This is in response to your request of June 19, 2001, seeking an opinion regarding whether it is legally appropriate for the Department, through its contractors, to transfer Government-owned personal property to the Regional Development Corporation (RDC) for the sum of one dollar ($1.00) and whether the RDC may resell the property and use the proceeds to further its economic development efforts.

First, with respect to transferring excess personal property for less than fair market value, both the Hall Amendment, Section 3155 of the National Defense Authorization Act for Fiscal Year 1994, and Section 161g of the Atomic Energy Act (AEA), 42 U.S.C. 2201(8), allow the Department to transfer property to entities such as the RDC for less than fair market value. The Hall Amendment is clear on its face in this regard. The Hall Amendment was enacted to assist communities where Department sites were being closed or reconfigured. It may be applicable in certain situations to personal property at the Los Alamos National Laboratory. It is, however, unnecessary for the purpose of this request to determine whether the Hall Amendment is applicable to transfers of personal property to the RDC because Section 161g of the AEA provides statutory authority for transfers to the RDC.

Eric Fygi, Acting General Counsel of the Department, addressed the authority of Section 161g definitively in his March 27, 1998 memorandum to Jennifer Fowler, Chief Counsel of the Oak Ridge Operations Office. At that time he reiterated previous legal interpretations that Section 161g provided full authority for the Department to "sell, lease, grant or dispose of real and personal property" which the Department has "acquired in connection with carrying out functions under the AEA or property that will be used to carry out objectives of the AEA." In his previous letter to Senator John Glenn dated August 7, 1997, Mr. Fygi had clarified that Section 161g authorized the Department to make transfers of property to further the Department's statutory objectives of aiding communities to adjust to changes in the Department's missions resulting from the end of the cold war. He further determined that Section 161g imposes "no market value restriction" and that the law fully supports a conveyance of excess property at less than fair market value in order to further the economic development objectives the Department has undertaken in recognizing and supporting community reuse organizations such as the RDC.

Therefore, the transfer of excess personal property to the RDC at the proposed nominal sum of one dollar ($1.00) is fully authorized by the law and is fully justified and supported under the facts presented in Mary Wilson June 18, 2001 letter to you on behalf of the RDC with respect to the need for RDC programs to assuage the severe unemployment, poverty, and literacy rates evident in Northern New Mexico in which the LANL is located and from which LANL recruits its workforce.

Likewise, the resale of excess Government property by the RDC and the use of any proceeds is also appropriate. Such action furthers the objectives of the Department in assisting communities that have been impacted by curtailments in the Department's original missions due to the end of the cold war. Furthermore, the RDC's use of the resale funds will support the development of training and other skills-building programs as well as local small business suppliers which will have a direct benefit on the Department's goals of assuring a continued supply of workers with the critical skills, knowledge and technical capabilities to support the nuclear weapons program of the 21^st century.

Section 161g imposes no restriction on the resale of excess Government property once it has been legally transferred to an entity such as the RDC. Once transferred, the RDC will hold legal title to any property it so receives and may dispose of it in the manner, at the time and price and under the circumstances it chooses and the RDC may use the proceeds for its programs which provide economic development assistance in the local communities. Any efforts by the Department of Energy to control the resale of such property could have the overall effect of thwarting the very objectives of the Department for which the property is being transferred.

Sincerely,
CSP