Department of the
Interior
Departmental Manual
Effective Date:
8/31/07
Series: Public Lands
Part
602: Land Acquisition, Exchange, and Disposal
Chapter
1: Appraisal of Real Property
Originating
Office: National Business Center
602
DM 1
1.1 Purpose. This chapter provides
Departmental policy for land valuation issues, real property appraisals, and
legislative land exchanges. It provides
policy and guidance for alternative methods of valuation (AMV) that address the
need to comply with nationally applicable appraisal standards; appraisals
prepared for third parties (i.e., non-Federal entities); and legislative land
exchanges. It further provides for a
Departmental determination on how to review appraisals to ensure appropriate
coordination and decision-making.
1.2 Authority. This policy is issued in accordance with
the current editions of the Uniform Appraisal Standards for Federal Land
Acquisitions (UASFLA) and the Uniform Standards of Professional Appraisal
Practice (USPAP).
1.3 Policy. All real property appraisals performed by the
Department shall conform to nationally recognized appraisal standards (i.e., the current editions of UASFLA and
USPAP, as applicable). The use of AMV,
such as public interest value, contingent valuation, habitat equivalency
analysis, and any other AMV in real property appraisals are expressly
prohibited.
1.4 Responsibilities.
A. The Associate Director, Appraisal Services
Directorate (ASD), has overall authority and responsibility to ensure the
effective implementation of AMV appraisals and appraisals prepared for third
parties. The Associate Director, ASD, is
responsible for coordinating with the Office of the Special Trustee for
American Indians (OST) and, as applicable, the Office of Congressional and
Legislative Affairs (OCL).
B. The
Director, OCL, has overall authority and responsibility to ensure the effective
implementation of legislative land exchanges and coordinates with the Associate
Director, ASD, as applicable.
1.5 Alternative
Methods of Valuation.
A. AMV
Directed by Congress. If Congress
directs the Department to prepare an AMV, the Department will describe the AMV applied; provide a
real property appraisal that conforms with nationally recognized standards
(i.e., UASFLA and USPAP, as applicable) for the specific transaction; explain
how the AMV differs from appraisal methods applied under UASFLA or USPAP; and
provide information to the appropriate committees prior to or after completion
of the transaction.
B. AMV
Requiring Congressional Authorization.
If the Department proposes to prepare an AMV in addition to a real
property appraisal in a specific transaction that requires Congressional
authorization, a written explanation, of the AMV applied and, how it differs from
appraisal methods applied under UASFLA or USPAP will be provided to the
appropriate Congressional committees. In
this case, Congress will determine the most appropriate valuation for the
transaction.
C. AMV
that Does not Require Congressional Authorization. If the Department proposes to prepare an AMV
in addition to a real property appraisal in a specific transaction that does
not require Congressional authorization, the Department will notify the
appropriate committees of Congress and the Office of Inspector General prior to
the completion of the transaction. The
notification will describe how the AMV differs from appraisal methods applied
under UASFLA or USPAP, and the basis upon which the Department plans to
complete the specific transaction.
1.6 Appraisals
Prepared for Third (i.e.,
non-Federal) Parties. Appraisals prepared by third (i.e., non-Federal) parties may assist in
achieving mutually beneficial outcomes for the Department and the non-Federal
party. The Department is not obligated
to review land transaction proposals, or the associated appraisals, if the
transaction does not comply with its land management missions, priorities, and
plans.
A. Upon
request by a bureau, ASD or OST, as applicable, the DOI appraisal staff will review
a third party appraisal if:
(1) The third party consults with ASD or OST, prior to the
initiation of the appraisal, on the scope of work and the selection of the
appraiser, and agrees that ASD or OST, as applicable, is both the client for
and an intended user of the appraisal.
(2) A senior bureau or Departmental official (i.e., Senior Executive Service level in the field or headquarters,
as applicable) transmits the appraisal with a determination that the land
transaction proposal supported by the appraisal complies with applicable
missions, priorities, and plans.
(3) ASD or OST, as applicable, determines that the appraisal was
prepared by a certified appraiser and meets applicable real property appraisal
standards. ASD and senior bureau personnel
should be involved with the appraisal from the beginning of the valuation
process.
B. The
ASD or OST review of an appraisal should not create an expectation that the
appraisal will be approved. In cases
where an appraisal is reviewed by ASD or OST, a second appraisal may be
required. If a second appraisal is
required, it will be conducted or overseen by ASD or OST and it will be
performed in accordance with procedures determined by ASD or OST, as applicable.
1.7 Legislative
Land Exchanges. Legislation is required to authorize land
exchanges in all interstate exchanges and exchanges directed by Congress that
include provisions exempting agencies from mandates that otherwise apply; such
as, the Federal Land Policy and Management Act of 1976 land use planning
requirements; the National Environmental Policy Act of 1969 analysis; or
appraisals. A legislative exchange may
be proposed even when no additional authority is required. Although most legislative exchanges address
Bureau of Land Management lands, legislation has also been enacted concerning
National Park Service and Fish and Wildlife Service lands.
A. All
legislative land exchanges initiated in the Department must be coordinated with
OCL. All officials and employees of the
Department will adhere to 461 DM 1, which addresses requests for information,
drafting, or other assistance regarding legislation from sources outside the
Department, and specifically requires coordination with the Legislative Counsel
in OCL.
B. Supporting
documentation must be provided for key provisions of the proposal. A real property appraisal that conforms to
national standards may include documentation of an AMV. If an AMV is included, then the documentation
must address how the AMV differs from methods utilized in a market appraisal
prepared in accordance with national appraisal standards.
C. The
OCL will determine the appropriate means for reviewing each legislative
exchange proposal, including the involvement of appropriate policy officials of
other offices (e.g., ASD or OST, as appropriate, and the
Solicitor).
D. Real
property appraisals prepared for proposed legislative exchanges must conform to nationally recognized
appraisal standards (UASFLA and USPAP,
as applicable). When the Department
prepares documentation based on an AMV for a legislative exchange, it is
required to provide a description of the AMV and an explanation of how it
differs from methods utilized in the real property appraisal that was prepared
consistent with nationally recognized appraisal standards (i.e., UASFLA and USPAP, as applicable). In this case, Congress will determine the
most appropriate valuation to be used for the transaction.