The Forest Service and BLM use the same fee schedule for rights-of-way. As table 1 shows, the Forest Service’s fees are frequently less than fees charged by nonfederal landowners for similar rights-of-way. Options Available to Revise the Fee System

The Forest Service has several options available to revise its fee system for rights-of-way to reflect fair market value. The first option involves developing a new fee schedule based on recent appraisals and local market data. Appraisals are a technique commonly used in the marketplace for determining fair market value. However, most of the industry representatives we spoke with told us that if the Forest Service improves its administration of the rights-of-way program by using more market-like administrative practices, they would be willing to pay fair market value for rights-of-way on Forest Service lands. Members of the Western Utility Group

Objectives, Scope, and Methodology

We were asked by the Chairman, Subcommittee on Oversight of Government Management and the District of Columbia, Senate Committee on Governmental Affairs, to determine (1) whether the fees currently charged to users of Forest Service rights-of-way that operate oil and gas pipelines, power lines, and communications lines reflect fair market value, (2) how the Forest Service’s fees compare with fees charged by nonfederal landowners, and (3) what, if any, changes are needed to the Forest Service’s fee system to ensure that fees reflect fair market value.
Why GAO Did This Study

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.

What GAO Found

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.