BLM and the Forest Service:

Federal Taxpayers Could Benefit More From Land Sales

GAO-01-882: Published: Jul 23, 2001. Publicly Released: Sep 10, 2001.

Additional Materials:

Contact:

Barry T. Hill
(202) 512-9775
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Since 1781, the federal government has transferred or sold about 1.1 billion acres to nonfederal entities--such as state and local governments, businesses, nonprofit groups, and individual citizens--under various initiatives that promoted general economic development, developed transportation systems, supported public schools, and encouraged settlement of the western frontier. Today, the Bureau of Land Management (BLM) and the Forest Service administer about seventy percent of the 657 million acres that remain in federal ownership. These agencies continue to transfer and sell federal land, but under more limited circumstances. For example, a community might want to develop a public park, a nonprofit group might want land for a shooting range, or a homeowner might want to obtain clear property title after mistakenly building part of his house on federal land. During fiscal years 1991 through 2000, BLM alone was authorized by law to transfer land. BLM transferred about 79,000 acres during this period under four key statutes and received about $3 million. BLM and the Forest Service are both authorized by law to sell land and are directed by law to receive at least fair market value when they do so; BLM has broader authority and has sold much more land, about 56, 000 acres, and received about $74 million. In contrast, the Forest Service sold only about 2,000 acres, all noncompetitively, and received about $5 million. When BLM and Forest Service sold land, they both generally received at least the appraised value. BLM generally offered land for competitive sale when agency personnel believed there was more than one potential buyer for the parcel; in these sales, the agency used appraised values as starting bids--that is, as minimum sale prices--and received prices that were, on average, about eighteen percent higher than appraised values. When BLM or the Forest Service sold land noncompetitively, they generally set the sale price at the appraised value. Some of the parcels the agencies sold noncompetitively might have been more appropriately offered for competitive sale, and in some of the noncompetitive sales, the appraised value underestimated the fair market value because it was not based on the land's current or planned use.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On May 16, 2002, the Bureau's Assistant Director, Minerals, Realty, and Resource Protection, issued Instruction Memorandum No. 2002-179 to all field officials, encouraging them to consider using alternative methods of monitoring compliance with requirements of the Recreation and Public Purposes Act. These methods include self-reporting, using summer interns, and hiring contractors. In addition, the guidance instructs field offices to input information on the required inspections into the agency's automated lands data base.

    Recommendation: The Director of BLM should assess the feasibility of less costly methods of monitoring parcels transferred under R&PPA, such as requiring entities that have acquired these parcels to periodically self-report on their compliance with deed restrictions.

    Agency Affected: Department of the Interior: Bureau of Land Management

  2. Status: Closed - Implemented

    Comments: On April 11, 2002, the Assistant Director, Minerals, Realty, and Resource Protection, issued Instruction Memorandum No. 2002-143, which states that BLM may make conveyances of land for less than its fair market value only if exceptional circumstances and compelling need warrant it, and only when specifically authorized to do so by Congress.

    Recommendation: The Direct of BLM should, when the agency faces specific circumstances which it believes warrant selling a parcel for less than its appraised value, obtain special legislation applying to the specific case that authorizes the agency to do so.

    Agency Affected: Department of the Interior: Bureau of Land Management

  3. Status: Closed - Implemented

    Comments: On August 8, 2002, The Bureau's Assistant Director, Minerals, Realty, and Resource Protection, issued Instruction Memorandum No. 2002-219, which reiterated the Bureau's policy that appraisers must consider all reasonable probable uses of the Federal lands, including existing and planned uses of the property.

    Recommendation: The Director BLM, to enforce federal revenues, when the agency sells land, should, when selling land directly to applicants, require that appraisals consider the parcel's current or planned use in determining its highest and best use, whether it is to be developed for an enterprise or added to an adjacent landowner's property.

    Agency Affected: Department of the Interior: Bureau of Land Management

  4. Status: Closed - Implemented

    Comments: On April 11, 2002, the Assistant Director, Minerals, Realty, and Resource Protection issued Instruction Memorandum No. 2002-143, which states that BLM's policy and regulations require the use of competitive sale procedures unless the authorized officer determines that the public interest would best be served by modified competitive bidding or direct sale. The memorandum requires the BLM authorized officer to document the rationale for use of other than competitive bidding methods.

    Recommendation: The Director of the Bureau of Land Management (BLM), to enforce federal revenues, when the agency sells land, should require competitive sales unless field offices specifically demonstrate why a parcel should be sold noncompetitively.

    Agency Affected: Department of the Interior: Bureau of Land Management

  5. Status: Closed - Implemented

    Comments: On July 25, 2000, the Forest Service issued Interim Directive 5509.11-2000-1, which changed appraisal instructions. Appraisals will now use the size of sales in the competitive private market area and, according to a Service official, will take into consideration the subject's current or planned use along with other factors that determine the highest and best use of the parcel. The information in the interim directive will be incorporated into the Forest Service handbook by July 2003.

    Recommendation: The Chief of the Forest Service, to enhance federal revenues, when the agency sells land, should when selling land directly to applicants, require that appraisals consider the parcel's current or planned use in determining the highest and best use, whether it is to be developed for an enterprise or added to an adjacent landowner's property.

    Agency Affected: Department of Agriculture: Forest Service

  6. Status: Closed - Implemented

    Comments: According to the Forest Service's response to GAO's report and a subsequent memorandum issued on March 27, 2002, to regional foresters, the Forest Service is reviewing each Small Tracts Act case to make a determination on whether the situation presents the opportunity for a competitive sale. This substantively implements the recommendation, as any decisions to sell parcels noncompetitively will be made affirmatively after opportunities for competitive sale are considered.

    Recommendation: The Chief of the Forest Service, to enhance federal revenues, when the agency sells land, should require that these parcels be sold competitively unless field offices specifically demonstrate why they should be sold noncompetitively.

    Agency Affected: Department of Agriculture: Forest Service

  7. Status: Closed - Not Implemented

    Comments: The Forest Service responded that it does not plan to revise its regulations, as it already has the authority to sell mineral survey fractions and road rights-of-way competitively, but it issued a memorandum reminding regional foresters that competitive sales should be considered as a means of valuing these parcels, and that this should be included in Small Tracts Act training sessions for field personnel.

    Recommendation: The Chief of the Forest Service, to enhance federal revenues, when the agency sells land, should change regulations implementing the Small Tracts Act to allow competitive sales of mineral survey fractions and road rights-of-way--either through public auctions or modified competitive bidding procedures--even if an adjacent landowner has applied to buy the parcel.

    Agency Affected: Department of Agriculture: Forest Service

  8. Status: Closed - Implemented

    Comments: This recommendation was implemented in September 2002, with the issuance of Instruction Memorandum 2002-260, which requires strict adherence to the policy, guidelines, and procedures for processing Color-of-Title claims, and provides a Color-of-Title Equity worksheet for consistent application of the requirements. Andrea Nygren, BLM's audit liaison (202-452-5153), provided the information on the status of this recommendation.

    Recommendation: The Director of BLM should develop policy and procedures for Color-of-Title applications, to provide consistency in proving applicants' eligibility, estimating applicants' equities, and using appraisals.

    Agency Affected: Department of the Interior: Bureau of Land Management

 

Explore the full database of GAO's Open Recommendations »

Sep 28, 2016

Sep 26, 2016

Aug 15, 2016

Jul 26, 2016

Jul 21, 2016

Jul 14, 2016

Jul 7, 2016

Looking for more? Browse all our products here