completed, the agency issues a Decision, including a Finding of No Significant Impact (FONSI) as required by the National Environmental Policy Act (NEPA). The Decision explains the agency decision to proceed with or deny the exchange. Copies of the Decision are sent to State and local government officials, authorized users of the selected federal lands, the Congressional delegation and interested parties. In addition, a legal notice announcing the availability of the Decision and the environmental analysis is published in newspapers of general circulation.

Prior to issuance of the Decision, neither the proponent nor the government is required to proceed with the exchange. Assuming the agency is going to approve the exchange, a binding exchange contract, known as an "Exchange Agreement", is presented for the deciding officer’s signature with the Decision. The Exchange Agreement identifies the properties to be exchanged, encumbrances, cash equalization payments that may be required to complete the exchange, the agreed upon values of the involved lands, a description of the goods and services and their costs for which the non-complying party is liable in the event of default, and other responsibilities of the proponent and the agency.

Final title reports are then requested, BLM is asked for concurrence to dispose of the minerals (if needed) and the final administrative review begins. Upon completion of these steps, BLM prepares a land patent for the selected land and the agency’s counsel (whether Department of Agriculture or Department of Interior) completes its review of the title commitment and warranty deed. Following receipt of counsel’s concurrence, a closing is scheduled at which time the proponent receives the patents to the federal lands and the United States receives the deeds to the private properties. Assuming the non-federal mineral estate is to be conveyed to the United States, it is donated by a separate deed in order to avoid being available for future location and entry activities under the General Mining Law. If cash equalization payments are called for, they are made at this time as well.

What are the key laws & regulations?

Federal Land Policy and Management Act of 1976 (FLPMA)

Governs land exchanges with the federal government. FLPMA authorizes the Secretary of the Interior to acquire land by exchange and to dispose of a tract of public land by exchange. FLPMA requires that the values of the lands exchanged be equal. If the values are not equal, they may be equalized by a cash payment up to 25% of the value of the federal lands to be disposed, as determined by appraisals.

Uniform Appraisal Standards for Federal Land Acquisition

The value of the lands involved in the exchange is determined by appraisals under this document, published in 1973 and updated in 1992. If the parties do not agree on the appraisal findings, they must submit to arbitration or agree to use another process to determine value.

Federal Land Exchange Facilitation Act of 1994 (FLEFA)

The purpose of the Act is to facilitate and expedite land exchanges under the authority of the Secretary of Agriculture and the Secretary of the Interior by streamlining and improving the procedures for such exchanges. The Act endorses the long-standing policy that a land exchange is an important tool to consolidate landownership for purposes of more efficient management; to secure important objectives of resource management, enhancement, development and protection; and to fulfill other public needs.

National Environmental Policy Act of 1969 (NEPA)

NEPA and its implementation guidelines issued by the Council on Environmental Quality establish a framework within which the potential impacts (environmental, cultural, social and economic) of a given project are fully disclosed. Depending on the nature of a land exchange and the level of effort required to fully assess the potential impacts of the transaction, the documentation required under NEPA can either take the form of a full Environmental Impact Statement (EIS), Environmental Assessment (EA) or a Categorical Exclusion (CE).

Endangered Species Act of 1973

Affords significant protection against federal actions that jeopardize federally listed Threatened, Endangered or Candidate species. Presence of any of these species (plant or animal) can effect the determination of the exchange's public benefit.

National Historic Preservation Act of 1966 (NHPA)

The Act was established to identify, preserve and protect historical and cultural properties of significant importance to the Nation’s heritage. NHPA requires federal agencies to establish and implement a program to comply with the Act and take into account the effects of its actions on cultural properties. Even cultural resources that have not yet been discovered (such as archaeological sites), but that possess significance, are subject to review. Once a site is determined "significant", it is listed in the National Register of Historic Places and is required by Federal law to be protected. This protection may include preservation of the actual site, or excavation and collection of the artifacts.

Executive Order 11988 "Floodplain Management" and Executive Order 11990 "Protection of Wetlands"

Requires federal agencies to minimize adverse impacts from occupying, destroying, or modifying floodplains and wetlands. These Executive Orders also discourage federal actions that support development within floodplains and wetlands.

Resources Conservation and Recovery Act of 1976 (RCRA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980

Requires federal agencies to evaluate properties for the presence of hazardous substances and to clean up any contaminated federal parcel before it is exchanged.

Requires the Forest Service to develop land and resource management plans for each unit of the National Forest System.

Requires that every Forest Service revise its land and resource management plan every ten to fifteen years.

Why use Western Land Group?

Knowledge and experience conducting public land exchanges

Land exchanges are complex, time consuming and expensive processes. As an experienced third party facilitator, we provide our clients with sufficient information upon which to make an informed business decision regarding a land exchange or other public lands-related transactions. Working closely with the client, we:

A third party facilitator who has developed in-depth expertise in managing the exchange process, like Western Land Group, can judge the multiple and time consuming tasks associated with processing an exchange. Experience in planning and implementing public information programs; working with elected officials; reviewing appraisals and surveys; identifying and resolving technical encumbrances; interpreting real estate; arranging for, and in some cases drafting environmental assessments; and closing real estate transactions are all tasks that require expertise.

Close working relationships with applicable agencies