FSH 5409.13 - LAND ACQUISITION HANDBOOK WO AMENDMENT 5409.13-91-1 EFFECTIVE 9/3/91 CHAPTER 20 - DONATIONS 21 - NEGOTIATIONS. Donation proposals may be developed during an initial contact about a possible purchase or exchange or they may be unsolicited offers. If a landowner wants to make a donation, summarize the conditions of the offer in a letter to the Forest Supervisor or Regional Forester. The letter should include: 1. The donor's name, address, marital status, and spouse's name. 2. County, State, legal description, and approximate area of the tract. 3. Known outstanding rights. 4. Reservations, if any, to be made by the donor. 5. The donor's responsibility for clearing title defects and tax or other liens. 6. The Forest Service's responsibility for securing title evidence, preparing and recording the deed. Carefully define donation offers, particularly those involving partial interests, to avoid misunderstandings later. 22 - EXAMINATION AND APPRAISALS. It is not necessary to examine land offered for donation as intensively as other land considered for acquisition. However, examine donations sufficiently to determine if the property is suitable for inclusion in the National Forest System as well as for any possible outstanding rights or adverse claims (Sec. 11.1, item 4). Appraisals are required only for donations of administrative sites. If the Regional Forester requires it, have a staff officer knowledgeable about property values in the donation area estimate the value for property accounting purposes. Such an estimate is not deemed an appraisal as defined in FSM 5410. 23 - CASE PROCESSING. The Forest Supervisor must review the donation proposal against existing landownership and land management plans. Analyze proposed donations not identified for acquisition in approved plans to determine if acceptance is in the public interest. Be wary of potential liabilities that the Government may assume with the donation such as impoundments or dam sites, additional management and protection costs resulting from the donation, and outstanding rights or reservations affecting public use and enjoyment of the donated rights. Carefully review the terms of proposed donations of scenic and conservation easements. Unless properly written, the donation may provide significant income tax benefits to the donor with few offsetting public benefits to the Government. The Forest Supervisor's report may be in the form of an environmental assessment (EA). The report must: 1. Address the public benefits and justification for accepting the donation. 2. Evaluate the effect of any outstanding and reserved rights, including a statement of estimated value (Sec. 22). 3. Describe the proposed use of the tract. 4. Identify the authority for acceptance (FSM 5420.13). 5. Include a map of appropriate scale showing the relationship of the offered tract to other National Forest System land. If an EA is not prepared, develop a separate report to address the identified subjects. The Regional Forester evaluates the suitability of the proposed donation for National Forest purposes, assesses the feasibility of economic and effective administration, judges the potential for controversy, estimates the relative significance of the offered land, and evaluates the nature of any reservations, encumbrances, or outstanding rights and their effect on administration. If the proposed donation is within the Regional Forester's delegated authority (FSM 5404.13c), the Regional Forester shall approve or disapprove. If disapproved, the Regional Forester notifies the Forest Supervisor in writing, clearly explaining the basis for the disapproval in order to properly inform the landowner. See section 24 for donations approved by the Regional Forester. 24 - APPROVAL AND ACCEPTANCE. Formal approval follows the Office of the General Counsel's approval of the title and the Forest Service's decision that the donation is in the public interest. Titles to donated land require Regional Attorney or attorney-in- charge approvals following the same procedures as with purchase cases, except that donations cannot be acquired by condemnation (ch. 50). The Regional Attorney notifies the Regional Forester or Forest Supervisor when a preliminary opinion indicates that title to the donated land is adequate and that the deed may be recorded by the Forest Service. After the Regional Forester approves a donation, forward form FS- 5400-9, Proposed Land Purchase, with a letter to the Chief giving the approval date. However, certain typesof donations require review and concurrence by the Chief prior to acceptance. FSM 5404, item 23, describes the exceptions to the Regional Forester's case approval authority. If the proposed donation requires the Chief's concurrence, the Regional Forester shall forward a copy of the landowner's offer, an environmental assessment or the donation report, and form FS-5400-9 to the Chief. The Regional Forester accepts all donations. Acceptance consists of a letter formally accepting the donation on behalf of the United States. Formal approval includes the Office of the General Counsel's approval of the title and the Forest Service's decision that the donation is in the public interest. Titles to donated land require Regional Attorney or attorney-in- charge approvals following the same procedures as with purchase cases, except that donations cannot be acquired by condemnation (ch. 50). The Regional Attorney notifies the Regional Forester or Forest Supervisor when a preliminary opinion indicates that title to the donated land is adequate and that the deed may be recorded by the Forest Service. Acceptance consists of a letter formally accepting the donation on behalf of the United States. The Forest Supervisor prepares an appropriate letter summarizing the public values involved in the donation and the authority under which the donation is accepted. The Regional Forester formally accepts title to the donation by signing the title- acceptance block at the bottom of this letter. Send a letter of thanks signed by the Regional Forester to the donor or donors. When appropriate, the Chief or the Secretary of Agriculture may sign the letter to the donor. The Regional Forester ensures that the title file is complete, updates the status records, and notifies the Chief of the title-acceptance date. The Forest Service must formally accept the donation before spending any funds to manage and protect the property. 25 - TAX IMPLICATIONS FOR DONORS. A major motivation for making a donation of land to the United States is the fact that the donor can take a charitable tax deduction equal to the fair market value of the property as of the date of the donation. While the Forest officer can encourage possible donations by pointing out possible tax advantages to the potential donor, care must be exercised that the Forest Service not guarantee the tax deductibility of any donation or the amount of the deduction. It is the responsibility of the donor to properly report donations for purposes of a charitable deduction. The Internal Revenue Service has published regulations pertaining to deductions for donations of land. (See: Federal Register of January 14, 1986; 51 F.R. 1496). It is the donor's responsibility to have the land appraised for purposes of determining the value of the deduction. If the tax deductibility of a possible donation is in question, the potential donor should be advised to consult with an independent accountant, tax attorney, or to seek a opinion from the Internal Revenue Service. 26 - CONDITIONAL GIFTS. The Act of October 10, 1978 (7 U.S.C. 2269) allows the Secretary of Agriculture to accept real or personal property gifts for the benefit of the U.S. Department of Agriculture or for carrying out any of its functions. This broad authority to accept gifts would cover any lands or interests in lands which might benefit National Forest purposes or management. Conditioned gifts are not to be encouraged, but are not per se unacceptable. Conditions to gifts must be closely examined for their management and fiscal implications, precedential nature, public relations, and other aspects. A condition to a gift will be specifically set forth in thetitle or other report, and must be approved by the Chief prior to acceptance of a gift.