The Art of the Land Deal

ReportThe Art of the Land DealFundamental problems in the appraisal functions and operations of land management agencies have caused taxpayers to get shortchanged in federal land deals

Energy & Natural Resources,  | Analysis
Dec 13, 2018  | 3 min read | Print Article

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Nationwide there are about 640 million acres of federal land owned by taxpayers. These federal lands have significant value, derived from agricultural resources, minerals under their soil, development possibilities, recreational opportunities, or many other uses. Federal taxpayers have paid to manage, preserve, and protect federal lands for generations, in many instances since before the founding of the states where the lands now reside.

Much of the land once owned by the federal government is now owned by nonfederal entities, such as states or private companies. Federal law permits certain federal agencies to convey public lands through sale, exchange, or transfer, so long as doing so serves the public interest. All too often, however, federal taxpayers have gotten shorted in land deals. The Art of the Land Deal examines problems historically associated with federal land disposal, new legislative threats, and the enduring structural issues that disadvantage the federal government in land transactions.

Fundamental problems in the appraisal functions and internal operations of land management agencies have led to systemic undervaluation of federal land in countless transactions conducted over decades. Independent reviews of the agencies in question report improved oversight of land transaction processing, but also document continued deficiencies in securing appraisals of federal land that meet recognized standards. Reform efforts have not fully addressed these problems, and no review has been conducted in recent years.

At the beginning of the 115th Congress, the House of Representatives voted to change the procedural rules to allow Congress to enact land conveyance legislation without fully considering its cost. This, combined with the demonstrated intent of some members of Congress to accelerate land conveyances and the inadequacy of valuation operations at the agencies that would conduct them, could result in significant losses to taxpayers.

Taxpayers for Common Sense is not opposed to federal land transfers or exchanges, just bad deals for taxpayers. Any effort to sell, exchange, or transfer federal land must reflect the land’s fair market value. Land deals must not favor parochial, well-connected interests who will unfairly benefit at taxpayers’ expense. And any such disposal must consider the long-term impact on federal balance sheets. Land disposal can serve the public interest if it takes place as the result of an open, honest, and transparent process.

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