Authority to Transfer Forfeited Property to the General Services Administration for Potential Sale to a Municipality

Opinion

Authority to Transfer Forfeited Property to the General Services Administration for Potential Sale to a Municipality

T he A ttorney General has authority under 21 U.S.C. § 8 8 1(e)(3) to transfer to the General Services A dm inistration real property forfeited to the United States Pursuant to the drug laws. U nder 40 U.S.C. §484(k)(2), if G SA determines that the property is needed to carry out neither its own responsibilities nor the responsibilities of any other federal agency, it may assign the property to the Secretary o f the Interior upon the Secretary’s recommendation that the property be used as a public park. This statute also allows the Secretary to sell the land for public park or recreational purposes to a m unicipality. If warranted by the public benefit that w ould accrue from use o f the land as a park or recreation area, the sales price might be so heavily discounted as to be normal.

December 19, 1985

M em orandum O p in io n for th e A ttorney G eneral

I. Introduction and Summary

This memorandum responds to your request for our opinion on the following questions: (1) whether you have authority to transfer certain forfeited real property to the General Services Administration (GSA); and (2) whether, assuming that GSA and the Secretary of the Interior (Secretary) choose to exercise their discretion in certain statutorily authorized ways, the land may be sold at a discounted price to a county in Florida for use as a park. As we understand the facts underlying this request, on March 16, 1984, agents of the United States Marshals Service (USMS) seized 167 acres of Florida land. The land was liable to forfeiture under 21 U.S.C. § 881(a)(6) because it represented “proceeds traceable to an exchange for a controlled substance.” On June 14, 1984, a judicial decree of forfeiture was entered, ordering the USMS to deliver the property to the United States of America “for disposition according to law.” United States v. One (1) One Hundred Ninety- Seven A cre P arcel o f Property Situation in Alachua County, Florida, No. GCA-84-0027 (N.D. Fla. June 14, 1984). On August 21, 1984, the United States Attorney for the Northern District of Florida directed the transfer of the property from the USMS to GSA pursuant to the Controlled Substances Act, which permits the Attorney General to transfer forfeited property to GSA “for disposition according to law.” 21 U.S.C. § 881(e)(3).1 1 G SA , how ever, appears to have treated this disposition as a request that it sell the property o f behalf o f the D epartm ent o f Justice pursuant to 21 U .S .C . § 881(e)(2). A t the request o f the D epartm ent, GSA has not yet pub licly advertised th e property.

126 The forfeited land is adjacent to a state park and is considered to be ecologi­ cally valuable. Alachua County, Florida has therefore expressed an interest in acquiring the land from the federal government at nominal cost for use as a park. The County, however, is willing to satisfy the liens and local back taxes that burden the land in the amount of approximately $100,000. We conclude that 21 U.S.C. § 881(e)(3) authorizes the Attorney General to transfer forfeited property to GSA. If GSA determines that the property is needed to carry out neither its own responsibilities nor the responsibilities of any other federal agency, GSA may declare the property surplus and dispose of it under the Federal Property and Administrative Services Act of 1949 (FPASA), 40 U.S.C. §§ 471-544, a statute that vests GSA with considerable discretion over the final disposition of surplus property. One of FPASA’s provisions, id. § 484(k)(2), permits GSA to assign to the Secretary land that the latter recommends for use as a public park. If the Secretary does make such a recommendation and if GSA does assign the land to the Secretary, the Secretary has authority under § 484(k)(2)(B) to sell the land to Alachua County at a discounted price in consideration of the public benefits that will accrue to the citizens of the United States through the use of the land as a park.2

II. Analysis

A. Legal Authority to Classify Land as “Excess P roperty” Under the Federal Property and Adm inistrative Services A ct o f 1949

Section 511(e)(3) of the Controlled Substances Act, 21 U.S.C. § 881(e)(3) provides: “Whenever property is forfeited under this subchapter the Attorney General may . . . require that the General Services Administration take custody of the property and remove it for disposition according to law.”3 The plain

2 We have no view , o f course, concerning: (1) w hether the Secretary should recommend that this Florida land be sold to A lachua C ounty for use as a park; (2) w hether GSA should exercise its discretion under g 484(k)(2) to assign the land to the Secretary; or (3) w hether the Secretary should exercise his discretion under § 484(k)(2)(B ) to determ ine that the land should be sold to the C ounty at a discounted price reflecting the public benefit derived from use o f this land as a park. 3 Section 881(e) also provides that the A ttorney General may: (1) retain the [forfeited] property for official use or transfer the custody or ow nership or any forfeited property to any Federal, State, o r local agency pursuant to [19 U.S.C. §1616]; (2) sell any forfeited property which is not required to be destroyed by law and w hich is not harmful to the public; [or] * * *

(4) forward it to the Drug Enforcement Administration for disposition (including delivery for medical or scientific use to any Federal or State agency under the regulations of the Attorney General). None o f these o th er authorities are available to transfer the land directly to A lachua C ounty at a nom inal price. The property may not be transferred directly to a state or local agency under § 881(e)(1) in this instance because no state o r local enforcem ent agency directly participated “in any o f the acts which led to the seizure or forfeiture o f the property." See 19 U.S.C. § 1616(a)(2). The authority under § 881(e)(2) to sell forfeited property clearly carries with it the requirement that the property be sold in an arm 's length transaction at a reasonable rather than a below-market price. Section 881(e)(4) is inapplicable by its terms. We therefore believe that § 881(e)(3) provides the only means by which Alachua County may legally receive this land at a discounted price.

127 meaning of this provision is that the Attorney General may transfer forfeited property to GSA for disposition pursuant to any legal authority applicable to the property.4 One such authority is the FPASA, which vests GSA with discretion to dispose of “surplus property” in a variety of ways. 40 U.S.C. § 484. The FPSA defines “surplus property” as “excess property not required for the needs and discharge of the responsibilities of all Federal agencies, as determined by [GSA].” Id. § 472(g). “Excess property,” in turn, is defined as “any property under the control of any Federal agency which is not required for its needs and the discharge of its responsibilities, as determined by the head thereof.” Id. § 472(e). Accordingly, a two-step process is required before property may be disposed of as surplus under the FPASA. First, the head of the agency that controls the property must declare it excess with respect to the needs of the agency. GSA then must determine that the property is excess with respect to the needs of other federal agencies. We conclude that GSA, which presently controls the forfeited land, may designate it as excess property under 40 U.S.C. § 472(e) if it determines in the exercise of its discretion that the property is not required for the needs of GSA or the discharge of its responsibilities. Nothing in the FPASA nor, to our knowledge, in any other statute, prevents forfeited property from being classi­ fied as “excess” property, assuming that it otherwise meets the statutory definition of “excess.”5 GSA, however, in both oral and written communications with the Depart­ ment, has stated that in its view, forfeited property cannot be classified as excess property for purposes o f disposal under the FPASA.6 The only rationale 4 The legislative history o f th is provision is w holly consistent w ith its plain language. See H.R. Rep. No. 1444, 9 1 st C ong., 2d Sess. 56 (1970) (statin g that th e section perm its the A ttorney G eneral, at his option, to dispose o f forfeited property in a variety o f ways). 5 The C om prehensive C rim e Control A ct o f 1984 established a D epartm ent o f Justice Assets Forfeiture Fund into w hich “ [t]here shall be deposited . . . all am ounts from the forfeiture o f property under any law enforced o r ad m inistered by the Department o f Justice rem aining after the paym ent o f expenses for forfeiture and sale authorized by law .” 28 U.S.C. § 524(c). T he legislative history o f the 1984 Act discusses only tw o options available to the A ttorney General w ith respect to forfeited property: to retain the property or sell it. See H .R . Rep. No. 1030, 98th Cong., 2 d Sess. 1940 & n.16 (1984). Therefore, an argum ent could be c on stru cted from the legislative history an d structure o f the 1984 Act that Congress understood that the D epartm ent o f Justice w ould sell at m arket value any forfeited property not retained. T he fo rfeiture provisions o f the 1984 A ct, how ever, apply only to property that was in the custody o f the D epartm ent o f Ju stice on o r after O ctober 12, 1984, the effective date o f these provision. See 28 U.S.C. § 524(c)(7). T he forfeited land in Alachua C ounty, how ever, w as transferred to the custody of GSA pursuant to $ 881 (e)(3) on A ugust 2 1 ,1 9 8 4 , and th u s is not covered by these provisions. M oreover, even i f the property had b een transferred a fte r the effective d a te o f the forfeiture provisions, w e w ould not be inclined to conclude that it co u ld not be transferred under $ 881(e)(3). In the 1984 A ct, C ongress did not explicitly repeal the clear auth o rity u n d er § 881 (e)(3) fo r the A ttorney G eneral to transfer the property to GSA fo r disposition under any app licab le legal authority, including authorities such as 40 U .S.C. § 484(k)(2), even if the transfer does not bring the D epartm ent m arket value for th e forfeited property. A ccordingly, we believe that it is wholly legal fo r th e A ttorney G eneral to continue to exercise his authority under § 881(e)(3), particularly in light o f the venerable d o ctrin e that repeals by im plication are disfavored. See United States v. United Continental Tuna Corp., 425 U .S. 164, 168 (1976). 6 In support o f its position, GSA cites th e “ A greem ent Betw een U nited States M arshals Service and G eneral Services A dm inistration” (June 24, 1985) and a docum ent entitled “Real Property Forfeitures Q uestions and Continued

128 offered by GSA for this analysis is that forfeited property is not acquired for the mission of the Department, but in rather connection with law enforcement, and it therefore cannot be deemed excess property. An agency is entitled to deference in its interpretation of a statute it adminis­ ters when the statue is unclear. See U dall v. Tallman, 380 U.S. 1, 16 (1965). GSA’s interpretation of “excess property,” however, is at odds with the plain language of the FPASA. The definition of excess property does not focus on the means by which or the purpose for which the property at issue was originally acquired, but instead considers only whether the property is required for the needs and the discharge of responsibilities of an agency. If the forfeited property is not so required, therefore, it may be classified as excess. GSA has not cited, and we have not found, any legislative history of the FPASA that casts doubt on this plain language.7 For the foregoing reasons, we conclude that the Attorney General has the statutory authority to transfer the land to GSA pursuant to § 881(e)(3) and that the property may then be classified as “excess property” by GSA.8 6 ( . . . continued) A nsw ers.” GSA apparently uses the latter docum ent in connection w ith the training o f em ployees involved in this area. The first tw o questions and answ ers read* Q. Is seized or forfeited property disposed o f under the Federal Property and A dm inistrative Services Act o f 1949, as am ended (FPASA)? A. No. Property is seized and forfeited pursuant to the Com prehensive Forfeiture A ct o f 1984. Certain properties are then disposed o f pursuant to our mem orandum o f understanding w ith the U.S. M arshals Service. Q. Is forfeited property excess o r surplus? A. See previous question and answer. A nother one o f the questions and answ ers seems to address specifically the question w hether forfeited property can be disposed in a public discount conveyance o f the kind contemplated in 40 U.S.C. § 484(k)(2)(B): Q. Is forfeited property surplus for the purpose o f public discount conveyances9 A. No, it is not surplus Federal real property w ithin the context o f 1949 FPASA. A dditionally, the USM S Agreement requires that the property will be sold to provide the maximum monetary return to the government. W e believe that the agreem ent between GSA and the USM S controls only the procedures for disposition of properties that the D epartm ent o f Justice decides to sell according to 21 U.S.C. § 881(e)(2), and is irrelevant to the disposition o f properties transferred by the D epartm ent o f Justice to GSA pursuant to § 881(e)(3). 7 The definitions o f “excess property” and “surplus property” w ere contained in the original Act. See Pub. L. No. 82 -2 8 8 , § 3, 63 Stat. 377, 3 78-79 (1949). The only legislative history pertaining to these definitions sim ply repeated their language. See H.R. Rep. No. 670, 81st Cong., 1st Sess. 8 (1949). The definitions have rem ained unchanged in all subsequent am endm ents o f the statute and have not been the subject o f any com m ent in the legislative history to these subsequent amendments. 8 We note, how ever, that the current guidelines concerning seized and forfeited property do not appear to contem plate disposition to G SA under 21 U.S.C. § 881(e)(3). These guidelines provide, in pertinent part: [Section 881(e) o f 21 U.S.C.] authorizes the A ttorney General to dispose o f forfeited property by (1) retaining the property fo r official use; (2) transferring custody or ow nership o f the property to any Federal, State or local agency pursuant to [19 U.S.C. §1616]; or (3) placing the forfeited cash o r proceeds o f sale o f forfeited property in an appropriation called the D epartm ent o f Justice A ssets Forfeiture Fund . . . . A decision o f the A ttorney G eneral regarding placing the forfeited property to another agency is not subject to judicial review. A ttorney G eneral’s G uidelines on Seized and Forfeited Property, SO Fed. Reg. 24,052, 24,052 (1985). W hen the U nited States A ttorney transferred this property to G SA on A ugust 21, 1984, how ever, the D epartm ent, had not yet prom ulgated internal guidelines concerning the disposition o f forfeited property. We therefore believe, assuming that the United States A ttorney was acting as the Attorney G eneral's delegate, that his transfer o f property in August 1984 cannot be seen as inconsistent with any guidelines extant at that time.

129 B. A uthority o f the Secretary o f the Interior to Sell Land to a Municipality a t a D iscounted P rice Under 4 0 U.S.C. § 484(k)(2)(B)

Once the land is classified as excess property, GSA would have to determine that the property “was not required for the needs and the discharge of responsi­ bilities of all federal agencies” before the property can be classified as “sur­ plus.” See 30 U.S.C. § 472(g). Once the land has been classified as surplus property, it may be disposed of under 40 U.S.C. § 484. Because a variety of disposal options are available under the section,9 GSA undertakes an analysis to determine “the estimated best and highest use” of the property. 41 C.F.R. § 101-47.303-1. GSA then notifies certain public agencies, including the Department of the Interior, of the potential availability of the property. See id. § 101-47.303-2. The Secretary of the Interior may then submit an application to GSA, recommending that the land be used as a public park or recreation area. Id. § 101-47.308-7. On receipt of such an application, GSA is authorized under 40 U.S.C. § 484(k)(2) to assign the property for use as a park or recreation area. The Secretary, in turn may “sell or lease” the land “for public park or recre­ ational purposes to any State, political subdivision, instrumentality or munici­ pality” under § 484(k)(2)(A).10 Although the Secretary may not make a gift of the property to Alachua County,11 he is authorized to sell or lease the land to the County at a discounted price. Section 484(k)(2)(B) provides: In fixing the sale or lease value of property to be disposed of under subparagraph (A) of this paragraph, the Secretary of the Interior shall take into consideration any benefit which has accrued or may accrue to the United States from the use of such property by any such State, political subdivision, instrumental­ ity, or municipality. It is not clear from the language of the statute whether the Secretary is authorized to sell the land at a wholly nominal price. The legislative history of § 484(k)(2)(B) makes clear, however, that Congress intended to authorize the 9 See, e.g., 4 0 U .S.C . § 484(e) (authorizing public sale o f surplus property); id. § 484(h) (authorizing transfer to the D epartm ent o f Agriculture fo r p nce support reasons); id. § 484(k)(1) (authorizing transfer to the D epartm ent o f E ducation fo r educational purposes). 10 Section 48 4 (k )(2 ) provides in part: U n d er such regulations as he m ay prescribe, the A dm inistration [of General Services] is authorized, h is d iscretio n , to assign to the Secretary o f the Interior for disposal, such surplus real p ro p erty , including buildings, fixtures, and equipm ent situated thereon, as is recom m ended by th e Secretary o f the Interior as needed for use as a public park or recreation area. (A ) Subject to the disapproval o f the A dm inistrator w ithin thirty days after notice to him by the Secretary o f the Interior o f a proposed transfer o f property for public park of public recreational use, the Secretary o f the Interior, through such officers or em ployees o f the D epartm ent o f the Interior as m ay designate, m ay sell o r lease such real property, including b uildings, fix tu res, and equipm ent situated thereon, for public park or public recreational purposes to any State, political subdivision, instrum entalities thereof, or municipality. 11 Section 4 8 4(k)(2)(A ) clearly requires th e sale o r lease o f property to be used as a public park. In contrast, G SA is authorized under the FPASA to donate surplus federal property for certain other purposes. See, e.g., 4 0 U .S.C . § 4 8 4 (k )(3 ) (perm itting GSA to donate surplus property to states for use as historic m onuments).

130 Secretary to convey land to localities for use as public parks at discounts approaching one-hundred percent. Section 484(k)(2)(B) was added to the FPASA by the Land and Water Conservation Fund Act Amendments of 1970, Pub. L. No. 91-485, § 2, 84 Stat. 1084, 1084-85.. At the time the 1970 amendments were enacted, statutory authority already existed to permit a public use discount of fifty percent on surplus land sold for park and recreation purposes. The House Report accompanying the 1970 amendments states that this discount was inadequate. See H.R. Rep. No. 1225, 91st Cong., 2d Sess. 5 (1970). The House Report notes that the “intangible value which attaches to public outdoor recreation . . . cannot be measured in monetary terms or comparative appraisals.” Id. at 6. It also quotes approvingly the recommenda­ tion of the Outdoor Recreation Resources Review Committee: “Surplus Fed­ eral Land suitable for outdoor recreation purposes should be made available to State and local governments at no cost, with appropriate reservation clauses.” I d Thus, although the language of § 484(k)(2)(B) requires that the Secretary sell the land for some price and does not authorize an outright donation, it is clear from the legislative history of the provision that Congress contemplated that the price might be so heavily discounted as to be nominal if warranted by the public benefit that would accrue form use of the land as a park or recreation area.12

Conclusion

We conclude that the Attorney General has authority to direct GSA to take custody of the forfeited land in Florida under 21 U.S.C. § 881(e)(3). We also believe that GSA is authorized to dispose of the property as surplus and assign it to the Secretary of the Interior on the latter’s recommendation that the land be used as a public park. Finally, the Secretary has authority under 40 U.S.C. § 484(k)(2)(B) to sell the land at a discounted price to Alachua County, Florida for use as a public park.

C harles J. C o oper Assistant Attorney General Office o f Legal Counsel

t2As we understand the facts o f th is case, the requirem ent that the Secretary receive at least a nominal price for land sold pursuant to § 484(k)(2) will be satisfied by the C o u n ty 's discharge o f the liens and back taxes on the land. There does not seem to be any legal obstacle to accepting the am ount necessary to satisfy these liabilities as the purchase price o f the land. O ur opinion that such a transaction w ould satisfy the requirem ents o f § 484(k)(2)(B ), o f course, does not constitute a recom m endation that the Secretary pursue this course of action.