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B-208410 1 (1984-01-27)

handle is hein.gao/gaobabnga0001 and id is 1 raw text is: LA COMMPROLLER GENERAL OF THE UNIE STATES WASHINGTON D.C. 2054 January 27, 1984 B-20841 0 The Honorable Mark 0. Hatfield Chairman, Committee on Appropriations United States Senate Dear Mr. Chairman: Subject: Evaluation of Department of the Interior Comments on GAO's Report on the Powder River Basin Coal Sale On May 11, 1983, we issued a report to the Congress entitled Analysis of the Powder River Basin Federal Coal Lease Sale: Economic Valuation Improvements and Legislative Changes Needed (GAO/RCED-83-119). As you know, this report has been one of the focal points for congressional debates on the continuation of federal coal leasing activities. On July 20, 1983, the Department of the Interior submitted comments--as required by the Legislative Reorganiization Act of 1970 (31 U.S.C. S720)--to our report, including actions it would take in response to our recommenda- tions. Because of continuing congressional interest in coal leasing, we believe our evaluation of Interior's comments is needed to complete the record. Overall, Interior indicated agreement with a number of our recommendations and other parts of our report, but also registered some major disagreements. Most significantly--as highlighted in its cover letter--Interior (1) raised strong objections to our contention that Powder River leases sold for roughly $100 million less than their fair market value and (2) disagreed with our recommendation to postpone scheduled lease sales until deficien- cies in Interior's fair market value determination procedures are corrected. In addition, Interior noted that it was developing the best possible procedures to assure receipt of fair market value without improperly dictating or influencing that value. we continue to believe, as stated in our Powder River report and subsequent congressional testimonies, that most Powder River leases sold for less than fair market value and that several features of Interior's leasing program need revision. Since our report was issued, Interior has made progress in bringing about some of the procedural improvements we recommended and is com- mitted to making other changes in response to recommendations of the Commission on Fair Market Value Policy for Federal Coal Leasing. With regard to our view that Interior accepted $100 million less than fair market value for Powder River leases, Interior's response implies that we arrived at the $100 million figure by making our own technical assumptions and judgments of tract value 123310

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