36 Cfr 254

Forest Service, USDA

Pt. 254

from an applicant other than a preferred operator is determined to be the
best application (and no preferred operator submits a responsive application
that is substantially equal to it), the
preferred operator who submitted the
best application from among the applications submitted by preferred operators shall be given the opportunity, by
amending its application, to meet the
terms and conditions of the best application received. If the amended application of that preferred operator is
considered by the authorized officer to
be at least substantially equal to the
best application, the preferred operator
shall be issued the visitor service authorization. If a preferred operator
does not amend its application to meet
the terms and conditions of the best
application, the authorized officer
shall issue the visitor service authorization to the applicant who submitted
the best application in response to the
prospectus.
§ 251.125 Preferred operator privileges
and limitations.
(a) A preferred operator has no preference within a National Forest in
Alaska beyond that authorized by section 1307 of ANILCA (16 U.S.C. 1397) and
by § 251.124 of this subpart.
(b) Local residents and most directly
affected Native Corporations have
equal priority for consideration in providing visitor services pursuant to
§ 251.124 of this subpart.
(c) Nothing in this subpart shall prohibit the authorized officer from
issuing special use authorizations to
other applicants within the CSU, as
long as the requirements of § 251.124 are
met.
(d) If an operator qualifies as a local
resident for any part of an area designated in the solicitation for a specific visitor service, in matters related
solely to that solicitation, the operator
shall be treated as a local resident for
the entire area covered by that solicitation.
(e) The preferences described in this
section may not be sold, assigned,
transferred, or devised, either directly
or indirectly, in whole or in part.

§ 251.126

Appeals.

Decisions related to the issuance of
special use authorizations in response
to written solicitations by the Forest
Service under this subpart or related to
the modification of special use authorizations to reflect historical use are
subject to administrative appeal under
subpart C of this part.

PART 254—LANDOWNERSHIP
ADJUSTMENTS
Subpart A—Land Exchanges
Sec.
254.1 Scope and applicability.
254.2 Definitions.
254.3 Requirements.
254.4 Agreement to initiate an exchange.
254.5 Assembled land exchanges.
254.6 Segregative effect.
254.7 Assumption of costs.
254.8 Notice of exchange proposal.
254.9 Appraisals.
254.10 Bargaining; arbitration.
254.11 Exchanges at approximately equal
value.
254.12 Value equalization; cash equalization
waiver.
254.13 Approval of exchanges; notice of decision.
254.14 Exchange agreement.
254.15 Title standards.
254.16 Case closing.
254.17 Information requirements.

Subpart B—National Forest Townsites
254.20 Purpose and scope.
254.21 Applications.
254.22 Designation and public notice.
254.23 Studies, assessments, and approval.
254.24 Conveyance.
254.25 Survey.
254.26 Appraisal.

Subpart C—Conveyance of Small Tracts
254.30 Purpose.
254.31 Definitions.
254.32 Encroachments.
254.33 Road rights-of-way.
254.34 Mineral survey fractions.
254.35 Limitations.
254.36 Determining public interest.
254.37–254.39 [Reserved]
254.40 Applications.
254.41 Public sale or exchange in absence of
application.
254.42 Valuation of tracts.
254.43 Surveys.
254.44 Document of conveyance.

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§ 254.1

36 CFR Ch. II (7–1–06 Edition)

Subpart A—Land Exchanges
AUTHORITY: 7 U.S.C. 428a(a) and 1011; 16
U.S.C. 484a, 485, 486, 516, 551, and 555a; 43
U.S.C. 1701, 1715, 1716, and 1740; and other applicable laws.
SOURCE: 59 FR 10867, Mar. 8, 1994, unless
otherwise noted.

§ 254.1

Scope and applicability.

(a) These rules set forth the procedures for conducting exchanges of National Forest System lands. The procedures in these rules may be supplemented by instructions issued to Forest Service officers in Chapter 5400 of
the Forest Service Manual and Forest
Service Handbooks 5409.12 and 5409.13.
(b) These rules apply to all National
Forest System exchanges of land or interests in land, including but not limited to minerals, water rights, and timber, except those exchanges made
under the authority of Small Tracts
Act of January 12, 1983 (16 U.S.C. 521c–
521i) (36 CFR part 254, subpart C), and
as otherwise noted. These rules also
apply to other methods of acquisition,
where indicated.
(c) The application of these rules to
exchanges made under the authority of
the Alaska Native Claims Settlement
Act, as amended (43 U.S.C. 1621), or the
Alaska National Interest Lands Conservation Act (16 U.S.C. 3192), shall be
limited to those provisions which do
not conflict with the provisions of
these Acts.
(d) Unless the parties to an exchange
otherwise agree, land exchanges for
which the parties have agreed in writing to initiate prior to April 7, 1994,
will proceed in accordance with the
rules and regulations in effect at the
time of the agreement.
(e) Except for exchanges requiring
cash equalization payments made
available through the Land and Water
Conservation Act of 1965, as amended
(16 U.S.C. 460[1]9), the boundaries of a
national forest are automatically extended to encompass lands acquired
under the Weeks Act of March 1, 1911,
as amended (16 U.S.C. 516), provided the
acquired lands are contiguous to existing national forest boundaries and
total no more than 3,000 acres in each
exchange.

(f) Exchanges under the Weeks Act of
March 1, 1911, or the General Exchange
Act of March 20, 1922, may involve
land-for-timber (non-Federal land exchanged for the rights to Federal timber), or timber-for-land (the exchange
of the rights to non-Federal timber for
Federal land), or tripartite land-fortimber (non-Federal land exchanged for
the rights to Federal timber cut by a
third party in behalf of the exchange
parties).
(g) Land exchanges involving National Forest System lands are authorized by a number of statutes, depending
upon the status (conditions of ownership) of such lands and the purpose for
which an exchange is to be made. The
status of National Forest System land
is determined by the method by which
the land or interests therein became
part of the National Forest System.
Unless otherwise provided by law,
lands acquired by the United States in
exchanges assume the same status as
the Federal lands conveyed.
(h) The Federal Land Policy and
Management Act of 1976, as amended
(43 U.S.C. 1701), is supplemental to all
applicable exchange laws, except the
cash equalization provisions of the
Sisk Act of December 4, 1967, as amended (16 U.S.C. 484a).
§ 254.2

Definitions.

For the purposes of this subpart, the
following terms have the meanings set
forth in this section.
Acquisition means the attainment of
lands or interests in lands by the Secretary, acting on behalf of the United
States, by exchange, purchase, donation, or eminent domain.
Adjustment to relative values means
compensation
for
exchange-related
costs, or other responsibilities or requirements assumed by one party,
which ordinarily would be borne by the
other party. These adjustments do not
alter the agreed upon value of the
lands involved in an exchange.
Agreement to initiate means a written,
nonbinding statement of present intent
to initiate and pursue an exchange,
which is signed by the parties and
which may be amended by consent of
the parties or terminated at any time
upon written notice by any party.

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§ 254.2

Appraisal or appraisal report means a
written statement independently and
impartially prepared by a qualified appraiser setting forth an opinion as to
the market value of the lands or interests in lands as of a specific date(s),
supported by the presentation and
analysis of relevant market information.
Approximately equal value means a
comparative estimate of value of the
lands involved in an exchange which
have readily apparent and substantially similar elements of value, such
as location, size, use, physical characteristics, and other amenities.
Arbitration is a process to resolve a
disagreement among the parties as to
appraised value, performed by an arbitrator appointed by the Secretary from
a list recommended by the American
Arbitration Association.
Assembled land exchange means an exchange of Federal land for a package of
multiple ownership parcels of non-Federal land consolidated for purposes of
one land exchange transaction.
Authorized officer means a Forest
Service line or staff officer who has
been delegated the authority and responsibility to make decisions and perform the duties described in this subpart.
Bargaining is a process other than arbitration, by which parties attempt to
resolve a dispute concerning the appraised value of the lands involved in
an exchange.
Federal lands means any lands or interests in lands, such as mineral and
timber interests, that are owned by the
United States and administered by the
Secretary of Agriculture through the
Chief of the Forest Service, without regard to how the United States acquired
ownership.
Hazardous substances are those substances designated under Environmental Protection Agency regulations
at 40 CFR part 302.
Highest and best use means an appraiser’s supported opinion of the most
probable and legal use of a property,
based on market evidence, as of the
date of valuation.
Lands means any land and/or interests in land.
Market value means the most probable price in cash, or terms equivalent

to cash, which lands or interest in
lands should bring in a competitive and
open market under all conditions requisite to a fair sale, where the buyer
and seller each acts prudently and
knowledgeably, and the price is not affected by undue influence.
Mineral laws means the mining and
mineral leasing laws applicable to Federally owned lands and minerals reserved from the public domain for national forest purposes and the Geothermal Steam Act of 1970 (30 U.S.C.
1001 et seq.), but not the Materials Act
of 1947 (30 U.S.C. 601 et seq.).
Outstanding interests are rights or interests in property held by an entity
other than a party to an exchange.
Party means the United States or any
person, State, or local government who
enters into an agreement to initiate an
exchange.
Person means any individual, corporation, or other legal entity legally
capable to hold title to and convey
land. An individual must be a citizen of
the United States and a corporation
must be subject to the laws of the
United States or of the State where the
land is located or the corporation is incorporated. No Member of Congress
may participate in a land exchange
with an agency of the United States, as
set forth in 18 U.S.C. 431–433.
Public land laws means that body of
non-mineral land laws dealing with the
disposal of National Forest System
lands administered by the Secretary of
Agriculture.
Reserved interest means an interest in
real property retained by a party from
a conveyance of the title to that property.
Resource values means any of the various commodity values or non-commodity values, such as wildlife habitat
and aesthetics, contained within land
interests, surface and subsurface.
Secretary means the Secretary of Agriculture or the individual to whom responsibility has been delegated.
Segregation means the removal for a
limited period, subject to valid existing
rights, of a specified area of the Federal lands from appropriation under
the public land laws and mineral laws,
pursuant to the authority of the Secretary of the Interior to allow for the

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§ 254.3

36 CFR Ch. II (7–1–06 Edition)

orderly administration of the Federal
lands.
Statement of value means a written report prepared by a qualified appraiser
in conformance with the minimum
standards of the Uniform Standards of
Professional Appraisal Practice that
states the appraiser’s conclusion(s) of
value.
§ 254.3 Requirements.
(a) Discretionary nature of exchanges.
The Secretary is not required to exchange any Federal lands. Land exchanges are discretionary, voluntary
real estate transactions between the
Federal and non-Federal parties. Unless and until the parties enter into a
binding exchange agreement, any party
may withdraw from and terminate an
exchange proposal at any time during
the exchange process.
(b) Determination of public interest.
The authorized officer may complete
an exchange only after a determination
is made that the public interest will be
well served.
(1) Factors to consider. When considering the public interest, the authorized officer shall give full consideration
to the opportunity to achieve better
management of Federal lands and resources, to meet the needs of State and
local residents and their economies,
and to secure important objectives, including but not limited to: protection
of fish and wildlife habitats, cultural
resources, watersheds, and wilderness
and aesthetic values; enhancement of
recreation opportunities and public access; consolidation of lands and/or interests in lands, such as mineral and
timber interests, for more logical and
efficient management and development; consolidation of split estates; expansion of communities; accommodation of existing or planned land use authorizations (§ 254.4(c)(4); promotion of
multiple-use values; implementation of
applicable Forest Land and Resource
Management Plans; and fulfillment of
public needs.
(2) Findings. To determine that an exchange well serves the public interest,
the authorized officer must find that—
(i) The resource values and the public
objectives served by the non-Federal
lands or interests to be acquired must
equal or exceed the resource values and

the public objectives served by the
Federal lands to be conveyed, and
(ii) The intended use of the conveyed
Federal land will not substantially
conflict with established management
objectives on adjacent Federal lands,
including Indian Trust lands.
(3) Documentation. The findings and
the supporting rationale shall be documented and made part of the administrative record.
(c) Equal value exchanges. Except as
provided in § 254.11 of this subpart,
lands or interests to be exchanged
must be of equal value or equalized in
accordance with the methods set forth
in § 254.12 of this subpart. An exchange
of lands or interests shall be based on
market value as determined by the
Secretary
through
appraisal(s),
through bargaining based on appraisal(s), through other acceptable
and commonly recognized methods of
determining market value, or through
arbitration.
(d) Same-State exchanges. Unless otherwise provided by statute, the Federal
and non-Federal lands involved in an
exchange must be located within the
same State.
(e) Congressional designations. Upon
acceptance of title by the United
States, lands acquired by the Secretary
of the Interior by exchange under the
authority granted by the Federal Land
Policy and Management Act of 1976, as
amended, which are within the boundaries of any unit of the National Forest
System, the National Wild and Scenic
Rivers System, the National Trails
System, the National Wilderness Preservation System, or any other system
established by Act of Congress; or the
boundaries of any national conservation area or national recreation area
established by Act of Congress, immediately are reserved for and become a
part of the unit or area in which they
are located, without further action by
the Secretary of the Interior, and,
thereafter, shall be managed in accordance with all laws, rules, regulations,
and land resource management plans
applicable to such unit or area.
(f) Land and resource management
planning. The authorized officer shall
consider only those exchange proposals
that are consistent with land and resource management plans (36 CFR part

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§ 254.3

219). Lands acquired by exchange that
are located within areas having an administrative designation established
through the land management planning process shall automatically become part of the area within which
they are located, without further action by the Forest Service, and shall be
managed in accordance with the laws,
rules, regulations, and land and resource management plan applicable to
such area.
(g) Environmental analysis. After an
agreement to initiate an exchange is
signed, the authorized officer shall undertake an environmental analysis in
accordance with the National Environmental Policy Act of 1969 (42 U.S.C.
4371), the Council on Environmental
Quality regulations (40 CFR parts 1500–
1508), and Forest Service environmental policies and procedures (Forest
Service Manual Chapter 1950 and Forest Service Handbook 1909.15). In making this analysis, the authorized officer
shall consider timely written comments received in response to the exchange notice published pursuant to
§ 254.8 of this subpart.
(h) Reservations or restrictions in the
public interest. In any exchange, the authorized officer shall reserve such
rights or retain such interests as are
needed to protect the public interest or
shall otherwise restrict the use of Federal lands to be exchanged, as appropriate. The use or development of lands
conveyed out of Federal ownership are
subject to any restrictions imposed by
the conveyance documents and all
laws, regulations, and zoning authorities of State and local governing bodies.
(i) Hazardous substances—(1) Federal
lands. The authorized officer shall determine whether hazardous substances
are known to be present on the Federal
lands involved in the exchange and
shall provide notice of known storage,
release, or disposal of hazardous substances on the Federal lands in the
contract agreement and in the conveyance document, pursuant to 40 CFR
part 373 and 42 U.S.C. 9620. For purposes of this section, the notice of hazardous substances on involved Federal
lands in an agreement to initiate an
exchange or an exchange agreement
meets the requirements for notices es-

tablished in 40 CFR part 373. Unless the
non-Federal party is a potentially responsible party under 42 U.S.C. 9607(a)
and participated as an owner, or in the
operation, arrangement, generation, or
transportation of the hazardous substances found on the Federal land, the
conveyance document from the United
States must contain a covenant warranting that all remedial action necessary to protect human health and the
environment with respect to any such
substances remaining on the property
has been taken before the date of
transfer and that any additional remedial action found necessary after the
transfer shall be conducted by the
United States, pursuant to 42 U.S.C.
9620(h)(3). The conveyance document
must also reserve to the United States
the right of access to the conveyed
property if remedial or corrective action is required after the date of transfer. Where the non-Federal party is a
potentially responsible party with respect to the property, it may be appropriate to enter into an agreement as
referenced in 42 U.S.C. 9607(e) whereby
that party would indemnify the United
States and hold the United States
harmless against any loss or cleanup
costs after conveyance.
(2) Non-Federal lands. The non-Federal party shall notify the authorized
officer of any hazardous substances
known to have been released, stored, or
disposed of on the non-Federal land,
pursuant to § 254.4 of this subpart. Notwithstanding such notice, the authorized officer shall determine whether
hazardous substances are known to be
present on the non-Federal land involved in an exchange. If hazardous
substances are known or believed to be
present on the non-Federal land, the
authorized officer shall reach an agreement with the non-Federal party regarding the responsibility for appropriate response action concerning the
hazardous substances before completing the exchange. The terms of this
agreement and any appropriate ‘‘hold
harmless agreement’’ shall be included
in an exchange agreement, pursuant to
§ 254.14 of this subpart.
(j) Legal description of properties. All
lands subject to an exchange must be
properly described on the basis of either a survey executed in accordance

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§ 254.4

36 CFR Ch. II (7–1–06 Edition)

with the Public Land Survey System
laws and standards of the United
States or, if those laws and standards
cannot be applied, the lands shall be
properly
described
and
clearly
locatable by other means as may be
prescribed or allowed by law.
(k) Special review. Except as provided
in this paragraph, land acquisitions of
$150,000 or more in value made under
the authority of the Weeks Act of
March 1, 1911, as amended (16 U.S.C.
516), must be submitted to Congress for
oversight review, pursuant to the Act
of October 22, 1976, as amended (16
U.S.C. 521b). However, minor and insignificant changes in land acquisition
proposals need not be resubmitted for
congressional oversight, provided the
general concept of and basis for the acquisition remain the same.
§ 254.4 Agreement to initiate an exchange.
(a) Exchanges may be proposed by
the Forest Service or by any person,
State, or local government. Initial exchange proposals should be directed to
the authorized officer responsible for
the management of Federal lands proposed for exchange.
(b) To assess the feasibility of an exchange proposal, the prospective parties may agree to obtain a preliminary
estimate of the values of the lands involved in the proposal. A qualified appraiser must prepare the preliminary
estimate.
(c) If the authorized officer agrees to
proceed with an exchange proposal, all
prospective parties shall execute a nonbinding agreement to initiate an exchange. At a minimum, the agreement
must include:
(1) The identity of the parties involved in the proposed exchange and
the status of their ownership or ability
to provide title to the land;
(2) A description of the lands or interest in lands being considered for exchange;
(3) A statement by a party, other
than the United States and State and
local governments, that such party is a
citizen of the United States or a corporation or other legal entity subject
to the laws of the United States or a
State thereof;

(4) A description of the appurtenant
rights proposed to be exchanged or reserved; any authorized uses, including
grants, permits, easements, or leases;
and any known unauthorized uses, outstanding interests, exceptions, covenants, restrictions, title defects or encumbrances;
(5) A time schedule for completing
the proposed exchange;
(6) An assignment of responsibility
for performance of required functions
and for costs associated with processing the exchange;
(7) A statement specifying whether
compensation for costs assumed will be
allowed pursuant to the provisions of
§ 254.7 of this subpart;
(8) Notice of any known release, storage, or disposal of hazardous substances on involved Federal or nonFederal lands and any commitments
regarding responsibility for removal or
other remedial actions concerning such
substances on involved non-Federal
lands (§ 254.3(i) and § 254.14);
(9) A grant of permission by each
party to physically examine the lands
offered by the other party;
(10) The terms of any assembled land
exchange arrangement, pursuant to
§ 254.5 of this subpart;
(11) A statement as to the arrangements for relocation of any tenants occupying non-Federal lands pursuant to
§ 254.15 of this subpart;
(12) A notice to an owner-occupant of
the voluntary basis for the acquisition
of the non-Federal lands, pursuant to
§ 254.15 of this subpart; and
(13) A statement as to the manner in
which documents of conveyance will be
exchanged, should the exchange proposal be successfully completed.
(d) Unless the parties agree to some
other schedule, no later than 90 days
from the date of the executed agreement to initiate an exchange, the parties shall arrange for appraisals which
are to be completed within timeframes
and under such terms as are negotiated. In the absence of current market information reliably supporting
value, the parties may agree to use
other acceptable and commonly recognized methods to estimate value.
(e) An agreement to initiate may be
amended by consent of the parties or

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§ 254.7

terminated at any time upon written
notice by any party.
(f) Entering into an agreement to initiate an exchange does not legally bind
any party to proceed with processing
or to consummate a proposed exchange, or to reimburse or pay damages to any party to a proposed exchange that is not consummated or to
anyone doing business with any such
party.
(g) The withdrawal from an exchange
proposal by an authorized officer at
any time prior to the notice of decision, pursuant to § 254.13 of this subpart, is not appealable under 36 CFR
part 215 or 36 CFR part 251, subpart C.
[59 FR 10867, Mar. 8, 1984, as amended at 64
FR 25822, May 13, 1999]

§ 254.5

Assembled land exchanges.

(a) Whenever the authorized officer
determines it to be practicable, an assembled land exchange arrangement
may be used to facilitate exchanges
and reduce costs.
(b) The parties to an exchange may
agree to such an arrangement where
multiple ownership parcels of non-Federal lands are consolidated into a package for the purpose of completing one
exchange transaction.
(c) An assembled land exchange arrangement must be documented in the
agreement to initiate an exchange,
pursuant to § 254.4 of this subpart.
(d) Value of the Federal and non-Federal lands involved in an assembled
land exchange arrangement shall be estimated pursuant to § 254.9 of this subpart.
[59 FR 10867, Mar. 8, 1994; 59 FR 15501, Apr. 1,
1994]

§ 254.6

Segregative effect.

(a) If a proposal is made to exchange
Federal lands, the authorized officer
may request the appropriate State Office of the Bureau of Management
(BLM) to segregate the Federal lands
by a notation on the public land
records. Subject to valid existing
rights, the Federal lands shall be segregated from appropriation under the
public land laws and mineral laws for a
period not to exceed 5 years from the
date of record notation.

(b) Any interests of the United States
in the non-Federal lands that are covered by the exchange proposal may be
noted and segregated from appropriation under the mineral laws for a period not to exceed 5 years from the
date of notation.
(c) The segregative effect terminates
as follows:
(1) Automatically, upon issuance of a
patent or other document of conveyance to the affected lands;
(2) On the date and time specified in
an opening order, published in the FEDERAL REGISTER by the appropriate BLM
State Office, if a decision is made not
to proceed with the exchange or upon
removal of any lands from the exchange proposal; or
(3) Automatically, at the end of the
segregation period not to exceed 5
years from the date of notation on the
public land records, whichever occurs
first.
§ 254.7

Assumption of costs.

(a) Generally, each party to an exchange will bear their own costs of the
exchange. However, if the authorized
officer finds it is in the public interest
as specified in paragraph (b) of this section, an agreement to initiate an exchange may provide that:
(1) One or more of the parties may assume, without compensation, all or
part of the costs or other responsibilities or requirements that the authorized officer determines would ordinarily be borne by the other parties; or
(2) Subject to the limitation in paragraph (c) of this section, the parties
may agree to make adjustments to the
relative values involved in an exchange
transaction, in order to compensate
parties for assuming costs or other responsibilities or requirements that the
authorized officer determines would ordinarily be borne by the other parties.
These costs or services may include but
are not limited to: land surveys; appraisals; mineral examinations; timber
cruises; title searches; title curative
actions; cultural resource surveys and
mitigation; hazardous substance surveys and controls; removal of encumbrances; arbitration, including all fees;
bargaining; cure of deficiencies preventing highest and best use of the

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36 CFR Ch. II (7–1–06 Edition)

land; conduct of public hearings; assemblage of non-Federal parcels from
multiple ownerships; and the expenses
of complying with laws, regulations,
and policies applicable to exchange
transactions, or which are necessary to
bring the Federal and non-Federal
lands involved in the exchange to their
highest and best use for appraisal and
exchange purposes.
(b) As a condition of an agreement to
initiate, the authorized officer may
agree to assume without compensation
costs ordinarily borne by the non-Federal party or to compensate the nonFederal party for assuming Federal
costs only on an exceptional basis
when it is clearly in the public interest
and when the authorized officer determines and documents that each of the
following circumstances exist:
(1) The amount of such cost assumed
or compensation is reasonable and accurately reflects the value of the cost
or service provided, or any responsibility and requirement assumed;
(2) The proposed exchange is a high
priority of the agency;
(3) The land exchange must be expedited to protect important Federal resource values, such as congressionally
designated areas or endangered species
habitat;
(4) Cash equalization funds are available for compensation of the non-Federal party; and
(5) There are no other practicable
means available to the authorized officer for meeting Federal exchange processing costs, responsibilities, or requirements.
(c) The total amount of an adjustment agreed to as compensation for
costs pursuant to this section shall not
exceed the limitations set forth in
§ 254.12(b) of this subpart.
[59 FR 10867, Mar. 8, 1994; 59 FR 15501, Apr. 1,
1994]

§ 254.8 Notice of exchange proposal.
(a) Upon entering into an agreement
to initiate an exchange, the authorized
officer shall publish a notice once a
week for four consecutive weeks in
newspapers of general circulation in
the counties in which the Federal and
non-Federal lands or interests proposed
for exchange are located. The authorized officer shall notify authorized

users, the jurisdictional State and
local governments, and the congressional delegation and shall make other
distribution of the notice as appropriate. At a minimum, the notice shall
include:
(1) The identity of the parties involved in the proposed exchange;
(2) A description of the Federal and
non-Federal lands being considered for
exchange;
(3) A statement as to the effect of
segregation from appropriation under
the public land laws and mineral laws,
if applicable;
(4) An invitation to the public to submit in writing any comments on or
concerns about the exchange proposal,
including advising the agency as to any
liens, encumbrances, or other claims
relating to the lands being considered
for exchange; and
(5) The deadline by which comments
must be received, and the name, title,
and address of the official to whom
comments must be sent and from
whom additional information may be
obtained.
(b) To be assured of consideration in
the environmental analysis of the proposed exchange, all comments must be
made in writing to the authorized officer and postmarked or delivered within
45 days after the initial date of publication.
(c) The authorized officer is not required to republish legal descriptions
of any lands that may be excluded from
the final exchange transaction, provided such lands were identified in the
notice of exchange proposal. In addition, minor corrections of land descriptions and other insignificant changes
do not require republication.
§ 254.9

Appraisals.

The Federal and non-Federal parties
to an exchange shall comply with the
appraisal standards as set forth in
paragraphs (a) through (d) of this section, and, to the extent appropriate,
with the Uniform Appraisal Standards
for Federal Land Acquisitions: Interagency Land Acquisition Conference
1992 (Washington, DC, 1992), ISBN 0–16–
038050–2 when appraising the values of
the Federal and non-Federal lands involved in an exchange.

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§ 254.9

(a) Appraiser qualifications. (1) A
qualified appraiser(s) shall provide to
the authorized officer appraisals estimating the market value of Federal
and non-Federal properties involved in
an exchange. A qualified appraiser may
be an employee or a contractor to the
Federal or non-Federal exchange parties. At a minimum, a qualified appraiser shall be an individual agreeable
to all parties and approved by the authorized officer, who is competent, reputable, impartial, and has training and
experience in appraising property similar to the property involved in the appraisal assignment.
(2) Qualified appraisers shall possess
qualifications consistent with State
regulatory requirements that meet the
intent of Title XI, Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C.
3331). In the event a State or Territory
does not have approved policies, practices, and procedures regulating the activities of appraisers, the Forest Service may establish appraiser qualification standards commensurate with
those generally adopted by other
States or Territories meeting the requirements of FIRREA.
(b) Market value. (1) In estimating
market value, the appraiser shall:
(i) Determine the highest and best
use of the property to be appraised;
(ii) Estimate the value of the lands
and interests as if in private ownership
and available for sale in the open market;
(iii) Include historic, wildlife, recreation, wilderness, scenic, cultural, or
other resource values or amenities as
reflected in prices paid for similar
properties in the competitive market;
(iv) Consider the contributory value
of any interest in land such as water
rights, minerals, or timber, to the extent they are consistent with the highest and best use of the property; and
(v) If stipulated in the agreement to
initiate in accordance with § 254.4 of
this subpart, estimate separately the
value of each property optioned or acquired from multiple ownerships by the
non-Federal party for purposes of exchange, pursuant to § 254.5 of this subpart. In this case, the appraiser also
must estimate the value of the Federal

and non-Federal properties in a similar
manner.
(2) In estimating market value, the
appraiser may not independently add
the separate values of the fractional interests to be conveyed, unless market
evidence indicates the following:
(i) The various interests contribute
their full value (pro rata) to the value
of the whole; and
(ii) The valuation is compatible with
the highest and best use of the property.
(3) In the absence of current market
information reliably supporting value,
the authorized officer may use other
acceptable and commonly recognized
methods to determine market value.
(c) Appraisal report standards. Appraisals prepared for exchange purposes
must contain the following minimum
information:
(1) A summary of facts and conclusions;
(2) The purpose and/or the function of
the appraisal, a definition of the estate
being appraised, and a statement of the
assumptions and limiting conditions
affecting the appraisal assignment, if
any;
(3) An explanation of the extent of
the appraiser’s research and actions
taken to collect and confirm information relied upon in estimating value;
(4) An adequate description of the
physical characteristics of the land
being appraised; a statement of all encumbrances; title information; location, zoning, and present use; an analysis of highest and best use; and at
least a 5-year sales history of the property;
(5) A disclosure of any condition that
is observed during the inspection of the
property or becomes known to the appraiser through the normal research
which would lead the appraiser to believe that hazardous substances may be
present on the property being appraised;
(6) A comparative market analysis
and, if more than one method of valuation is used, an analysis and reconciliation of the methods used to support
the appraiser’s estimate of value;
(7) A description of comparable sales,
including a description of all relevant
physical, legal, and economic factors
such as parties to the transaction,

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§ 254.10

36 CFR Ch. II (7–1–06 Edition)

source and method of financing, effect
of any favorable financing on sale
price, and verification by a party involved in the transaction;
(8) An estimate of market value;
(9) The effective date of valuation,
date of appraisal, signature, and certification of the appraiser;
(10) A certification by the appraiser
to the following:
(i) The appraiser has personally contacted the property owner or designated representative and offered the
owner an opportunity to be present
during inspection of the property;
(ii) The appraiser has personally examined the subject property and all
comparable sale properties relied upon
in the report;
(iii) The appraiser has no present or
prospective interest in the appraised
property; and
(iv) The appraiser has not received
compensation that was contingent on
the analysis, opinions, or conclusions
contained in the appraisal report; and
(11) Copies of relevant written reports, studies, or summary conclusions
prepared by others in association with
the appraisal assignment which were
relied upon by the appraiser to estimate value, which may include, but is
not limited to, current title reports,
mineral reports, or timber cruises prepared by qualified specialists.
(d) Appraisal review. (1) Appraisal reports shall be reviewed by a qualified
review appraiser meeting the qualifications set forth in paragraph (a) of this
section. Statements of value prepared
by agency appraisers are not subject to
this review.
(2) The review appraiser shall determine whether the appraisal report:
(i) Is complete, logical, consistent,
and supported by market analysis;
(ii) Complies with the standards prescribed in paragraph (c) of this section;
and
(iii) Reasonably estimates the probable market value of the lands appraised.
(3) The review appraiser shall prepare
a written review report, containing at
a minimum:
(i) A description of the review process
used;
(ii) An explanation of the adequacy,
relevance, and reasonableness of the

data and methods used by the appraiser
to estimate value;
(iii) The review appraiser’s conclusions regarding the appraiser’s estimate of market value; and
(iv) A certification by the review appraiser to the following:
(A) The review appraiser has no
present or prospective interest in the
property which is the subject of the review report; and
(B) The review appraiser has not received compensation that was contingent upon approval of the appraisal report.
§ 254.10 Bargaining; arbitration.
(a) Unless the parties to an exchange
agree in writing to suspend or modify
the deadlines contained in paragraphs
(a)(1) through (a)(4) of this section, the
parties shall adhere to the following:
(1)(i) Within 180 days from the date of
receipt of the appraisal(s) for review
and approval by the authorized officer,
the parties to an exchange may agree
on the appraised values or may initiate
a process of bargaining or some other
process to determine values. Bargaining or any other process must be
based on an objective analysis of the
valuation in the appraisal report(s) and
is a means of reconciling differences in
such report(s). Bargaining or another
process to determine values may involve one or more of the following actions:
(A) Submission of the disputed appraisal(s) to another qualified appraiser for review:
(B) Request for additional appraisals;
(C) Involvement of an impartial third
party to facilitate resolution of the
value disputes, or
(D) Use of some other acceptable and
commonly recognized practice for resolving value disputes.
(ii) Any agreement based upon bargaining must be in writing and made
part of the administrative record of the
exchange. Such agreement must contain a reference to all relevant appraisal information and state how the
parties reconciled or compromised appraisal information to arrive at an
agreement based on market value.
(2) If within 180 days from the date of
receipt of the appraisal(s) for review
and approval by the authorized officer,

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§ 254.12

the parties to an exchange cannot
agree on values but wish to continue
with the land exchange, the appraisal(s), at the initiative of either
party, must be submitted to arbitration, unless, in lieu of arbitration, the
parties have employed a process of bargaining or some other process to determine values. If arbitration occurs, it
must be conducted in accordance with
the real estate valuation arbitration
rules of the American Arbitration Association. The Secretary or an official
to whom such authority has been delegated shall appoint an arbitrator from
a list provided by the American Arbitration Association.
(3) Within 30 days after completion of
arbitration, the parties involved in the
exchange must determine whether to
proceed with the exchange, modify the
exchange to reflect the findings of the
arbitration or any other factors, or
withdraw from the exchange. A decision to withdraw from the exchange
may be made upon written notice by
either party at this time or at any
other time prior to entering into a
binding exchange agreement.
(4) If the parties agree to proceed
with an exchange after arbitration, the
values established by arbitration are
binding upon all parties for a period
not to exceed 2 years from the date of
the arbitration decision.
(b) Arbitration is limited to the disputed valuation of the lands involved
in a proposed exchange and an arbitrator’s award decision is limited to the
value estimate(s) of the contested appraisal(s). An arbitrator may not include in an award decision recommendations regarding the terms of a
proposed exchange, nor may an arbitrator’s award decision infringe upon the
authority of the Secretary to make all
decisions regarding management of
Federal lands and to make public interest determinations.
§ 254.11 Exchanges at approximately
equal value.
(a) The authorized officer may exchange lands which are of approximately equal value upon a determination that:
(1) The exchange is in the public interest and the consummation of the
proposed exchange will be expedited;

(2) The value of the lands to be conveyed out of Federal ownership is not
more than $150,000 as based upon a
statement of value prepared by a qualified appraiser and accepted by an authorized officer;
(3) The Federal and non-Federal
lands are substantially similar in location, acreage, use, and physical attributes; and
(4) There are no significant elements
of value requiring complex analysis.
(b) The authorized officer, not the
non-Federal party, determines whether
the Federal and non-Federal lands are
approximately equal in value and must
document how the determination was
made.
§ 254.12 Value
equalization;
equalization waiver.

(a) To equalize the agreed upon values of the Federal and non-Federal
lands involved in an exchange, either
with or without adjustments of relative values as compensation for various costs, the parties to an exchange
may agree to:
(1) Modify the exchange proposal by
adding or excluding lands; and/or
(2) Use cash equalization, after making all reasonable efforts to equalize
values by adding or deleting lands.
(b) The combined amount of any cash
equalization
payment
and/or
the
amount of adjustments agreed to as
compensation for costs under § 254.7 of
this subpart may not exceed 25 percent
of the value of the Federal lands to be
conveyed.
(c) The Secretary of Agriculture may
not waive cash equalization payment
due the United States, but the parties
may agree to waive cash equalization
payment due the non-Federal party.
The amount to be waived may not exceed 3 percent of the value of the lands
being exchanged out of Federal ownership or $15,000, whichever is less.
(d) A cash equalization payment may
be waived only after the authorized officer certifies, in writing, that the
waiver will expedite the exchange and
that the public interest will be best
served by the waiver.

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§ 254.13

36 CFR Ch. II (7–1–06 Edition)

§ 254.13 Approval of exchanges; notice
of decision.
(a) Upon completion of all environmental analyses and appropriate documentation, appraisals, and all other
supporting studies and requirements to
determine if a proposed exchange is in
the public interest and in compliance
with applicable law and regulations,
the authorized officer shall decide
whether to approve an exchange proposal.
(1) When a decision to approve or disapprove an exchange is made, the authorized officer shall publish a notice
of the availability of the decision in
newspapers of general circulation. At a
minimum, the notice must include:
(i) The date of decision;
(ii) A concise description of the decision;
(iii) The name and title of the deciding official;
(iv) Directions for obtaining a copy of
the decision; and
(v) The date of the beginning of the
appeal period.
(2) The authorized officer shall distribute notices to the State and local
governmental subdivisions having authority in the geographical area within
which the lands covered by the notice
are located, the non-Federal exchange
parties, authorized users of involved
Federal lands, the congressional delegation, and individuals who requested
notification or filed written objections,
and others as appropriate.
(b) For a period of 45 days after the
date of publication of a notice of the
availability of a decision to approve or
disapprove an exchange proposal, the
decision shall be subject to appeal as
provided under 36 CFR part 215 or, for
eligible parties, under 36 CFR part 251,
subpart C.
[59 FR 10867, Mar. 8, 1994, as amended at 64
FR 25822, May 13, 1999]

§ 254.14

Exchange agreement.

(a) The parties to a proposed exchange may enter into an exchange
agreement subsequent to a decision by
the authorized officer to approve the
exchange, pursuant to § 254.13 of this
subpart. Such an agreement is required
if hazardous substances are present on

the non-Federal lands. An exchange
agreement must contain the following:
(1) Identification of the parties, description of the lands and interests to
be exchanged, identification of all reserved and outstanding interests, stipulation of any necessary cash equalization, and all other terms and conditions necessary to complete an exchange;
(2) Inclusion of the terms regarding
responsibility for removal, indemnification (‘‘hold harmless’’ agreement), or other remedial actions concerning any hazardous substances on
the involved non-Federal lands; and
(3) The agreed upon values of the involved lands, until consummation of
the land exchange.
(b) An exchange agreement, as described in paragraph (a) of this section,
is legally binding on all parties, subject
to the terms and conditions thereof,
provided:
(1) Acceptable title can be conveyed;
(2) No substantial loss or damage occurs to either property from any cause;
(3) No undisclosed hazardous substances are found on the involved Federal or non-Federal lands prior to conveyance;
(4) The exchange proposal receives
any required Secretarial approval;
(5) No objections are raised during
any required congressional oversight;
(6) In the event of an appeal under 36
CFR part 215 or 36 CFR part 251, subpart C, a decision to approve an exchange proposal pursuant to § 254.13 of
this subpart is upheld; and
(7) The agreement is not terminated
by mutual consent or upon such terms
as may be provided in the agreement.
(c) In the event of a failure to perform or to comply with the terms of an
exchange agreement, the noncomplying party is liable for all costs borne
by the other party as a result of the
proposed exchange, including, but not
limited to, land surveys, appraisals,
mineral examinations, timber cruises,
title searches, title curative actions,
cultural resource surveys and mitigation, hazardous substance surveys and
controls, removal of encumbrances, arbitration, curing deficiencies preventing highest and best use of the
land, and any other expenses incurred

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§ 254.15

in processing the proposed land exchange.
(d) Absent an executed exchange
agreement, an action taken by the parties prior to consummation of an exchange does not create any contractual
or other binding obligations or rights
enforceable against any party.
[59 FR 10867, Mar. 8, 1994; 59 FR 15501, Apr. 1,
1994, as amended at 64 FR 25822, May 13, 1999]

§ 254.15 Title standards.
(a) Title evidence. (1) Unless otherwise
specified by the USDA Office of the
General Counsel, evidence of title for
the non-Federal lands being conveyed
to the United States must be in recordable form and in conformance with the
Department of Justice regulations and
‘‘Standards for the Preparation of Title
Evidence in Land Acquisitions by the
United States’’ in effect at the time of
conveyance.
(2) The United States is not required
to furnish title evidence for the Federal lands being exchanged.
(b) Conveyance documents. (1) Unless
otherwise specified by the USDA Office
of the General Counsel, all conveyances
to the United States must be prepared,
executed, and acknowledged in accordance with the Department of Justice
regulations and ‘‘Standards for the
Preparation of Title Evidence in Land
Acquisitions by the United States’’ in
effect at the time of conveyance.
(2) Conveyances of lands from the
United States are made by patent,
quitclaim deed, or deed and without express or implied warranties, except as
to hazardous substances pursuant to
§ 254.3 of this subpart.
(c) Title encumbrances—(1) Non-Federal
lands. (i) Title to the non-Federal lands
must be acceptable to the United
States. For example, encumbrances
such as taxes, judgment liens, mortgages, and other objections or title defects shall be eliminated, released, or
waived in accordance with requirements of the preliminary title opinion
of the USDA Office of the General
Counsel or the Department of Justice,
as appropriate.
(ii) The United States shall not accept lands in which there are reserved
or outstanding interests that would
interfere with the use and management
of the land by the United States or

would otherwise be inconsistent with
the authority under which, or the purpose for which, the lands are to be acquired. Reserved interests of the nonFederal landowner are subject to the
appropriate rules and regulations of
the Secretary, except upon special
finding by the Chief, Forest Service in
the case of States, agencies, or political subdivisions thereof (36 CFR part
251, subpart A).
(iii) Any personal property owned by
the non-Federal party which is not a
part of the exchange proposal, should
be removed by the non-Federal party
prior to acceptance of title by the
United States, unless the authorized
officer and the non-Federal party to
the exchange previously agree upon a
specified period to remove the personal
property. If the personal property is
not removed prior to acceptance of
title or within the otherwise prescribed
time, it shall be deemed abandoned and
shall become vested in the United
States.
(iv) The exchange parties must reach
agreement on the arrangements for the
relocation of any tenants. Qualified
tenants occupying non-Federal lands
affected by a land exchange may be entitled to relocation benefits under 49
CFR 24.2. Unless otherwise provided by
law or regulation (49 CFR 24.101(a)(1)),
relocation benefits are not applicable
to owner-occupants involved in exchanges with the United States provided the owner-occupants are notified
in writing that the non-Federal lands
are being acquired by the United
States on a voluntary basis.
(2) Federal lands. If Federal lands proposed for exchange are occupied under
grant, permit, easement, or non-mineral lease by a third party who is not a
party to the exchange, the third party
holder of such authorization and the
non-Federal party to the exchange may
reach agreement as to the disposition
of the existing use(s) authorized under
the terms of the grant, permit, easement, or lease. The non-Federal exchange party shall submit documented
proof of such agreement prior to
issuance of a decision to approve the
land exchange, as instructed by the authorized officer. If an agreement cannot be reached, the authorized officer

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§ 254.16

36 CFR Ch. II (7–1–06 Edition)

shall consider other alternatives to accommodate the authorized use or shall
determine whether the public interest
will be best served by terminating such
use pursuant to 36 CFR 251.60.
§ 254.16

Case closing.

(a) Title transfers. Unless otherwise
agreed, and notwithstanding the decision in United States v. Schurz, 102 U.S.
378 (1880), or any other law or ruling to
the contrary, title to both the non-Federal and Federal lands pass simultaneously and are deemed accepted by
the United States and the non-Federal
landowner, respectively, when the documents of conveyance are recorded in
the county clerk’s or other local recorder’s office. Before recordation, all
instructions, requirements, and conditions set forth by the United States
and the non-Federal landowner must be
met. The minimum requirements and
conditions necessary for recordation
include the following, as appropriate:
(1) The determination by the authorized officer that the United States will
receive possession, acceptable to it, of
such lands;
(2) The issuance of title evidence as
of the date of recordation which conforms to the instructions and requirements of the USDA Office of the General Counsel’s preliminary title opinion; and
(3) Continuation searches disclosing
no matters of record that would require any change in the aforementioned title evidence as issued.
(b) Automatic segregation of lands.
Subject to valid existing rights, nonFederal lands acquired through exchange by the United States automatically are segregated from appropriation under the public land laws and
mineral laws until midnight of the 90th
day after acceptance of title by the
United States, and the public land
records must be noted accordingly.
Thereafter, the lands will be open automatically to operation of the public
land laws and mineral laws, except to
the extent otherwise provided by law,
unless action is taken pursuant to 43
CFR part 2300 to initiate a withdrawal
within the 90-day period.

§ 254.17 Information requirements.
The requirements governing the
preparation of an agreement to initiate
in § 254.4 of this subpart and an exchange agreement in § 254.14 of this
subpart constitute information requirements as defined by the Paperwork Reduction Act of 1980 (44 U.S.C.
3507) and have been approved for use
pursuant to 5 CFR part 1320 and assigned OMB Control Number 0596–0105.
[59 FR 10867, Mar. 8, 1994; 59 FR 15501, Apr. 1,
1994]

Subpart B—National Forest
Townsites
AUTHORITY: Pub. L. 85–569; 72 Stat. 438; 16
U.S.C. 478a, as amended by sec. 213, Pub. L.
94–579; 90 Stat. 2743.
SOURCE: 50 FR 29673, July 22, 1985, unless
otherwise noted.

§ 254.20 Purpose and scope.
(a) A Forest Service official may,
upon application, set aside and designate for townsite purposes up to 640
acres of National Forest System lands
adjacent to or contiguous to an established community in Alaska, Arizona,
California, Colorado, Idaho, Montana,
Nevada, New Mexico, Oregon, Utah,
Washington, and Wyoming.
(b) National Forest System lands,
needed by a community, may be sold
under the Townsite Act, for fair market value if those lands would serve indigenous community objectives that
outweigh the public objectives and values of retaining the lands in Federal
ownership. Indigenous community objectives may include space for housing
and for service industries, expansion of
existing economic enterprises, new industries utilizing local resources and
skills, public schools, public health facilities, community parks, and other
recreation areas for local citizens, but
would exclude such uses as commercial
enterprises or new industries and housing projects that would change the
character of the local community.
§ 254.21 Applications.
(a) An application to purchase National Forest System lands—
(1) Must be made by designated officials) authorized to do business in the

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