SUPPLEMENTARY INFORMATION:

Background and Need

Administrative sites are land or property controlled by the Forest Service used or acquired for administrative purposes. The 2018 Farm Bill provides that the Secretary of Agriculture may lease an administrative site that is under the Secretary's jurisdiction under Public Law 115-334 Sec. 8623. The Forest Service Facility Realignment and Enhancement Act of 2005 (FSFREA), Public Law 109-54, also provides that the Forest Service may dispose of administrative sites by sale, lease, exchange, and other methods. The Administrative Site Leasing Program, which includes leasing administrative sites under both the Farm Bill and FSFREA authorities, was initially considered a special use authorization. This prevents the Agency from issuing leases that function as they are commonly legally defined, and the terms of the existing special use framework can discourage partnerships and investment. For example, special use authorization regulatory requirements, constrain the use of the leasehold interest as collateral for loans, limits assignment and transfer of the lease, and provides for unilateral termination of the authorization by the Forest Service. These requirements limit financing options and negatively impact the marketability of leasing projects.

Exempting administrative site leasing from special use regulation requirements will remove regulatory constraints incompatible with standard real estate leasing practices and reflect the unique statutory basis and long-term real property nature of these leases. Without this regulatory change, agency partners will continue to face challenges in obtaining the financing needed to pursue affordable housing and other projects under these authorities.

This final rule is intended to provide a consistent regulatory treatment of administrative site leases under both FSFREA and the 2018 Farm Bill by removing those leases from the special-use framework. Existing special use authorizations for administrative site leasing may remain in effect under their original terms or, at the authorized officer's discretion, be replaced, upon mutual agreement with the lessee, by a lease issued under the applicable statutory authority after satisfaction of all applicable requirements.

This final rule removes administrative site leasing authorized under section 8623 of the 2018 Farm Bill and FSFREA from the scope of 36 CFR part 251, subpart B. This change is expected to increase flexibility in how leasing projects are administered by separating incompatible processes that are unnecessary, irrelevant, or do not add value, while retaining processes necessary for legal sufficiency and public accountability. Additional programmatic guidance on administrative site leases can be found in Forest Service Manual 2750.

Summary of Comments and Responses

On May 6, 2026, the Forest Service published a proposed rule in the Federal Register (91 FR 24494) to exempt administrative site leases from the special use requirements in 36 CFR 251 to ensure compatible business practices are possible under the Administrative Site Leasing program. The agency received 25 comments; 8 were supportive of the proposed change and 17 were not. Comments were received from local governments, housing and public finance organizations, the general public and one Tribe. Several commenters supported the rule, emphasizing the need for affordable workforce housing in high-cost communities and explaining that current special-use requirements make financing difficult or impracticable for many projects. Those who opposed the proposed change, including the Osage Nation's Historic Preservation Office, generally expressed concern that the rule could facilitate privatization or disposal of National Forest System lands. The Department does not agree that the rule has that effect. The rule does not authorize land sales, change existing land-disposal authority, or exempt administrative-site leasing projects from National Historic Preservation Act (NHPA), Archaeological Resources Protection Act (ARPA), National Environmental Policy Act (NEPA), public notice, local-government consultation, or other applicable statutory requirements.

After reviewing all comments, the Department is adopting the proposed rule without change. The Department does not believe the concerns raised by commenters warrant changes to the rule text because the rule addresses only the regulatory treatment of administrative-site leases and does not alter statutory requirements or other legal requirements independent of subpart B that apply to future administrative-site leasing decisions.

A summary of substantive comments and responses is provided below.

Comment: Some commenters, especially those in housing finance, public finance, and local governments, support the rule because it could help address the need for affordable workforce housing, especially in high-cost communities. The current special ( printed page 68888) use regulatory requirements often make financing difficult or impracticable. One commenter said their firm had reviewed multiple housing projects over five years, but lenders refused financing each time because the lease could not serve as loan collateral, the lease could not be assigned in case of default, and the Forest Service could end the lease unilaterally under the current regulatory framework.

Response: These are the type of financing and transferability concerns the Department intends to address through this de-regulatory action. The Department recognizes that the current regulatory framework limits the Forest Service's flexibility to structure administrative-site leases in a manner consistent with the underlying leasing authorities and to address community needs, including affordable housing.

Comment: Some commenters who did not support the rule, including the Osage Nation's Historic Preservation Office, expressed concern that the rule could facilitate privatization or disposal of National Forest System lands, including sales to private developers. Some of these commenters also said that allowing leased “public” lands and buildings to be used as collateral for loans would expose them to repossession and transfer without Federal oversight. Some commenters said that exempting administrative site leases from subpart B would enable Federal property to be conveyed to private entities, undermining public ownership protections.

Response: The rule does not authorize land sales or change any existing land-disposal authority. It addresses the regulatory treatment of administrative site leases by exempting them from subpart B and is intended to improve the Forest Service's ability to partner to redevelop administrative sites. Use of a leasehold interest as collateral would not convey or encumber title to the underlying National Forest System land. Any collateral, assignment, transfer, default, or lender step-in provisions would be governed by and subject to the lease terms and the applicable statutory authority, including any terms, conditions, bonding, reservations, or approvals necessary to protect the public interest and Federal ownership.

Comment: A subset of commenters objected to this rule because they believe exempting administrative site leases from the special use framework in 36 CFR part 251 would result in reduced project monitoring, environmental compliance, and public involvement. The letter from the Osage Nation also cited concerns about compliance with the NHPA, the ARPA, and the Native American Graves Protection and Repatriation Act (NAGPRA).

Response: The rule does not exempt administrative site leasing projects from NHPA, ARPA, NAGPRA or other applicable statutory requirements. Section 8623 of the 2018 Farm Bill provides that National Environmental Policy Act (NEPA) applies to leases issued under that authority and includes requirements for consultation with local government officials and public notice before an administrative site is made available for lease. Exempting administrative site leases from subpart B means that procedures and terms required solely by subpart B, including its proposal-processing and lease-administration provisions, will no longer apply to these leases. The Department has determined that those requirements need not apply categorically to administrative site leases. Administrative site leases will remain subject to the applicable statutory authority, other applicable law. As necessary, the Forest Service will provide implementing guidance for the proposal processing and other administrative procedures and will incorporate appropriate monitoring, bonding, default, resource-protection, and other requirements into the terms of individual leases.

Comment: In their letter, the Osage Nation also cited concerns specific to Tribes and the Federal government's trust responsibility to consult with Tribes. The comment stated that the proposed change would make leased administrative sites no longer subject to the Tribal consultation mandated by the NHPA or the multitude of laws that protect cultural heritage at the national level, and that a special use permit ensures Tribal consultation takes place so that lands and properties under Federal ownership that contain significant cultural resources and historical importance do not lose those protections.

Response: The Department is committed to respecting Tribal sovereignty and upholding Federal Trust responsibilities with Tribes. As stated previously, exempting administrative site leases from subpart B will not change ownership of Federal lands or facilities. It also will not change the need to ensure compliance with all applicable laws, including NHPA and NAGPRA. Where an administrative-site lease is an undertaking that affects historic properties, the Forest Service will comply with NHPA Section 106 and its implementing regulations, including applicable consultation with Tribes that attach religious and cultural significance to affected historic properties. Where NAGPRA applies to planned activities, discoveries, or excavations on Federal or Tribal lands, the applicable NAGPRA requirements will continue to apply.

Regulatory Certifications

Regulatory Planning and Review

Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will determine whether a regulatory action is significant as defined by E.O. 12866 and will review significant regulatory actions. OIRA has determined that this final rule is not significant as defined by E.O. 12866. E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The Department has developed the final rule consistent with E.O. 13563.

Congressional Review Act

Pursuant to subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 et seq.), OIRA has designated this final rule as not a major rule as defined by 5 U.S.C. 804(2).

National Environmental Policy Act

The final rule is purely administrative in nature, exempting administrative site leasing from 36 CFR part 251, subpart B. Departmental regulations at 7 CFR 1b.4(c)(20) exclude from documentation in an environmental assessment or environmental impact statement “rules, regulations, or policies to establish service wide administrative procedures, program processes, or instructions.” The Department's assessment is that this final rule falls within this category of actions and that no extraordinary circumstances exist that would require preparation of an environmental assessment or environmental impact statement.

Regulatory Flexibility Act

The Department has considered this final rule under the Regulatory Flexibility Act (5 U.S.C. 602 et. seq.). This final rule would not have any direct effect on small entities as defined by the Regulatory Flexibility Act. This final rule would not impose any additional recordkeeping requirements on small entities, would not affect their competitive position in relation to large entities, and would not affect their cash ( printed page 68889) flow, liquidity, or ability to remain in the market. Therefore, the Department has determined that this final rule would not have a significant economic impact on a substantial number of small entities pursuant to the Regulatory Flexibility Act.

Federalism

The Department has considered this final rule under the requirements of E.O. 13132, Federalism. The Department has determined that the final rule conforms to the federalism principles set out in this E.O., would not impose any compliance costs on the States; and would not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, the Department has concluded that this final rule would not have federalism implications.

Consultation and Coordination With Indian Tribal Governments

E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. This final rule is purely administrative in nature. The Department has reviewed this final rule in accordance with the requirements of E.O. 13175 and has determined that this final rule would not have substantial direct effects on Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Therefore, consultation and coordination with Indian Tribal governments is not required for this final rule.

Family Policymaking Assessment

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for a rule that may affect family well-being. The final rule would have no impact on the autonomy or integrity of the family as an institution. Accordingly, the Department has concluded that it is not necessary to prepare a Family Policymaking Assessment for the final rule.

Takings Implications

The Department has analyzed the final rule in accordance with the principles and criteria in E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. The Department has determined that the final rule would not pose the risk of a taking of private property.

Energy Effects

The Department has reviewed the final rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Department has determined that the final rule would not constitute a significant energy action as defined in E.O. 13211.

Civil Justice Reform

The Department has analyzed the final rule in accordance with the principles and criteria in E.O. 12988, Civil Justice Reform. Upon publication of the final rule, (1) all State and local laws and regulations that conflict with the final rule or that impede its full implementation would be preempted; (2) no retroactive effect would be given to this final rule; and (3) it would not require administrative proceedings before parties may file suit in court challenging its provisions.

Unfunded Mandates

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Department has assessed the effects of the final rule on State, local, and Tribal governments and the private sector. The final rule would not compel the expenditure of $100 million or more, adjusted annually for inflation, in any one year by State, local, and Tribal governments in the aggregate or by the private sector. Therefore, a statement under section 202 of the Act is not required.

Paperwork Reduction Act

The final rule does not contain any recordkeeping or reporting requirements or other information collection requirements as defined in 5 CFR part 1320 that are not already required by law or not already approved for use. However, if implementation of this rule results in substantive or material changes to current Forest Service forms or collections previously approved under the special uses Information Collection Request (ICR), a revised ICR will be submitted to OMB for review and approval before the revised information collection is implemented.

Therefore, for the reasons set forth in the preamble, the Forest Service amends chapter II of title 36 of the Code of Federal Regulations as follows:

91 FR 68887