DOD to Require Yellow Book Appraisals in Base Closure/Realignment

In an August 4 Proposed Rule the Department of Defense explicitly adopts the use of the Uniform Appraisal Standards for Federal Land Acquisitions in order to obtain fair market value in future base relocations and closings. Known as "The Yellow Book," the manual was published by the Appraisal Institute in cooperation with the U.S. Department of Justice.

The proposed rule states that an estimate of the fair market value of the property must be prepared prior to making an EDC, and that the most recent edition of the Uniform Appraisal Standards for Federal Land Acquisitions shall be used. Furthermore, the secretary filing for the EDC is fully responsible for completion of the valuation. The secretary, in preparing the estimate of fair market value, shall consider the proposed uses identified in the redevelopment plan to the extent that they are not inconsistent with the highest and best use.

Fair market value is also sought on rental properties. However, "to assist local redevelopment efforts" the secretary concerned may also lease real and personal property, pending final disposition, for less than fair market value if the secretary determines that a public interest will be served as a result of the lease; and the fair market value of the lease is unobtainable or not compatible with such public benefit.

The Department of Defense engaged in four rounds of base closures and realignments announced in 1988, 1991, 1993, and 1995. Congress has authorized another to occur in 2005, and the process for selecting installations for closure and realignment is currently under way. In anticipation of the recommendations of the 2005 Defense Base Closure and Realignment Commission becoming law, the DoD is revising its existing regulations on the disposal process to ensure they reflect current law and policy and take advantage of experience gained from the previous four rounds.

Comments are due by October 11, 2005, and should be sent to: BRAC Regulations, Deputy Under Secretary of Defense (Installations & Environment), 3015 Defense Pentagon, Washington, D.C. 20301-3015. For more information, contact Steven N. Kleiman at 703-571-9085.

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