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entitled 'Federal-Aid Highways: States Need Guidance on Sales or Leases 
of Real Property Purchased with Federal Funds' which was released on 
January 13, 2003.



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Report to the Ranking Minority Member, Committee on Commerce, Science, 

and Transportation, U.S. Senate:



December 2002:



Federal-Aid Highways:



States Need Guidance on Sales or Leases of Real Property Purchased with 

Federal Funds:



GAO-03-207:



GAO Highlights:



Highlights of GAO-03-207, a report to the Ranking Minority Member, 

Committee on Commerce, Science, and Transportation, United States 

Senate:



Why GAO Did This Study:



In 1998, the Transportation Equity Act for the 21st Century (TEA-21), 

authorized the states to retain the federal share of proceeds from the 

sale or lease of real property that had been purchased with federal-aid 

funds.  It also required the states to use the federal share on other 

highway projects eligible for funding under the federal-aid highway 

program.  GAO determined (1) the extent to which states are selling, 

leasing, or disposing of real property purchased with federal-aid funds 

and (2) how the proceeds generated from the sale or lease of real 

property are being used, including whether they are being used in 

accordance with TEA-21.  GAO issued a related legal opinion in 

September 

2002.



What GAO Found:



All of the 51 state Departments of Transportation GAO surveyed, 

including 

the District of Columbia, reported selling, leasing, or disposing of 

real 

property, such as unused land purchased with federal-aid funds.  From 

June 1998 through May 2002, 37 states sold, leased, or disposed of at 

least 5,636 properties that generated about $148 million in proceeds 

for 

the states.  States varied on whether they tracked and reported this 

information to DOT; therefore, GAO did not report this information 

for 

the other 14 states.  State DOT officials view the policy that 

allowed 

them to retain the federal share of the proceeds as being positive 

because it provided states greater flexibility for financing their 

transportation programs.  However, proceeds generated from the sale 

or 

lease of property are not currently a major source of revenue for 

states’ 

transportation programs.  GAO determined that the proceeds generated 

from 

the sale, lease, or disposal of real property were less than 1 

percent of 

states’ transportation revenue from other sources, including federal 

aid, 

in 1999 and 2000.



States reported using the proceeds generated from the sale or lease 

of 

property in different ways; and at least 2 states may have used the 

proceeds in ways that do not comply with the specific statutory 

requirements to use the proceeds on projects eligible for federal-

aid 

highway funding.  Forty-seven states reported using the proceeds 

to fund 

other state transportation projects, and at least 4 states use the 

proceeds as their match for projects receiving federal funds. GAO 

issued a 

legal opinion in September 2002, concluding that Congress did not 

intend 

for states to use such proceeds as their match. DOT has interpreted 

TEA-21 

as allowing for the use of the federal share as a state’s match.  

GAO also 

found that 2 states did not have restrictions on how the federal 

share of 

the proceeds should be used; therefore, the proceeds may have been 

used on 

projects not eligible for federal-aid.  DOT issued some guidance 

but is 

considering issuing more guidance to states to ensure proceeds 

are used 

for eligible projects under the federal-aid highway program.



Highlights Figure:



[See PDF for image]



[End of figure]



What GAO Recommends:



GAO recommends that DOT develop and report on how DOT plans to 

comply with 

GAO’s legal opinion concerning the statute governing the sale or 

lease of 

real property.  GAO also recommends that DOT provide additional 

guidance 

to the state DOTs that will help ensure states use the proceeds 

of 

property sales or leases as required by TEA-21.



www.gao.gov/cgi-bin/getrpt?GAO-03-207.



To view the full report, including the scope and methodology, 

click on the 

link above.  For more information, contact Kate Siggerud, 

(202) 512-2834.



Contents:



Letter:



Results in Brief:



Background:



All States Report Selling, Leasing, or Disposing of Real Property:



States’ Use of Proceeds Vary and Sometimes May Not Comply with the 

Statutory Requirements on the Use of the Proceeds:



Conclusions:



Recommendations for Executive Action:



Agency Comments and Our Evaluation:



Appendixes:



Appendix I: Objectives, Scope, and Methodology:



Appendix II: GAO Legal Opinion:



Appendix III: GAO Letter and Survey to State DOTs:



Appendix IV: Survey Responses of State DOTs’ Sales or Leases of Real 

Property:



Appendix V: Fiscal Year 1999 Proceeds Information:



Appendix VI: Fiscal Year 2000 Proceeds Information:



Tables:



Table 1: State DOTs that Sold, Leased, or Disposed of Real Property 

Purchased with Federal-Aid Funds, June 1998 - May 2002:



Table 2: Number of Properties Originally Purchased with Federal-Aid 

Funds for Which States Retained Proceeds Upon the Properties Sale or 

Lease, June 1998 - May 2002:



Table 3: States’ Total Proceeds from the Sale, Lease, or Disposal of 

Real Property Purchased with Federal-Aid Funds, June 1998 - May 2002:



Table 4: Comparisons of States’ Property Proceeds with States’ Total 

Receipts, Fiscal Year 1999:



Table 5: Comparisons of States’ Property Proceeds with States’ Total 

Receipts, Fiscal Year 2000:



Figures:



Figure 1: Comparison of State Proceeds from Property Sales and Leases 

with State Highway Receipts, Including Federal Aid, in 1999-Top Five 

Ratios:



Figure 2: Comparison of State Proceeds from Property Sales and Leases 

with State Highway Receipts, Including Federal Aid, in 2000--Top Five 

Ratios:



DOT: Department of Transportation:



FHWA: Federal Highway Administration:



TEA-21: Transportation Equity Act for the 21ST Century:



December 13, 2002:



The Honorable John McCain

Ranking Minority Member

Committee on Commerce, Science, and Transportation

United States Senate:



Dear Senator McCain:



The Federal Highway Administration (FHWA), within the U.S. Department 

of Transportation (DOT), is responsible for the federal-aid highway 

program. This program distributes billions of dollars in federal 

highway funds to the states. FHWA provides federal assistance to the 

states from the Highway Trust Fund for several purposes, including the 

construction and maintenance of highways and related activities. 

Federal-aid highway projects are typically funded with an 80 percent 

federal contribution. The nonfederal share of the cost (typically 20 

percent) must come from state, local, and/or private funds and is 

commonly referred to as a match. One of the related activities eligible 

for federal aid involves the cost of acquiring necessary real property 

for a highway project. When such property is no longer needed, it can 

be sold or disposed of by the state. Similarly, land retained by states 

can be leased to others. The 1998 Transportation Equity Act for the 

21ST Century (TEA-21), which authorized DOT highway and transit 

programs from 1998 through 2003, provided the states greater 

flexibility in connection with selling and leasing real property 

associated with federal-aid transportation projects. TEA-21 authorized 

the states to retain the federal share of net proceeds from the sale or 

lease of real property and to apply the federal share to other projects 

eligible for funding under title 23, U.S.C., herein known as federal-

aid highway and related programs.[Footnote 1]



FHWA has interpreted the statutory provisions governing the federal 

share of proceeds from the sale or lease of real property as permitting 

the states to use the federal share of the net proceeds without having 

to follow the rules and regulations associated with a federal-aid 

project. FHWA believes that the federal government’s interest in such 

funds is satisfied as long as the proceeds are used for projects 

eligible for funding under federal-aid highway and related programs. 

FHWA has informed the states that they may treat the proceeds from such 

transactions as state funds that are not subject to restrictions that 

would apply if the funds were treated as federal highway funds. In a 

recent legal opinion, we disagreed with FHWA’s interpretation (see app. 

II).



As the authorized period under TEA-21 draws to a close in 2003, 

Congress will need to make decisions about reauthorizing the surface 

transportation programs, including requirements related to selling, 

leasing, and disposing of real property. As agreed with your staff, 

this report discusses (1) the extent to which states are selling, 

leasing, or disposing of real property purchased with federal-aid funds 

and (2) how the proceeds generated from the sale or lease of real 

property are being used, including whether they are being used in 

accordance with TEA-21.



To determine the extent to which states are selling, leasing, or 

disposing of real property purchased with federal-aid highway funds, we 

obtained information from FHWA officials and surveyed 51 state DOTs, 

including the District of Columbia. We then compared fiscal years 1999 

and 2000 total proceeds reported by each state from the sale or lease 

of real property with the states’ total highway receipts reported by 

DOT. We obtained information from state DOTs about how they use the 

proceeds generated from the sale or lease of real property and about 

any restrictions they placed on the proceeds, and we compared these 

responses with our legal opinion. We also obtained information from 

officials of the DOT Inspector General’s office regarding their review 

of Massachusetts’ Central Artery Project that had initially raised 

concerns about FHWA’s interpretation of TEA-21 changes related to sales 

and leases of real property. We conducted our review from June 2002 

through December 2002 in accordance with generally accepted government 

audit standards.



Results in Brief:



All of the 51 state DOTs that we surveyed, including the District of 

Columbia, reported selling, leasing, or disposing of real property such 

as unused land purchased with federal-aid funds. From June 1998 through 

May 2002, 37 states sold, leased, or disposed of at least 5,636 

properties that generated about $148 million (2001 dollars) in proceeds 

for the states. However, states varied as to whether they tracked and 

reported this information to DOT. For example, eight states did not 

distinguish sold, leased, or disposed of properties originally acquired 

with federal funds from those properties that were acquired without 

federal funds and/or did not identify the amount of proceeds generated. 

States also varied in their policies for retaining the proceeds they 

receive from the sale or lease of real property. Out of the 51 states 

surveyed, 3 states reported that they returned the federal share of the 

proceeds by crediting an existing federal-aid project within their 

states. The proceeds generated from the sale or lease of real property 

do not currently appear to be a major source of revenue for states’ 

transportation programs. On the basis of our comparison of proceeds the 

states reported they generated from the sale, lease, or disposal of 

real property with the states’ overall revenues available for highway 

projects, we found that the ratios were less than 1 percent in 1999 and 

in 2000. Nevertheless, state DOT officials view the current regulations 

that allow them to retain the federal share of the proceeds as positive 

because they provide the states greater flexibility for financing their 

transportation programs.



States reported using the proceeds generated from the sale or lease of 

real property in several ways; and at least two states may have used 

the proceeds in ways that do not comply with specific statutory 

requirements to only use the proceeds on projects eligible for funding 

under federal-aid highway and related programs. This use of the 

proceeds conflicts with FHWA’s interpretation of the statute. For the 

states we surveyed and visited, 47 states use the proceeds generated 

from the sale or lease of real property to fund other state 

transportation projects eligible for federal aid, and at least four 

states use the proceeds as their match for projects receiving federal 

contributions. In our legal opinion, we concluded that Congress did not 

intend for states to use such proceeds as their match. Under FHWA’s 

interpretation of the statute, however, states would be allowed to use 

the federal share as the state’s match. For the 51 states we surveyed, 

the restrictions on the use of the proceeds varied. Forty-two states 

reported that they deposit the proceeds in accounts used for road 

projects, and 47 states reported that they restrict the use of these 

proceeds to projects eligible for federal aid. However, at least two 

states did not have similar restrictions; and in these cases, the 

proceeds of property sales could be used for projects that are not 

eligible for funding under federal-aid highway and related programs, 

contrary to the specific requirements of the statute and FHWA’s 

interpretation. FHWA officials told us, that at meetings with state 

officials, they told the states that “as a practical matter” they 

should take steps to demonstrate that the federal share of proceeds 

from property sales are being allocated to projects eligible for 

federal aid. FHWA officials were not aware of the potential 

noncompliance that we identified but said they may issue guidance on 

tracking the use of proceeds from property sales in 2003.



We are making recommendations to (1) clarify how FHWA plans to comply 

with our legal opinion about the eligible uses of these funds and (2) 

improve the agency’s guidance for complying with TEA-21 language 

regarding property sales and leases.



DOT officials commented on a draft of this report and generally agreed 

with the facts regarding states’ sales and leases of property 

originally purchased with federal funds. Because DOT is still 

considering how to respond to GAO’s legal opinion, the officials did 

not comment on the first recommendation and said that DOT would 

consider our second recommendation when the review of GAO’s legal 

opinion is completed.



Background:



In our recent legal opinion, we reviewed the statutory provisions 

governing the disposition of the proceeds from the sale or lease of 

real property acquired with federal highway grant funds and FHWA’s 

interpretation of that provision. FHWA issued regulations in 1999 

implementing real property management policies in conjunction with the 

federal-aid highway program, which we reviewed. We disagreed with 

FHWA’s interpretation of the law. We concluded that Congress did not 

intend for states to convert federal money to state money by buying and 

selling property and/or use the federal share of recaptured funds to 

reduce or avoid their obligation to provide matching funds.



DOT’s Inspector General raised similar concerns about FHWA’s 

interpretation of the federal law governing the proceeds from the sale 

or lease of real property in its report[Footnote 2] regarding the 

finance plan for the Central Artery Tunnel Project[Footnote 3] in 

Massachusetts. In its report, the DOT Inspector General questioned 

whether the proceeds derived from the sale of excess properties 

purchased with federal-aid highway funds should be counted against the 

$8.549 billion cap imposed by Congress on federal contributions to the 

Central Artery Tunnel Project.[Footnote 4] Further, the DOT Inspector 

General found that Massachusetts intended to sell land, originally 

purchased with federal aid, on which it had temporarily located its 

project headquarters, reinvesting the money in the project as “state 

funds.” The sale of the project headquarters is expected to generate 

about $100 million.



All States Report Selling, Leasing, or Disposing of Real Property:



All 51 of the state DOTs we surveyed, including the District of 

Columbia, reported selling, leasing, or disposing of real property 

purchased with federal-aid funds (see app. IV for responses from state 

DOTs). We found that from June 1998 through May 2002, 37 states 

reported they sold, leased, or disposed of at least 5,636 properties 

that generated about $148 million (2001 dollars)[Footnote 5] in revenue 

for the states. We excluded eight states[Footnote 6] from our 

calculations of the total number of properties sold, leased, or 

disposed of because these states either did not distinguish sold, 

leased, or disposed of properties originally acquired with federal 

funds from those properties that were acquired without federal funds 

and/or identify the amount of proceeds generated. We excluded another 

six states from our calculations for various reasons.[Footnote 7] In 

all, we excluded 14 states from our calculations because of these 

variances. For example, California has an agreement with FHWA that 

recognizes that the amount of revenue generated from the sales or 

leases of land purchased with federal-aid funds is substantially less 

than the state’s expenditures on highways; therefore, the state is not 

required to track and report the proceeds from the sales. Also, 

Louisiana state officials reported that they do not track and report 

federal dollars because their real estate property management database 

is not designed to distinguish sales of property acquired with federal-

aid funds. Nevertheless, these states reported that they sold, leased, 

or disposed of some real properties originally purchased with federal 

funds.



States also vary in their policies for retaining the net proceeds they 

receive from the sale or lease of real property because they have 

different views of the federal requirements. Most states that we 

surveyed deposit the proceeds into state transportation accounts to be 

used at a later date. However, three states reported that they do not 

follow that procedure but credit an existing federal-aid project within 

the state. For example, Maryland DOT officials told us that they credit 

an ongoing federal-aid project within their state. In their opinion, 

retaining the federal share would require the state to establish 

special tracking accounts to trace each dollar of revenue from affected 

property sales or leases from its receipt to its expenditure on a 

specific eligible federal-aid project which would not be cost 

effective. The cost to establish these accounts would exceed its 

current annual state revenue from these properties. Nevada and Texas 

DOTs also credit existing federal-aid projects within their states 

because, in their view, it is more efficient not to track the federal 

share of the proceeds. FHWA officials told us that, in their view, when 

states credit the federal share of the net proceeds to an existing 

federal-aid project, they lose the opportunity provided by TEA-21 to 

use the proceeds for other state highway projects.



For states that retain the federal share of the net proceeds, five 

state officials[Footnote 8] that we contacted said they view the 

current regulations that allow them to retain the federal share of the 

proceeds generated from the sale or lease of real property as positive 

because it gives the states greater flexibility to sell or lease real 

property to support the states’ transportation programs. For example, 

officials in California and Virginia told us that selling or leasing 

surplus property and retaining the proceeds provide additional funds to 

complete more state highway projects. State DOTs and FHWA officials in 

Illinois, Virginia, and California also told us that the current 

regulations eliminate the administrative burden of tracking and 

returning the federal share of the funds to the federal government.



Proceeds from Property Sales and Leases Are Not a Major Source of 

Revenue:



The proceeds generated from the state DOTs’ sales or leases of real 

property do not currently appear to be a major source of revenue for 

the states’ transportation programs. We compared the proceeds 

generated, as reported to us in our survey, with the states’ 

revenues[Footnote 9] available for highway projects. The ratio between 

the proceeds generated by the states and the states’ receipts 

represented less than 1 percent of the states’ revenues in 1999 and 

2000[Footnote 10] (see apps. V and VI). Figures 1 and 2 show the states 

with the highest ratio between the proceeds from property sales or 

leases with the states’ revenues for 1999 and 2000, respectively. We 

calculated that in 1999, the total ratio of the federal share of 

proceeds from property sales and leases in comparison with the state 

revenues was 0.075 percent. Of the 35 states for which we calculated 

ratios, 8 states had ratios that were greater than or equal to 0.1 

percent, and 27 states had ratios that were less than 0.1 percent.



Figure 1: Comparison of State Proceeds from Property Sales and Leases 

with State Highway Receipts, Including Federal Aid, in 1999-Top Five 

Ratios:



[See PDF for image]



[End of figure]



We calculated that in 2000, the total ratio of the federal share of 

proceeds from property sales and leases in comparison with the state 

revenues was 0.069 percent. Of the 35 states for which we calculated 

ratios, 10 states had ratios that were greater than or equal to 0.1 

percent, and 25 states had ratios that were less than 0.1 percent.



Figure 2: Comparison of State Proceeds from Property Sales and Leases 

with State Highway Receipts, Including Federal Aid, in 2000--Top Five 

Ratios:



[See PDF for image]



[End of figure]



We noted no particular trend in the amount of proceeds from these types 

of property sales or leases over the period of our survey. Therefore, 

it is possible that the proceeds from property sales or leases could 

increase or decrease in the future. One likely sale of property in the 

near future by the Massachusetts Highway Department would have a large 

effect on the total proceeds from the sale or lease of properties 

purchased using federal highway aid in that state. The Department used 

federal aid to purchase a substantial amount of property for rights-of-

way associated with the Central Artery Tunnel Project. Sale or lease of 

property associated with this project has already generated nearly $9 

million in revenue for the state during the period of our survey (see 

app. IV for state responses). In addition, the state plans to sell the 

project’s headquarters building. The federal government contributed 90 

percent of the original cost to acquire the building, and federal 

officials estimate that the sale of the building will generate about 

$100 million for the state’s transportation program. In 2000, 

Massachusetts received about $490 million in federal highway aid.



States’ Use of Proceeds Vary and Sometimes May Not Comply with the 

Statutory Requirements on the Use of the Proceeds:



States reported using the proceeds generated from the sale or lease of 

real property in different ways; and their survey responses indicated 

that some uses of the proceeds may not comply with specific statutory 

requirements of only using the proceeds on projects eligible for 

funding under federal-aid highway and related programs. This use of the 

proceeds conflicts with FHWA’s interpretation of the statute. For the 

51 states we surveyed, 42 states reported that they deposited the 

proceeds from sales of property originally purchased with federal funds 

in accounts established to fund state highway projects. Officials from 

47 state DOTs reported using the proceeds to fund other state 

transportation projects eligible for federal aid, and at least four 

states use the proceeds as their match for projects receiving federal 

contributions. For example, state DOT officials in Illinois, Louisiana, 

Nebraska, and North Carolina told us, in our visits or through their 

survey responses, that they use the proceeds generated from the sale or 

lease of property for matching purposes. Our legal opinion concluded 

that the states could not use the proceeds to match contributions, 

stating that the intent of Congress was not to allow states to “use the 

proceeds of such transactions to reduce or avoid their matching fund 

obligations.” FHWA has interpreted the statute as allowing for such 

use. In eight states, we could not determine from the survey responses 

how the states were using the proceeds because they do not (1) track 

property purchased with federal-aid funds separately from other 

property or (2) separate federal and state proceeds generated from the 

sale and lease of real property. In these cases, the federal share is 

commingled with state funds and cannot be accounted for separately.



TEA-21 stated that proceeds must be used for projects eligible for 

federal aid; and, according to their survey responses, most states have 

placed such restrictions on the accounts into which the proceeds were 

placed. FHWA officials said that, in their view, states would be in 

compliance with TEA-21 if they placed proceeds in accounts restricted 

for use on projects eligible for funding under federal-aid highway and 

related programs. However, officials in two states told us that their 

accounts do not have this type of restriction. Therefore, in at least 

two cases, it is possible that states have used the proceeds on 

projects that are not eligible for federal aid. For example, a state 

DOT official in Indiana[Footnote 11] told us that the state uses the 

proceeds to fund state highway projects but does not track whether 

these projects are eligible federal-aid projects. New Mexico DOT 

officials[Footnote 12] reported that the proceeds are not restricted to 

funding eligible federal-aid projects; therefore, the funds could be 

used for other transportation projects not eligible for federal aid.



FHWA May Issue Additional Guidance on the Federal Share of Property 

Sales and Leases:



FHWA officials said that they may issue additional guidance in 2003 to 

clarify how states should implement the TEA-21 language regarding 

property sales and FHWA’s subsequent regulations. They acknowledged 

that they were not aware of (1) the possibility that states were not 

complying with the explicit statutory requirements that the federal 

share of proceeds from property sales or leases be used only on 

projects eligible for funding under federal-aid highway and related 

programs and (2) the amount of variation in how states tracked these 

types of property transactions and the federal share of the proceeds. 

They also said that FHWA has issued some guidance[Footnote 13] to the 

states regarding the proceeds generated from the disposal of properties 

purchased with federal aid. For example, in meetings with state 

officials, FHWA officials explained that as a practical matter states 

should have an accounting system in place that documents (1) the amount 

of the federal share of the proceeds deposited in the state 

transportation fund during the fiscal year and (2) the amount of the 

federal share of net proceeds expended on eligible federal-aid projects 

during the fiscal year. However, they also noted that TEA-21 does not 

require states to track and report the federal share. FHWA officials 

told us they are considering additional guidance to help ensure that 

states are using the federal share of these proceeds only on projects 

eligible for funding under federal-aid highway and related programs.

[Footnote 14] As of October 2002, FHWA had not decided on the details 

of what material to include in the guidance or when to issue it. FHWA 

officials told us it is likely to focus on how states can demonstrate 

that they are ensuring that the applicable federal share of proceeds 

from property sales or leases is being allocated to eligible 

federal-aid projects.



Conclusions:



Most states have taken advantage of the greater flexibility for 

managing and disposing of real property provided under TEA-21 because 

it streamlines the process for their highway programs. However, in 

accordance with our recent legal opinion, those states that used the 

proceeds from these property sales or leases to match federal-aid 

highway projects were not complying with the statute governing the sale 

or lease of real property. In addition, two states did not restrict the 

use of the proceeds to projects eligible for funding under federal-aid 

highway and related programs, as explicitly required by the statute. 

FHWA has an excellent opportunity to clarify its interpretation of TEA-

21; and, after considering all relevant factors, provide additional 

guidance to states regarding how they should cost-effectively treat the 

proceeds from sales or leases of property originally purchased with 

federal aid.



Recommendations for Executive Action:



To help ensure that states act in accordance with TEA-21 in disposing 

of real property originally purchased with federal aid, we are 

recommending that the Secretary of Transportation direct the FHWA 

Administrator to:



* develop and report on a strategy regarding how FHWA plans to comply 

with GAO’s legal opinion concerning the statute governing the sale or 

lease of real property; and:



* provide additional guidance to the state DOTs that will help ensure 

that states use the proceeds of property sales or leases as required by 

TEA-21, including the types of documentation or tracking that would be 

cost effective and appropriate to demonstrate compliance.



Agency Comments and Our Evaluation:



We obtained comments on a draft of this report from DOT officials, 

including the FHWA Director of the Office of Program Administration and 

the Division Administrator, FHWA Massachusetts Division Office. They 

agreed with the facts presented in the draft report regarding states’ 

sale, lease, and disposal of real property originally purchased with 

federal funds and with the states’ use of the proceeds. The DOT’s 

General Counsel is considering GAO’s legal opinion on how the federal 

share of the proceeds should be used, so the officials did not comment 

on those sections of the draft report. For the same reason, the 

officials did not comment on our recommendation that the DOT develop 

and report on a strategy regarding how it plans to comply with GAO’s 

legal opinion. The FHWA commented that the report should recognize 

first, that FHWA’s interpretation of the relevant provisions of TEA-21 

was based on a regulation issued in 1999 and secondly, that FHWA has 

provided extensive guidance on the implementation of these provisions. 

We made several changes to the report based on these comments. However, 

we continue to believe that the potential noncompliance with TEA-21 we 

observed in two states, which FHWA acknowledges conflicts with its 

interpretation of the statute, and the varying practices we observed in 

other states suggest the need for clarifying existing guidance or 

issuing additional guidance, as indicated in our recommendations. 

Regarding the recommendation to issue additional guidance to help 

ensure that states use the proceeds from the sale or lease of real 

property originally purchased with federal funds as required by TEA-21, 

FHWA officials said they would consider providing additional guidance 

pending the outcome of the Department’s review of GAO’s legal opinion. 

The FHWA officials also provided technical comments, which we have 

incorporated into this report as appropriate.



As arranged with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days 

after the date of this letter. At that time, we will send copies of 

this report to the cognizant congressional committees, the Secretary of 

Transportation, and the Administrator, Federal Highway Administration. 

In addition, this report will also be available on GAO’s Web site for 

no charge at http://www.gao.gov.



If you or your staff have any questions about this report, please call 

me at (202) 512-2834. Key contributors to this report were Sally 

Gilley, Octavia Parks, and Jobenia Odum.



Sincerely yours,



Signed by Katherine Siggerud:



Katherine Siggerud

Acting Director, Physical Infrastructure Team:



[End of section]



Appendixes:



Appendix I: Objectives, Scope, and Methodology:



The Committee on Commerce, Science, and Transportation requested that 

we determine (1) the extent to which states are selling, leasing, or 

disposing of real property purchased with federal-aid funds and (2) how 

the proceeds generated from the sale or lease of real property are 

being used in accordance with the intent of TEA-21. We drew from our 

legal opinion regarding FHWA’s interpretation of the federal law 

governing the sale or lease of real property.



To determine the extent to which the states are selling, leasing, or 

disposing of real property purchased with federal-aid funds, we 

obtained information from FHWA officials and surveyed 51 state DOTs, 

including the District of Columbia, to identify the number of 

properties and value of real properties that were sold, leased, or 

otherwise disposed of from June 1998 to May 2002. Before we submitted 

the survey to the 51 state DOTs, we obtained input from FHWA officials 

in developing our survey because they recently attempted to collect the 

same type of information from the state DOTs. We pretested the survey 

with Georgia DOT. We obtained and analyzed responses from all 51 

states, including the District of Columbia, and conducted follow-up 

interviews as necessary. We compared each state’s 1999 and 2000 total 

proceeds generated from the sale or lease of real property with the 

states’ total receipts obtained for highway projects reported by DOT. 

We did not independently verify the data provided by the state DOTs or 

assess the reliability of the data reported by DOT. We obtained 

preliminary data regarding real property sales and leases from FHWA and 

selected five states (California, Georgia, Illinois, Texas, and 

Virginia), based primarily on--among other reasons--high property sales 

and leases and how these states’ were dispersed throughout the United 

States. We selected California and Texas because they had the highest 

income from property sales; Illinois was selected because of its 

geographic location, and it was one of the states that had a high 

number of property sales and income. Georgia was selected because 

FHWA’s preliminary data of states property sales indicated that Georgia 

had not taken advantage of the provisions of title 23, section 156 of 

U.S.C. Finally, Virginia was selected because FHWA’s preliminary data 

indicated total income from property sales or leases, but the number of 

properties was not reported. We interviewed state and federal officials 

at these states, regarding their opinions about the benefits of the 

current regulations relative to the states’ transportation programs 

among other reasons.



To determine how the proceeds generated from the sale or lease of real 

property are used, we contacted states DOT officials responsible for 

the right-of-way programs and obtained information regarding (1) how 

they use proceeds generated from the sale or lease of real property, 

(2) any restrictions on the use of the proceeds, and (3) the states’ 

sources for matching federal contributions. We also obtained and 

reviewed state right-of-way disposal procedures and other documentation 

related to the sale or lease of real property. We obtained and reviewed 

documentation regarding FHWA’s division office and headquarters 

oversight roles related to the sale or lease of real property. We also 

interviewed officials of the U.S. DOT Inspector General’s office and 

reviewed documentation regarding their review of the Massachusetts’ 

Central Artery Tunnel Project that had initially raised concerns about 

FHWA’s interpretation of TEA-21 changes related to sales and leases of 

real property.



[End of section]



Appendix II: GAO Legal Opinion:



B-290744:



September 13, 2002:



The Honorable John McCain Ranking Minority Member Committee on 

Commerce, Science and Transportation United States Senate:



Subject: Use of Proceeds from the Sale of Real Property Purchased with 

Federal Highway Funds:



Dear Senator McCain:



This is in response to your letter dated April 3, 2002, requesting our 

views regarding the Federal Highway Administration’s (FHWA) 

interpretation of 23 U.S.C. § 156 (2000). As explained below, § 156 

authorizes states to use the proceeds from sales of real property 

purchased with federal funds for other eligible projects. Your letter 

asks whether the proceeds from real property sales retain their 

character as federal funds under § 156; you also ask questions about 

how the states have applied § 156. This opinion addresses the proper 

interpretation of § 156. The remaining issues you raise will be 

addressed in a separate GAO report.



Under § 156, and in particular, § 156(c), states disposing of excess 

property acquired with Federal Highway Trust (title 23) funds are 

authorized to reapply the federal share of the proceeds to other 

eligible title 23 projects. The FHWA construes § 156 as allowing states 

to treat the proceeds of excess property sales as state funds. FHWA 

believes that the federal government retains no residual interest in 

those proceeds. It has informed the states that projects funded through 

proceeds from such transactions are not subject to restrictions that 

would otherwise apply if such funds were treated as federal funds.



As your letter points out, the Department of Transportation’s (DOT’s) 

Office of Inspector General (DOT-IG) questioned FHWA’s interpretation 

of § 156 in its report, October 2001 Finance Plan for the Central 

Artery/Tunnel Project, IN-2002-086, March 11, 2002. You ask us to 

examine the issues raised in the DOT-IG’s report and determine whether 

FHWA’s interpretation is correct. In this regard, you would also like 

us to consider whether states (1) can convert federal money to state 

money by buying and selling property, (2) can use such means to reduce 

or avoid their obligation to provide matching funds, and (3) can thus 

avoid normal safeguards on the use of federal funds.



As explained below, we disagree with FHWA’s interpretation of § 156. 

Section 156 permits states to apply the federal share of proceeds of 

excess property dispositions to other title 23 projects in lieu of 

returning those funds to the Highway Trust Fund. The federal interest 

in such funds is not extinguished. Consequently, states may not convert 

federal money to state money by buying and selling property or use the 

federal share of recaptured funds to reduce or avoid their obligation 

to provide matching funds.



Background:



Prior to 1998, if a state sold real property purchased with federal 

highway funds, it had to return the federal share of the net proceeds 

of the sale to FHWA. In 1998, Congress adopted the Transportation 

Equity Act for the 219‘ Century (TEA-21), Pub. L. No. 105-178, title I, 

§ 1303(a), 112 Stat. 227 (1998), which authorized states to reapply the 

federal share to other projects. As amended by TEA-21, 23 U.S.C. § 156 

reads as follows:



“(a) Minimum charge.-... a State shall charge, at a minimum, fair 

market value for the sale, use, lease, or lease renewal (other than for 

utility use and occupancy or for a transportation project eligible for 

assistance under this title) of real property acquired with Federal 

assistance made available from the Highway Trust Fund....



(b) Exceptions.-The Secretary may grant an exception to the requirement 

of subsection (a) for a social, environmental, or economic purpose.



“(c) Use of Federal share of income.-The Federal share of net income 

from the revenues obtained by a State under subsection (a) shall be 

used by the State for projects eligible under this title.



The predecessor to § 156 of title 23, U.S.C., applied only to the sale, 

use, lease or lease renewals of “right-of-way airspace,” as opposed to 

the broader coverage of “real property” under TEA-21. It provided:



“... States shall charge, as a minimum, fair market value, with 

exceptions granted at the discretion of the Secretary for social, 

environmental, and economic mitigation purposes, for the sale, use, 

lease, or lease renewals (other than for utility use and occupancy or 

for transportation projects eligible for assistance under this title) 

of right-of-way airspace acquired as a result of a project funded in 

whole or in part with Federal assistance made available from the 

Highway Trust Fund.... The Federal share of net income from the 

revenues obtained by the State for sales, uses, or leases (including 

lease renewals) under this section shall be used by the State for 

projects eligible under this title.” (Emphasis added.):



FHWA correctly interprets the TEA-21 amendment as expanding the scope 

of § 156 to allow reapplication of the proceeds from all real property 

dispositions, including the disposition of excess real property. It 

goes on, however, to apply its interpretation of air rights 

dispositions under the pre-TEA-21 statute to excess property 

dispositions. Under the prior statute, FHWA treated air rights receipts 

as being in the nature of project income that it believes the states 

had the right to use as they saw fit. Indeed, until the current 

regulations were adopted in 1999, FHWA’s regulations stated that 

“Disposition of income received from the authorized use of airspace 

shall be the [state highway department’s] responsibility and credit to 

Federal funds is not required.”’ Starting from this vantage point, 

FHWA now reads the current language of § 156 as extinguishing the

federal share in all proceeds from the disposition of any kind of real 

property, allowing the states to treat all proceeds as state funds. It 

reads its regulation, 23 C.F.R. § 710.403(e), added by 64 Fed. Reg. 

71290 (Dec. 21, 1999), similarly. That regulation provides:



“The Federal share of net income from the sale or lease of excess real 

property shall be used by the STD for activities eligible for funding 

under title 23 of the United States Code. Where project income derived 

from the sale or lease of excess property is used for subsequent title 

23 projects, use of the income does not create a Federal-aid project.”:



As noted, FHWA’s views regarding the proceeds from the sale of excess 

property were questioned by the DOT-IG in its recent report concerning 

the October 2001 finance plan for the Boston Central Artery/Tunnel 

Project (CA/T Project). The CA/T Project was unique in that Congress 

capped the total amount of federal funds for the project at $ 8.549 

billion. Department of Transportation and Related Agencies 

Appropriations Act, Pub. L. No. 106-346, § 340(d), 114 Stat 1356 

(2000). The DOT-IG found that this amount was fully identified in the 

CANT Project Finance Plan but that Massachusetts intended to sell land 

on which it had temporarily located its project headquarters, 

reinvesting that money in the project as “state funds.” Pointing out 

that the federal government had contributed a significant portion of 

the monies the state would realize, the DOT-IG questioned 

reclassification of that money as state funds and concluded that the 

CANT cap would be exceeded if that money was counted as part of the 

federal share.



In rejecting FHWA’s position that a sale or other disposition of excess 

property extinguishes the federal share, the DOT-IG stated that in its 

opinion the better view is that in TEA-21 Congress intended merely to 

streamline the process for reapplying the federal share of real estate 

proceeds to other federal-aid projects but did not intend to extinguish 

the federal share of the money. In support of this view, the DOT-IG 

observed that § 156(c) specifically refers to the “federal share” of 

the net income from the proceeds obtained by a state from the sale or 

lease of excess property. The DOT-IG also pointed out that consequences 

of FHWA’s position might include allowing states: (1) to convert 

federal to state money by buying and selling property, (2) to use such 

transactions to reduce or avoid their obligation to make matching 

contributions, and (3) to avoid the safeguards that govern the 

expenditure of federal funds. The DOT-IG stated that the better view of 

the statute was that the federal share of real property remains federal 

money but that the states should be permitted to reapply the money to 

other eligible projects.



In reviewing the DOT-IG report, we focused on the general issue of how 

the proceeds from excess property sales should be treated under § 156. 

We did not review matters that were not raised by your request (e.g., 

the nature of the credit for recaptured property and the CANT cap).



FHWA’s Comments:



As did the DOT-IG, we requested that FHWA provide us with a written 

explanation of its interpretation. According to FHWA, the TEA-21 

amendment of § 156 was proposed by the executive branch in order to 

combine the rules governing disposal of excess real property by sale or 

lease with the rules governing the disposition of air rights. FHWA says 

this was done to reduce administrative overhead by eliminating 

different sets of rules and by simplifying those rules. It points out 

that in drafting TEA-21 the Senate Committee on Environment and Public 

Works embraced its rationale, stating that the purpose of the change 

was to simplify property management practices by applying the same 

standard to all real property interests acquired with Federal-aid 

highway funds. S. Rep. No. 105-95, at 28-39 (1997). The Senate 

provision was adopted in the Conference Report, H.R. Conf. Rep. No. 

105-550, at 424-425 (1998).



In addressing this matter in its comments to the DOT-IG and our office, 

FHWA maintains that nothing in § 156 either after amendment by TEA-21 

or before, or the legislative history of either provision, could be 

construed to require that § 156 proceeds be treated as federal funds or 

be returned to the Treasury, to the Highway Trust Fund, or to the 

apportionment category from which they were derived. In its analysis, 

FHWA acknowledged the government-wide common rule’ governing grants to 

states and local governments, under which the federal government 

retains a percentage interest in the proceeds from real property sales. 

However, with little explanation, it dismissed this retained federal 

interest as “superceded by” § 156, as amended, and by its regulation.



In its submission to our office, FHWA asserts that the income resulting 

from real property sales should be treated in the same manner as were 

air rights receipts, namely as project income that the states should 

have the right to use as they see fit. To support its view that the 

disposition of income received from the authorized use of airspace 

should be left to the state highway department and that no credit to 

federal funds was required, it cites our decision at 41 Comp. Gen. 653 

(1962) in which we addressed the way states handle airspace-use 

revenue.



Analysis:



We agree with the DOT-IG’s view that Congress, by adding the 

disposition of excess property to the authority granted by § 156, 

intended merely to streamline the process for reapplying the federal 

share of real estate proceeds to other federal-aid projects.



The statute says nothing about the federal share losing its identity. 

To the contrary, § 156 refers to a “federal share” in the proceeds of a 

real property disposition. The statute states simply that any federal 

share in the net proceeds, which a state receives as a result of the 

sale, use, lease or lease renewal of such property, is to be applied to 

other eligible title 23 projects. Logically, the use of the term 

“federal share” indicates that the federal share retains its character 

as federal funds. Furthermore, by providing in § 156(a) that states 

must dispose of real property at fair market value, unless the 

Secretary grants an exception for a social, environmental, or economic 

purpose, the statutory text evidences a strong and on-going federal 

interest in any revenues generated from such disposal.’ In our view, 

this is a clear indication that the federal share of these proceeds 

should continue to be treated as federal rather than state funds.



Congress’s continuing interest in the federal share of air rights and 

recaptured excess property sales proceeds is illuminated by examining 

the historical background leading to enactment of § 156. As FHWA notes, 

that history begins with our 1962 decision, 41 Comp. Gen. 653. There 

the Bureau of Public Roads had proposed to recapture the federal share 

of funds in air rights disposals by requiring that the federal share be 

applied (1) to other interstate system projects or (2) to finance other 

(non-Federal-aid) highway projects. 41 Comp. Gen. at 655. Our decision 

pointed out that Congress had not considered that issue and hence 

provided no specific direction concerning the disposition of receipts 

from the use of air space. 41 Comp. Gen. at 657. Accordingly, absent 

statutory language authorizing the Bureau to require that the proceeds 

derived from air rights be used as proposed, we found that the state 

was free to retain the proceeds. That said, we recognized the 

significance of the federal contribution in Federal-aid projects and 

suggested that the Assistant Secretary recommend that Congress consider 

an amendment providing an appropriate credit to the United States from 

any profits derived by a state from the use of air rights. 41 Comp. 

Gen. at 657-658.6:



Subsequently, Congress adopted the language that is now § 156(c) in the 

Surface Transportation and Uniform Relocation Assistance Act of 1987, 

Pub.L. 100-17, title 1, § 126(a), 101 Stat. 167 (1987). The original 

text of § 156 dealt only with the disposal of air rights and tracks the 

Bureau’s 1962 proposals discussed in 41 Comp. Gen. at 655. In other 

words, in 1987, Congress asserted an interest in the federal share of 

the proceeds resulting from the disposition of air rights. The fact 

that § 156 allows states to use the federal share of net income from 

such proceeds for title 23 projects does not detract from, and indeed 

is entirely consistent with, the proposition that Congress had 

addressed what it perceived as the federal interest in such proceeds.



Under the common grant rules, air right proceeds, unlike proceeds from 

the sale of excess property, were (and are still) treated as program 

income. Such proceeds are to be handled as a deduction, reducing total 

allowable project costs (federal and state share) by the total amount. 

49 C.F.R. § 18.25(g)(1). The DOT implementation of the common rule, 

adopted just after enactment of the 1987 act, expressly refers to § 

156, stating that the statute requires that all such proceeds be 

applied to title 23 eligible projects. 49 C.F.R. § 18.25(g)(7). Thus, 

the common rule as applied to air rights also recognizes a substantial 

federal interest in those proceeds.



The common rule governing the sale of excess property clearly 

articulates the federal government’s interest, as well, in controlling 

the proceeds of sale. The regulations at 49 C.F.R. § 18.31 then 

provided (and still provide) that a grantee state, upon determining 

that real property is no longer needed for the originally authorized 

purpose, must request disposition instructions from the awarding 

(grantor) agency, which may include retention or transfer of title, or 

sale of the property. 49 C.F.R. § 18.31(c). The grantor agency is 

compensated if the property is retained for use for other purposes, or 

sold. Id. The amount due the awarding agency is calculated by applying 

the awarding agency’s percentage of participation in the cost of the 

original purchase to the fair market value or proceeds of the sale 

after deducting actual and reasonable associated expenses. 49 C.F.R. 

§ 18.31(c)(2). Thus, under the common rule, a state would be required 

to return to FHWA the federal share of the net proceeds resulting from 

the disposal of real property acquired with federal grant funds.



It is in this light that we consider FHWA’s argument that the absence 

of specific language in the statute or its legislative history 

indicating that any part of the proceeds be returned to FHWA or 

credited to federal funds supports its construction of the statute. In 

our view, FHWA has the argument precisely backwards. As applied to the 

sale of excess property, the common rule protected the federal 

government’s interest in its share of the proceeds. Absent specific 

legislative direction to the contrary, the natural presumption is that 

by enacting § 156 Congress meant only to authorize states to apply the 

recaptured federal share to other eligible projects, rather than return 

such amounts to FHWA. There is nothing in this legislative action that 

is inconsistent with the proceeds retaining their character as federal 

funds.



The common rule, of which Congress was presumably aware when it adopted 

TEA-21, has not been amended in response to the adoption of TEA-21. 

This is appropriate, we believe, because properly understood the common 

rule and § 156 are entirely consistent when read together. In § 156, 

Congress said nothing explicitly or implicitly that would alter the 

federal character of these funds, which is so clearly articulated in

the common rule. TEA-21 sought to enhance administrative effectiveness 

by allowing recovered funds to be transferred for use in other title 23 

projects but reflects Congress’s continuing interest in grant funds 

provided by the federal government. Viewed from this perspective, it is 

not reasonable to interpret the § 156(c) language as indicative of any 

intent by Congress to negate the federal character of proceeds captured 

upon the sale of excess property.



We recognize that the DOT-IG’s report, after questioning FHWA’s 

interpretation of § 156, states that in view of FHWA’s administrative 

role it will defer to FHWA’s interpretation provided DOT’s Office of 

General Counsel would formally concur with FHWA’s position. The DOT-IG 

also required that the appropriate congressional committees be notified 

of that concurrence.



As a general proposition, an agency’s interpretation of a statute it is 

charged with administrating is entitled to deference. Chevron U.S.A. 

Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837, 842-843 

(1984); United States v. Mead Corp., 533 U.S. 218 (2001); Sladwore v. 

Swift& Co., 323 U.S. 134 (1944). This discretion, however, is not 

without limits. The agency’s interpretation must be reasonable and must 

be based on a permissible construction of the statute. See, e.g., 

Chevron U.S.A. Inc. v. Natural Resources Defense CouncilInc., 467 U.S. 

at 844. For the reasons discussed we do not view FHWA’s position as a 

reasonable construction of the statute.



Based on the above, we do not agree with FHWA’s interpretation of § 

156. Buying and selling real property does not extinguish the federal 

character of these funds. Consequently, we do not believe states can 

convert federal money to state money by buying and selling property or 

use the proceeds of such transactions to reduce or avoid their matching 

fund obligations or to avoid normal safeguards on the use of federal 

funds.



Sincerely yours,



Signed by Anthony H. Gamboa:



Anthony H. Gamboa 

General Counsel:



[End of section]



Appendix III: GAO Letter and Survey to State DOTs:



June 2002:



(Name of State DOT Representative) 

(Address):



Dear (name of Representative):



The U.S. General Accounting Office (GAO), an agency of Congress, has 

been asked to examine the provisions of Title 23, section 156-proceeds 

from the sale or lease of real property purchased with federal-aid 

highway funds. As part of our study, GAO is surveying all fifty state 

departments of transportation. Results from this survey will help GAO 

to inform the Congress on the extent and use of revenues generated from 

the sale or lease of property purchased with federal-aid funds. In 

order for us to provide the Congress with an accurate assessment, we 

also intend to interview select state officials.



Your name was given to us as the representative responsible for right-

of-way information. We ask that you ensure that the following questions 

are answered and e-mailed back to us by July 10, 2002. Microsoft Word 

software should be used to complete the questionnaire. If you do not 

have Microsoft word, please call or e-mail the following GAO employees: 

Sally Gilley, (404)679-1959 gilleys@ ao.gov or Octavia Parks, (404)679-

1818 parkso@gao.gov. Also, please forward all responses to this GAO 

employee. Please do not change the wording of the questionnaire. We ask 

that question 7 be used for any comments.



Thank you in advance for taking the time to respond. Your participation 

is very important in providing Congress with complete and accurate 

information. If you have questions, please contact Sally Gilley at 

(404)679-1959 or Octavia Parks at (404)679-1818.



Sincerely yours,



Attachment:



PLEASE USE MICROSOFT WORD TO COMPLETE THE QUESTIONAIRE. IF YOU DO NOT 

HAVE MICROSOFT WORD, PLEASE CALL THE GAO EMPLOYEES IDENTIFIED IN THE 

COVER LETTER.



PLEASE DO NOT CHANGE THE WORDING OF THE QUESTIONAIRE.



PLEASE USE QUESTION 7 FOR COMMENTS.



1.Are you able to identify those properties that were sold, leased, or 

otherwise disposed of during the period of June 1998 to May 31, 2002 

that were originally acquired with federal funds from those properties 

that were acquired without any federal aid funds? (Check one):



Yes (continue):



No (thank you for your time; please return by e-mail):



Sometimes (explain):



2. Has your state sold, leased, or otherwise disposed of property 

purchased with federal aid funds during the period of June 1998 to May 

31, 2002? (Check one):



Yes (continue):



No (go to question 5):



3. For those sold, leased, or otherwise disposed of properties 

purchased with federal aid funds, what is the number of properties 

disposed of during the period of June 1998 to May 31, 2002? Please show 

the number of properties by year.



4. For those sold, leased, or otherwise disposed of properties 

purchased with federal aid funds, what is the total amount realized 

during the period of June 1998 to May 31, 2002? Please show total 

dollar amount by year.



5. Are all proceeds from the disposal of properties purchased with 

federal aid funds accounted for in the same manner?



Yes (continue):



No (thank you for your time; please return by e-mail):



6. Please identify the account(s) in which proceeds realized during the 

period of June 1998 to May 31, 2002 were placed. Please also indicate 

any restrictions on the use of funds in these accounts:



Account name:



Restrictions on account’s use:



7. Please provide comments you may have concerning our questions or the 

data you provided.



Thank you.



[End of section]



Appendix IV: Survey Responses of State DOTs’ Sales or Leases of Real 

Property:



Table 1: State DOTs that Sold, Leased, or Disposed of Real Property 

Purchased with Federal-Aid Funds, June 1998 - May 2002:



[See PDf for image]



[A] Column totals: “Yes” (40), “No” (8), “Sometimes” (3).



[B] Column totals: “Yes” (51), “No” (0), “Sometimes” (0).



[C] “No”-State officials could not readily distinguish properties 

originally acquired with federal funds. :



[D] “Sometimes” - State officials could sometimes distinguish 

properties originally acquired with federal funds.



[E] State officials reported federal funds are returned by crediting an 

ongoing federal-aid project.



Source: Developed by GAO from data provided by State DOTs.



[End of figure]



[End of table]



Table 2: Number of Properties Originally Purchased with Federal-Aid 

Funds for Which States Retained Proceeds Upon the Properties Sale or 

Lease, June 1998 - May 2002:



State: Alabama; FY 1998: 79; FY 1999[A]: 63; FY 2000[A]: 119; FY 

2001[A]: 67; FY 2002

(Partial)[A]: 40; Total: 368.



State: Alaska; FY 1998: 2; FY 1999[A]: 3; FY 2000[A]: 3; FY 2001[A]: 1; 

FY 2002

(Partial)[A]: 1; Total: 10.



State: Arizona; FY 1998: 29; FY 1999[A]: 23; FY 2000[A]: 24; FY 

2001[A]: 34; FY 2002

(Partial)[A]: 28; Total: 138.



State: Arkansas; FY 1998: 35; FY 1999[A]: 13; FY 2000[A]: 11; FY 

2001[A]: 9; FY 2002

(Partial)[A]: 3; Total: 71.



State: California; FY 1998: State officials could not readily 

distinguish properties originally acquired with federal funds..



State: Colorado; FY 1998: 22; FY 1999[A]: 35; FY 2000[A]: 41; FY 

2001[A]: 54; FY 2002

(Partial)[A]: 56; Total: 208.



State: Connecticut; FY 1998: 2; FY 1999[A]: 3; FY 2000[A]: 2; FY 

2001[A]: 7; FY 2002

(Partial)[A]: 6; Total: 20.



State: Delaware; FY 1998: N/R; FY 1999[A]: N/R; FY 2000[A]: N/R; FY 

2001[A]: N/R; FY 2002

(Partial)[A]: 1; Total: 1.



State: District of Columbia; FY 1998: State officials reported one 

transfer of jurisdiction from Washington, D.C. to National Park 

Service..



State: Florida[B]; FY 1998: 3; FY 1999[A]: 11; FY 2000[A]: 12; FY 

2001[A]: 9; FY 2002

(Partial)[A]: 0; Total: Not calculated.



State: Georgia; FY 1998: 48; FY 1999[A]: 112; FY 2000[A]: 107; FY 

2001[A]: 61; FY 2002

(Partial)[A]: 0; Total: 328.



State: Hawaii; FY 1998:  N/R; FY 1999[A]: 44; FY 2000[A]: 51; FY 

2001[A]: 55; FY 2002

(Partial)[A]: 57; Total: 207.



State: Idaho; FY 1998: N/R ; FY 1999[A]: 67; FY 2000[A]: 77; FY 

2001[A]: 70; FY 2002

(Partial)[A]: 50; Total: 264.



State: Illinois; FY 1998: State officials could not readily distinguish 

properties originally acquired with federal funds..



State: Indiana; FY 1998: 12; FY 1999[A]: 22; FY 2000[A]: 17; FY 

2001[A]: 12; FY 2002

(Partial)[A]: 11; Total: 74.



State: Iowa; FY 1998: 9; FY 1999[A]: 68; FY 2000[A]: 58; FY 2001[A]: 

65; FY 2002

(Partial)[A]: 50; Total: 250.



State: Kansas; FY 1998: State officials could not readily distinguish 

properties originally acquired with federal funds..



State: Kentucky; FY 1998: N/R; FY 1999[A]: 39; FY 2000[A]: 41; FY 

2001[A]: 33; FY 2002

(Partial)[A]: 41; Total: 154.



State: Louisiana; FY 1998: State officials could not readily 

distinguish properties originally acquired with federal funds.



State: Maine; FY 1998: 7; FY 1999[A]: 11; FY 2000[A]: 11; FY 2001[A]: 

6; FY 2002

(Partial)[A]: 6; Total: 41.



State: Maryland; FY 1998: State officials could not readily distinguish 

properties originally acquired with federal funds. Also, state 

officials reported federal funds are returned by crediting an ongoing 

federal-aid project..



State: Massachusetts; FY 1998: 21; FY 1999[A]: 4; FY 2000[A]: 10; FY 

2001[A]: 20; FY 2002

(Partial)[A]: N/R; Total: 55.



State: Michigan; FY 1998: 50; FY 1999[A]: 65; FY 2000[A]: 25; FY 

2001[A]: 28; FY 2002

(Partial)[A]: 9; Total: 177.



State: Minnesota[B]; FY 1998: 6; FY 1999[A]: 6; FY 2000[A]: 4; FY 

2001[A]: 5; FY 2002

(Partial)[A]: 3; Total: Not calculated.



State: Mississippi; FY 1998: N/R; FY 1999[A]: 12; FY 2000[A]: 9; FY 

2001[A]: 5; FY 2002

(Partial)[A]: 13; Total: 39.



State: Missouri; FY 1998: 9; FY 1999[A]: 13; FY 2000[A]: 13; FY 

2001[A]: 14; FY 2002

(Partial)[A]: 12; Total: 61.



State: Montana; FY 1998: N/R; FY 1999[A]: 12; FY 2000[A]: 16; FY 

2001[A]: 17; FY 2002

(Partial)[A]: 18; Total: 63.



State: Nebraska; FY 1998: N/R; FY 1999[A]: 10; FY 2000[A]: 21; FY 

2001[A]: 8; FY 2002

(Partial)[A]: 10; Total: 49.



State: Nevada; FY 1998: State officials could not readily distinguish 

properties originally acquired with federal funds. Also, state 

officials reported federal funds are returned by crediting an ongoing 

federal-aid project..



State: New Hampshire; FY 1998: State officials only reported averages..



State: New Jersey; FY 1998: 0; FY 1999[A]: 7; FY 2000[A]: 10; FY 

2001[A]: 7; FY 2002

(Partial)[A]: 7; Total: 31.



State: New Mexico; FY 1998: 0; FY 1999[A]: 2; FY 2000[A]: 0; FY 

2001[A]: 2; FY 2002

(Partial)[A]: 54; Total: 58.



State: New York; FY 1998: N/R; FY 1999[A]: 5; FY 2000[A]: 8; FY 

2001[A]: 2; FY 2002

(Partial)[A]: 6; Total: 21.



State: North Carolina; FY 1998: 6; FY 1999[A]: 14; FY 2000[A]: 11; FY 

2001[A]: 10; FY 2002

(Partial)[A]: 1; Total: 42.



State: North Dakota; FY 1998: 2; FY 1999[A]: 4; FY 2000[A]: 2; FY 

2001[A]: 2; FY 2002

(Partial)[A]: 0; Total: 10.



State: Ohio; FY 1998: N/R; FY 1999[A]: 112; FY 2000[A]: 137; FY 

2001[A]: 98; FY 2002

(Partial)[A]: 206; Total: 553.



State: Oklahoma; FY 1998: State officials could not readily distinguish 

properties originally acquired with federal funds..



State: Oregon; FY 1998: 51; FY 1999[A]: 69; FY 2000[A]: 57; FY 2001[A]: 

62; FY 2002

(Partial)[A]: 53; Total: 292.



State: Pennsylvania; FY 1998: 7; FY 1999[A]: 17; FY 2000[A]: 21; FY 

2001[A]: 18; FY 2002

(Partial)[A]: 7; Total: 70.



State: Rhode Island; FY 1998: N/R; FY 1999[A]: 124; FY 2000[A]: 123; FY 

2001[A]: 117; FY 2002

(Partial)[A]: 90; Total: 454.



State: South Carolina; FY 1998: 3; FY 1999[A]: 5; FY 2000[A]: 7; FY 

2001[A]: 18; FY 2002

(Partial)[A]: 13; Total: 46.



State: South Dakota; FY 1998: N/R; FY 1999[A]: N/R; FY 2000[A]: 2; FY 

2001[A]: N/R; FY 2002

(Partial)[A]: 1; Total: 3.



State: Tennessee; FY 1998: 13; FY 1999[A]: 25; FY 2000[A]: 27; FY 

2001[A]: 27; FY 2002

(Partial)[A]: 16; Total: 108.



State: Texas; FY 1998: State officials reported the number of 

properties purchased with federal aid funds but also reported federal 

funds are returned by crediting an ongoing federal-aid project; 

therefore, we excluded these numbers from our total..



State: Utah; FY 1998: 5; FY 1999[A]: 6; FY 2000[A]: 12; FY 2001[A]: 5; 

FY 2002

(Partial)[A]: 0; Total: 28.



State: Vermont; FY 1998: 1; FY 1999[A]: 4; FY 2000[A]: 6; FY 2001[A]: 

2; FY 2002

(Partial)[A]: 5; Total: 18.



State: Virginia[B]; FY 1998: N/R; FY 1999[A]: N/R; FY 2000[A]: N/R; FY 

2001[A]: 21; FY 2002

(Partial)[A]: 9; Total: Not calculated.



State: Washington; FY 1998: N/R; FY 1999[A]: 308; FY 2000[A]: 310; FY 

2001[A]: 321; FY 2002

(Partial)[A]: 302; Total: 1,241.



State: West Virginia; FY 1998: 15; FY 1999[A]: 15; FY 2000[A]: 0; FY 

2001[A]: 48; FY 2002

(Partial)[A]: 12; Total: 75.



State: Wisconsin; FY 1998: State officials could not readily 

distinguish properties originally acquired with federal funds..



State: Wyoming; FY 1998: 1; FY 1999[A]: 2; FY 2000[A]: 4; FY 2001[A]: 

2; FY 2002

(Partial)[A]: N/R ; Total: 9.



State: Total; FY 1998: 429; FY 1999[A]: 1,338; FY 2000[A]: 1,393; FY 

2001[A]: 1,307; FY 2002

(Partial)[A]: 1,184; Total: 5,636.



Notes:



We obtained information from June 1998 to May 2002.



We grouped the total properties sold and leased for each state. :



N/R indicates Not Reported.



[A] We recognize that some states have different starting and ending 

months for their fiscal years than the federal government. We believe 

that any discrepancy due to these differences would be minimal. 

Information we obtained for 1998 begins with the month of June, and 

2002 ends with the month of May.



[B] State officials from Florida, Minnesota, and Virginia reported they 

were able to “sometimes” identify those properties that were sold, 

leased, or otherwise disposed of that were originally acquired with 

federal funds. This may indicate that these numbers are estimates; 

therefore, we excluded these numbers from our total.



Source: Developed by GAO from data provided by State DOTs.



[End of table]



Table 3: States’ Total Proceeds from the Sale, Lease, or Disposal of 

Real Property Purchased with Federal-Aid Funds, June 1998 - May 2002:



[See PDF for image]



Notes:



We obtained information from June 1998 to May 2002. :



The dollar amounts represented in this table are expressed in nominal 

values.



We grouped the total properties sold and leased for each state. :



N/R indicates Not Reported.



[A] We recognize that some states have different starting and ending 

months for their fiscal years than the federal government. However, 

given the relatively low and steady rate of change in the price level 

of the economy since 1998, we believe that any discrepancy due to these 

differences would be minimal. Information we obtained for 1998 begins 

with the month of June, and 2002 ends with the month of May.



[B] State officials from Florida, Minnesota, and Virginia reported they 

were able to “sometimes” identify the proceeds from the sale or lease 

of property acquired with federal funds, which may indicate that these 

numbers are estimates; therefore, these states were excluded from the 

total. :



[C] State officials from Oklahoma and Kansas were able to report the 

proceeds from the sale or lease of property acquired with federal funds 

but were unable to report the number of properties sold or leased. This 

may indicate that these numbers are estimates; therefore, we excluded 

these numbers from our total.



[D] State officials reported estimates for 2002 totals; therefore, we 

excluded these numbers from our report. :



Source: Developed by GAO from data provided by State DOTs.



[End of figure]



[End of section]



Appendix V: Fiscal Year 1999 Proceeds Information:



To analyze the significance of the proceeds from the sale or lease of 

real property purchased with federal-aid funds with other states’ 

revenues available for highway purposes, we compared states’ property 

proceeds with states’ total receipts. Table 4 shows the result of our 

analysis.



Table 4: Comparisons of States’ Property Proceeds with States’ Total 

Receipts, Fiscal Year 1999:



State[A, B, C, D]: Alabama; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: $260,577; Total 

receipts including federal contributions: $1,149,923,000; Ratio of 

proceeds and highway receipts: 0.023%.



State[A, B, C, D]: Alaska; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 199,241; Total receipts 

including federal contributions: 415,566,000; Ratio of proceeds and 

highway receipts: 0.048.



State[A, B, C, D]: Arizona; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 198,883; Total receipts 

including federal contributions: 1,789,631,000; Ratio of proceeds and 

highway receipts: 0.011.



State[A, B, C, D]: Arkansas; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 76,896; Total receipts 

including federal contributions: 781,194,000; Ratio of proceeds and 

highway receipts: 0.010.



State[A, B, C, D]: Colorado; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,290,467; Total 

receipts including federal contributions: 1,400,358,000; Ratio of 

proceeds and highway receipts: 0.092.



State[A, B, C, D]: Connecticut; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 1,068,000; Total 

receipts including federal contributions: 1,194,190,000; Ratio of 

proceeds and highway receipts: 0.089.



State[A, B, C, D]: Georgia; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 4,642,572; Total 

receipts including federal contributions: 1,769,962,000; Ratio of 

proceeds and highway receipts: 0.262.



State[A, B, C, D]: Hawaii; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 528,331; Total receipts 

including federal contributions: 321,264,000; Ratio of proceeds and 

highway receipts: 0.164.



State[A, B, C, D]: Idaho; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 2,083,429; Total 

receipts including federal contributions: 473,902,000; Ratio of 

proceeds and highway receipts: 0.440.



State[A, B, C, D]: Indiana; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 76,993; Total receipts 

including federal contributions: 1,675,527,000; Ratio of proceeds and 

highway receipts: 0.005.



State[A, B, C, D]: Iowa; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 748,649; Total receipts 

including federal contributions: 1,274,354,000; Ratio of proceeds and 

highway receipts: 0.059.



State[A, B, C, D]: Kentucky; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 655,025; Total receipts 

including federal contributions: 1,452,514,000; Ratio of proceeds and 

highway receipts: 0.045.



State[A, B, C, D]: Maine; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 18,000; Total receipts 

including federal contributions: 413,718,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A, B, C, D]: Massachusetts; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 990,610; Total 

receipts including federal contributions: 4,035,797,000; Ratio of 

proceeds and highway receipts: 0.025.



State[A, B, C, D]: Michigan; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 11,539,450; Total 

receipts including federal contributions: 2,553,633,000; Ratio of 

proceeds and highway receipts: 0.452.



State[A, B, C, D]: Mississippi; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 584,791; Total 

receipts including federal contributions: 1,152,532,000; Ratio of 

proceeds and highway receipts: 0.051.



State[A, B, C, D]: Missouri; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 4,436,584; Total 

receipts including federal contributions: 1,587,419,000; Ratio of 

proceeds and highway receipts: 0.279.



State[A, B, C, D]: Montana; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 449,958; Total receipts 

including federal contributions: 435,175,000; Ratio of proceeds and 

highway receipts: 0.103.



State[A, B, C, D]: Nebraska; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 245,342; Total receipts 

including federal contributions: 649,580,000; Ratio of proceeds and 

highway receipts: 0.038.



State[A, B, C, D]: New Jersey; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 1,027,612; Total 

receipts including federal contributions: 3,021,151,000; Ratio of 

proceeds and highway receipts: 0.034.



State[A, B, C, D]: New Mexico; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 106,440; Total 

receipts including federal contributions: 974,423,000; Ratio of 

proceeds and highway receipts: 0.011.



State[A, B, C, D]: New York; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 698,625; Total receipts 

including federal contributions: 5,148,005,000; Ratio of proceeds and 

highway receipts: 0.014.



State[A, B, C, D]: North Carolina; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 603,590; Total 

receipts including federal contributions: 2,433,617,000; Ratio of 

proceeds and highway receipts: 0.025.



State[A, B, C, D]: North Dakota; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 168,794; Total 

receipts including federal contributions: 413,951,000; Ratio of 

proceeds and highway receipts: 0.041.



State[A, B, C, D]: Ohio; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 121,281; Total receipts 

including federal contributions: 3,377,774,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A, B, C, D]: Oregon; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,780,532; Total 

receipts including federal contributions: 1,007,122,000; Ratio of 

proceeds and highway receipts: 0.177.



State[A, B, C, D]: Pennsylvania; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 2,162,256; 

Total receipts including federal contributions: 4,660,704,000; Ratio of 

proceeds and highway receipts: 0.046.



State[A, B, C, D]: Rhode Island; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 1,566,057; 

Total receipts including federal contributions: 320,431,000; Ratio of 

proceeds and highway receipts: 0.489.



State[A, B, C, D]: South Carolina; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 83,147; Total 

receipts including federal contributions: 1,007,385,000; Ratio of 

proceeds and highway receipts: 0.008.



State[A, B, C, D]: Tennessee; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 448,709; Total 

receipts including federal contributions: 1,475,245,000; Ratio of 

proceeds and highway receipts: 0.030.



State[A, B, C, D]: Utah; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 89,810; Total receipts 

including federal contributions: 869,845,000; Ratio of proceeds and 

highway receipts: 0.010.



State[A, B, C, D]: Vermont; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 79,101; Total receipts 

including federal contributions: 254,560,000; Ratio of proceeds and 

highway receipts: 0.031.



State[A, B, C, D]: Washington; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 599,299; Total 

receipts including federal contributions: 1,859,009,000; Ratio of 

proceeds and highway receipts: 0.032.



State[A, B, C, D]: West Virginia; States’ proceeds from the sale or 

lease of real property purchased with federal-aid funds: 152,470; Total 

receipts including federal contributions: 1,089,541,000; Ratio of 

proceeds and highway receipts: 0.014.



State[A, B, C, D]: Wyoming; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 86,292; Total receipts 

including federal contributions: 393,043,000; Ratio of proceeds and 

highway receipts: 0.022.



State[A, B, C, D]: Total; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: $39,867,813; Total 

receipts including federal contributions: $53,313,565,000; Ratio of 

proceeds and highway receipts: 0.075%.



[A] California, Illinois, Louisiana, Maryland, Nevada and Wisconsin 

could not provide the proceeds from sales, leases, or otherwise 

disposed of properties; therefore, these states were not included. 

Delaware and South Dakota did not provide data for 1999. District of 

Columbia reported that it did not have sales or leases but did transfer 

one jurisdiction to the National Park Service, which did not generate 

proceeds. New Hampshire only provided averages for its proceeds. :



[B] State officials from Florida, Minnesota, and Virginia reported they 

were able to “sometimes” identify the proceeds from the sale or lease 

of property acquired with federal funds, which may indicate these 

numbers are estimates; therefore, these states were excluded from the 

total. :



[C] State officials from Oklahoma and Kansas were able to report the 

proceeds from the sale or lease of property acquired with federal funds 

but were unable to report the number of properties sold or leased, 

which may indicate these numbers are estimates; therefore, these states 

were excluded from the total.



[D] State officials from Texas reported the proceeds from the sale or 

lease of property acquired with federal funds but also reported federal 

funds are returned by crediting an ongoing federal-aid project; 

therefore, we excluded these numbers from our total. :



Source: Developed by GAO from data provided by State DOTs and FHWA.



[End of section]



Appendix VI: Fiscal Year 2000 Proceeds Information:



To analyze the significance of the proceeds from the sale or lease of 

real property purchased with federal-aid funds with other states’ 

revenues available for highway purposes, we compared states’ property 

proceeds with states’ total receipts. Table 5 shows the result of our 

analysis.



Table 5: Comparisons of States’ Property Proceeds with States’ Total 

Receipts, Fiscal Year 2000:



State[A,B,C,D]: Alabama; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: $542,178; Total 

receipts

including

federal 

contributions: $1,262,239,000; Ratio of proceeds and 

highway receipts: 0.043%.



State[A,B,C,D]: Alaska; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 79,892; Total receipts

including

federal 

contributions: 501,359,000; Ratio of proceeds and 

highway receipts: 0.016.



State[A,B,C,D]: Arizona; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,317,343; Total 

receipts

including

federal 

contributions: 2,113,820,000; Ratio of proceeds and 

highway receipts: 0.062.



State[A,B,C,D]: Arkansas; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 38,441; Total receipts

including

federal 

contributions: 1,037,247,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A,B,C,D]: Colorado; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,295,209; Total 

receipts

including

federal 

contributions: 1,958,473,000; Ratio of proceeds and 

highway receipts: 0.066.



State[A,B,C,D]: Connecticut; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 52,201; Total receipts

including

federal 

contributions: 1,269,463,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A,B,C,D]: Georgia; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 6,237,800; Total 

receipts

including

federal 

contributions: 1,852,170,000; Ratio of proceeds and 

highway receipts: 0.337.



State[A,B,C,D]: Hawaii; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 584,484; Total receipts

including

federal 

contributions: 226,138,000; Ratio of proceeds and 

highway receipts: 0.258.



State[A,B,C,D]: Idaho; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 1,095,484; Total receipts

including

federal 

contributions: 504,630,000; Ratio of proceeds and 

highway receipts: 0.217.



State[A,B,C,D]: Indiana; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 94,867; Total receipts

including

federal 

contributions: 1,959,235,000; Ratio of proceeds and 

highway receipts: 0.005.



State[A,B,C,D]: Iowa; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 29,553; Total receipts

including

federal 

contributions: 1,410,210,000; Ratio of proceeds and 

highway receipts: 0.002.



State[A,B,C,D]: Kentucky; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 885,958; Total receipts

including

federal 

contributions: 1,670,428,000; Ratio of proceeds and 

highway receipts: 0.053.



State[A,B,C,D]: Maine; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 82,000; Total receipts

including

federal 

contributions: 751,571,000; Ratio of proceeds and 

highway receipts: 0.011.



State[A,B,C,D]: Massachusetts; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 4,387,582; Total 

receipts

including

federal 

contributions: 3,468,038,000; Ratio of proceeds and 

highway receipts: 0.127.



State[A,B,C,D]: Michigan; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 5,476,251; Total 

receipts

including

federal 

contributions: 2,815,272,000; Ratio of proceeds and 

highway receipts: 0.195.



State[A,B,C,D]: Mississippi; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 58,765; Total receipts

including

federal 

contributions: 926,906,000; Ratio of proceeds and 

highway receipts: 0.006.



State[A,B,C,D]: Missouri; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 73,000; Total receipts

including

federal 

contributions: 2,038,239,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A,B,C,D]: Montana; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 693,346; Total receipts

including

federal 

contributions: 484,248,000; Ratio of proceeds and 

highway receipts: 0.143.



State[A,B,C,D]: Nebraska; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,065,344; Total 

receipts

including

federal 

contributions: 718,604,000; Ratio of proceeds and 

highway receipts: 0.148.



State[A,B,C,D]: New Jersey; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 4,203,700; Total 

receipts

including

federal 

contributions: 5,102,359,000; Ratio of proceeds and 

highway receipts: 0.082.



State[A,B,C,D]: New Mexico; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 64,770; Total receipts

including

federal 

contributions: 1,108,855,000; Ratio of proceeds and 

highway receipts: 0.006.



State[A,B,C,D]: New York; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 585,955; Total receipts

including

federal 

contributions: 5,117,702,000; Ratio of proceeds and 

highway receipts: 0.011.



State[A,B,C,D]: North Carolina; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 339,184; Total 

receipts

including

federal 

contributions: 2,619,172,000; Ratio of proceeds and 

highway receipts: 0.013.



State[A,B,C,D]: North Dakota; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 2,901; Total 

receipts

including

federal 

contributions: 395,485,000; Ratio of proceeds and 

highway receipts: 0.001.



State[A,B,C,D]: Ohio; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 133,792; Total receipts

including

federal 

contributions: 3,125,999,000; Ratio of proceeds and 

highway receipts: 0.004.



State[A,B,C,D]: Oregon; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 2,077,468; Total receipts

including

federal 

contributions: 1,023,632,000; Ratio of proceeds and 

highway receipts: 0.203.



State[A,B,C,D]: Pennsylvania; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 2,598,190; Total 

receipts

including

federal 

contributions: 4,026,523,000; Ratio of proceeds and 

highway receipts: 0.065.



State[A,B,C,D]: Rhode Island; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 1,679,374; Total 

receipts

including

federal 

contributions: 267,353,000; Ratio of proceeds and 

highway receipts: 0.628.



State[A,B,C,D]: South Carolina; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 204,363; Total 

receipts

including

federal 

contributions: 872,060,000; Ratio of proceeds and 

highway receipts: 0.023.



State[A,B,C,D]: South Dakota; States’ proceeds from the sale or lease 

of real property purchased with federal-aid funds: 11,060; Total 

receipts

including

federal 

contributions: 411,768,000; Ratio of proceeds and 

highway receipts: 0.003.



State[A,B,C,D]: Tennessee; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 336,580; Total receipts

including

federal 

contributions: 1,439,811,000; Ratio of proceeds and 

highway receipts: 0.023.



State[A,B,C,D]: Utah; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: 1,061,239; Total receipts

including

federal 

contributions: 922,769,000; Ratio of proceeds and 

highway receipts: 0.115.



State[A,B,C,D]: Vermont; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 53,600; Total receipts

including

federal 

contributions: 272,088,000; Ratio of proceeds and 

highway receipts: 0.020.



State[A,B,C,D]: Washington; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 1,041,852; Total 

receipts

including

federal 

contributions: 1,680,148,000; Ratio of proceeds and 

highway receipts: 0.062.



State[A,B,C,D]: Wyoming; States’ proceeds from the sale or lease of 

real property purchased with federal-aid funds: 57,912; Total receipts

including

federal 

contributions: 385,358,000; Ratio of proceeds and 

highway receipts: 0.015.



State[A,B,C,D]: Total; States’ proceeds from the sale or lease of real 

property purchased with federal-aid funds: $38,541,637; Total receipts

including

federal 

contributions: $55,739,372,000; Ratio of proceeds and 

highway receipts: 0.069%.



[A] California, Illinois, Louisiana, Maryland, Nevada, and Wisconsin 

could not provide the proceeds from sales, leases, or otherwise 

disposed of properties; therefore, these states were not included. 

Delaware did not provide data for 2000. West Virginia did not generate 

proceeds from the sale or lease of excess property for 2000. District 

of Columbia reported that it did not have sales or leases but did 

transfer one jurisdiction to the National Park Service, which did not 

generate proceeds. New Hampshire only provided averages for its 

proceeds.



[B] State officials from Florida, Minnesota, and Virginia reported they 

were able to “sometimes” identify the proceeds from the sale or lease 

of property acquired with federal funds, which may indicate these 

numbers are estimates; therefore, these states were excluded from the 

total.



[C] State officials from Oklahoma and Kansas were able to report the 

proceeds from the sale or lease of property acquired with federal funds 

but were unable to report the number of properties sold or leased, 

which may indicate these numbers are estimates; therefore, these states 

were excluded from the total.



[D] State officials from Texas reported the proceeds from the sale or 

lease of property acquired with federal funds but also reported federal 

funds are returned by crediting an ongoing federal-aid project; 

therefore, we excluded these numbers from our total.



Source: Developed by GAO from data provided by State DOTs and FHWA.



[End of table]



FOOTNOTES



[1] Such projects may include certain highway, transit, bicycle or 

pedestrian or other transportation-related projects covered under title 

23.



[2] October 2001 Finance Plan for the Central Artery/Tunnel Project, 

Federal Highway Administration, DOT Inspector General (March 11, 2002).



[3] The Central Artery Tunnel Project is the largest federally funded 

public works project in recent history, involving the reconstruction of 

Interstate 93 (the Central Artery) and the extension of Interstate 90 

(the Ted Williams Tunnel). Interstate 93 reconstruction includes a new 

eight-lane highway beneath the existing elevated Central Artery through 

downtown Boston. Interstate 90 extension involves placement of a four-

lane immersed tube tunnel beneath Boston Harbor. The Central Artery 

Tunnel Project is approximately 7.5 miles long and includes 

approximately 160 lane-miles of new and reconstructed highway.



[4] Our legal opinion did not address whether Massachusetts’ actions 

would cause the cap on federal contributions to be exceeded (see app. 

II).



[5] We converted nominal dollars into constant 2001 dollars; we used 

price indexes for gross domestic product based on federal fiscal years 

that were constructed from data from the U.S. Department of Commerce’s 

Bureau of Economic Analysis.



[6] California, Illinois, Kansas, Louisiana, Maryland, Nevada, 

Oklahoma, and Wisconsin were excluded from our calculations. 

California, Illinois, Louisiana, Maryland, Nevada, and Wisconsin could 

not distinguish sold, leased, or disposed of properties originally 

acquired with federal funds or identify the amount of proceeds 

generated. State officials in Kansas and Oklahoma could not distinguish 

sold, leased, or disposed of properties originally acquired with 

federal funds but were able to provide the amount of proceeds generated 

from sales or leases.



[7] The District of Columbia, Florida, Minnesota, New Hampshire, Texas, 

and Virginia were excluded from our calculations. The District of 

Columbia officials reported they disposed of excess property by 

transferring one property to the National Park Service. This transfer 

did not generate proceeds. Florida, Minnesota, and Virginia officials 

reported that they could “sometimes” identify properties originally 

acquired with federal funds. New Hampshire only provided averages. 

Texas officials identified the number of properties originally acquired 

with federal funds and the amount of proceeds, but they return the 

federal share by crediting an ongoing federal-aid project within the 

state.



[8] California, Georgia, Illinois, Texas, and Virginia.



[9] State receipts (or “revenues”) include highway-user revenue and all 

other receipts that are expended for highway purposes, regardless of 

source, including state highway user tax revenues, road and crossing 

tolls, general funds, miscellaneous income, bond proceeds, and payments 

from federal and local government.



[10] Information on state highway receipts for 2001 and 2002 are not 

available; therefore, states’ proceeds for fiscal years 2001 and 2002 

were not compared with state highway receipts. We did not use the data 

obtained from states for 1998 and 2002 because the data from these 

years does not reflect the entire calendar year.



[11] A DOT official in Indiana reported that the state sold 74 

properties that generated $15,724 in 1998; $76,993 in 1999; $94,867 in 

2000; $91,282 in 2001; and $56,497 in 2002.



[12] DOT officials in New Mexico reported that the state sold 58 

properties that generated $50,739 in 1998; $106,440 in 1999; $64,770 in 

2000; $212,327 in 2001; and $77,161 in 2002.



[13] Questions and answers for the regulation at 23 Code of Federal 

Regulation, part 710 available on FHWA’s Web site; FHWA Right of Way 

Program Administration booklet; and FHWA Project Development Guide, 

chapter 12.



[14] FHWA officials also agreed that their lack of knowledge about 

state practices might be due to the low priority placed on oversight of 

property management and disposal of real property.



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