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Land Entity White Paper November 30, 1999 <br />that involves the land continuing to serve the government's purpose. Thus, it might be possible, <br />with DOI approval, to transfer Land Entity interests in land (along with the Land Entity's federal <br />funding conditions) to a state or conservation group, or another entity able to assure the federal <br />government that the lands would be appropriately managed for habitat. With DOI approval, it <br />would also be possible that a Land Entity could be formed to retain Program interests in land to <br />benefit endangered species, even if the Program failed. <br />d Constraints on Creation of a New Entity <br />Where creation of a new Land Entity is one option contemplated, there is an additional <br />potential constraint on federal participation. Under 31 U.S.C. Sec. 9701, federal agencies cannot <br />create a corporation to carry out their functions. This statute has been interpreted very strictly. <br />Because DOI will be a signatory to any agreement that creates a Program, and will assign <br />members to the Governance Committee, it could be viewed as helping to create any new Land <br />Entity. Arguments can, however, logically be made that a new entity with some or all of these <br />characteristics would not have been created by an agency to take over federal functions: (1) no <br />federal board members; (2) broader corporate mission and functions than just Program tasks <br />(e.g., holding interests in wetlands for mitigation banking as well as holding interests in Program <br />lands); (3) carrying out a few narrow Program tasks rather than serving as a strong, independent <br />Land Entity; and (4) competing with other new or existing entities for selection to carry out <br />Program tasks. There is little case law to indicate where the connection between the federal <br />government and "creation" of a new entity become too tenuous to be an issue. Thus, any new <br />entity is potentially subject to challenge in court. If a new entity is desired, DOI will need to <br />agree that, for reasons such as those listed above, it does not believe it is creating a corporation <br />to carry out its functions, or Congress will need to authorize the Land Entity by legislation. <br />Selecting an existing organization as Land Entity would, of course, pose no problems. <br />e. 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 time to <br />time to confirm that the Program is serving as a reasonable and prudent alternative and avoiding <br />jeopardy to the Program's target species. The Governance Committee does not have the <br />authority to override FWS, and thus it cannot delegate that authority or contract it away. A Land <br />Entity with bylaws or a charter that attempted to override FWS's authority could not be funded. <br />f. Constraints on Federal Employees Participating in a Non Profit <br />Conflict of interest regulations generally do not allow federal officials and employees to <br />participate in a non - profit entity in a way that furthers that entity's financial interest. On its face, <br />the broad sweep of the regulation would prohibit participating in most board decisions of a land <br />entity. There is a waiver provision, however, which DOI attorneys suggest would be generally <br />available in this type of situation. So federal employees almost certainly could participate in any <br />A- 5 <br />