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Land Entity White Paper <br />November 30, 199' <br />Federal regulations prohibit persons who would personally benefit <br />from being part of the decision - making process in entities that are <br />to receive government funds. <br />Federal regulations are designed to avoid having a non - profit or <br />state or local government benefit from receiving federal funds <br />beyond the direct benefit intended by the grant or agreement. For <br />that reason, entities receiving federal funds generally cannot apply <br />them to administrative costs of the organization or invest them to <br />earn interest during the period between receiving the federal funds <br />and disbursing them for their intended use. <br />Real property acquisition using federal or state funds is subject to <br />government appraisal. <br />• If land is later sold, either the government must be repaid its share <br />of fair market value less selling expenses, or title must transfer to <br />the federal government in exchange for compensation <br />proportionate to the federal contribution to the fair market value of <br />the property, or another acceptable arrangement has to be worked <br />out that involves the land continuing to serve the government's <br />purpose <br />C. Constraints on Creation of a New Entity <br />Under 31 U.S.C. Sec. 9701, federal agencies cannot create a corporation to carry <br />out their functions. Where creation of a new Land Entity is one option contemplated, <br />DOI could be viewed as helping to create an entity to carry out its functions. If a new <br />entity with substantial responsibilities is to be created, Congress will need to authorize it. <br />Selecting an existing organization as Land Entity would, of course, pose no problems. <br />D. Constraints of the ESA <br />The Cooperative Agreement and proposed Program have taken great care not to <br />compromise the obligation of the U.S. Fish and Wildlife Service to determine and from <br />time to time to confirm that the Program is serving as a reasonable and prudent <br />alternative and avoiding jeopardy to the Program's target species. The Governance <br />Committee does not have the authority to override FWS, and thus it cannot delegate that <br />authority or contract it away. A Land Entity with bylaws or a charter that attempted to <br />override FWS's authority could not be funded. <br />F:1 <br />