Interior Releases Valuation Plan for Land Buy-Back Program
On October 29, the Department of the Interior released its revised Land Buy-Back Program Valuation Plan as a further means to support President Barack Obama’s commitment to help strengthen American Indian communities according to a White House press release.
The draft Plan received a review from The Appraisal Foundation (TAF), the nation’s foremost authority on appraisal standards and qualifications. Upon the review the Plan was revised to incorporate all of TAF’s recommendations.
“There is no greater authority for establishing standards for appraisals and qualifications for appraisers than The Appraisal Foundation,” said Kevin Washburn, Assistant Secretary – Indian Affairs. “TAF’s independent analysis confirms that the steps we are taking to determine fair market value for offers to landowners are cost-effective and conform to the best practices for valuation. We are grateful for their comprehensive review and have incorporated their recommendations into the Valuation Plan we will use in the months and years ahead as we work through a transparent process to provide fair market value to tribal landowners.”
Interior looks to use the Valuation Plan as methods “to determine the value of fractional lands held by Indian landowners to ensure that willing sellers are offered fair market value for their land interests,” the release stated.
The $1.9 billion made available to purchase fractionated interests in trust or restricted land from willing sellers with 10 years through the Cobell Settlement will be implemented in the Land Buy-Back Program for Tribal Nations (Buy-Back Program). Once tribal governments purchase land, the interest will be held in trust for its beneficial use.
Congress has authorized the non-profit, non-partisan organization known as TAF to issue national appraiser standards and qualifications and guidance on valuation methods. TAF found that the Valuation Plan is a sound approach to meeting the appraisal demands required by the Buy-Back Program.
“We are honored to participate in this historic project and to lend our expertise to the Department of the Interior and its mission to provide Indian landowners with a fair market price for their fractional lands,” said David S. Bunton, President of The Appraisal Foundation. “The Land Buy-Back Program is a massive undertaking deserving the highest quality in appraisal standards and techniques. We are pleased that the Department has incorporated all of our recommendations and we are confident that these will greatly benefit landholders for years to come.”
The release states that Interior holds about 65 million acres in trust for American Indians and the Buy-Back Program has the potential to unlock millions of acres of fractionated lands for the benefit of tribal communities. Of the 56 million acres, 10 million is held for individual American Indians and nearly 46 million acres are held for Indian tribes. The land is held in more than 200,000 tracts, with about 93,500 (on approximately 150 reservations) contain fractional ownership interests subject to purchase by the Buy-Back Program.
Due to the large amount of properties involved, the Buy-Back Program will use a mass appraisal technique that will assess values simultaneously for many properties within a particular geographic area. The mass appraisal technique was deemed the most efficient and cost-effective means to appraise similar, non-complex, vacant lands that have comparable land sales available by TAF and the Program. Understanding that this process may not be the best case for all tracts, TAF reviewed the other appraisal methodologies identified in the Plan for such instances, including project appraisals and property-specific appraisals.
Both the Buy-Back Program and Valuation Plan was developed by the Office of Appraisal Services in the Office of the Special Trustee for American Indians.
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