BLM and the Forest Service: Federal Taxpayers Could Benefit More From Land Sales

A letter report issued by the General Accounting Office with an abstract that begins "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.