When BLM or the Forest Service estimates a parcel’s fair market value, they generally obtain an appraisal that complies with federal appraisal standards. According to the standards, fair market value is defined as the amount for which a property would be sold—for cash or its equivalent— by a willing and knowledgeable seller with no obligation to sell, to a willing and knowledgeable buyer with no obligation to buy. The standards require an appraiser to first identify the property’s “highest and best use,” which is defined as the use that is physically possible, legally permissible, financially feasible, and maximally profitable for the owner. The appraiser must estimate the property’s value using at least one of three approaches: (1) the sales comparison approach, which compares the property with other properties that have been sold; (2) the income approach, which applies a capitalization rate to the property’s potential net income; or (3) the cost approach, which adds the estimated value of the land to the current cost of replacing any improvements (such as buildings). The sales comparison approach is generally considered to be the most reliable when sufficient market data are available; it considers various factors—such as the location, size and other physical characteristics, and uses of the properties—to estimate the extent of comparability between the property being appraised and the comparable properties. On the basis of the prices of the properties that are judged to be the most comparable, the appraiser then estimates the fair market value of the property being appraised. Federal appraisal standards generally address appraisal procedures and documentation rather than outcomes. The standards explicitly allow for the application of professional judgment in estimating a property’s fair market value: “The appraiser should not hesitate to acknowledge that appraising is not an exact science and that reasonable men may differ somewhat in arriving at an estimate of the fair market value.” Before either agency uses an appraised value, an agency appraiser must review the appraisal report, assure it complies with federal appraisal standards, and approve it for agency use. Four key statutes authorize BLM to transfer land. Under these statutes, BLM transferred about 79,000 acres for about $3 million during fiscal years 1991 through 2000: about 13,000 acres under the Desert Land Act; about 42,000 acres under the Recreation and Public Purposes Act (R&PPA); about 4,000 acres under the Color-of-Title acts; and about 20,000 acres under the Southern Nevada Public Land Management Act (SNPLMA). The Forest Service did not transfer land during our study period, although it recently received authority to do so under the Education Land Grant Act. Enacted in 1877, the Desert Land Act authorizes BLM to transfer arid western land to applicants who have made efforts to reclaim, irrigate, and cultivate it, for $1.25 per acre. Applicants must first identify such land— limited to 320 acres per application—as suitable for agriculture and incapable of producing crops without irrigation; in addition, the land generally cannot have minerals or timber. Among other requirements, applicants must hold a legal right to the water they plan to use for irrigation and prove that they have expended at least $3 per acre in reclamation, irrigation, and cultivation. According to BLM, identifying federal land that could be acquired under this statute is now difficult for several reasons, including the following: most of the arid western land that is suitable for agricultural development is now privately owned, the amount of water available for irrigation is now limited, and the costs of developing irrigation projects are now high—roughly $250,000 for a 320-acre parcel. In addition, the application process is time-consuming for applicants and agency officials, sometimes taking 10 or more years to complete. Under the Desert Land Act, BLM transferred about 13,000 acres from fiscal year 1991 through fiscal year 2000 and received about $15,000. Figure 1 shows the acres transferred under the Desert Land Act, and the amount received, annually for this 10-year period. The number of acres transferred annually ranged from about 300 acres in fiscal year 1999 to about 3,100 acres in fiscal year 1996. R&PPA authorizes BLM to transfer land to state governments, local governments, and nonprofit organizations, if the land will be developed and used for recreational or public purposes, upon application from any of these entities. Prices for this land are set in the act or by the agency at less than fair market value, depending on the type of entity applying and the purpose for which the land will be used, as shown in table 1. Before BLM transfers land to an applicant under R&PPA, the agency is authorized and generally prefers to enter first into a multi-year lease with the applicant. Such leases help the agency to assure that applicants develop their proposed projects as planned and in a timely manner. When BLM transfers land under R&PPA, the agency restricts the deed to require that the parcel continue to be used for the stated purpose and not be transferred to another owner without BLM’s consent. If these deed restrictions are violated, BLM generally requires that the owner take corrective action—such as returning the parcel to its stated purpose—or transfer the parcel back to BLM. In cases when the owner wants to continue to use the parcel in a way that violates the deed restrictions, BLM often agrees to take back the parcel and then sell it to the former owner for its current appraised value. To assure that the deed restrictions are met, BLM’s policy is that field offices should visually inspect each transferred parcel at least once every 5 years. For example: BLM field office staff inspected a 160-acre parcel in Idaho that had been transferred to a nonprofit group to develop and use as a trap-shooting and rifle range. In their inspection, staff found an occupied trailer, an abandoned car, miscellaneous garbage, and weeds growing in the area that was to be cleared—all in violation of the deed restriction. BLM staff subsequently directed the group to take specific actions to correct the violations. Field office representatives told us that limited staff resources and higher work priorities preclude them from inspecting all transferred parcels every 5 years. BLM’s automated public lands database shows that field office staff visited only about 40 percent of the 277 parcels with restricted deeds that were transferred in the period from fiscal years 1991 through 2000; monitoring visits were done (or scheduled) at intervals longer than 5 years for some parcels but were not done (or scheduled) at all for other parcels. To address this problem, BLM offices have adopted alternative approaches: for example, one field office hired a summer intern to inspect transferred parcels; another requested additional funds to hire contractors to do these inspections; yet another used a volunteer. However, BLM has not assessed the feasibility of other less costly approaches, such as requiring owners of transferred parcels to document their compliance with deed restrictions by submitting periodic reports and/or photographs of their land; field office staff could review these documents and inspect parcels as needed—for example, if the documents were not submitted on time or appeared to show noncompliance. Under R&PPA, BLM transferred about 42,000 acres during fiscal years 1991 through 2000 and received a total of about $2.6 million: about 22,000 acres were transferred to state or local governments for historic monument or recreation purposes (at no cost); about 17,000 acres to state or local governments for other government-controlled purposes that serve the general public (for the greater of $10 per acre or $50 total); and the remaining approximate 3,000 acres to state or local governments or nonprofit organizations for other public purposes (for a percentage of the appraised value). Figure 2 shows the acres transferred under R&PPA, and the amount received, annually for fiscal years 1991 through 2000. The number of acres transferred under R&PPA ranged from about 900 in fiscal year 1993 to about 6,500 in fiscal year 1995. The amount received from R&PPA transfers ranged from about $9,000 in fiscal year 1993 to almost $1.6 million in fiscal year 1999. The significant increase in that year was due primarily to transfers of three parcels in Las Vegas, Nevada, to churches, at 50 percent of their appraised values—one parcel yielded over $250,000 and two parcels yielded more than $500,000 each. BLM is also authorized to transfer land under the Color-of-Title Act and several other laws that the agency collectively refers to as the Color-of- Title acts. Most of the land is transferred under Class I claims made under the Color-of-Title Act. Class I claims are those made by applicants who have valid reasons to believe that they already owned the land. Applicants must identify the land (limited to 160 acres per applicant), show that they (or their ancestors or the prior owners) held title to the land for more than 20 years without knowing it was in fact federally owned, and placed valuable improvements on the land or cultivated it. By law, the price of the land is based on the appraised value—net of the value of improvements or development—that is discounted to reflect an applicant’s equities; if this calculation results in a price below $1.25 per acre, the minimum price is set at $1.25 per acre. The Color-of-Title Act does not define “equities.” However, under BLM’s policy, determining an applicant’s equities may include considering factors such as the longevity of the applicant’s claim, whether the applicant paid fair market value for the land, the origin of the errors that initiated the chain of title, and whether taxes on the land have been paid. BLM has no guidance on how to quantify these factors or use them to set prices.