U.S. Forest Service:

Fee System for Rights-of-Way Program Needs Revision

RCED-96-84: Published: Apr 22, 1996. Publicly Released: May 22, 1996.

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Pursuant to a congressional request, GAO reviewed the Forest Service's issuance of rights-of-way on national forest lands, focusing on: (1) whether the fees collected for rights-of-way reflect fair market value; (2) how Forest Service fees compare with fees charged by private landowners; and (3) the changes needed to ensure that Forest Service fees reflect fair market value.

GAO found that: (1) Forest Service fees for rights-of-way for oil and gas pipelines, power lines, and communications lines are typically below fair market value; (2) Forest Service fees for rights-of-way are generally less than those charged by nonfederal landowners; (3) options available to the Forest Service for revising its fee determination system include using a new fee schedule based on recent appraisals and local market data, using a new fee schedule with the flexibility to disregard it when its fees are below fair market value, and using site-specific appraisals only; and (4) many rights-of-way users would be willing to pay fair market value for Forest Service rights-of-ways if the Forest Service would improve the administration of its rights-of-way program.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: For several years, the Forest Service has been working with the Bureau of Land Management (BLM) to develop a common fee system for rights of way that is more reflective of fair market value. This was intended to be one part of an effort to revise its rights-of-way program, which also was to include having the Forest Service and BLM issue a common authorization, such as an easement. However, while the agencies agree with the need for change, they have yet to make meaningful progress in implementing a new fee system. The Forest Service estimates that it will be at least 2 more years before a new fee system is implemented.

    Recommendation: To meet the requirements of the Federal Land Policy and Management Act, Mineral Leasing Act, and Office of Management and Budget's Circular A-25, the Secretary of Agriculture should direct the Chief of the Forest Service to develop a fee system that ensures that fair market value is obtained from companies that have rights-of-way to operate oil and gas pipelines, power lines, and communications lines across Forest Service lands. While there are a number of options available to accomplish this goal, the option of establishing fees based on local market data or site-specific appraisals paid for by the users of the rights-of-way appears to be the most attractive because it collects fair market value for each right-of-way and also reduces the agency's administrative costs.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: For several years, the Forest Service has been working with the Bureau of Land Management (BLM) to develop a common fee system for rights of way that is more reflective of fair market value. This was intended to be one part of an effort to revise its rights-of-way program, which also was to include having the Forest Service and BLM issue a common authorization, such as an easement. However, while the agencies agree with the need for change, they have yet to make meaningful progress in implementing a new fee system. The Forest Service estimates that it will be at least 2 more years before a new fee system is implemented.

    Recommendation: The Secretary of Agriculture should improve the administration of the rights-of-way program by: (1) authorizing rights-of-way with a more market-like instrument--specifically, easements; (2) billing once during the term of an authorization or, at a minimum, reducing the frequency of the billing cycle; and (3) consolidating the billing of multiple permits issued to the same operator in a forest or region.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: The Forest Service plans to seek this authority once it has developed a new fee system. However, the agency is several years away from developing a new fee system.

    Recommendation: To the extent that the Forest Service needs additional authority to charge one-time fees, the Secretary of Agriculture should seek that authority from Congress.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: The Forest Service has a task force that is reengineering the application and review processes associated with issuing a special-use permit. The task force will be making and implementing suggestions to streamline the processing of special-use permits. However, after several years, the agency has yet to make any significant changes in its application and review processes. The agency estimates that it will be another two years before any meaningful changes are made.

    Recommendation: The Forest Service should continue its efforts to streamline its practices for processing applications for right-of-way authorizations.

    Agency Affected: Department of Agriculture: Forest Service

 

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